<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 8, 1998
REGISTRATION NO. 333-51839
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
---------------------------
DAY INTERNATIONAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3069 31-1436349
(STATE OR OTHER JURISDICTION OF INCORPORATION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
---------------------------
P.O. BOX 338
130 WEST SECOND STREET
DAYTON, OHIO 45401-0338
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
NUMBER, INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL
EXECUTIVE OFFICES)
---------------------------
DENNIS R. WOLTERS
P.O. BOX 338
130 WEST SECOND STREET
DAYTON, OHIO 45401-0338
(937) 224-4000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
---------------------------
COPY TO:
ANDREW L. SOMMER
DEBEVOISE & PLIMPTON
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
---------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: (As soon
as practicable after this Registration Statement becomes effective.)
If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware Corporation Law, as amended, provides in
regards to indemnification of directors and officers as follows:
"145 INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND
AGENTS; INSURANCE.-- (a) A corporation shall have power to indemnify
any person who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an
action by or in the right of the corporation) by reason of the fact
that the person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by the person in connection
with such action, suit or proceeding if the person acted in good faith
and in a manner the person reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe the
person's conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which the person reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that the person's
conduct was unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that the person
is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including
attorneys' fees) actually and reasonably incurred by the person in
connection with the defense or settlement of such action or suit if the
person acted in good faith and in a manner the person reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in respect
of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent
that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which the Court of Chancery or such other court shall
deem proper.
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<PAGE> 3
(c) To the extent that a present or former director or
officer of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of this section, or in defense of any claim,
issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred
by such person in connection therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination that
indemnification of the present or former director, officer, employee or
agent is proper in the circumstances because the person has met the
applicable standard of conduct set forth in subsections (a) and (b) of
this section. Such determination shall be made with respect to a person
who is a director or officer at the time of such determination, (1) by
a majority vote of the directors who are not parties to such action,
suit or proceeding even though less than a quorum or (2) by a committee
of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if
such directors so direct, by independent legal counsel in a written
opinion, or (4) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
such person is not entitled to be indemnified by the corporation as
authorized in this section. Such expenses (including attorneys' fees)
incurred by former directors and officers or other employees and agents
may be so paid upon such terms and conditions, if any, as the
corporation deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in such person's official capacity and as
to action in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such
person's status as such, whether or not the corporation would have the
power to indemnify such person against such liability under this
section.
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer,
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<PAGE> 4
employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under this
section with respect to the resulting or surviving corporation as such
person would have with respect to such constituent corporation if its
separate existence had continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee, or agent
with respect to an employee benefit plan, its participants or
beneficiaries; and a person who acted in good faith and in a manner
such person reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of
the corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person."
The Certificate of Incorporation and Article V of the By-Laws of the
Company authorize indemnification of officers and directors to the full extent
permitted under Delaware law, including a provision eliminating (except under
certain enumerated circumstances) the liability of directors for duty of care
violations.
The indemnification provided for the Delaware General Corporation Law
is not exclusive of any other rights of indemnification, and a corporation may
maintain insurance against liabilities for which indemnification is not
expressly provided by the Delaware General Corporation Law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) LIST OF EXHIBITS
Exhibit
Number Description of Documents
*1.1 - Purchase Agreement, dated as of March 13, 1998, between
the Company and Societe Generale Securities Corporation.
II-3
<PAGE> 5
Number Description of Documents
***2.1 - Stock Purchase Agreement, dated as of December 18,
1997, by and among Greenwich IV, LLC, GSD Acquisition
Corp. and the Stockholders of Day International
Group, Inc. parties thereto.
***2.2 - Amendment No. 1 to Stock Purchase Agreement, dated as
of January 16, 1998, by and among Greenwich IV, LLC, GSD
Acquisition Corp. and the Stockholders of Day
International Group, Inc. parties thereto.
*3.1.1 - Certificate of Incorporation of the Company.
*3.1.2 - Amendment to Certificate of Incorporation of the
Company.
*3.1.3 - Amendment to Certificate of Incorporation of the
Company.
*3.2 - By-laws of the Company.
*4.1 - Indenture (the "Indenture"), dated as of June 6, 1995,
among Day International Group, Inc. (as Issuer), Day
International, Inc. (as Guarantor) and American Bank
National Association (as Trustee).
*4.2 - The First Supplemental Indenture, dated March 13, 1998,
to the Indenture.
*4.3.1 - Indenture (the "Subordinated Indenture"), dated as of
March 18, 1998, among Day International Group, Inc., Day
International, Inc. and The Bank of New York.
*4.3.2 - Form of Global Notes (filed as part of Exhibit 4.3.1.).
*4.4 - Registration Rights Agreement, dated as of March 18,
1998, by and between the Company and Societe Generale
Securities Corporation.
*4.5.1 - Certificate of Designation, dated March 18, 1998, of
the Powers, Preferences and Relative, Participating,
Optional and other Special Rights of 12 1/4% Senior
Exchangeable Preferred Stock due 2010 and Qualifications,
Limitations and Restrictions thereof (the "Exchangeable
Preferred Stock").
*4.5.2 - Form of Global Certificate for the Exchangeable
Preferred Stock.
*4.6 - Exchange Debenture Indenture, dated as of March 18,
1998, between the Company, Day International, Inc., and
The Bank of New York as Trustee relating to the Notes.
****4.7 - Credit Agreement (the "Credit Agreement"), dated January
15, 1998, among the Company (as Borrower), the Senior
Lenders, Societe Generale Securities Corporation (as
Arranger) and Societe Generale (as Administrative Agent).
*4.8 - Guarantee and Collateral Agreement, dated January 15,
1998, made by the Company and Day International, Inc.
in favor of Societe Generale as Administrative Agent for
the benefit of the Senior Lenders and certain other
secured parties.
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<PAGE> 6
*4.9 - Patent and Trademark Security Agreement, dated January
15, 1998, made by the Company in favor of the
Administrative Agent for the benefit of the Senior Lenders
under the Credit Agreement.
*4.10 - Mortgage and Security Agreement dated January 16, 1998,
from Day, as Mortgagor, to the Administrative Agent, with
respect to the Florida Property.
*4.11 - Mortgage and Security Agreement dated January 16, 1998,
from Day, as Mortgagor, to the Administrative Agent, with
respect to the South Carolina Property.
*4.12 - Deed of Trust, dated January 15, 1998, from Day, as
Mortgagor, to the Administrative Agent, with respect to
the North Carolina Property.
*4.13 - Mortgage and Security Agreement form Day, as Mortgagor,
to the Administrative Agent, with respect to the Michigan
Property.
**5 - Opinion of Debevoise & Plimpton regarding the legality
of the New Notes being registered.
*10.1 - Stockholders Agreement, dated January 16, 1998, among
GSD Acquisition Corp., Greenwich IV, LLC, Societe Generale
Capital Corporation and certain Employee Stockholders.
*10.2.1 - Day International, Inc. Stock Option Plan, dated as of
July 6, 1995
*10.2.2 - Amendment to the Stock Option Plan, dated September 19,
1996.
*10.2.3 - Second Amendment to the Stock Option Plan, dated as of
January 16, 1998.
**10.3 - 1998 Day International Group, Inc. Stock Option Plan.
*10.4 - Amendment to the Employment Agreement, dated January 16,
1998, between Day International, Inc. and Dennis R.
Wolters.
*10.5 - Amendment to the Employment Agreement, dated January 16,
1998, between Day International, Inc. and David B.
Freimuth.
**10.6 - Management Agreement between the Company, Greenwich Street
and SG.
+12.1 - Computation of Ratio of Earnings to Fixed Charges.
+12.2 - Computation of Ratio of Earnings to Combined Fixed Charges
and Preference Dividends (included as Part of Exhibit
12.1).
+12.3 - Computation of Ratio of Total Debt to EBITDA.
+12.4 - Computation of EBITDA to Cash Interest Expense.
+12.5 - Computation of EBITDA less Capital Expenditures to Cash
Interest Expense.
*21.1 - List of Subsidiaries of the Registrant.
+21.2 - Schedule of Valuation and Qualifying Accounts.
+23.1 - Consent of Deloitte & Touche LLP.
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<PAGE> 7
**23.2 - Consent of Debevoise & Plimpton (included as Exhibit 5).
+24 - Powers of Attorney (included on signature pages to this
Registration Statement on Form S-4).
*25.1 - State of Eligibility and Qualification Under the Trust
Indenture Act of 1939 (Form T-1) of The Bank of New York
relating to the Company's 9 1/2% Senior Subordinated Notes
due 2008.
*25.2 - State of Eligibility and Qualification Under the Trust
Indenture Act of 1939 (Form T-1) of The Bank of New York
relating to the Company's 12 1/4% Senior Exchangeable
Preferred Stock due 2010.
**99.1 - Form of Letter of Transmittal.
**99.2 - Form of Notice of Guaranteed Delivery.
**99.3 - Form of Exchange Agent Agreement between the Company and
the Exchange Agent.
- ----------------
+ Previously filed.
* Filed herewith.
** To be filed by amendment.
*** Incorporated by reference to the Company's Form 8-K, dated
January 16, 1998. (File No. 33-93644)
**** Incorporated by reference to the Company's Form 8-K, dated
February 23, 1998. (File No. 33-93644)
***** Incorporated by reference to the Company's Form 10-K, for
the year ended December 31, 1997. (File No. 33-93644)
ITEM 22. UNDERTAKINGS.
The Registrant hereby undertakes
(1) To file, during any period in which officers or sales are
being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933; (ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registration statement. Notwithstanding
the foregoing, any increase or decrease in volume of securities offered
(if
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<PAGE> 8
the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; (iii) to include any material information with respect to
the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(5) That prior to any public reoffering of the securities
registered hereunder through use of a prospectus which is a part of
this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145 (c), the issuer
undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
(6) That every prospectus (i) that is filed pursuant to
paragraph (5) immediately preceding, or (ii) that purports to meet the
requirements of Section 10 (a) (3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415 will be
filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes
of determining any liability under the Securities Act, each such
post-effective amendment shall be deemed to be a new registration
statement relating to the securities offering therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(7) Insofar as indemnification for liabilities arising under
the Securities Act may be permitted to directors, officers, and
controlling persons of the Registrants pursuant to the foregoing
provisions or otherwise, the Registrants have been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrants of
expenses incurred or paid by a director, officer or controlling person
of the Registrants in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrants
will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question
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<PAGE> 9
whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(8) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in the
registration statement when it became effective.
(9) To respond to requests for information that is
incorporated by reference into the prospectus pursuant to Items 4,
10(b), 11 or 13 of this Form within one business day of receipt of
such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date of the
registration statement through the date of responding to the request.
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<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Day
International Group, Inc. has caused this Amendment No. 1 to its Registration
Statement on Form S-4 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Dayton, State of Ohio, on the 8th day of May,
1998.
DAY INTERNATIONAL GROUP, INC.
By: /s/ Dennis R. Wolters
-------------------------------------
Dennis R. Wolters
President and Chief Executive Officer
Pursuant to the requirements of this Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities indicated on the dates indicated.
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PRINCIPAL EXECUTIVE OFFICER:
Dennis R. Wolters* President, Chief Executive Officer and Director
</TABLE>
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<TABLE>
<S> <C>
PRINCIPAL ACCOUNTING OFFICER:
David B. Freimuth* Vice President and Chief Financial Officer
PRINCIPAL FINANCIAL OFFICER:
David B. Freimuth* Vice President and Chief Financial Officer
DIRECTORS:
Alfred C. Eckert, III*
Christine K. Vanden Beukel*
</TABLE>
- ------------------------------------
* By power of attorney authorizing Christine K. Vanden Beukel or David B.
Freimuth to execute the Registration Statement and amendments and/or
post-effective amendments and supplements hereto on behalf of Day
International Group, Inc. and its Directors and Officers.
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<PAGE> 12
EXHIBIT INDEX
-------------
Number Description of Documents
*1.1 - Purchase Agreement, dated as of March 13, 1998, between
the Company and Societe Generale Securities Corporation.
***2.1 - Stock Purchase Agreement, dated as of December 18,
1997, by and among Greenwich IV, LLC, GSD Acquisition
Corp. and the Stockholders of Day International
Group, Inc. parties thereto.
***2.2 - Amendment No. 1 to Stock Purchase Agreement, dated as
of January 16, 1998, by and among Greenwich IV, LLC, GSD
Acquisition Corp. and the Stockholders of Day
International Group, Inc. parties thereto.
*3.1.1 - Certificate of Incorporation of the Company.
*3.1.2 - Amendment to Certificate of Incorporation of the
Company.
*3.1.3 - Amendment to Certificate of Incorporation of the
Company.
*3.2 - By-laws of the Company.
*4.1 - Indenture (the "Indenture"), dated as of June 6, 1995,
among Day International Group, Inc. (as Issuer), Day
International, Inc. (as Guarantor) and American Bank
National Association (as Trustee).
*4.2 - The First Supplemental Indenture, dated March 13, 1998,
to the Indenture.
*4.3.1 - Indenture (the "Subordinated Indenture"), dated as of
March 18, 1998, among Day International Group, Inc., Day
International, Inc. and The Bank of New York.
*4.3.2 - Form of Global Notes (filed as part of Exhibit 4.3.1.).
*4.4 - Registration Rights Agreement, dated as of March 18,
1998, by and between the Company and Societe Generale
Securities Corporation.
*4.5.1 - Certificate of Designation, dated March 18, 1998, of
the Powers, Preferences and Relative, Participating,
Optional and other Special Rights of 12 1/4% Senior
Exchangeable Preferred Stock due 2010 and Qualifications,
Limitations and Restrictions thereof (the "Exchangeable
Preferred Stock").
*4.5.2 - Form of Global Certificate for the Exchangeable
Preferred Stock.
*4.6 - Exchange Debenture Indenture, dated as of March 18,
1998, between the Company, Day International, Inc., and
The Bank of New York as Trustee relating to the Notes.
****4.7 - Credit Agreement (the "Credit Agreement"), dated January
15, 1998, among the Company (as Borrower), the Senior
Lenders, Societe Generale Securities Corporation (as
Arranger) and Societe Generale (as Administrative Agent).
*4.8 - Guarantee and Collateral Agreement, dated January 15,
1998, made by the Company and Day International, Inc.
in favor of Societe Generale as Administrative Agent for
the benefit of the Senior Lenders and certain other
secured parties.
<PAGE> 13
*4.9 - Patent and Trademark Security Agreement, dated January
15, 1998, made by the Company in favor of the
Administrative Agent for the benefit of the Senior Lenders
under the Credit Agreement.
*4.10 - Mortgage and Security Agreement dated January 16, 1998,
from Day, as Mortgagor, to the Administrative Agent, with
respect to the Florida Property.
*4.11 - Mortgage and Security Agreement dated January 16, 1998,
from Day, as Mortgagor, to the Administrative Agent, with
respect to the South Carolina Property.
*4.12 - Deed of Trust, dated January 15, 1998, from Day, as
Mortgagor, to the Administrative Agent, with respect to
the North Carolina Property.
*4.13 - Mortgage and Security Agreement form Day, as Mortgagor,
to the Administrative Agent, with respect to the Michigan
Property.
**5 - Opinion of Debevoise & Plimpton regarding the legality
of the New Notes being registered.
*10.1 - Stockholders Agreement, dated January 16, 1998, among
GSD Acquisition Corp., Greenwich IV, LLC, Societe Generale
Capital Corporation and certain Employee Stockholders.
*10.2.1 - Day International, Inc. Stock Option Plan, dated as of
July 6, 1995
*10.2.2 - Amendment to the Stock Option Plan, dated September 19,
1996.
*10.2.3 - Second Amendment to the Stock Option Plan, dated as of
January 16, 1998.
**10.3 - 1998 Day International Group, Inc. Stock Option Plan.
*10.4 - Amendment to the Employment Agreement, dated January 16,
1998, between Day International, Inc. and Dennis R.
Wolters.
*10.5 - Amendment to the Employment Agreement, dated January 16,
1998, between Day International, Inc. and David B.
Freimuth.
**10.6 - Management Agreement between the Company, Greenwich Street
and SG.
+12.1 - Computation of Ratio of Earnings to Fixed Charges.
+12.2 - Computation of Ratio of Earnings to Combined Fixed Charges
and Preference Dividends (included as Part of Exhibit
12.1).
+12.3 - Computation of Ratio of Total Debt to EBITDA.
+12.4 - Computation of EBITDA to Cash Interest Expense.
+12.5 - Computation of EBITDA less Capital Expenditures to Cash
Interest Expense.
*21.1 - List of Subsidiaries of the Registrant.
+21.2 - Schedule of Valuation and Qualifying Accounts.
+23.1 - Consent of Deloitte & Touche LLP.
<PAGE> 14
**23.2 - Consent of Debevoise & Plimpton (included as Exhibit 5).
+24 - Powers of Attorney (included on signature pages to this
Registration Statement on Form S-4).
*25.1 - State of Eligibility and Qualification Under the Trust
Indenture Act of 1939 (Form T-1) of The Bank of New York
relating to the Company's 9 1/2% Senior Subordinated Notes
due 2008.
*25.2 - State of Eligibility and Qualification under the Trust
Indenture Act of 1939 (Form T-1) of The Bank of New York
relating to the Company's 12 1/4% Senior Exchangeable
Preferred Stock due 2010.
**99.1 - Form of Letter of Transmittal.
**99.2 - Form of Notice of Guaranteed Delivery.
**99.3 - Form of Exchange Agent Agreement between the Company and
the Exchange Agent.
- ----------------
+ Previously filed.
* Filed herewith.
** To be filed by amendment.
*** Incorporated by reference to the Company's Form 8-K, dated
January 16, 1998. (File No. 33-93644)
**** Incorporated by reference to the Company's Form 8-K, dated
February 23, 1998. (File No. 33-93644)
***** Incorporated by reference to the Company's Form 10-K, for
the year ended December 31, 1997. (File No. 33-93644)
<PAGE> 1
DAY INTERNATIONAL GROUP, INC. Exhibit 1.1
$115,000,000
9 1/2% SENIOR SUBORDINATED NOTES DUE 2008
35,000 SHARES
OF 12 1/4% SENIOR EXCHANGEABLE PREFERRED STOCK DUE 2010
(LIQUIDATION PREFERENCE $1,000 PER SHARE)
PURCHASE AGREEMENT
March 13, 1998
SOCIETE GENERALE SECURITIES CORPORATION
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Day International Group, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell $115,000,000 principal amount of its 9
1/2% Senior Subordinated Notes due 2008 (the "Notes") and 35,000 shares of its
12 1/4% Senior Exchangeable Preferred Stock due 2010 (Liquidation Preference
$1,000 per share) (the "Preferred Stock"). The Notes are to be issued pursuant
to an Indenture dated as of March 16, 1998 (the "Indenture") to be entered into
among the Company, Day International, Inc., a Delaware corporation (the
"Guarantor") and The Bank of New York, as trustee (the "Trustee"). Pursuant to
the terms of the Company's Certificate of Designations for the Preferred Stock
(the "Certificate of Designations"), the Preferred Stock shall be exchangeable,
in whole and not in part, at the option of the Company, into 12 1/4% Exchange
Debentures due 2010 (the "Debentures"), which, when issued, shall be issued
pursuant to the provisions of an indenture (the "Debenture
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Indenture") between the Company and The Bank of New York, as trustee (the
"Debenture Trustee").
This is to confirm the agreement concerning the concurrent
purchase of the Notes and the Preferred Stock from the Company by Societe
Generale Securities Corporation (the "Initial Purchaser"). Payment of principal
of, premium, liquidated damages or expenses, if any, and interest on the Notes
will be unconditionally guaranteed, jointly and severally, on a senior
subordinated basis by the Guarantor (the "Guarantee," together with the Notes,
the Preferred Stock and the Debentures, the "Securities") and any newly acquired
or created Domestic Subsidiary that is a Significant Subsidiary (as such terms
are defined in the Indenture).
The Notes and the Preferred Stock will be concurrently offered
and sold to the Initial Purchaser without being registered under the Securities
Act of 1933, as amended (the "Securities Act"), in reliance upon an exemption
therefrom. The Company has prepared a preliminary offering memorandum dated
February 27, 1998 (the "Preliminary Offering Memorandum") and will prepare an
offering memorandum dated the date hereof (the "Offering Memorandum") setting
forth information concerning the Company and the Securities. Copies of the
Preliminary Offering Memorandum have been, and copies of the Offering Memorandum
will be, delivered by the Company to the Initial Purchaser pursuant to the terms
of this Agreement (the "Agreement"). Any references herein to the Preliminary
Offering Memorandum and the Offering Memorandum shall be deemed to include all
amendments and supplements thereto, unless otherwise noted. The Company hereby
confirms that it has authorized the use of the Preliminary Offering Memorandum
and the Offering Memorandum in connection with the offering and resale of the
Securities by the Initial Purchaser in accordance with Section 2.
Holders of the Notes and the Preferred Stock (including the
Initial Purchaser and their direct and indirect transferees) will be entitled to
the benefits of a Registration Rights Agreement, substantially in the form
attached hereto as Annex A (the "Registration Rights Agreement"), pursuant to
which the Company and the Guarantor will agree to file with the Securities and
Exchange Commission (the "Commission") (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") relating to an
issue of subordinated notes of the Company (the "Exchange Notes") which are
identical in all material respects to the Notes (except that the Exchange Notes
will not contain terms with respect to transfer restrictions) and (A) an issue
of preferred stock of the Company (the "Exchange Preferred") or (B) an issue of
subordinated debentures (the "Exchange Debentures," together with the Exchange
Notes and the Exchange Preferred, the "Exchange Securities") which are identical
in all material respects, respectively, to the Preferred Stock and the
Debentures
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(except that the Exchange Preferred and the Exchange Debentures will not contain
terms with respect to transfer restrictions) and (ii) under certain
circumstances, a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "Shelf Registration Statement," together with the Exchange
Offer Registration Statement, the "Registration Statements") relating to the
sale of the Notes, Preferred Stock and, if applicable, the Debentures, and to
use their best efforts to cause such Registration Statements to be declared
effective.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY AND THE GUARANTOR.
The Company and the Guarantor represent and warrant to and agree, jointly and
severally, with the Initial Purchaser that:
(a) Accurate Information. Each of the Preliminary Offering
Memorandum and the Offering Memorandum, as of its respective date, did
not, and on the Closing Date 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 in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that neither the Company nor any
Guarantor makes any representation or warranty as to information
contained in or omitted from the Preliminary Offering Memorandum or the
Offering Memorandum in reliance upon and in conformity with written
information relating to the Initial Purchaser furnished to the Company
and the Guarantor by or on behalf of the Initial Purchaser specifically
for use therein (the "Initial Purchaser's Information").
(b) Compliance with Securities Act. Each of the Preliminary
Offering Memorandum and the Offering Memorandum, as of its respective
date, contains all of the information that, if requested by a
prospective purchaser of the Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4)
under the Securities Act.
(c) No Registration Required. Assuming the accuracy of the
representations and warranties of the Initial Purchaser contained in
Section 2 and its compliance with the agreements set forth therein, it
is not necessary, in connection with the issuance and sale of the
Securities to the Initial Purchaser and the offer, resale and delivery
of the Securities by the Initial Purchaser in the manner contemplated
by this Agreement and the Offering Memorandum, to register the
Securities under the Securities Act or to qualify the Indenture or the
Debenture Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
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(d) Corporate Existence; Compliance with Law. The Company and
each of its subsidiaries (as defined in Section 14) have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership
or lease of property or the conduct of their respective businesses
requires such qualification, and have all power and authority necessary
to own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to so
qualify or have such power or authority would not have, singularly or
in the aggregate, a material adverse effect on the condition (financial
or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole (a "Material Adverse
Effect").
(e) Corporate Power; Authorization. Each of the Company and
the Guarantor has full right, power and authority to execute and
deliver this Agreement, the Registration Rights Agreement, the
Indenture, the Certificate of Designations relating to the Preferred
Stock, the Debenture Indenture and the Securities (collectively, the
"Transaction Documents") and to perform its respective obligations
hereunder and thereunder; and all corporate action required to be taken
for the due and proper authorization, execution and delivery of each of
the Transaction Documents and the consummation of the transactions
contemplated by this Agreement and the Indenture have been duly and
validly taken.
(f) Enforceable Obligations.
(i) The Indenture, when duly executed by the proper
officers of the Company and the Guarantor and delivered by the
Company and the Guarantor, assuming due authorization,
execution and delivery thereof by the Trustee, will constitute
a valid and binding agreement of the Company and the Guarantor
enforceable against the Company and the Guarantor in
accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing;
(ii) The Debenture Indenture, when duly executed by
the proper officers of the Company and delivered by the
Company, assuming due authorization, execution and delivery
thereof by the Debenture Trustee, will constitute a valid
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and binding agreement of the Company enforceable against the
Company in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
(iii) The Registration Rights Agreement, when duly
executed by the proper officers of the Company and the
Guarantor and delivered by the Company and the Guarantor,
assuming due authorization, execution and delivery thereof by
the Trustee, will constitute a valid and binding agreement of
the Company and the Guarantor, respectively, enforceable
against them in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
(iv) The Guarantee, when duly executed by the proper
officers of each of the Guarantor, and executed and delivered
in accordance with the provisions of the Indenture and, upon
the execution, authentication and delivery of the Notes and
payment therefor, will constitute a valid and binding
obligation of the Guarantor enforceable against the Guarantor
in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing;
(v) The Notes, when duly executed by the proper
officers of the Company, will constitute valid and binding
obligations of the Company enforceable against the Company in
accordance with the provisions of the Indenture, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
(vi) The Preferred Stock, when duly executed by the
proper officers of the Company, will be validly issued, fully
paid and non-assessable, and the
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issuance of the Preferred Stock is not subject to preemptive
or other similar rights of any security holder of the Company
arising by operation of law, under the certificate and by-laws
of the Company or under any agreement to which the Company or
any of its subsidiaries is a party;
(vii) The Debentures, when duly executed by the
proper officers of the Company and, when issued and delivered
in exchange for the Preferred Stock in accordance with the
Certificate of Designations and the Debenture Indenture, will
constitute valid and binding obligations of the Company
enforceable against the Company in accordance with the
provisions of the Debenture Indenture, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to
or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing;
and
(viii) The Indenture, the Debenture Indenture, the
Registration Rights Agreement, the Certificate of Designations
and the Securities conform in all material respects to the
descriptions thereof contained in the Offering Memorandum.
(g) Capitalization of the Company. Upon the completion of the
transactions described in the Offering Memorandum, the Company will
have an authorized capitalization as set forth in the Offering
Memorandum, and all of the issued shares of capital stock of the
Company will have been duly and validly authorized and issued, are
fully paid and non-assessable and conform in all material respects to
the description thereof contained in the Offering Memorandum.
(h) Capitalization of Subsidiaries. All the outstanding shares
of capital stock of each subsidiary of the Company have been duly
authorized and validly issued, are fully paid and nonassessable and,
except to the extent set forth in the Offering Memorandum, are owned by
the Company directly or indirectly through one or more wholly-owned
subsidiaries (or are owned by nominees of the Company or directors of
its subsidiaries), free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other
claim of any third party.
(i) No Legal Bar. Assuming the proposed amendments to the
indenture governing the 11 1/8% Senior Subordinated Notes due 2005
become effective under the first supplemental indenture thereto, the
execution, delivery and performance of
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each of the Transaction Documents by the Company and the Guarantor and
the consummation of the transactions contemplated hereby and thereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets.
(j) No Further Requirements. Except for such consents,
approvals, authorizations, registrations or qualifications (i) which
shall have been obtained or made prior to the Closing Date and (ii) as
may be required to be obtained under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and applicable state securities
laws in connection with the purchase and distribution of the Securities
by the Initial Purchaser, no consent, approval, authorization or order
of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of each of the Transaction Documents by the Company or the Guarantor
and the consummation of the transactions contemplated hereby and
thereby.
(k) Financial Statements. Deloitte & Touche LLP and Arthur
Andersen LLP are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of Rule 101 of
the Code of Professional Conduct of the American Institute of Certified
Public Accountants ("AICPA") and its interpretations and rulings
thereunder. The historical financial statements (including the related
notes) contained in the Offering Memorandum comply in all material
respects with the requirements applicable to a registration statement
on Form S-1 under the Securities Act (except that certain supporting
schedules are omitted); such financial statements have been prepared in
accordance with generally accepted accounting principles consistently
applied throughout the periods covered thereby and fairly present in
all material respects the financial position of the entities purported
to be covered thereby at the respective dates indicated and the results
of their operations and their cash flows for the respective periods
indicated; and the financial information contained in the Offering
Memorandum under the headings "Summary--Summary Historical and Pro
Forma Financial Information," "Capitalization," "Selected Historical
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of
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Operations" are derived from the accounting records of the Company and
its subsidiaries and fairly present in all material respects the
information purported to be shown thereby. The pro forma financial
information contained in the Offering Memorandum has been prepared on a
basis consistent with the historical financial statements contained in
the Offering Memorandum (except for the pro forma adjustments specified
therein), includes all material adjustments to the historical financial
information required by Rule 11-02 of Regulation S-X under the
Securities Act and the Exchange Act to reflect the transactions
described in the Offering Memorandum, gives effect to assumptions made
on a reasonable basis and fairly presents in all material respects the
historical and proposed transactions contemplated by the Offering
Memorandum and the Transaction Documents. The other historical
financial and statistical information and data included in the Offering
Memorandum are, in all material respects, fairly presented.
(l) No Material Adverse Change. Neither the Company nor any of
its subsidiaries has sustained, since the date of the latest audited
financial statements included in the Offering Memorandum, any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Memorandum; and,
since such date, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Offering Memorandum.
(m) No Material Litigation. There is no legal or governmental
proceeding pending to which the Company or any of its subsidiaries is a
party or of which any property or assets of the Company or any of its
subsidiaries is the subject which, singularly or in the aggregate, if
determined adversely to the Company or any of its subsidiaries, is
reasonably likely to have a Material Adverse Effect; and to the best of
the Company's and the Guarantor's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(n) No Defaults. Neither the Company nor any of its
subsidiaries (i) is in violation of its charter or by-laws, (ii) is in
default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in
the due performance or observance of any term, covenant or condition
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contained in any material indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its property or assets is subject
or (iii) is in violation in any respect of any law, ordinance,
governmental rule, regulation or court decree to which it or its
property or assets may be subject, except any violations or defaults
which, singularly or in the aggregate, would not have a Material
Adverse Effect.
(o) Possession of Licenses and Permits. The Company and each
of its subsidiaries possess all material licenses, certificates,
authorizations and permits issued by, and have made all declarations
and filings with, the appropriate state, federal or foreign regulatory
agencies or bodies which are necessary or desirable for the ownership
of their respective properties or the conduct of their respective
businesses as described in the Offering Memorandum, except where any
failures to possess or make the same, singularly or in the aggregate,
would not have a Material Adverse Effect, and the Company has not
received notification of any revocation or modification of any such
license, authorization or permit and has no reason to believe that any
such license, certificate, authorization or permit will not be renewed.
(p) No Lending Relationships. Except as disclosed in the
Offering Memorandum, to the best knowledge of the Company, the Company
(i) does not have any material lending or other relationship with any
bank or lending affiliate of the Initial Purchaser and (ii) does not
intend to use any of the proceeds from the sale of the Securities
hereunder to repay any outstanding debt owed to any affiliate of the
Initial Purchaser.
(q) Investment Company Act. Neither the Company nor any of
its subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company
Act"), and the rules and regulations of the Commission thereunder.
(r) No Stabilization. Neither the Company, nor any of its
subsidiaries, has taken or may take, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation
of the price of the Securities to facilitate the sale or resale of the
Securities.
(s) Possession of Intellectual Property. The Company and each
of its subsidiaries own or possess adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names,
trademark registrations, service
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mark registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures) necessary for the
conduct of their respective businesses, except where the failure to own
or possess such rights or use such intellectual properties would not,
individually or in the aggregate, have a Material Adverse Effect and
have no reason to believe that the conduct of their respective
businesses will conflict with, and have not received any notice of any
claim of conflict with, any such rights of others, except where such
claim would not, individually or in the aggregate, have a Material
Adverse Effect.
(t) Title to Property. The Company and each of its
subsidiaries have good and (in the case of real property) marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in each
case free and clear of all liens, encumbrances, claims and defects that
could reasonably be expected to have a Material Adverse Effect.
(u) No Labor Dispute. No labor disturbance by the employees
of the Company or any of its subsidiaries exists or, to the best of the
Company's knowledge, is imminent which in either case could reasonably
be expected to have a Material Adverse Effect.
(v) Employee Benefit Plans. No "prohibited transaction" (as
defined in Section 406 of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code")) or
"accumulated funding deficiency" (as defined in Section 302 of ERISA)
or any of the events set forth in Section 4043(b) of ERISA (other than
events with respect to which the 30-day notice requirement under
Section 4043 of ERISA has been waived) has occurred during the five
year period prior to the date hereof with respect to any employee
benefit plan of the Company or any of its subsidiaries which could
reasonably be expected to have a Material Adverse Effect; each such
employee benefit plan of the Company or any of its subsidiaries is in
compliance in all material respects with applicable law, including
ERISA and the Code; the Company has not incurred during the five year
period prior to the date hereof and does not expect to incur liability
under Title IV of ERISA with respect to the termination of, or
withdrawal from, any "pension plan" which could reasonably be expected
to have a Material Adverse Effect; and each "pension plan" (as defined
in ERISA) for which the Company would have any liability that is
intended to be qualified under Section 401(a) of the
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Code is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which could reasonably be
expected to cause the loss of such qualification.
(w) No Material Environmental Liabilities. Except as described
in the Offering Memorandum, there has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission, or
other release of any kind of toxic or other wastes or other hazardous
substances by, due to, or caused by the Company or any of its
subsidiaries (or, to the best of the Company's knowledge, any other
entity for whose acts or omissions the Company or any of its
subsidiaries is or could reasonably be expected to be liable) upon any
of the property now or previously owned or leased by the Company or any
of its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; there has
been no disposal, discharge, emission or other release of any kind onto
such property or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
(x) Taxes. The Company and its subsidiaries each (i) has filed
all material federal, state and foreign income and franchise tax
returns which it is required to file, (ii) has paid all taxes shown
thereon to be due and payable and all other federal, state, local and
foreign taxes due and payable for which it is liable, including, but
not limited to, withholding taxes and amounts payable under the Code,
and has furnished all material information returns it is required to
furnish pursuant to the Code (other than any taxes with respect to
which the failure to pay, in the aggregate, would not have a Material
Adverse Effect or taxes the amount or validity of which are currently
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been established in accordance
with GAAP) and (iii) does not have any tax deficiency or claims
outstanding or assessed or, to the best of the Company's knowledge,
proposed in writing against it which could reasonably be expected to
have a Material Adverse Effect.
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(y) Insurance Policies. The Company and each of its
subsidiaries have insurance covering their respective properties,
operations, personnel and businesses, adequate and suitable
for its business and comparable to insurance customarily carried by
comparable companies similarly situated and carrying on the same or
similar business. Neither the Company nor any of its subsidiaries has
received notice from any insurer or agent of such insurer that material
capital improvements or other material expenditures are required or
necessary to be made in order to continue such insurance.
(z) Accounting Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is computed with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(aa) Minute Books. The minute books of the Company and each of
its subsidiaries have been made available to the Initial Purchaser and
counsel for the Initial Purchaser, and such books (i) contain in all
material respects a complete summary of all meetings and actions of the
directors and stockholders of the Company and each of its subsidiaries
since the time of its respective incorporation through the date of the
latest meeting and action, and (ii) accurately in all material respects
reflect all transactions referred to in such minutes.
(bb) Transactions with Management and Others. No relationship,
direct or indirect, exists between or among the Company or the
Guarantor on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or the Guarantor on the other
hand, which is required to be described in the Offering Memorandum and
which is not so described.
(cc) No Outstanding Subscriptions. Except as described in the
Offering Memorandum, there are no outstanding subscriptions, rights,
warrants, calls or options to acquire, or instruments convertible into
or exchangeable for, or agreements or understandings with respect to
the sale or issuance of, any shares of capital stock of or other equity
or other ownership interest in the Company or any of its subsidiaries.
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(dd) Solvency. On and immediately after the Closing Date, the
Company (after giving effect to the issuance of the Securities and to
the other transactions related thereto as described in the Offering
Memorandum) will be Solvent. As used in this paragraph, the term
"Solvent" means, with respect to a particular date, that on such date
(i) the present fair market value (or present fair saleable value) of
the assets of the Company is not less than the total amount required to
pay the probable liabilities of the Company on its total existing debts
and liabilities (including contingent liabilities) as they become
absolute and matured, (ii) the Company is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations
and commitments as they mature and become due in the normal course of
business, (iii) assuming the sale of the Securities as contemplated by
this Agreement and the Offering Memorandum, the Company is not
incurring debts or liabilities beyond its ability to pay as such debts
and liabilities mature and (iv) the Company is not engaged in any
business or transaction, and is not about to engage in any business or
transaction, for which its property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in
the industry in which the Company is engaged. In computing the amount
of such contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount that, in the light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
(ee) No Margin Securities. Neither the Company nor any of its
subsidiaries owns any "margin securities" as that term is defined in
Regulations G and U of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), and none of the proceeds of the
sale of the Securities will be used, directly or indirectly, for the
purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any margin security or for any other purpose which
might cause any of the Securities to be considered a "purpose credit"
within the meanings of Regulation G, T, U or X of the Federal Reserve
Board.
(ff) No Brokerage Fees. Neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person that would give rise to a valid claim against the
Company or the Initial Purchaser for a brokerage commission, finder's
fee or like payment in connection with the offering and sale of the
Securities other than fees payable to the Initial Purchaser in
connection with the Offering and the sale of the Securities.
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(gg) Compliance with 144A(d)(3). The Securities satisfy the
eligibility requirements of Rule 144A(d)(3) under the Securities Act.
(hh) No Offers to Buy. Neither the Company nor any of its
affiliates has, directly or through any agent, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as such term is defined in the Securities Act), which is or
will be integrated with the sale of the Securities in a manner that
would require registration of the Securities under the Securities Act.
(ii) No General Solicitation. None of the Company or any of
its affiliates or any other person acting on its or their behalf has
engaged, in connection with the offering of the Securities, in any form
of general solicitation or general advertising within the meaning of
Rule 502(c) under the Securities Act.
(jj) No Registered Securities. There are no securities of the
Company registered under the Exchange Act or listed on a national
securities exchange or quoted in a U.S. automated inter-dealer
quotation system.
(kk) Compliance with Regulation M. The Company has not taken
and will not take, directly or indirectly, any action prohibited by
Regulation M under the Exchange Act in connection with the offering of
the Securities.
(ll) No Forward-Looking Statement. No forward-looking
statement (within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Preliminary Offering
Memorandum or the Offering Memorandum has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good
faith.
(mm) No Commerce with Cuba. None of the Company or any of its
subsidiaries does business with the government of Cuba or with any
person or affiliate located in Cuba within the meaning of Florida
Statutes Section 517.075.
2. PURCHASE AND RESALE OF THE SECURITIES. (a) On the basis of
the representations, warranties and agreements contained herein, and subject to
the terms and conditions set forth herein, the Company agrees to issue and sell
to the Initial Purchaser and the Initial Purchaser agrees to purchase from the
Company, (i) the principal amount of Notes set forth in Schedule 1 hereto at a
purchase price equal to 99.638% of the principal amount thereof and (ii) the
number of shares of Preferred Stock set forth in Schedule 1 hereto at a purchase
price of $996.75 per share. The Company shall not be obligated to deliver any of
the
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<PAGE> 15
Notes or Preferred Stock except upon payment for all the Notes and Preferred
Stock to be purchased as provided herein.
(b) The Initial Purchaser has advised the Company that it
proposes to offer the Securities for resale upon the terms and subject to the
conditions set forth herein and in the Offering Memorandum. The Initial
Purchaser represents and warrants to, and agrees with, the Company that (i) it
is purchasing the Securities pursuant to a private sale exempt from registration
under the Securities Act, (ii) it has not solicited offers for, or offered or
sold, and 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
Rule 502(c) of Regulation D under the Securities Act ("Regulation D") or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act and (iii) it has solicited and will solicit offers for the
Securities only from, and has offered or sold and will offer, sell or deliver
the Securities, as part of its initial offering, only to (A) persons whom it
reasonably believes to be qualified institutional buyers ("Qualified
Institutional Buyers") as defined in Rule 144A under the Securities Act, 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
it 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 accordance with Rule 144A and (B) outside the
United States in accordance with Regulation S under the Securities Act
("Regulation S"). The Initial Purchaser agrees that, prior to or simultaneously
with the confirmation of sale by the Initial Purchaser to any purchaser of any
of the Securities purchased by the Initial Purchaser from the Company pursuant
hereto, the Initial Purchaser shall furnish to that purchaser a copy of the
Offering Memorandum (and any amendment or supplement thereto that the Company
shall have furnished to the Initial Purchaser prior to the date of such
confirmation of sale). In addition to the foregoing, the Initial Purchaser
acknowledges and agrees that the Company and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Sections 5(d) and (e), counsel
for the Company and for the Initial Purchaser, respectively, may rely upon the
accuracy of the representations and warranties of the Initial Purchaser and its
compliance with its agreements contained in this Section 2, and the Initial
Purchaser hereby consents to such reliance.
(c) The Company acknowledges and agrees that the Initial
Purchaser may sell Securities to any of its affiliates and that any such
affiliate may sell Securities purchased by it to the Initial Purchaser.
3. DELIVERY OF AND PAYMENT FOR THE SECURITIES. Delivery of and
payment for the Securities shall be made at the offices of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York, NY, or at such other place as shall be
agreed upon by the Initial Purchaser
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<PAGE> 16
and the Company, at 10:00 A.M., New York City time, on March 18, 1998, or at
such other date or time, not later than seven full business days thereafter, as
shall be agreed upon by the Initial Purchaser and the Company (such date and
time being referred to herein as the "Closing Date").
The Securities to be purchased by the Initial Purchaser
hereunder and sold to Qualified Institutional Buyers or in offshore transactions
to persons other than "U.S. Persons," as defined in Regulation S shall be
represented, respectively, by three global securities, consisting of Rule 144A
Global Notes, Regulation S Global Notes and Institutional Accredited Investor
Global Notes (as such terms are defined in the Offering Memorandum), in
book-entry form which will be deposited by or on behalf of the Company with The
Depository Trust Company ("DTC") or its designated custodian, and in the case of
the Preferred Stock, shall be in definitive or global form in such denominations
and registered in such names as the Initial Purchaser may request at least two
days prior to the Closing Date. On the Closing Date, the Company shall deliver
or cause to be delivered the Securities to the Initial Purchaser against payment
to or upon the order of the Company of the purchase price by wire transfer
payable in Federal (same day) funds by causing the DTC to credit the Securities
to the account of the Initial Purchaser at the DTC.
Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of the Initial Purchaser hereunder. The Company shall make the
certificates representing the Securities available for inspection by the Initial
Purchaser and for delivery to the DTC or its designated custodian in New York,
New York, not later than two full business days prior to the Closing Date.
4. FURTHER AGREEMENTS OF THE COMPANY AND THE GUARANTOR. The
Company and the Guarantor agree with the Initial Purchaser:
(a) to advise the Initial Purchaser promptly and, if
requested, confirm such advice in writing, of the happening of any
event which makes any statement of a material fact made in the Offering
Memorandum untrue or which requires the making of any additions to or
changes in the Offering Memorandum (as amended or supplemented from
time to time) in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; to advise
the Initial Purchaser promptly of any order preventing or suspending
the use of the Preliminary Offering Memorandum or the Offering
Memorandum, of any suspension of the qualification of the Securities
for offering or sale in any jurisdiction and of the initiation or
threatening of any proceeding for any such purpose; and to use its best
efforts to prevent the issuance of any such order preventing or
suspending the use of the
16
<PAGE> 17
Preliminary Offering Memorandum or the Offering Memorandum or
suspending any such qualification and, if any such suspension is
issued, to obtain the lifting thereof at the earliest possible time;
(b) to furnish promptly to the Initial Purchaser and counsel
for the Initial Purchaser, without charge, as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum (and any
amendments or supplements thereto) as may be reasonably requested;
(c) prior to making any amendment or supplement to the
Offering Memorandum, to furnish a copy thereof to the Initial Purchaser
and counsel for the Initial Purchaser and not to effect any such
amendment or supplement to which the Initial Purchaser shall reasonably
object by notice to the Company after a reasonable period to review;
(d) if, at any time prior to completion of the resale of the
Securities by the Initial Purchaser, any event shall occur or condition
exist as a result of which it is necessary, in the opinion of counsel
for the Initial Purchaser or counsel for the Company, to amend or
supplement the Offering Memorandum in order that the Offering
Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Offering Memorandum to comply with applicable
law, to promptly prepare and furnish to the Initial Purchaser such
amendment or supplement as may be necessary to correct such untrue
statement or omission or so that the Offering Memorandum, as so amended
or supplemented, will comply with applicable law;
(e) for so long as the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Securities and prospective
purchasers of the 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
Securities Act, unless the Company is then subject to and in compliance
with Section 13 or 15(d) of the Exchange Act (the foregoing agreement
being for the benefit of the holders from time to time of the
Securities and prospective purchasers of the Securities designated by
such holders);
(f) for so long as the Securities are outstanding, to furnish
to the Initial Purchaser copies of any annual reports, quarterly
reports and current reports filed by
17
<PAGE> 18
the Company with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar forms as may be designated by the Commission, and such
other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Securities pursuant to
the Indenture or the Exchange Act or any rule or regulation of the
Commission thereunder;
(g) to promptly take from time to time such actions as the
Initial Purchaser may reasonably request to qualify the Securities for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchaser may designate and to continue
such qualifications in effect for so long as required for the resale of
the Securities; and to arrange for the determination of the eligibility
for investment of the Securities under the laws of such jurisdictions
as the Initial Purchaser may reasonably request; provided that the
Company and its subsidiaries shall not be obligated to qualify as
foreign corporations in any jurisdiction in which they are not so
qualified or to file a general consent to service of process in any
jurisdiction;
(h) to assist the Initial Purchaser in arranging for the
Securities to be designated Private Offerings, Resales and Trading
through Automated Linkages ("PORTAL") Market securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. ("NASD") relating to trading in the PORTAL
Market and for the Securities to be eligible for clearance and
settlement through the DTC;
(i) not to, and to cause its affiliates not to, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as such term is defined in the Securities Act) which
could be integrated with the sale of the Securities in a manner which
would require registration of the Securities under the Securities Act;
(j) except following the effectiveness of the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case
may be, not to, and to cause its affiliates not to, and not to
authorize or knowingly permit any person acting on their behalf to,
solicit any offer to buy or offer to sell the Securities by means of
any form of general solicitation or general advertising within the
meaning of Regulation D or in any manner involving a public offering
within the meaning of Section 4(2) of the Securities Act; and not to
offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
contract or disposition would cause the exemption afforded by Section
4(2) of the Securities Act to cease to be applicable to the offering
and sale of the Securities as contemplated by this Agreement and the
Offering Memorandum;
18
<PAGE> 19
(k) During the period beginning from the date hereof and
continuing to, and including, the Closing Date or such earlier time as
the Initial Purchaser may notify the Company, not to offer for sale,
sell, contract to sell or otherwise dispose of, directly or indirectly,
or file a registration statement for, or announce any offering of, any
securities of the Company that are substantially similar to the
Securities.
(l) during the period from the Closing Date until two years
after the Closing Date, without the prior written consent of the
Initial Purchaser, not to, and not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired by them, except for Securities
purchased by the Company or any of its affiliates and resold in a
transaction registered under the Securities Act;
(m) not to, for so long as the Securities are outstanding, be
or become, or be or become owned by, an open-end investment company,
unit investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act, and to not be or become, or be or become owned by, a closed-end
investment company required to be registered, but not registered
thereunder;
(n) in connection with the offering of the Securities, until
the Initial Purchaser shall have notified the Company of the completion
of the resale of the Securities, not to, and to cause its affiliated
purchasers (as defined in Regulation M under the Exchange Act) not to,
either alone or with one or more other persons, bid for or purchase,
for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities; and not to, and to cause its affiliated
purchasers not to, make bids or purchase for the purpose of creating
actual, or apparent, active trading in or of raising the price of the
Securities;
(o) in connection with the offering of the Securities, to make
its officers, employees, independent accountants and legal counsel
reasonably available upon request by the Initial Purchaser;
(p) to furnish to the Initial Purchaser on the date hereof a
copy of the independent accountants' report included in the Offering
Memorandum signed by the accountants rendering such report;
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<PAGE> 20
(q) to do and perform all things required to be done and
performed by it under this Agreement that are within its control prior
to or after the Closing Date, and to use its best efforts to satisfy
all conditions precedent on its part to the delivery of the Securities;
(r) to not take any action prior to the execution and delivery
of the Indenture which, if taken after such execution and delivery,
would have violated any of the covenants contained in the Indenture or
the Debenture Indenture;
(s) to not take any action prior to the Closing Date which
would require the Offering Memorandum to be amended or supplemented
pursuant to Section 4(d);
(t) prior to the Closing Date, not to issue any press release
or other communication directly or indirectly or hold any press
conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except
for routine oral marketing communications in the ordinary course of
business and consistent with the past practices of the Company and of
which the Initial Purchaser is notified), without the prior written
consent of the Initial Purchaser, unless in the judgment of the Company
and its counsel, and after notification to the Initial Purchaser, such
press release or communication is required by law;
(u) to apply the net proceeds from the sale of the Securities
as set forth in the Offering Memorandum under the heading "Use of
Proceeds"; and
(v) to cause the Certificate of Designations to be filed with
the appropriate authorities prior to the Closing Date.
5. CONDITIONS OF INITIAL PURCHASER'S OBLIGATIONS. The
obligations of the Initial Purchaser hereunder are subject to the accuracy, when
made and on the Closing Date, of the representations and warranties of the
Company and the Guarantor contained herein, to the accuracy of the statements of
the Company and the Guarantor made in any certificates pursuant to the
provisions hereof, to the performance by the Company and the Guarantor of their
obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Company shall have received the consent of the
registered holders of at least a majority in principal amount of the
Company's outstanding 11 1/8% Senior Subordinated Notes due 2005 to
adopt the Proposed Amendments contained in, and as defined in, the
Company's Consent Solicitation Statement dated February
20
<PAGE> 21
20, 1998, as supplemented by the Supplement to the Consent Solicitation
Statement dated March 6, 1998 and by the Supplement to the Consent
Solicitation Statement dated March 12, 1998 and such Proposed
Amendments shall be effective.
(b) All corporate proceedings and other legal matters incident
to the authorization, form and validity of each of the Transaction
Documents and all other legal matters relating to the Transaction
Documents and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Initial
Purchaser, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(c) The Offering Memorandum (and any amendments or supplements
thereto) shall have been printed and copies distributed to the Initial
Purchaser as promptly as practicable on or following the date of this
Agreement or at such other date and time as to which the Initial
Purchaser may agree; and no stop order suspending the sale of the
Securities in any jurisdiction shall have been issued and no proceeding
for that purpose shall have been commenced or shall be pending or
threatened.
(d) The Initial Purchaser shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the
Offering Memorandum or any amendment or supplement thereto contains an
untrue statement of a fact which, in the opinion of counsel for the
Initial Purchaser, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
(e) Debevoise & Plimpton shall have furnished to the Initial
Purchaser such counsel's written opinion, as counsel to the Company,
addressed to the Initial Purchaser and dated the Closing Date, in form
and substance reasonably satisfactory to the Initial Purchaser, to the
effect that:
(i) each of the Company and the Guarantor has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of Delaware and each other
domestic jurisdiction identified by management of the Company
to such counsel in which the Company or the Guarantor, as the
case may be, own property or have significant operations and
has all requisite corporate power and authority necessary to
own or hold its properties and to conduct the businesses in
which it is engaged (except where the failure to so
21
<PAGE> 22
qualify or have such power or authority would not, singularly
or in the aggregate, have a Material Adverse Effect),
(ii) the Company has an authorized capitalization as
set forth in the Offering Memorandum, and the capital stock of
the Company conforms in all material respects to the
description thereof contained in the Offering Memorandum;
(iii) the statements in the Offering Memorandum under
the heading "United States Federal Tax Considerations",
insofar as such statements purport to summarize the Federal
laws of United States, fairly summarize such provisions
described therein in all material respects; and such counsel
does not have actual knowledge of any current or pending legal
or governmental actions, suits or proceedings which would be
required to be described in the Offering Memorandum if the
Offering Memorandum were a prospectus included in a
registration statement on Form S-1 which are not described as
so required;
(iv) the Indenture conforms in all material respects
with the requirements of the Trust Indenture Act and the rules
and regulations of the Commission applicable to an indenture
which is qualified thereunder;
(v) the Company and the Guarantor have full right,
power and authority to execute and deliver each of the
Transaction Documents to which it is a party and to perform
its obligations thereunder; and all corporate action required
to be taken for the due and proper authorization, execution
and delivery of each of the Transaction Documents and the
consummation of the transactions contemplated thereby have
been duly and validly taken;
(vi) each of the Purchase Agreement and the
Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and the Guarantor and
constitutes a valid and legally binding agreement of the
Company and the Guarantor enforceable against the Company and
the Guarantor in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors'
rights generally and to general equity principles (whether
considered in a proceeding in equity or at law), an implied
covenant of good faith and fair dealing, the possible judicial
application of foreign governmental or judicial
22
<PAGE> 23
action affecting creditors' rights, and, in the case of
indemnification and contribution provisions therein,
considerations of public policy;
(vii) the Indenture has been duly authorized,
executed and delivered by the Company and the Guarantor and,
assuming due authorization, execution and delivery thereof by
the Trustee, constitutes a valid and legally binding agreement
of the Company and the Guarantor enforceable against the
Company and the Guarantor in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other
similar laws of general applicability relating to or affecting
creditors' rights generally and to general equity principles
(whether considered in a proceeding in equity or at law), an
implied covenant of good faith and fair dealing, the possible
judicial application of foreign laws or foreign governmental
or judicial action affecting creditors' rights, and, in the
case of indemnification and contribution provisions therein,
considerations of public policy;
(viii) the Securities have been duly authorized and
issued by the Company and, assuming due authentication thereof
by the Trustee in accordance with the terms of the Indenture
and upon payment and delivery in accordance with the Purchase
Agreement and the Indenture and in the case of the Debentures,
when issued and delivered in exchange for the Preferred Stock,
will constitute valid and legally binding obligations of the
Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their
terms, except as may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws of general applicability relating to or
affecting creditors' rights generally and to general equity
principles (whether considered in a proceeding in equity or at
law), and an implied covenant of good faith and fair dealing
and the possible judicial application of foreign laws or
foreign governmental or judicial action affecting creditors'
rights;
(ix) the Preferred Stock has been duly executed by
the proper officers of the Company, will be validly issued,
fully paid and non-assessable, and the issuance of the
Preferred Stock is not subject to preemptive or other similar
rights of any security holder of the Company arising by
operation of law, under the certificate and by-laws of the
Company or under any agreement to which the Company or any of
its subsidiaries is a party;
23
<PAGE> 24
(x) each Transaction Document, to the extent
described in the Offering Memorandum, conforms in all material
respects to the description thereof contained in the Offering
Memorandum;
(xi) the execution, delivery and performance by the
Company and the Guarantor of each of the Purchase Agreement,
the Indenture and the Registration Rights Agreement, the
compliance by the Company and the Guarantor with the terms
thereof, the consummation of the transactions contemplated by
such documents and the issuance, authentication, sale and
delivery of the Securities will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any of the agreements and
instruments listed on Exhibit A hereto (which agreements and
instruments constitute all the agreements or instruments of
the Company or any of its domestic subsidiaries which are
listed in the Exhibit Index to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1997 and
which relate to the transactions contemplated by the
Transaction Documents (other than the Transaction Documents)),
nor will such actions result in any violation of the
provisions of the charter or by-laws of the Company or any of
its subsidiaries or any existing Federal or New York State,
statute, rule or regulation or, to the knowledge of counsel,
any judgment, order, decree of any Federal or New York State
court or arbitrator or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets; and no consent, approval,
authorization or order of, or filing or registration with, any
such court or arbitrator or governmental agency or body under
any such statute, judgment, order, decree, rule or regulation
is required for the execution, delivery and performance by the
Company or the Guarantor of each of the Purchase Agreement,
the Indenture or the Registration Rights Agreement, the
issuance, authentication, sale and delivery of the Securities
and compliance by the Company and the Guarantor with the terms
thereof and the consummation of the transactions contemplated
by the Transaction Documents, except for such consents,
approvals, authorizations, filings, registrations or
qualifications (i) which have been obtained or made prior to
the Closing Date, (ii) as may be required under state
securities or Blue Sky laws in connection with the purchase
and resale of the Securities by the Initial Purchaser, and
(iii) as may be required under the Securities Act of 1933, as
amended (the "Act"), the Trust Indenture Act of 1939, as
amended, or state securities or Blue Sky laws in connection
with the Exchange Offer contemplated in the Offering
Memorandum.
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<PAGE> 25
(xii) to the best knowledge of such counsel, and
other than as set forth or contemplated in the Offering
Memorandum there are no pending actions or suits or judicial,
arbitral, rule-making, administrative or other proceedings to
which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its
subsidiaries is the subject which question the validity or
enforceability of any of the Transaction Documents or any
action taken or to be taken pursuant thereto; and to the best
knowledge of such counsel, no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others.
(xiii) neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws;
(xiv) neither the Company nor any of its subsidiaries
is (A) an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder, without taking
account of any exemption under the Investment Company Act
arising out of the number of holders of the Company's
securities or (B) a "holding company" or a "subsidiary
company" of a holding company or an "affiliate" thereof within
the meaning of the Public Utility Holding Company Act of 1935,
as amended;
(xv) neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance,
execution or delivery of the Securities will violate
Regulation G, T, U or X of the Federal Reserve Board; and
(xvi) assuming the accuracy of the representations,
warranties and agreements of the Company and of the Initial
Purchaser contained in the Purchase Agreement, the issuance,
offer and sale of the Securities to the Initial Purchaser and
the initial resale and delivery of the Securities in the
manner contemplated by the Purchase Agreement and the Offering
Memorandum are exempt from the registration requirements of
the Securities Act, and it is not necessary to qualify the
Indenture under the Trust Indenture Act.
Such counsel shall also state that they themselves have not
checked the accuracy or completeness of, or otherwise verified, and are
not passing upon and assume no responsibility for the accuracy or
completeness of, the information contained or incorporated by reference
in the Offering Memorandum, except to the limited extent stated in
paragraphs (ii), (iii) and (x) above. In the course of such counsel's
review,
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<PAGE> 26
such counsel has participated in conferences with certain officers and
other representatives of the Company, representatives of its
independent public accountants and representatives of the Initial
Purchaser, at which the contents of the Offering Memorandum were
discussed, and in the course of that review and discussion, but without
independent check or verification, no facts have come to such counsel's
attention that have caused such counsel to believe that any part of the
Offering Memorandum contains an untrue statement of a material fact or
omits 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; it being
understood that such counsel shall express no opinion as to the
financial statements or other financial, accounting or statistical data
included in an of the documents mentioned in this paragraph.
In rendering such opinion, such counsel may rely as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and public officials which are
furnished to the Initial Purchaser and take such other qualifications
and limitations as are customary for opinions of this type.
References to the Offering Memorandum in this paragraph (e)
include any supplements thereto at the Closing Date.
(f) The Initial Purchaser shall have received from Simpson
Thacher & Bartlett, counsel for the Initial Purchaser, such opinion,
dated the Closing Date, with respect to such matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for enabling them to
pass upon such matters.
(g) At the time of the execution of this Agreement, the
Initial Purchaser shall have received from each of Arthur Andersen LLP
and Deloitte & Touche LLP, respectively, a letter, addressed to the
Initial Purchaser and dated such date, in form and substance
satisfactory to the Initial Purchaser (i) confirming that they are
independent certified public accountants with respect to the Company
and its subsidiaries within the meaning of the Securities Act and the
applicable published rules and regulations thereunder and (ii) stating
the conclusions and findings of such firm with respect to the financial
statements and certain financial information contained in the
Preliminary Offering Memorandum or the Offering Memorandum.
References to the Offering Memorandum in this paragraph (g)
and in paragraph (h) below include any supplement thereto at the date
of the letter.
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<PAGE> 27
(h) On the Closing Date, the Initial Purchaser shall have
received a letter (the "bring-down letter") from each of Arthur
Andersen LLP and Deloitte & Touche LLP, respectively, addressed to the
Initial Purchaser and dated the Closing Date (i) confirming, as of the
date of the bring-down letter (or, with respect to matters involving
changes or developments since the respective dates as of which
specified financial information is given in the Offering Memorandum, as
of a date not more than three business days prior to the date of the
bring-down letter), the conclusions and findings of such firm with
respect to the financial information and other matters covered by its
letter delivered to the Initial Purchaser concurrently with the
execution of this Agreement pursuant to Section 5(g) above (the
"initial letters").
(i) The Company shall have furnished to the Initial Purchaser
a certificate, dated the Closing Date, of its Chairman of the Board,
its President or a Vice President and its chief financial officer
stating that (A) such officers have carefully examined the Offering
Memorandum (B) in their opinion, the Offering Memorandum, as of its
date, did not include any untrue statement of a material fact and did
not omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and since the
date of the Offering Memorandum, no event has occurred which should
have been set forth in a supplement or amendment to the Offering
Memorandum so that the Offering Memorandum (as so amended or
supplemented) would not include any untrue statement of a material fact
and would not omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading and (C)
to the best of their knowledge after reasonable investigation, as of
the Closing Date, the representations and warranties of the Company and
the Guarantor in this Agreement are true and correct in all material
respects, each of the Company and the Guarantor has complied in all
material respects with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to the
Closing Date, and subsequent to the date of the most recent financial
statements in the Offering Memorandum, there has been no material
adverse change in the financial position or results of operation of the
Company and its subsidiaries, or any change, or any development
including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects
of the Company and its subsidiaries taken as a whole, except as set
forth in the Offering Memorandum.
(j) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial
statements included in the Offering Memorandum any loss or interference
with its business from fire, explosion, flood or
27
<PAGE> 28
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Memorandum or (ii)
since such date there shall not have been any change in the capital
stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in the
business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth in the
Offering Memorandum, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Initial Purchaser, so
material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Securities on the terms and in
the manner contemplated in the Offering Memorandum exclusive of any
supplement.
(k) The Initial Purchaser shall have received a counterpart of
the Registration Rights Agreement which shall have been executed and
delivered by a duly authorized officer of each of the Company and the
Guarantor.
(l) The Indenture and the Debenture Indenture shall have been
duly executed and delivered by the Company, the Guarantor, the Trustee
and the Debenture Trustee, and the Notes shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee.
(m) The Certificate of Designations shall have been filed with
the appropriate authorities.
(n) The Securities shall have been approved by the NASD for
trading in the PORTAL Market.
(o) If any event shall have occurred that requires the Company
under Section 4(d) to prepare an amendment or supplement to the
Offering Memorandum, such amendment or supplement shall have been
prepared, the Initial Purchaser shall have been given a reasonable
opportunity to comment thereon, and copies thereof shall have been
delivered to the Initial Purchaser reasonably in advance of the Closing
Date.
(p) There shall not have occurred any invalidation of Rule
144A under the Securities Act by any court or any withdrawal or
proposed withdrawal of any rule or regulation under the Securities Act
or the Exchange Act by the Commission or any amendment or proposed
amendment thereof by the Commission which in the
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<PAGE> 29
judgment of the Initial Purchaser would materially impair the ability
of the Initial Purchaser to purchase, hold or effect resales of the
Securities as contemplated hereby.
(q) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Securities; and no injunction,
restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued as of the
Closing Date which would prevent the issuance or sale of the
Securities.
(r) Subsequent to the execution and delivery of this Agreement
(i) no downgrading shall have occurred in the rating accorded the
Securities or any of the Company's other debt securities by any
"nationally recognized statistical rating organization," as that term
is defined by the Commission for purposes of Rule 436(g)(2) of the
Rules and Regulations and (ii) no such organization shall have publicly
announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), its
rating of the Securities or any of the Company's other debt securities.
(s) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Initial Purchaser,
impracticable or inadvisable to proceed with the sale or delivery of
the Securities on the terms and in the manner contemplated in the
Offering Memorandum.
All opinions, letters, evidence and certificates mentioned
above or elsewhere in this Agreement shall be deemed to be in compliance with
the provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Initial Purchaser.
29
<PAGE> 30
6. TERMINATION. The obligations of the Initial Purchaser
hereunder may be terminated by the Initial Purchaser, in its absolute
discretion, by notice given to and received by the Company prior to delivery of
and payment for the Securities if, prior to that time, any of the events
described in Sections 5(j), 5(r) or 5(s) shall have occurred.
7. DEFAULT OF INITIAL PURCHASER. (a) Obligations of Default of
Initial Purchaser. If, on the Closing Date, the Initial Purchaser defaults in
the performance of its obligations under this Agreement, the Initial Purchaser
may make arrangements for the purchase of such Securities by other persons
satisfactory to the Company and the Initial Purchaser. If other initial
purchasers satisfactory to the Company and the Initial Purchaser do not elect to
purchase the Securities which the Initial Purchaser agreed but failed to
purchase, this Agreement shall terminate without liability on the part of the
Company, except that the Company will be liable for the payment of expenses to
the extent set forth in Sections 8 and 11 except that the provisions of Section
9 shall not terminate and shall remain in effect.
(b) Liability of Defaulting Initial Purchaser; Closing Date.
Nothing contained herein shall relieve the Initial Purchaser of any liability it
may have for damages caused by its default. If other initial purchasers agree to
purchase the Securities of the Initial Purchaser, either the Initial Purchaser
or the Company may postpone the Closing Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Initial Purchaser may be necessary in the Preliminary Offering
Memorandum, the Offering Memorandum or in any other document or arrangement, and
the Company agrees to file promptly any amendment or supplement to the
Preliminary Offering Memorandum, the Offering Memorandum that effects any such
changes.
8. REIMBURSEMENT OF INITIAL PURCHASER'S EXPENSES. If (a) this
Agreement shall have been terminated pursuant to Section 6 or 7, (b) the Company
shall fail to tender the Securities for delivery to the Initial Purchaser for
any reason permitted under this Agreement or (c) the Initial Purchaser shall
decline to purchase the Securities for any reason permitted under this
Agreement, the Company shall reimburse the Initial Purchaser for the fees and
expenses of its counsel and for such other out-of-pocket expenses as shall have
been reasonably incurred by it in connection with this Agreement and the
proposed purchase and resale of the Securities, and upon demand the Company
shall pay the full amount thereof to the Initial Purchaser. If this Agreement is
terminated pursuant to Section 7 by reason of the default of the Initial
Purchaser, the Company shall not be obligated to reimburse the Initial Purchaser
on account of those expenses.
9. INDEMNIFICATION OF INITIAL PURCHASER AND THE COMPANY. (a)
Indemnification of Initial Purchaser. The Company and the Guarantor, jointly and
severally,
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<PAGE> 31
shall indemnify and hold harmless the Initial Purchaser, its officers, directors
and employees and each person, if any, who controls any Initial Purchaser within
the meaning of the Securities Act (collectively referred to for the purposes of
this Section 9 as the Initial Purchaser) against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Initial Purchaser may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of or is
based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering Memorandum
or in any amendment or supplement thereto or (ii) the omission or alleged
omission to state in the Preliminary Offering Memorandum or the Offering
Memorandum or in any amendment or supplement thereto 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, and shall reimburse
the Initial Purchaser for any legal or other expenses reasonably incurred by the
Initial Purchaser in connection with investigating or preparing to defend or
defending against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, however, that the foregoing indemnification agreement with respect to
the Preliminary Offering Memorandum shall not inure to the benefit of the
Initial Purchaser from whom the person asserting any such loss, claim, damage or
liability purchased Securities, if (i) a copy of the Offering Memorandum (as
then amended or supplemented) was required by law to be delivered to such person
at or prior to the written confirmation of the sale of Securities to such
person, (ii) a copy of the Offering Memorandum (as then amended or supplemented)
was not sent or given to such person by or on behalf of the Initial Purchaser
and (iii) the Offering Memorandum (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage or liability, unless,
in the case of (i), (ii) and (iii) occurring, such failure to deliver the
Offering Memorandum was a result of non-compliance by the Company of Section
4(d) hereunder; and further provided, however, that the Company and the
Guarantor shall not be liable in any such case to the extent that any such loss,
claim, damage, liability or action arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
the Preliminary Offering Memorandum or the Offering Memorandum or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company and the Guarantor by the Initial Purchaser
specifically for use therein, which information the parties hereto agree is
limited to the Initial Purchaser's Information.
(b) Indemnification of Company, Directors and Officers. The
Initial Purchaser shall indemnify and hold harmless the Company and the
Guarantor, their respective officers, directors and employees and each person,
if any, who controls the Company or Guarantor within the meaning of the
Securities Act (collectively referred to for the purposes of this
31
<PAGE> 32
Section 9 as the Company), against any loss, claim, damage or liability, joint
or several, or any action in respect thereof, to which the Company or any
Guarantor may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact contained in
the Preliminary Offering Memorandum or the Offering Memorandum or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Company by the Initial Purchaser specifically for use therein, and shall
reimburse the Company or such Guarantor for any legal or other expenses
reasonably incurred by the Company or such Guarantor in connection with
investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, liability or
action as such expenses are incurred; provided that the parties hereto hereby
agree that such written information provided by the Initial Purchaser consists
solely of the Initial Purchaser's Information.
(c) Actions; Notification. Promptly after receipt by an
indemnified party under this Section 9 of notice of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section 9,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 9 except to the extent it has been materially prejudiced by such
failure; and, provided, further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 9. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 9 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party 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 at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to
32
<PAGE> 33
it which are different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable for such
indemnified party to employ separate counsel or (iii) the indemnifying party has
failed to assume the defense of such action and employ counsel reasonably
satisfactory to the indemnified party, in which case, if such indemnified party
notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially
similar or related actions 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 at any time for all such
indemnified parties, which firm shall be designated in writing by the Initial
Purchaser, if the indemnified parties under this Section 9 consist of the
Initial Purchaser or any of its respective officers, employees or controlling
persons, or by the Company, if the indemnified parties under this Section 9
consist of the Company or any of the Company's directors, officers, employees or
controlling persons. Each indemnified party, as a condition of the indemnity
agreements contained in Sections 9(a) and 9(b), shall use all reasonable efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. Subject to the provisions of Section 9(d) below, no indemnifying party
shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) Settlement Without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested that an indemnifying party
reimburse the indemnified party for fees and expenses of counsel in accordance
with the applicable provisions of this Agreement, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by this
Section 9 effected without its written consent if (i) such settlement is entered
into more than 60 days after receipt by such indemnifying party of the request
for reimbursement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 45 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request and the applicable terms of
this Agreement prior to the date of such settlement.
(e) Contribution. If the indemnification provided for in this
Section 9 is unavailable or insufficient to hold harmless an indemnified party
under Section 9(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss,
33
<PAGE> 34
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
and the Guarantor on the one hand and the Initial Purchaser on the other from
the offering of the Securities or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company and the Guarantor on the one hand and the
Initial Purchaser on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Guarantor on the one hand and the Initial
Purchaser on the other with respect to such offering shall be deemed to be in
the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses) received
by the Company and the Guarantor bear to the total underwriting discounts and
commissions received by the Initial Purchaser with respect to the Securities
purchased under this Agreement, in each case as set forth in the table on the
cover page of the Offering Memorandum. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Guarantor on the one hand
or the Initial Purchaser on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission; provided that the parties hereto agree that
the written information furnished to the Company by the Initial Purchaser for
use in the Preliminary Offering Memorandum, or the Offering Memorandum consists
solely of the Initial Purchaser's Information. The Company and the Initial
Purchaser agree that it would not be just and equitable if contributions
pursuant to this Section 9(e) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 9(e) shall be deemed to include, for
purposes of this Section 9(e), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending or
preparing to defend any such action or claim. Notwithstanding the provisions of
this Section 9(e), the Initial Purchaser shall not be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public less
the amount of any damages which the Initial Purchaser has otherwise paid or
become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
34
<PAGE> 35
The obligations of the Company, the Guarantor and the Initial
Purchaser in this Section 9 are in addition to any other liability which the
Company, the Guarantor or the Initial Purchaser, as the case may be, may
otherwise have.
10. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the Initial Purchaser, the
Company, the Guarantor and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Initial Purchaser, the Company, the
Guarantor and their respective successors and the controlling persons and
officers, directors and employees referred to in Section 9 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
11. EXPENSES. The Company and the Guarantor agree with the
Initial Purchaser to pay (a) the costs incident to the authorization, issuance,
sale, preparation and delivery of the Securities and any taxes payable in that
connection; (b) the costs incident to the preparation, printing and distribution
of the Preliminary Offering Memorandum the Offering Memorandum any amendments
and exhibits thereto the costs of printing, reproducing and distributing the
applicable Transaction Documents by mail, telex or other means of
communications; (c) all expenses and listing fees incurred in connection with
the application for quotation of the Securities on the PORTAL Market and the
approval of the Securities for book-entry transfer by the DTC; (d) any
applicable listing or other fees; (e) the fees and expenses of qualifying the
Securities under the securities laws of the several jurisdictions as provided in
Section 4(g) and of preparing, printing and distributing Blue Sky Memoranda and
legal investment surveys (including related fees and expenses of counsel to the
Initial Purchaser); (f) any fees charged by securities rating services for
rating the Securities; (g) all fees and expenses of the Trustee and any agent
thereof; and (h) all other costs and expenses incident to the performance of the
obligations of the Company under this Agreement (including, without limitation,
the fees and expenses of counsel to the Company and the fees and expenses of
Arthur Andersen LLP and Deloitte & Touche LLP); provided that, except as
otherwise provided in this Section 11 and in Section 8, the Initial Purchaser
shall pay its own costs and expenses, including the fees and expenses of its
counsel, any transfer taxes on the Securities which it may sell and the expenses
of advertising any offering of the Securities made by the Initial Purchaser.
12. SURVIVAL. The respective indemnities, rights of
contribution, representations, warranties and agreements of the Company, the
Guarantor and the Initial Purchaser contained in this Agreement or made by or on
behalf on them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Securities and
35
<PAGE> 36
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
of them or any person controlling any of them.
13. NOTICES, ETC. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Initial Purchaser, shall be delivered or sent by
mail, telex or facsimile transmission to Societe Generale Securities
Corporation, 1221 Avenue of the Americas, New York, New York 10020,
Attention: Carl Mayer, Telephone: (212) 278-5423, Telecopy: (212)
278-5460 with a copy to Simpson Thacher & Bartlett, 425 Lexington
Avenue, New York, New York 10017, Attention: John B. Tehan, Esq.,
Telecopy: (212) 455-2502;
(b) if to the Company or the Guarantor, shall be delivered or
sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Offering Memorandum, Attention: Dennis
Wolters, Telephone: (937) 226-5869, Telecopy: (937) 226-0052 with a
copy to Debevoise & Plimpton, 875 Third Avenue, New York, New York
10022, Attention: Andrew L. Sommer, Esq., Telecopy: (212) 909-6836) and
to Greenwich Street Capital Partners, L.P., 388 Greenwich Street, 36th
Floor, New York, New York 10013, Attention: Christine K. Vanden Beukel,
Telecopy: (212) 816-0166;
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof.
14. DEFINITIONS OF CERTAIN TERMS. For purposes of this
Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.
15. INITIAL PURCHASER'S INFORMATION. The parties hereto
acknowledge and agree that, for all purposes of this Agreement, the Initial
Purchaser's Information consists solely of the following information in the
Offering Memorandum: (i) the last paragraph on the front cover page concerning
the terms of the offering by the Initial Purchaser; (ii) the legend on pages i
and ii of the Offering Memorandum concerning over-allotment and trading
activities by the Initial Purchaser; and (iii) the statements concerning the
Initial Purchaser contained in the third, fourth and fifth paragraphs under the
heading "Plan of Distribution."
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<PAGE> 37
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
17. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
18. HEADINGS. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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<PAGE> 38
If the foregoing is in accordance with your understanding of
the agreement between the Company, the Guarantor and the Initial Purchaser,
kindly indicate your acceptance in the space provided for that purpose below.
Very truly yours,
DAY INTERNATIONAL GROUP, INC.
By
Name:
Title:
DAY INTERNATIONAL, INC.
By
Name:
Title:
Accepted:
SOCIETE GENERALE SECURITIES CORPORATION
By
Name:
Title:
38
<PAGE> 39
SCHEDULE 1
<TABLE>
<CAPTION>
Principal Amount
of Notes to be Number of Shares
Initial Purchaser Purchased of Preferred Stock
- ----------------- --------- ------------------
<S> <C> <C>
Societe Generale Securities Corporation....... $115,000,000 35,000
- -------------------------------------------------------------------------------------------
Total......................................... $115,000,000 35,000
</TABLE>
1
<PAGE> 40
Annex A
[Form of Registration Rights Agreement]
2
<PAGE> 1
Exhibit 3.1.1
CERTIFICATE OF INCORPORATION
OF
DAY INTERNATIONAL HOLDINGS, INC.
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is Day International Holdings, Inc.
SECOND: The address of its registered office in the State of Delaware is
1209 Orange Street, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is one thousand (1,000), all of which shares shall be
Common Stock, par value $.01 per share.
FIFTH: The name and mailing address of the incorporator is as follows:
NAME ADDRESS
---- -------
Jill Henderson c/o Kirkland & Ellis
655 Fifteenth Street, N.W.
Suite 1200
Washington, D.C. 20005
SIXTH: The Corporation is to have perpetual existence.
<PAGE> 2
SEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is hereby authorized to adopt, amend or repeal
the bylaws of the Corporation.
EIGHTH: Meetings of stockholders may be held within or without the State
of Delaware, as the bylaws may provide. The books of the Corporation may be kept
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the bylaws of the Corporation.
Elections of directors need not be by written ballot unless the bylaws of the
Corporation so provide.
NINTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 191 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or the stockholders
or class of stockholders of the Corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number
2
<PAGE> 3
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
the Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders, or class of
stockholders, of the Corporation, as the case may be, and also on this
Corporation.
TENTH: To the fullest extent permitted by the General Corporation Law
of the State of Delaware (including, without limitation, Section 102(b)(7)), as
amended from time to time, no director of the Corporation shall be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director. Any repeal or amendment of this Article TENTH or adoption of
any provision of the Certificate of Incorporation inconsistent with this Article
TENTH shall have prospective effect only and shall not adversely affect the
liability of a director of the Corporation with respect to any act or omission
occurring at or before the time of such repeal, amendment or adoption of an
inconsistent provision.
ELEVENTH: The Corporation shall, to the fullest extent permitted by the
General Corporation Law of the State of Delaware (including, without limitation,
Section 145 thereof), as amended from time to time, indemnify any promoter or
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<PAGE> 4
director whom it shall have power to indemnify from and against any and all of
the expenses, liabilities or other losses of any nature. The indemnification
provided in this Article ELEVENTH shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any bylaw, agreement,
vote of stockholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be
promoter or director and shall inure to the benefit of the heirs, executors and
administrators of such a person.
TWELFTH: The Corporation elects not to be governed by Section 203 of the
General Corporation Law of the State of Delaware.
THIRTEENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
4
<PAGE> 5
I, THE UNDERSIGNED, being the incorporator hereinafter named, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Delaware, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts stated herein are true, and
accordingly, have hereunto set my hand on this 5th day of April, 1995.
-------------------------------------
Jill Henderson, Sole Incorporator
5
<PAGE> 1
Exhibit 3.1.2
CERTIFICATE OF AMENDMENT OF
THE CERTIFICATE OF INCORPORATION
OF
DAY INTERNATIONAL GROUP, INC.
(Adopted in accordance with the provisions of Section 241
of the General Corporation Law of the State of Delaware)
Day International Group, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), does hereby
certify:
1. That the Board of Directors of the Corporation by unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable that Article Fourth of the
Certificate of Incorporation of the Corporation be amended, so that as amended
it shall read as follows:
"FOURTH:
A. AUTHORIZED SHARES
The total number of shares of capital stock which the Corporation
has authority to issue is 355,000 shares, consisting of:
(1) 105,000 shares of Preferred Stock, par value $.01 per share
(the "Preferred Stock"); and
(2) 200,000 shares of Class A Voting Common Stock, par value $.01
per share (the "Class A Common Stock"); and
(3) 50,000 shares of Class B Non-Voting Common Stock, par value
$.01 per share (the "Class B Common Stock" and, together with the Class
A Common Stock, the "Common Stock").
<PAGE> 2
a. Common Stock
1. The rights, preferences, privileges and restrictions of the
Class A Common Stock and the Class B Common Stock shall be equal and
identical in all respects except as provided in Section a.3 below and
except to the extent otherwise required by law, the holders of shares
of the Class A Common Stock shall have the exclusive voting rights and
power of the Common Stock, and the holders of shares of the Class B
Common Stock shall not be entitled to vote upon the election of
directors or upon any other matters, provided that the holders of
shares of the Class B Common Stock shall be entitled to notice of, and
to attend, stockholders' meetings.
2. Subject to all of the rights of the Preferred Stock,
dividends may be paid on the Common Stock, as and when declared by the
Board of Directors, out of any funds of the Corporation legally
available for the payment of such dividends.
3. The holders of the Class B Common Stock shall have the
following conversion rights:
(i) Upon the occurrence of any Conversion Event (as
defined herein), each holder of Class B Common Stock shall be
entitled to convert into the same number of shares of Class A
Common Stock any or all of the shares of such holder's Class B
Common Stock being sold, distributed or otherwise disposed of
or converted in connection with the occurrence of such
Conversion Event. For purposes of this Section a. (a) a
"Conversion Event" shall mean any transfer of shares of Class
B Common Stock to any person or persons who are not affiliates
of the transferor, including, without limitation, pursuant to
any public offering or public sale of securities of the
Corporation (including a public offering registered under the
Securities Act of 1933 and a public sale pursuant to Rule 144
under the Securities Act of 1933 or any similar rule then in
force), (b) a "person" shall mean any natural person or any
corporation, partnership, joint venture, trust, unincorporated
organization and any other entity or organization and (c) an
"affiliate," with respect to any person, shall mean such
person's spouse, parents, members of such person's family or
such person's lineal descendants and any other person than
directly, or indirectly thorough one or more intermediaries,
controls, or is controlled by, or is under common control
with, such person.
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<PAGE> 3
(ii) Subject to clause (i), each conversion of shares
of Class B Common Stock into shares of Class A Common Stock at
the option of the holder shall be effected by the surrender of
the certificate or certificates representing the shares to be
converted at the principal office of the Corporation at any
time (including within a reasonable time prior to the
occurrence of any Conversion Event, if necessary to effect the
conversion of shares related thereto, provided, however, that
the holders of such shares will not be entitled to vote on any
matters to be voted on by the Corporation's stockholders
during such interim period, such certificates being deemed to
represent only shares of Class B Common Stock for such
purpose) during normal business hours, together with a written
notice by the holder of such Class B Common Stock stating that
a Conversion Event has occurred or is expected to occur and
that such holder desires to convert the shares, or a stated
number of the shares, of such Class B Common Stock represented
by such certificate or certificates into shares of Class A
Common Stock (and including instructions of issuance of the
Class A Common Stock to be issued upon such conversion). Each
conversion at the option of the holder shall be deemed to have
been effected as of the close of business on the later of (a)
the date on which the Conversion Event has occurred and (b)
the date on which such certificate or certificates have been
surrendered and such notice has been received, and at such
later time the rights of the holder of the converted Class B
Common Stock, as a holder of Class B Common Stock, shall cease
and the person or persons in whose name or names the
certificate or certificates for shares of Class A Common Stock
are to be issued upon such conversion shall be deemed to have
become the holder or holders of record of the shares
represented thereby. Promptly after the Conversion Event has
occurred and the surrender of certificates and the receipt of
written notice, the Corporation shall issue and deliver in
accordance with the surrendering holder's instructions (x) the
certificate or certificates for the shares of Class A Common
Stock issuable upon such conversion and (y) a certificate
representing any shares of Class B Common Stock which were
represented by the certificate or certificates delivered to
the Corporation in connection with such conversion but which
were not converted. If any shares of Class B Common Stock are
converted into shares of Class A Common Stock in connection
with a Conversion Event and such shares of Class A Common
Stock are not actually sold, distributed or otherwise disposed
of so that a Conversion Event does not actually occur, such
shares of Class A Common Stock shall be automatically
converted back into the same number of shares of Class B
Common Stock.
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<PAGE> 4
(iii) The issuance of certificates upon conversion
will be made without charge to the holders of such shares for
any issuance tax in respect thereof or other cost incurred by
the Corporation in connection with such conversion, except
that the holder of any such shares shall be responsible for
the payment of all applicable transfer taxes if the shares of
Class A Common Stock are issued in the name of a person or
persons other than such holder.
(iv) The Corporation shall at all times reserve and
keep available out of its authorized but unissued shares of
Class A Common Stock solely for the purpose of issuance upon
the conversion of the Class B Common Stock such number of
shares of Class A Common Stock issuable upon the conversion of
all outstanding shares of Class B Common Stock. All shares of
Class A Common Stock which are so issuable shall, when issued,
be duly and validly issued, fully paid and non-assessable and
free from all taxes, liens and charges (other than as created
by or through the holder thereof). The Corporation shall take
all such actions as it deems necessary or appropriate to
assure that all such shares of Class A Common Stock may be so
issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities
exchange upon which shares of Class A Common Stock may be
listed.
(v) Except as provided in the last sentence of the
first paragraph of clause (ii), shares of Class B Common Stock
that are converted into shares of Class A Common Stock as
provided herein shall be retired and cancelled and shall not
be reissued.
B. PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in
one or more series. The Board of Directors of the Corporation is hereby
authorized to determine and alter all rights, preferences and
privileges and qualifications, limitations and restrictions thereof
(including, without limitation, voting rights and the limitation and
exclusion thereof) granted to or imposed upon any wholly unissued
series of Preferred Stock and the number of shares constituting any
such series and the designation thereof, and to increase or decrease
(but not below the number of shares of such series then outstanding)
the number of shares of any series subsequent to the issue of shares of
that series then outstanding. In the event that the number of shares of
any series is so decreased, the shares constituting such reduction
shall resume the status which such shares had prior to
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<PAGE> 5
the adoption of the resolution originally fixing the number of shares
of such series."
2. That GSD Acquisition Corp. ("GSD") and the stockholders of
the Corporation other than GSD have each adopted a resolution authorizing the
amendments to the Certificate of Incorporation herein above set forth.
3. That the aforesaid amendment was duly adopted in accordance
with the applicable provisions of Section 241 of the General Corporation Law of
the State of Delaware.
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<PAGE> 6
IN WITNESS WHEREOF, DAY INTERNATIONAL GROUP, INC. has caused
this instrument to be executed for and on its behalf by its President thereunto
duly authorized, and attested by the Assistant Secretary, this day of ,
1998.
DAY INTERNATIONAL GROUP, INC.
By:
------------------------------
Name: Dennis R. Wolters
Title: President and Chief Executive
Officer
ATTEST:
- ------------------------------
Name:
Title:
6
<PAGE> 1
Exhibit 3.1.3
CERTIFICATE OF AMENDMENT OF
THE CERTIFICATE OF INCORPORATION
OF
DAY INTERNATIONAL HOLDINGS, INC.
(Adopted in accordance with the provisions of Section 241
of the General Corporation Law of the State of Delaware)
Day International Holdings, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), does hereby
certify:
1. That the Board of Directors of the Corporation by unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable that Article First of the
Certificate of Incorporation of the Corporation be amended, so that as amended
it shall read as follows:
"FIRST. The name of the corporation (hereinafter referred to as the
"Corporation") is Day International Group, Inc."
2. That the Board of Directors of the Corporation by unanimous
written consent of its members, filed with the minutes of the Board, adopted a
resolution proposing and declaring advisable that Article Fourth of the
Certificate of Incorporation of the Corporation be amended, so that as amended
it shall read as follows:
<PAGE> 2
"FOURTH:
A. AUTHORIZED SHARES
The total number of shares of capital stock which the Corporation
has authority to issue is 110,000 shares, consisting of:
(1) 10,000 shares of Preferred Stock, par value $.01 per share (the
"Preferred Stock"), and
(2) 100,000 shares of Common Stock, par value $.01 per share (the
"Common Stock").
B. PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or
more series. The Board of Directors of the Corporation is hereby
authorized to determine and alter all rights, preferences and privileges
and qualifications, limitations and restrictions thereof (including,
without limitation, voting rights and the limitation and exclusion
thereof) granted to or imposed upon any wholly unissued series of
Preferred Stock and the number of shares constituting any such series and
the designation thereof, and to increase or decrease (but not below the
number of shares of such series then outstanding) the number of shares of
any series subsequent to the issue of shares of that series then
outstanding. In the event that the number of shares of any series is so
decreased, the shares constituting such reduction shall resume the status
which such shares had prior to the adoption of the resolution originally
fixing the number of shares of such series."
3. That the sold stockholder of the Corporation has adopted a
resolution authorizing the amendments to the Certificate of Incorporation herein
above set forth.
4. That the aforesaid amendment was duly adopted in accordance with
the applicable provisions of Section 241 of the General Corporation Law of the
State of Delaware.
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<PAGE> 3
IN WITNESS WHEREOF, this Certificate of Amendment of the Certificate of
Incorporation has been signed by the members of the Board of Directors this ___
day of May, 1995.
___________________________________
W. Richard Bingham, Director
___________________________________
Theodore C. Rogers, Director
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<PAGE> 1
Exhibit 3.2
BYLAWS
OF
DAY INTERNATIONAL HOLDINGS, INC.
(A Delaware corporation)
ARTICLE I - OFFICES
Section 1. Registered Office. The registered office in the State of
Delaware shall be at 1209 Orange Street, in the City of Wilmington, County of
Castle. The name of the corporation's registered agent at such address shall be
The Corporation Trust Company. The registered office or registered agent of the
corporation may be changed from time to time by action of the board of directors
on the filing of a certificate or certificates as required by law.
Section 2. Other Offices. The corporation may also have offices at
such other places, both within and without the State of Delaware, as the board
of directors may from time to time determine or the business of the corporation
may require.
ARTICLE II - MEETINGS OF STOCKHOLDERS
Section 1. Place and Time of Meetings. An annual meeting of the
stockholders shall be held each year beginning in the year 1996, prior to the
last day of May or at such other time as the board of directors shall decide. At
such meeting, the stockholders shall elect the directors of the corporation and
conduct such other business as may come before the meeting. The time and place
of the annual meeting shall be determined by the board of directors. Special
meetings of the stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof. Special meetings
of the stockholders may be called by the president for any purpose and shall be
called by the secretary if directed by the board of directors.
Section 2. Notice. Whenever stockholders are required or permitted
to take action at a meeting, written or printed notice of every annual or
special meeting of the stockholders, stating the place, date, time, and, in the
case of special meetings, the
<PAGE> 2
purpose or purposes, of such meeting, shall be given to each stockholder
entitled to vote at such meeting not less than 10 nor more than 60 days before
the date of the meeting. All such notices shall be delivered, either personally
or by mail, by or at the direction of the board of directors, the president or
the secretary, and if mailed, such notice shall be deemed to be delivered when
deposited in the United States mail with postage prepaid and addressed to the
stockholder at his or her address as it appears on the records of the
corporation.
Section 3. Stockholders List. The officer having charge of the stock
ledger of the corporation shall make, at least 10 days before every meeting of
the stockholders, a complete list arranged in alphabetical order of the
stockholders entitled to vote at such meeting, specifying the address of and the
number of shares registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least 10 days prior
to the meeting, either at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
Section 4. Quorum. The holders of a majority of the outstanding
shares of capital stock entitled to vote thereat, whether present in person or
represented by proxy, shall constitute a quorum at all meetings of the
stockholders, except as otherwise provided by statute or by the certificate of
incorporation. If a quorum is not present, the holders of the shares present in
person or represented by proxy at the meeting and entitled to vote thereat shall
have the power, by the affirmative vote of the holders of a majority of such
shares, to adjourn the meeting to another time or place. Unless the adjournment
is for more than thirty days or unless a new record date is set for the
adjourned meeting, no notice of the adjourned meeting need be given to any
stockholder, provided that the time and place of the adjourned meeting were
announced at the meeting at which the adjournment was taken. At the adjourned
meeting, the corporation may transact any business which might have been
transacted at the original meeting.
Section 5. Vote Required. When a quorum is present or represented by
proxy at any meeting, the vote of the holders of a majority of the shares
present in person or represented by proxy at the meeting and entitled to vote on
the subject matter shall be the act of the stockholders, unless the question is
one upon which by express provisions of an applicable statute or of the
certificate of incorporation a different vote is required, in which case such
express provision shall govern and control the decision of such question.
2
<PAGE> 3
Section 6. Voting Rights. Except as otherwise provided by the
Delaware General Corporation Law or by the certificate of incorporation of the
corporation or any amendments thereto and subject to Section 3 of Article VI
hereof, each stockholder shall at every meeting of the stockholders be entitled
to one vote in person or by proxy for each share of capital stock held by such
stockholder.
Section 7. Proxies. Each stockholder entitled to vote at a meeting
of stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him or her
by proxy, but no such proxy shall be voted or acted upon after three years from
its date, unless the proxy provides for a longer period.
Section 8. Action by Written Consent. Any action required to be
taken at any annual or special meeting of stockholders of the corporation, or
any action which may be taken at any annual or special meeting of such
stockholders, may be taken without a meeting, without prior notice and without a
vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted, and
shall be delivered to the corporation by delivery to its registered office in
the State of Delaware or the corporation's principal place of business or an
officer or agent of the corporation having custody of the books in which
proceedings of meetings are recorded. All consents delivered in accordance with
this section shall be deemed to be recorded when so delivered. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the earliest date consent delivered to the
corporation as required by this section, written consents signed by the holders
of a sufficient number of shares to take such corporate action are recorded.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing. Any action taken pursuant to such written consent of the
stockholders shall have the same force and effect as if taken by the
stockholders at a meeting thereof.
ARTICLE III - DIRECTORS
Section 1. Number, Election and Term of Office. The board of
directors shall not be less than one (1) nor more than ten (10) in number. The
initial board of directors shall consist of two persons. Thereafter, the number
of directors shall be established from time to time by resolution of the board
of directors, provided, however,
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that no vote to decrease the number of the directors of the corporation shall
shorten the term of any incumbent director.
The directors shall be elected at the annual meeting of
stockholders, except as provided in Section 3 of this Article III, and each
director elected shall hold office until the next annual meeting of stockholders
and until a successor is duly elected and qualified or until his or her death,
resignation or removal as hereinafter provided.
Section 2. Removal and Resignation. Any director or the entire board
of directors may be removed at any time, with or without cause, by the holders
of a majority of the shares of stock of the corporation then entitled to vote at
an election of directors, except as otherwise provided by statute. Any director
may resign at any time upon written notice to the corporation.
Section 3. Vacancies. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office though less than a quorum, and
each director so chosen shall hold office until the next annual meeting of
stockholders and until a successor is duly elected and qualified or until his or
her earlier death, resignation or removal as hereinafter provided.
Section 4. Annual Meetings. The annual meeting of each newly elected
board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of stockholders.
Section 5. Other Meetings and Notice. Regular meetings, other than
the annual meeting, of the board of directors may be held without notice at such
time and at such place as shall from time to time be determined by resolution of
the board. Special meetings of the board of directors may be called by or at the
request of the president on at least 24 hours notice to each director, either
personally, by telephone, by mail, or by telegraph; in like manner and on like
notice the secretary must call a special meeting on the written request of a
majority of directors.
Section 6. Quorum. A majority of the total number of directors shall
constitute a quorum for the transaction of business. The vote of a majority of
directors present at a meeting at which a quorum is present shall be the act of
the board of directors. If a quorum shall not be present at any meeting of the
board of directors, the directors present thereat may adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present.
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<PAGE> 5
Section 7. Committees. The board of directors may, by resolution
passed by a majority of the whole board, designate one or more committees. Each
committee shall consist of one or more of the directors of the corporation,
which, to the extent provided in such resolution and not otherwise limited by
statute, shall have and may exercise the powers of the board of directors in the
management and affairs of the corporation including without limitation the power
to declare a dividend and to authorize the issuance of stock. The board of
directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. Such committee or committees shall have such name or names as may
be determined from time to time by resolution adopted by the board of directors.
Each committee shall keep regular minutes of its meetings and report the same to
the directors when required.
Section 8. Committee Rules. Each committee of the board of directors
may fix its own rules of procedure and shall hold its meetings as provided by
such rules, except as may otherwise be provided by the resolution of the board
of directors designating such committee, but in all cases the presence of at
least a majority of the members of such committee shall be necessary to
constitute a quorum. In the event that a member and that member's alternate, if
alternates are designated by the board of directors as provided in Section 7 of
this Article III, of such committee is/are absent or disqualified, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not such member or members constitute a quorum, may unanimously appoint
another member of the board of directors to act at the meeting in place of any
such absent or disqualified member.
Section 9. Communications Equipment. Members of the board of
directors or any committee thereof may participate in and act at any meeting of
such board or committee through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in the meeting pursuant to this
section shall constitute presence in person at the meeting.
Section 10. Action by Written Consent. Any action required or
permitted to be taken at any meeting of the board of directors, or of any
committee thereof, may be taken without a meeting if all members of the board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of the proceedings of the board of directors
or committee.
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<PAGE> 6
ARTICLE IV - OFFICERS
Section 1. Number. The officers of the corporation shall be elected
by the board of directors and shall consist of a president, one or more
vice-presidents, a secretary, a treasurer, and such other officers and assistant
officers as may be deemed necessary or desirable by the board of directors. Any
number of offices may be held by the same person. In its discretion, the board
of directors may choose not to fill any office for any period as it may deem
advisable, except the offices of president and secretary.
Section 2. Election and Term of Office. The officers of the
corporation shall be elected annually by the board of directors at the meeting
of the board of directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices created and filled at any meeting of the board of directors. Each
officer shall hold office until the next annual meeting of the board of
directors and until a successor is duly elected and qualified or until his or
her earlier death, resignation or removal as hereinafter provided.
Section 3. Removal. Any officer or agent elected by the board of
directors may be removed by the board of directors whenever in its judgment the
best interest of the corporation would be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the board
of directors for the unexpired portion of the term by the board of directors
then in office.
Section 5. Compensation. Compensation of all officers shall be fixed
by the board of directors, and no officer shall be prevented from receiving such
compensation by virtue of the fact that he or she is also a director of the
corporation.
Section 6. The President. The president shall be the chief executive
officer of the corporation, shall preside at all meetings of the board of
directors and all meetings of the stockholders and shall have such other powers
and perform such duties as are specified in these bylaws and as may from time to
time be assigned to him by the board of directors. In the event there is a
deadlock among directors, the president shall be empowered to cast the deciding
vote.
The president shall have general and active management of the
business of the corporation and shall see that all orders and resolutions of the
board of directors are
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<PAGE> 7
carried into effect. The president shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation. The
president shall have general powers of supervision and shall be the final
arbitrator of all differences between officers of the corporation, and such
decision as to any matter affecting the corporation subject only to the board of
directors.
Section 7. Vice Presidents. The vice-president, or if there shall be
more than one, the vice-presidents in the order determined by the board of
directors, shall, in the absence or disability of the president, perform the
duties and exercise the powers of the president and shall perform such other
duties and have such other powers as the board of directors may, from time to
time, determine or these bylaws may prescribe.
Section 8. The Secretary and Assistant Secretaries. The secretary
shall attend all meetings of the board of directors and all meetings of the
stockholders and record all the proceedings of the meetings of the corporation
and the board of directors in a book to be kept for that purpose and shall
perform like duties for the standing committees when required. The secretary
shall give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the board of directors; perform such other duties as may be
prescribed by the board of directors or president, under whose supervision he or
she shall be; shall have custody of the corporate seal of the corporation and
the secretary, or an assistant secretary, shall have authority to affix the same
to any instrument requiring it and when so affixed, it may be attested by his or
her signature or by the signature of such assistant secretary. The board of
directors may give general authority to any other officer to affix the seal of
the corporation and to attest the affixing by his or her signature. The
assistant secretary, or if there be more than one, the assistant secretaries in
the order determined by the board of directors, shall, in the absence or
disability of the secretary, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
Section 9. The Treasurer and Assistant Treasurer. The treasurer
shall have the custody of the corporate funds and securities; shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
corporation; shall deposit all monies and other valuable effects in the name and
to the credit of the corporation as may be ordered by the board of directors,
taking proper vouchers for such disbursements; and shall render to the president
and the board of directors, at its regular meeting or when the board of
directors so requires, an account of the corporation. If required by the board
of directors, the treasurer shall give the corporation a bond (which shall be
rendered every
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<PAGE> 8
six years) in such sums and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of the office of treasurer and for the restoration to the corporation, in
case of death, resignation, retirement, or removal from office, of all books,
papers, vouchers, money, and other property of whatever kind in the possession
or under the control of the treasurer belonging to the corporation. The
assistant treasurer, or if there shall be more than one, the assistant
treasurers in the order determined by the board of directors, shall in the
absence or disability of the treasurer, perform the duties and exercise the
powers of the treasurer and shall perform such other duties and have such other
powers as the board of directors may from time to time prescribe.
Section 10. Other Officers, Assistant Officers and Agents. Officers,
assistant officers and agents, if any, other than those whose duties are
provided for in these bylaws, shall have such authority and perform such duties
as may from time to time be prescribed by resolution of the board of directors.
ARTICLE V - INDEMNIFICATION OF OFFICERS, DIRECTORS AND OTHERS
Section 1. Each person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he or she is
or was a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer, employee, or
agent of another corporation, partnership, joint venture, trust or other
enterprise shall be indemnified and held harmless by the corporation to the
fullest extent which it is empowered to do so by the Delaware General
Corporation Law against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
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Section 2. The corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to procure a
judgment in its favor by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees) actually and reasonably incurred by him or
her in connection with the defense or settlement of such action or suit if he or
she acted in good faith and in a manner he or she reasonably believed to be in
or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnify for such expenses which the court
shall deem proper.
Section 3. To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in Sections 1 and 2 of this Article V
or in defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her in connection therewith.
Section 4. Any indemnification under Sections 1 and 2 of this
Article V (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
or she has met the applicable standard of conduct set forth in Sections 1 and 2
of this Article V. Such determination shall be made (1) by the board of
directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.
Section 5. Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of the director, officer, employee, or agent to
create an obligation to repay such amount if it shall ultimately be determined
that he or she is not entitled to be indemnified by the corporation as
authorized in this Article V.
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Section 6. The indemnification and advancement of expenses provided
by or granted pursuant to the other sections of this Article V shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any other bylaw, agreement, vote
of stockholders, of disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office.
Section 7. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him or her and incurred by him or her in any such capacity, or arising out of
his or her status as such, whether or not the corporation would have the power
to indemnify him or her against such liability under the provisions of this
Article V.
Section 8. For the purposes of this Article V, references to "the
corporation" shall include, in addition to the resulting corporation, any
constituent corporation (including any constituent of a constituent) absorbed in
a consolidation or merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees and
agents so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise shall stand
in the same position under the provisions of this Article V with respect to the
resulting or surviving corporation as he or she would have with respect to such
constituent corporation if its separate existence had continued.
Section 9. For purposes of this Article V, references to "other
enterprises" shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; and references to "serving at the request of the corporation"
shall include any service as a director, officer, employee or agent of the
corporation which imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee benefit plan, its
participants, or beneficiaries; and a person who acted in good faith and in a
manner he reasonably believed to be in the interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation" as referred to in
this Article V.
10
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Section 10. The indemnification and advancement of expenses provided
by, or granted pursuant to this Article V shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
ARTICLE VI - CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the corporation shall be
entitled to have a certificate, signed by, or in the name of the corporation by
the president or a vice-president, and the secretary or an assistant secretary
of the corporation, certifying the number of shares owned by him or her in the
corporation. Where a certificate is signed (1) by a transfer agent or an
assistant transfer agent other than the corporation or its employee or (2) by a
registrar, other than the corporation or its employee, the signature of any such
president, vice-president, secretary, or assistant secretary may be facsimile.
In case any officer or officers have signed a certificate or certificates, or
whose facsimile signature or signatures have been used on certificate or
certificates, shall cease to be such officer or officers of the corporation
whether because of death, resignation or otherwise before such certificate or
certificates have been delivered by the corporation, such certificate or
certificates may nevertheless be issued and delivered as though the person or
persons who signed such certificate or certificates or whose facsimile signature
or signatures have been used on such certificate or certificates had not ceased
to be such officer or officers of the corporation. All certificates for shares
shall be consecutively numbered or otherwise identified. The name of the person
to whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the books of the corporation. All
certificates surrendered to the corporation for transfer shall be cancelled, and
no new certificate shall be issued in replacement until the former certificate
for a like number of shares shall have been surrendered or cancelled, except as
otherwise provided in Section 2 with respect to lost, stolen or destroyed
certificates.
Section 2. Lost Certificates. The board of directors may direct a
new certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen, or destroyed. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen, or destroyed certificate or
certificates, or his or her legal representative, to give the corporation a bond
in such sum as it may direct as
11
<PAGE> 12
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
Section 3. Fixing a Record Date. The board of directors may fix in
advance a record date for the determination of stockholders entitled to notice
of, and to vote at, any meeting of stockholders and any adjournment thereof;
stockholders entitled to consent to corporate action in writing without a
meeting; stockholders entitled to receive payment of any dividend or other
distribution or allotment of rights or entitled to exercise any rights in
respect to any change, conversion or exchange of stock; or, for the purpose of
any other lawful action, which record date may not precede the date on which the
resolution fixing such record date is adopted by the board of directors. The
record date for the determination of stockholders entitled to notice of, and to
vote at, a meeting of stockholders shall not be more than sixty (60) days nor
less than ten (10) days before the date of such meeting. The record date for the
determination of stockholders entitled to consent to corporate action in writing
without a meeting shall not be more than ten (10) days after the date upon which
the resolution fixing the record date is adopted by the board of directors. The
record date for the determination of stockholders with respect to any other
action shall not be more than sixty (60) days before the date of such action. If
no record date is fixed: the record date for determining stockholders entitled
to notice of, and to vote at, a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held; the record date for determining stockholders entitled
to consent to corporate action in writing without a meeting when no prior action
by the board of directors is required by the Delaware General Corporation Law,
shall be the first date on which a signed written consent setting forth the
action taken or proposed to be taken is delivered to the corporation by delivery
to its registered office in the State of Delaware, its principal place of
business, or an officer or agent of the corporation having custody of the book
in which proceedings of meetings of stockholders are recorded; and, the record
date for determining stockholders with respect to any other action shall be the
close of business on the day on which the board of directors adopts the
resolution relating thereto.
ARTICLE VII - GENERAL PROVISIONS
Section 1. Dividends. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the certificate of
incorporation. Before payment of any dividend, there may be set aside out
12
<PAGE> 13
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, equalize dividends, repair or
maintain any property of the corporation, or for any other purpose, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
Section 2. Checks, Drafts or Orders. All checks, drafts, or other
orders for the payment of money by or to the corporation and all notes and other
evidences of indebtedness issued in the name of the corporation shall be signed
by such officer or officers, agent or agents of the corporation, and in such
manner, as shall be determined by resolution of the board of directors or a duly
authorized committee thereof.
Section 3. Contracts. The board of directors may authorize any
officer or officers, or any agent or agents, of the corporation to enter into
any contract or to execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or confined to
specific instances.
Section 4. Loans. The corporation may lend money to, or guarantee
any obligation of, or otherwise assist any officer or other employee of the
corporation or of its subsidiary, including any officer or employee who is a
director of the corporation or its subsidiary, whenever, in the judgment of the
directors, such loan, guaranty or assistance may reasonably be expected to
benefit the corporation. The loan, guaranty or other assistance may be with or
without interest, and may be unsecured, or secured in such manner as the board
of directors shall approve, including, without limitation, a pledge of shares of
stock of the corporation. Nothing contained in this section shall be deemed to
deny, limit or restrict the powers of guaranty or warranty of the corporation at
common law or under any statute.
Section 5. Fiscal Year. The fiscal year of the corporation shall be
fixed by resolution of the board of directors.
Section 6. Corporate Seal. The board of directors shall provide a
corporate seal which shall be in the form of a circle and shall have inscribed
thereon the name of the corporation and the words "Corporate Seal, Delaware."
The seal may be used by causing it or a facsimile thereof to be impressed or
affixed or reproduced or otherwise.
Section 7. Voting Securities Owned by Corporation. Voting securities
in any other corporation held by the corporation shall be voted by the president
or the vice president, unless the board of directors specifically confers
authority to vote with respect
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thereto, upon some other person or officer. Any person authorized to vote
securities shall have the power to appoint proxies, with general power of
substitution.
Section 8. Inspection of Books and Records. Any stockholder of
record, in person or by attorney or other agent, shall, upon written demand upon
oath stating the purpose thereof, have the right during the usual hours of
business to inspect for any proper purpose the corporation's stock ledger, a
list of its stockholders, and its other books and records, and to make copies or
extracts therefrom. A proper purpose shall mean any purpose reasonably related
to such person's interest as a stockholder. In every instance where an attorney
or other agent shall be the person who seeks the right to inspection, the demand
under oath shall be accompanied by a power of attorney or such other writing
which authorizes the attorney or other agent to so act on behalf of the
stockholder. The demand under oath shall be directed to the corporation at its
registered office in the State of Delaware or at its principal place of
business.
Section 9. Section Headings. Section headings in these bylaws are
for convenience of reference only and shall not be given any substantive effect
in limiting or otherwise construing any provision herein.
Section 10. Inconsistent Provisions. In the event that any provision
of these bylaws is or becomes inconsistent with any provision of the certificate
of incorporation, the Delaware General Corporation Law or any other applicable
law, the provision of these bylaws shall not be given any effect to the extent
of such inconsistency but shall otherwise be given full force and effect.
ARTICLE VIII - AMENDMENTS
These bylaws may be amended, altered or repealed and new bylaws
adopted at any meeting of the board of directors by a majority vote. The fact
that the power to adopt, amend, alter or repeal the bylaws has been conferred
upon the board of directors shall not divest the stockholders of the same
powers.
14
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Exhibit 4.1
DAY INTERNATIONAL GROUP, INC.
AS ISSUER
DAY INTERNATIONAL, INC.
AS GUARANTOR
$100,000,000
11 1/8% SENIOR SUBORDINATED NOTES
DUE JUNE 1, 2005
------------------------------------
INDENTURE
DATED AS OF JUNE 6, 1995
------------------------------------
AMERICAN BANK NATIONAL ASSOCIATION
TRUSTEE
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
<S> <C> <C>
Section 1.1 Definitions.....................................................1
Section 1.2 Other Definitions..............................................20
Section 1.3 Incorporation by Reference of Trust Indenture Act..............21
Section 1.4 Rules of Construction..........................................21
ARTICLE 2
THE NOTES
Section 2.1 Form and Dating................................................22
Section 2.2 Execution and Authentication...................................22
Section 2.3 Registrar and Paying Agent.....................................23
Section 2.4 Paying Agent to Hold Money in Trust............................23
Section 2.5 Holder Lists...................................................24
Section 2.6 Transfer and Exchange..........................................24
Section 2.7 Replacement Notes..............................................29
Section 2.8 Outstanding Notes..............................................30
Section 2.9 Treasury Notes.................................................30
Section 2.10 Temporary Notes................................................30
Section 2.11 Cancellation...................................................31
Section 2.12 Defaulted Interest.............................................31
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1 Notices to Trustee.............................................32
Section 3.2 Selection of Notes to be Redeemed..............................32
Section 3.3 Notice of Redemption...........................................32
Section 3.4 Effect of Notice of Redemption.................................33
Section 3.5 Deposit of Redemption Price....................................33
Section 3.6 Notes Redeemed In Part.........................................34
Section 3.7 Optional Redemption............................................34
Section 3.8 No Mandatory Redemption........................................35
</TABLE>
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<TABLE>
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ARTICLE 4
COVENANTS
<S> <C> <C>
Section 4.1 Payment of Notes......................................................35
Section 4.2 Maintenance of Office or Agency.......................................35
Section 4.3 Reports...............................................................36
Section 4.4 Compliance Certificate................................................36
Section 4.5 Taxes.................................................................37
Section 4.6 Stay, Extension and Usury Laws........................................37
Section 4.7 Change of Control.....................................................38
Section 4.8 Asset Sales...........................................................38
Section 4.9 Restricted Payments...................................................42
Section 4.10 Incurrence of Indebtedness and Issuance of Preferred Stock............45
Section 4.11 Liens.................................................................48
Section 4.12 Dividend and Other Payment Restrictions Affecting Subsidiaries........48
Section 4.13 Limitation on Layering Debt...........................................49
Section 4.14 Transactions with Affiliates..........................................49
Section 4.15 Additional Subsidiary Guarantees......................................50
Section 4.16 Corporate Existence...................................................50
ARTICLE 5
SUCCESSORS
Section 5.1 Merger, Consolidation, or Sale of Assets..............................50
Section 5.2 Successor Corporation Substituted.....................................51
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default.....................................................52
Section 6.2 Acceleration..........................................................54
Section 6.3 Other Remedies........................................................54
Section 6.4 Waiver of Past Defaults...............................................55
Section 6.5 Control by Majority...................................................55
Section 6.6 Limitation on Suits...................................................55
Section 6.7 Rights of Holders of Notes to Receive Payments........................56
Section 6.8 Collection Suit by Trustee............................................56
</TABLE>
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<TABLE>
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Section 6.9 Trustee May File Proofs of Claim......................................56
Section 6.10 Priorities............................................................57
Section 6.11 Undertaking for Costs.................................................57
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee.....................................................58
Section 7.2 Rights of Trustee.....................................................59
Section 7.3 Individual Rights of Trustee..........................................60
Section 7.4 Trustee's Disclaimer..................................................60
Section 7.5 Notice of Defaults....................................................60
Section 7.6 Reports by Trustee to Holders of the Notes............................61
Section 7.7 Compensation and Indemnity............................................61
Section 7.8 Replacement of Trustee................................................62
Section 7.9 Successor Trustee by Merger, etc......................................63
Section 7.10 Eligibility; Disqualification.........................................63
Section 7.11 Preferential Collection of Claims Against Company.....................63
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant Defeasance..............64
Section 8.2 Legal Defeasance and Discharge........................................64
Section 8.3 Covenant Defeasance...................................................64
Section 8.4 Conditions to Legal or Covenant Defeasance............................65
Section 8.5 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.................................66
Section 8.6 Repayment to Company..................................................67
Section 8.7 Reinstatement.........................................................68
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes...................................68
Section 9.2 With Consent of Holders of Notes......................................69
Section 9.3 Compliance with Trust Indenture Act...................................70
Section 9.4 Revocation and Effect of Consents.....................................70
</TABLE>
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<TABLE>
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Section 9.5 Notation on or Exchange of Notes......................................71
Section 9.6 Trustee to Sign Amendments, etc.......................................71
ARTICLE 10
SUBORDINATION
Section 10.1 Agreement to Subordinate..............................................71
Section 10.2 Liquidation; Dissolution; Bankruptcy..................................71
Section 10.3 Default on Designated Senior Indebtedness.............................72
Section 10.4 Acceleration of Notes.................................................73
Section 10.5 When Distribution Must Be Paid Over...................................73
Section 10.6 Notice by Company.....................................................74
Section 10.7 Subrogation...........................................................74
Section 10.8 Relative Rights.......................................................74
Section 10.9 Subordination May Not Be Impaired by Company..........................75
Section 10.10 Distribution or Notice to Representative..............................75
Section 10.11 Rights of Trustee and Paying Agent....................................75
Section 10.12 Authorization to Effect Subordination.................................75
Section 10.13 Amendments............................................................76
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.1 Subsidiary Guarantees.................................................76
Section 11.2 Execution and Delivery of Subsidiary Guarantees.......................78
Section 11.3 Guarantors May Consolidate, etc., on Certain Terms....................78
Section 11.4 Releases Following Sale of Assets.....................................79
Section 11.5 Limitation of Guarantor's Liability...................................80
Section 11.6 Application of Certain Terms and Provisions to the Guarantor..........80
Section 11.7 Subordination of Subsidiary Guarantees................................81
ARTICLE 12
MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls..........................................81
Section 12.2 Notices...............................................................81
Section 12.5 Statements Required in Certificate of Opinion.........................82
Section 12.6 Rules by Trustee and Agents...........................................83
</TABLE>
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<PAGE> 6
<TABLE>
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<S> <C> <C>
Section 12.7 No Personal Liability of Directors, Officers, Employees and
Stockholders..........................................................83
Section 12.8 GOVERNING LAW.........................................................83
Section 12.9 No Adverse Interpretation of Other Agreements.........................83
Section 12.10 Successors............................................................83
Section 12.11 Severability..........................................................83
Section 12.12 Counterpart Originals.................................................83
Section 12.13 Table of Contents, Headings, etc......................................84
</TABLE>
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INDENTURE dated as of June 6, 1995, among Day International
Group, Inc., a Delaware corporation (the "Company"), Day International, Inc., a
Delaware corporation (the "Guarantor"), and American Bank National Association,
as trustee (the "Trustee").
Each party agrees as follows for the benefit of each other and
for the equal and ratable benefit of the Holders of the 11 1/8% Series A Senior
Subordinated Notes due 2005 (the "Series A Notes") and the 11 1/8% Series B
Senior Subordinated Notes due 2005 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
"Acquired Indebtedness" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified Person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person.
"Acquisition Agreement" means, collectively, the Stock Purchase
Agreement, dated April 11, 1995, as amended on or prior to the date of the
Indenture, among the Company, M.A. Hanna Company and Cadillac Plastic Group,
Inc., the Share Purchase Agreement, dated April 11, 1995, as amended on or prior
to the date of the Indenture, between the Company and Cadillac Plastic Limited,
and the Asset Purchase Agreement, dated April 11, 1995, between Day
International (Canada) Limited and the Company.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For purposes of this definition,
"control" (including, with correlative meanings, the term "controlling,"
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by
<PAGE> 8
agreement or otherwise; provided that beneficial ownership of 10% or more of the
voting securities of a Person shall be deemed to be control. Notwithstanding the
foregoing, (a) the limited partners in AIP shall not be deemed to be Affiliates
of AIP solely by reason of their investment in such funds and (b) no Person
(other than the Company or any Subsidiary of the Company) in whom a Receivables
Subsidiary makes an Investment in connection with a Qualified Receivables
Transaction shall be deemed to be an Affiliate of the Company or any of its
Subsidiaries solely by reason of such Investment.
"Agent" means any Registrar, Paying Agent or co-registrar.
"AIP" means, collectively, American Industrial Partners Capital
Fund, L.P., a Delaware limited partnership, and American Industrial Partners
Capital Fund II, L.P., a Delaware limited partnership.
"Asset Sale" means (i) the sale, lease, conveyance or other
disposition that does not constitute a Restricted Payment or an Investment by
such person of any of its non-cash assets (including, without limitation, by way
of a sale and leaseback and including the issuance, sale or other transfer of
any of the capital stock of any Subsidiary of such person) other than to the
Company or to any of its Wholly Owned Subsidiaries that is a Guarantor
(including the receipt of proceeds of insurance paid on account of the loss of
or damage to any asset and awards of compensation for any asset taken by
condemnation, eminent domain or similar proceeding, and including the receipt of
proceeds of business interruption insurance); and (ii) the issuance of Equity
Interests in any Subsidiaries or the sale of any Equity Interests in any
Subsidiaries, in each case, in one or a series of related transactions,
provided, that notwithstanding the foregoing, the term "Asset Sale" shall not
include: (a) the sale, lease, conveyance, disposition or other transfer of all
or substantially all of the assets of the Company, as permitted pursuant to
Section 5.1 hereof, (b) the sale or lease of equipment, inventory, accounts
receivable or other assets in the ordinary course of business consistent with
past practice, (c) a transfer of assets by the Company to a Wholly Owned
Subsidiary that is a Guarantor or by a Wholly Owned Subsidiary to the Company or
to another Wholly Owned Subsidiary that is a Guarantor or by a Wholly Owned
Subsidiary that is not a Guarantor to another Wholly Owned Subsidiary that is
not a Guarantor, (d) an issuance of Equity Interests by a Wholly Owned
Subsidiary to the Company or to another Wholly Owned Subsidiary that is a
Guarantor, or by a Wholly Owned Subsidiary that is not a Guarantor to another
Wholly Owned Subsidiary that is not a Guarantor, (e) the surrender or waiver of
contract rights or the settlement, release or surrender of contract, tort or
other claims of any kind, (f) the grant in the ordinary course of business of
any non-exclusive license of patents, trademarks, registrations
2
<PAGE> 9
therefor and other similar intellectual property, (g) sales of accounts
receivable and related assets of the type specified in the definition of
"Qualified Receivables Transaction" to a Receivables Subsidiary for the fair
market value thereof, including cash in an amount at least equal to 75% of the
book value thereof as determined in accordance with GAAP, (h) Permitted
Investments, or (i) transfers of accounts receivable and related assets of the
type specified in the definition of "Qualified Receivables Transaction" (or a
fractional undivided interest therein) by a Receivables Subsidiary in a
Qualified Receivables Transaction. For the purposes of clause (i), notes
received in exchange for the transfer of accounts receivable and related assets
shall be deemed cash if the Receivables Subsidiary or other payor is required to
repay said notes as soon as practicable from available cash collections less
amounts required to be established as reserves pursuant to contractual
agreements with entities that are not Affiliates of the Company entered into as
part of a Qualified Receivables Transaction.
"Board of Directors" means the Board of Directors of the Company,
or any authorized committee of the Board of Directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital lease
that would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (iii) in the case of a partnership, partnership
interests (whether general or limited) and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities not more than twelve
months from the date of acquisition, (b) U.S. dollar denominated (or foreign
currency fully hedged) time deposits, certificates of deposit, Eurodollar time
deposits or Eurodollar certificates of deposit of (i) any domestic commercial
bank of recognized standing having capital and surplus in excess of $100,000,000
or (ii) any bank whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof or from Moody's is at least P-1 or
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<PAGE> 10
the equivalent thereof (any such bank being an "Approved Lender"), in each case
with maturities of not more than twelve months from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Lender
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-2 (or the equivalent thereof) or
better by S&P or P-2 (or the equivalent thereof) or better by Moody's and
maturing within twelve months of the date of acquisition, (d) repurchase
agreements with a bank or trust company or recognized securities dealer having
capital and surplus in excess of $100,000,000 for direct obligations issued by
or fully guaranteed by the United States of America in with the Company shall
have a perfected first priority security interest (subject to no other Liens)
and having, on the date of purchase thereof, a fair market value of at least
100% of the amount of repurchase obligations, and (e) interests in money market
mutual funds which invest solely in assets or securities of the type described
in subparagraph (a), (b), (c) or (d) hereof.
"Cash Retention Notes" means the promissory notes issued by the
Company or its Subsidiaries pursuant to Section 2.3 of the Share Purchase
Agreement, dated April 11, 1995, as amended on or before the date of this
Indenture, between the Company and Cadillac Plastic Limited.
"Change of Control" means such time as (i) prior to the initial
public offering by the Company of its common stock (other than a public offering
pursuant to a registration statement on Form S-8), AIP and its Affiliates
(collectively, the "Initial Investors") cease to be, directly or indirectly, the
beneficial owners, in the aggregate of at least 51% of the voting power of the
voting common stock of the Company or (ii) after the initial public offering by
the Company of its common stock (other than a public offering pursuant to a
registration statement on Form S-8), (A) any Schedule 13D, Form 13F or Schedule
13G under the Exchange Act, or any amendment to such Schedule or Form, is
received by the Company which indicates that, or the Company otherwise becomes
aware that, a "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) has become, directly or indirectly, the
"beneficial owner," by way of merger, consolidation or otherwise, of 35% or more
of the voting power of the voting capital stock of the Company and (B) such
person or group has become, directly or indirectly, the beneficial owner of a
greater percentage of the voting capital stock of the Company than beneficially
owned by the Initial Investors, or (iii) the sale, lease or transfer of all or
substantially all of the assets of the Company to any person or group (other
than the Initial Investors or their Related Parties (as defined below)), or (iv)
during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by the
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<PAGE> 11
Board of Directors of the Company, as the case may be, or whose nomination for
election by the shareholders of the Company, as the case may be, was approved by
a vote of a majority of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) ceases for any reason to constitute a
majority of the directors of the Company, as the case may be, then in office,
"Related Party" with respect to any Initial Investor means (A) any controlling
stockholder, 80% (or more) owned Subsidiary, or spouse, or immediate family
member (in the case of any individual) of such Initial Investor or (B) trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or persons beneficially holding an 80% or more controlling
interest of which consist of such Initial Investor and/or such other persons
referred to in the immediately preceding clause (A).
"Consolidated EBITDA" means, with respect to the Company and its
Subsidiaries for any period, the sum of, without duplication, (i) the
Consolidated Net Income for such period, plus (ii) the Fixed Charges for such
period, plus (iii) provision for taxes based on income or profits for such
period (to the extent such income or profits were included in computing
Consolidated Net Income for such period), plus (iv) consolidated depreciation,
amortization and other non-cash charges of the Company and its Subsidiaries
required to be reflected as expenses on the books and records of the Company,
minus (v) cash payments with respect to any non-recurring, non-cash charges
previously added back pursuant to clause (iv), and (vi) excluding the impact of
foreign Currency translations. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and other non-cash charges of, a Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated EBITDA only to the extent (and
in the same proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and only if a
corresponding amount would be permitted at the date of determination to be
dividended to the Company by such Subsidiary without prior approval (that has
not been obtained), pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for
any period, the aggregate of the Net Income of such Person and its Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not a
Subsidiary or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions paid in
cash to the referent Person or a Wholly Owned Subsidiary thereof that is a
Guarantor, (ii) the Net Income of any Subsidiary
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<PAGE> 12
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded, (iv) the
cumulative effect of a change in accounting principles shall be excluded, (v)
the Net Income of, or any dividends or other distributions from, any
Unrestricted Subsidiary, to the extent otherwise included, shall be excluded,
whether or not distributed to the Company or one of its Subsidiaries, and (vi)
all other extraordinary gains and extraordinary losses shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of
any date, the sum of (i) the consolidated equity of the common stockholders of
such Person and its consolidated Subsidiaries as of such date plus (ii) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Subsidiaries and in Persons
that are not Subsidiaries (except, in each case, Permitted Investments), and (z)
all unamortized debt discount and expense and unamortized deferred charges as of
such date, all of the foregoing determined in accordance with GAAP.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 12.2 hereof or such other address as to
which the Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as
of the date of this Indenture, by and among the Company and NationsBank of
Texas, N.A., as agent, and the lenders parties thereto, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced, restated or refinanced from time to time.
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<PAGE> 13
"Default" means any event that is or with the passage of time or
the giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of the Notes
attached hereto as Exhibit A, that do not include the information called for by
footnotes 1 and 2 thereof.
"Depository" means, with respect to the Notes issuable or issued
in whole or in part in global form, the Person specified in Section 2.3 hereof
as the Depository with respect to the Notes, until a successor shall have been
appointed and become such Depository pursuant to the applicable provision of
this Indenture, and, thereafter, "Depository" shall mean or include such
successor.
"Designated Senior Indebtedness" means (i) so long as the Senior
Bank Debt is outstanding, the Senior Bank Debt and (ii) thereafter, any other
Senior Indebtedness permitted under this Indenture the principal amount of which
is $25,000,000 or more and that has been designated by the Company as
"Designated Senior Indebtedness."
"Disqualified Stock" means any Capital Stock that, 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 redeemable at
the option of the Holder thereof, in whole or in part, on or prior to the date
on which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options
or other rights to acquire Capital Stock (but excluding any debt security that
is convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an underwritten public offering of Equity
Interests of the Company other than Disqualified Stock pursuant to a
registration statement filed with the SEC in accordance with the Securities Act.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series B Notes for
Series A Notes.
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<PAGE> 14
"Existing Indebtedness" means the Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the date of this Indenture (including, without limitation,
Indebtedness under the Cash Retention Notes), until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any period,
the sum, without duplication, of (i) the consolidated interest expense of such
Person and its Subsidiaries for such period, whether paid or accrued (including,
without limitation, amortization of original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect of letter
of credit or bankers' acceptance financings, and net payments (if any) pursuant
to Hedging Obligations) and (ii) the consolidated interest expense of such
Person and its Subsidiaries that was capitalized during such period, and (iii)
any interest expense on Indebtedness of another Person that is Guaranteed by
such Person or one of its Subsidiaries or secured by a Lien on assets of such
Person or one of its Subsidiaries (whether or not such Guarantee or Lien is
called upon) and (iv) the product of (a) all cash dividend payments (and
non-cash dividend payments in the case of a Person that is a Subsidiary) on any
series of preferred stock of such Person payable to a party other than the
Company or a Wholly Owned Subsidiary, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state and local statutory tax rate of such Person, expressed as a
decimal, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person
for any period, the ratio of the Consolidated EBITDA of such Person and its
Subsidiaries for such period to the Fixed Charges of such Person and its
Subsidiaries for such period. In the event that the Company or any of its
Subsidiaries incurs, assumes, Guarantees or redeems any Indebtedness (other than
revolving credit borrowings) or issues preferred stock subsequent to the
commencement of the four-quarter reference period for which the Fixed Charge
Coverage Ratio is being calculated but prior to the date on which the event for
which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock, as if the
same had occurred at the beginning of the applicable four-quarter reference
period. For purposes of making the computation referred to above, (i)
acquisitions that have been made by the Company or any of its Subsidiaries,
including through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the
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<PAGE> 15
Calculation Date shall be deemed to have occurred on the first day of the
four-quarter reference period, and (ii) the Consolidated EBITDA attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded, and
(iii) the Fixed Charges attributable to discontinued operations, as determined
in accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Subsidiaries following the Calculation Date.
"Foreign Subsidiary" means any Wholly Owned Subsidiary organized
and incorporated in a jurisdiction outside of the United States that is not a
Guarantor.
"Foreign Intercompany Indebtedness" means any Indebtedness of one
Foreign Subsidiary to another Foreign Subsidiary.
"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 have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"Global Note" means a Note that contains the paragraph referred
to in footnote 1 and the additional schedule referred to in footnote 2 to the
form of the Note attached hereto as Exhibit A.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the payment of which
guarantee or obligations the full faith and credit of the United States is
pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any part of
any Indebtedness.
"Guarantor Senior Indebtedness" means (i) any Guarantees by the
Guarantor or any other Guarantor of the Senior Bank Debt and (ii) any other
Indebtedness permitted to be incurred by the Guarantor or any other Guarantor
under the terms of this Indenture, unless the instrument under which such
Indebtedness is
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<PAGE> 16
incurred expressly provides that it is on a parity with or subordinated in right
of payment to the Subsidiary Guarantees. Notwithstanding anything to the
contrary in the foregoing, Guarantor Senior Indebtedness will not include (w)
any liability for federal, state, local, or other taxes owed or owing by the
Guarantor or any other Guarantor, (x) any Indebtedness of the Guarantor or any
other Guarantor to any of its Subsidiaries or other Affiliates, (y) any trade
payables or (z) any Indebtedness that is incurred in violation of this
Indenture.
"Guarantors" means each of (i) the Guarantor and (ii) any other
Subsidiary that executes a Subsidiary Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns.
"Hanna Notes" means any promissory note issued by M.A. Hanna or
its Subsidiary to the Company or one of its Wholly Owned Subsidiaries pursuant
to Section 2.3 of the Share Purchase Agreement, dated April 11, 1995, as amended
on or prior to the date of the Indenture, between the Company and Cadillac
Plastic Limited.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance deferred
and unpaid of the purchase price of any property or representing any Hedging
Obligations, except any such balance that constitutes an accrued expense or
trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as all
indebtedness of others secured by a Lien on any asset of such Person (whether or
not such indebtedness is assumed by such Person) and, to the extent not
otherwise included, the Guarantee by such Person of any indebtedness of any
other Person.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
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<PAGE> 17
"Investments" means, with respect to any Person, all investments
by such Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
transfers of assets outside the ordinary course of business (other than Asset
Sales), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities and all other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided that an acquisition of assets, Equity Interests or other securities by
the Company for consideration consisting of common equity securities of the
Company shall not be deemed to be an Investment.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and, except in connection with any Qualified Receivables
Transaction, any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Subsidiaries
or the extinguishment of any Indebtedness of such Person or any of its
Subsidiaries and (ii) any extraordinary or nonrecurring gain (but not loss),
together with any related provision for taxes on such extraordinary or
nonrecurring gain (but not loss).
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<PAGE> 18
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), and any reserve for adjustment in respect of the sale price of
such asset or assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity; and (iii) as to which the lenders have been notified in
writing that they will not have any recourse to the stock or assets of the
Company or any of its Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to
the Global Notes, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the Offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of
the Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 12.5 hereof.
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<PAGE> 19
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
12.5 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Partners" means American Industrial Partners, a Delaware general
partnership.
"Permitted Investments" means (a) any Investments in the Company
or in a Wholly Owned Subsidiary of the Company that is a Guarantor and that is
engaged in the same or a similar line of business as the Company and its
Subsidiaries were engaged in on the date of this Indenture and reasonable
extensions or expansions thereof; (b) any Investment by the Company or a Wholly
Owned Subsidiary of the Company in a Receivables Subsidiary or any Investment by
a Receivables Subsidiary in any other Person in connection with a Qualified
Receivables Transaction; provided, that the foregoing Investment is in the form
of a note that the Receivables Subsidiary or other Person is required to repay
as soon as practicable from available cash collections less amounts required to
be established as reserves pursuant to contractual agreements with entities that
are not Affiliates of the Company entered into as part of a Qualified
Receivables Transaction; (c) any Investments in Cash Equivalents; (d)
Investments by the Company or any Subsidiary of the Company in a Person if as a
result of such Investment (i) such Person becomes a Wholly Owned Subsidiary of
the Company and a Guarantor that is engaged in the same or a similar line of
business as the Company and its Subsidiaries were engaged in on the date of this
Indenture and reasonable extensions or expansions thereof or (ii) such Person is
merged, consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Subsidiary of the Company that is a Guarantor and that is engaged
in the same or a similar line of business as the Company and its Subsidiaries
were engaged in on the date of this Indenture and reasonable extensions or
expansions thereof; (e) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 4.8; (f) Investments outstanding as of the date of this Indenture;
(g) Investments in the form of promissory notes of members of the Company's
management in consideration of the purchase by such members of Equity Interests
(other than Disqualified Stock) in the Company; (h) Investments by the Company
or a Wholly Owned Subsidiary of Company that is a Guarantor in a Foreign
Subsidiary if 100% of the proceeds thereof concurrently used by such Foreign
Subsidiary to purchase the outstanding Equity Interests of another Foreign
Subsidiary from the Company or a Wholly Owned Subsidiary of the Company that is
a Guarantor and the resulting Investment by such first Foreign Subsidiary in
such second Foreign Subsidiary; (i) Investments by the
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<PAGE> 20
Company or a Wholly Owned Subsidiary of the Company that is a Guarantor in the
U.K. Holding Subsidiaries if such Investment consists solely of the transfer of
the Company's or such Subsidiary's Equity Interests in Day International (U.K.)
Holdings Limited and its successors and the resulting Investment by the U.K.
Holding Subsidiaries in such Person; (j) Investments by any Foreign Subsidiary
in Hanna Notes; (k) Investments which constitute Existing Indebtedness of the
Company of any of its Subsidiaries; (1) Investments constituting Foreign
Intercompany Indebtedness; and (m) other Investments in any Person that do not
exceed $10,000,000 at any time outstanding.
"Permitted Liens" means (i) Liens securing Senior Indebtedness in
an aggregate principal amount at any time outstanding not to exceed amounts
permitted under Section 4.10 hereof; (ii) Liens in favor of the Company; (iii)
Liens on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company; (iv) Liens on property existing at
the time of acquisition thereof by the Company or any Subsidiary of the Company,
provided that such Liens were in existence prior to the contemplation of such
acquisition; (v) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other obligations of a like nature
incurred in the ordinary course of business; (vi) Liens existing on the date of
this Indenture; (vii) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (viii) Liens incurred in the
ordinary course of business of the Company or any Subsidiary of the Company with
respect to obligations that do not exceed $5,000,000 at any one time outstanding
and that (a) are not incurred in connection with the borrowing of money or the
obtaining of advances or credit (other than trade credit in the ordinary course
of business) and (b) do not in the aggregate materially detract from the value
of the property or materially impair the use thereof in the operation of
business by the Company or such Subsidiary: (ix) Liens incurred or deposits made
in the ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (x) easements,
rights-of-way, restrictions, minor defects or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with the
business of the Company or any of its Subsidiaries; (xi) Purchase Money Liens
(including extensions and renewals thereof); (xii) Liens securing reimbursement
obligations with respect to letters of credit which encumber only documents and
other
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<PAGE> 21
property relating to such letters of credit and the products and proceeds
thereof; (xiii) judgment and attachment Liens not giving rise to an Event of
Default; (xiv) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements; (xv) Liens
arising out of consignment or similar arrangements for the sale of goods; (xvi)
any interest or title of a lessor in property subject to any capital lease
obligation or operating lease; (xvii) Liens arising from filing Uniform
Commercial Code financing statements regarding leases; (xviii) Liens on assets
of Subsidiaries with respect to Acquired Indebtedness; and (xix) Liens on assets
of a Receivables Subsidiary incurred in connection with a Qualified Receivables
Transaction.
"Permitted Refinancing Debt" means any Indebtedness of the
Company or any of its Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of the Company or any of its Subsidiaries; provided that: (i) the
principal amount of such Permitted Refinancing Indebtedness does not exceed the
principal amount of the Indebtedness so extended, refinanced, renewed, replaced,
defeased or refunded (plus the amount of reasonable expenses incurred in
connection therewith); (ii) such Permitted Refinancing Indebtedness has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded; and (iv) such
Indebtedness is incurred either by the Company or by the Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or agency or political subdivision thereof (including any subdivision
or ongoing business of any such entity or substantially all of the assets of any
such entity, subdivision or business).
"Purchase Money Lien" means a Lien granted on an asset or
property to secure a Purchase Money Obligation permitted to be incurred under
this Indenture and incurred solely to finance the acquisition of such asset or
property; provided, however,
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<PAGE> 22
that such Lien encumbers only such asset or property and is granted within 180
days of such acquisition.
"Purchase Money Obligations" of any person means any obligations
of such person to any seller or any other person incurred or assumed to finance
the acquisition of real or personal property to be used in the business of such
person or any of its Subsidiaries in an amount that is not more than 100% of the
cost of such property, and incurred within 180 days after the date of such
acquisition (excluding accounts payable to trade creditors incurred in the
ordinary course of business).
"Qualified Receivables Transaction" means any transaction or
series of transactions that may be entered into by the Company or any of its
Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell,
convey or otherwise transfer to (a) a Receivables Subsidiary (in the case of a
transfer by the Company or any of its Subsidiaries) and (ii) any other person
(in the case of a transfer by a Receivables Subsidiary), or may grant a security
interest in, any accounts receivable (whether now existing or arising in the
future) of the Company or any of its Subsidiaries, and any assets related
thereto including, without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations in respect of
such accounts receivable, proceeds of such accounts receivable and other assets
which are customarily transferred or in respect of which security interests are
customarily granted in connection with asset securitization transactions
involving accounts receivable.
"Receivables Subsidiary" means a Wholly Owned Subsidiary of the
Company which engages in no activities other than in connection with the
financing of accounts receivable and which is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any Subsidiary of the Company
(excluding guarantees of Obligations (other than the principal of, and interest
on, Indebtedness) pursuant to representations, warranties, covenants and
indemnities entered into in the ordinary course of business in connection with a
Qualified Receivables Transaction), (ii) is recourse to or obligates the Company
or any Subsidiary of the Company in any way other than pursuant to
representations, warranties, covenants and indemnities entered into in the
ordinary course of business in connection with a Qualified Receivables
Transaction or (iii) subjects any property or asset of the Company or any
Subsidiary of the Company, directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to representations, warranties,
covenants and indemnities entered into in the ordinary course of business in
connection with a Qualified Receivables Transaction,
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<PAGE> 23
(b) with which neither the Company nor any Subsidiary of the Company has any
material contract, agreement, arrangement or understanding other than on terms
no less favorable to the Company or such Subsidiary than those that might be
obtained at the time from persons who are not Affiliates of the Company, other
than fees payable in the ordinary course of business in connection with
servicing accounts receivable and (c) with which neither the Company nor any
Subsidiary of the Company has any obligation to maintain or preserve such
Subsidiary's financial condition or cause such Subsidiary to achieve certain
levels of operating results. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution of the Board of Directors of the Company giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date of this Indenture, by and among the Company and
the other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time.
"Representative" means the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee,
means any officer within the Corporate Trust Administration of the Trustee (or
any successor group of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Bank Debt" means the Indebtedness outstanding under the
Credit Agreement as such agreement may be restated, further amended,
supplemented or otherwise modified or replaced from time to time hereafter,
together with any refunding or replacement of such Indebtedness.
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<PAGE> 24
"Senior Indebtedness" means (i) the Senior Bank Debt and (ii) any
other Indebtedness permitted to be incurred by the Company under the terms of
this Indenture, unless the instrument under which such Indebtedness is incurred
expressly provides that it is on a parity with or subordinated in right of
payment to the Notes. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (w) any liability for federal, state,
local or other taxes owed or owing by the Company, (x) any Indebtedness of the
Company to any of its Subsidiaries or other Affiliates, (y) any trade payables
or (z) any Indebtedness that is incurred in violation of this Indenture.
"Senior Revolving Debt" means revolving credit borrowings and
letters of credit under the Credit Agreement and/or any successor facility or
facilities.
"Senior Term Debt" means term loans under the Credit Agreement
and/or any successor facility or facilities.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Act, as such Regulation is in effect on the date
hereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or of one or
more Subsidiaries of such Person (or any combination thereof). Unrestricted
Subsidiaries shall not be included in the definition of Subsidiary for any
purposes of this Indenture (except, as the context may otherwise require, for
purposes of the definition of "Unrestricted Subsidiary.")
"Subsidiary Guarantees" means the Subsidiary Guarantees of the
Guarantors in the form set forth as Exhibit B hereto.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Section 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
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<PAGE> 25
"Transfer Restricted Notes" means Securities that bear or are
required to bear the legend set forth in Section 2.6 hereof.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"U.K. Holding Subsidiaries" means one or more domestic Wholly
Owned Subsidiaries of the Company formed for the sole purpose of holding, and
which in fact hold only, all of the Equity Interests of Day International (U.K.)
Holdings Limited and its successors.
"Unrestricted Subsidiary" means (i) any Subsidiary (other than
the Guarantor or any successor) that is designated by the Board of Directors as
an Unrestricted Subsidiary pursuant to a Board Resolution; but only to the
extent that such Subsidiary: (a) has no Indebtedness other than Non-Recourse
Debt; (b) is not party to any agreement, contract, arrangement or understanding
with the Company or any Subsidiary of the Company unless the terms of any such
agreement, contract, arrangement or understanding are no less favorable to the
Company or such Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Company; (c) is a Person with respect to
which neither the Company nor any of its Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Subsidiaries. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.9 hereof. If, at any time,
any Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.10 hereof, the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Subsidiary; provided that such designation shall
be deemed to be an incurrence of Indebtedness by a Subsidiary of the Company of
any outstanding Indebtedness of such Unrestricted Subsidiary and such
designation shall
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<PAGE> 26
only be permitted if (i) such Indebtedness is permitted under Section 4.10
hereof, and (ii) no Default or Event of Default would be in existence following
such designation.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person.
Unrestricted Subsidiaries shall not be included in the definition of Wholly
Owned Subsidiary for any purposes of this Indenture (except, as the context may
otherwise require, for purposes of the definition of "Unrestricted Subsidiary.")
Section 1.2 Other Definitions.
<TABLE>
<CAPTION>
Defined in
Term Section
---- ---------
<S> <C>
"Affiliate Transaction" 4.14
"Asset Sale Offer" 4.8
"Change of Control Offer" 4.7
"Change of Control Payment" 4.7
"Covenant Defeasance" 8.3
"DTC" 2.3
"Legal Defeasance" 8.2
"Offer Amount" 4.8
"Offer Period" 4.8
"Paying Agent" 2.3
"Payment Blockage Notice" 10.3
"Payment Default" 6.1
"Purchase Date" 4.8
"Registrar" 2.3
"Restricted Payments" 4.9
"Securities Act" 2.6
</TABLE>
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<PAGE> 27
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor
obligor upon the Notes.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule under
the TIA have the meanings so assigned to them.
Section 1.4 Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act
shall be deemed to include substitute, replacement of successor sections
or rules adopted by the SEC from time to time.
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<PAGE> 28
ARTICLE 2
THE NOTES
Section 2.1 Form and Dating. The Notes and the Trustee's
certificate of authentication shall be substantially in the form of Exhibit A
hereto. The Notes may have notations, legends or endorsements required by law,
stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and 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.
Global Notes shall be substantially in the form of Exhibit A
attached hereto (including the text referred to in footnotes 1 and 2 thereto).
Notes issued in definitive form shall be substantially in the form of Exhibit A
attached hereto (but without including the text referred to in footnotes 1 and 2
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder thereof as required
by Section 2.6 hereof.
Section 2.2 Execution and Authentication. Two Officers shall sign
the Notes for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
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<PAGE> 29
The Trustee shall, upon a written order of the Company signed by
two Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.7 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. 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 agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.3 Registrar and Paying Agent. The Company shall
maintain an office or agency where Notes may be presented for registration of
transfer or for exchange ("Registrar") and an office or agency where Notes may
be presented for payment ("Paying Agent"). The Registrar shall keep a register
of the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term
"Registrar" includes any co-registrar and the term "Paying Agent" includes any
additional paying agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the Trustee in writing of
the name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust. The Company
shall require each Paying Agent other than the Trustee to agree in writing that
the Paying Agent will hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall
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<PAGE> 30
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
Section 2.5 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 all Holders and shall otherwise comply with TIA
Section 312(a). If the Trustee is not the Registrar, the Company shall furnish
to the Trustee at least seven Business Days before each interest payment date
and at such other times as the Trustee may request in writing, a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of the Holders of Notes and the Company shall otherwise comply with
TIA Section 312(a).
Section 2.6 Transfer and Exchange. (a) Transfer and Exchange of
Definitive Notes. When Definitive Notes are presented by a Holder to the
Registrar with a request: (x) to register the transfer of the Definitive Notes;
or (y) to exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar shall register
the transfer or make the exchange as requested if its requirements for such
transactions are met, provided, however, that the Definitive Notes presented or
surrendered for register of transfer or exchange: (i) shall be duly endorsed or
accompanied by a written instruction of transfer in form satisfactory to the
Registrar duly executed by such Holder or by his attorney, duly authorized in
writing; and (ii) in the case of a Definitive Note that is a Transfer Restricted
Note, such request shall be accompanied by the following additional information
and documents, as applicable: (A) if such Transfer Restricted Note is being
delivered to the Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or (B) if such Transfer Restricted
Note is being transferred to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration in accordance with
Rule 144 or Rule 904 under the Securities Act or pursuant to an effective
registration statement under the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit B hereto); or (C) if such
Transfer Restricted Note is being transferred in reliance on another exemption
from the registration requirements of the Securities Act, a certification to
that effect from such Holder (in substantially the form of Exhibit B hereto) and
an Opinion of Counsel from such Holder or the transferee reasonably
24
<PAGE> 31
acceptable to the Company and to the Registrar to the effect that such transfer
is in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in a
Global Note. A Definitive Note may not be exchanged for a beneficial interest in
a Global Note except upon satisfaction of the requirements set forth below. Upon
receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with: (i) if such Definitive Note is a Transfer Restricted Note, a
certification from the Holder thereof (in substantially the form of Exhibit B
hereto) to the effect that such Definitive Note is being transferred by such
Holder to a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in accordance with Rule 144A under the Securities Act; and (ii)
whether or not such Definitive Note is a Transfer Restricted Note, written
instructions from the Holder thereof directing the Trustee to make, or to direct
the Note Custodian to make, an endorsement on the Global Note to reflect an
increase in the aggregate principal amount of the Notes represented by the
Global Note, in which case the Trustee shall cancel such Definitive Note in
accordance with Section 2.11 hereof and cause, or direct the Note Custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depository and the Note Custodian, the aggregate principal amount of
Notes represented by the Global Note to be increased accordingly. If no Global
Notes are then outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2 hereof, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note. (i) Any Person having a beneficial interest in a Global Note
may upon request exchange such beneficial interest for a Definitive Note. Upon
receipt by the Trustee of written instructions or such other form of
instructions as is customary for the Depository, from the Depository or its
nominee on behalf of any Person having a beneficial interest in a Global Note,
and, in the case of a Transfer Restricted Note, the following additional
information and documents (all of which may be submitted by facsimile): (A) if
such beneficial interest is being transferred to the Person designated by the
Depository as being the beneficial owner, a certification to that effect from
such Person (in substantially the form of Exhibit B hereto); or (B) if such
beneficial interest
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<PAGE> 32
is being transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under the Securities
Act or pursuant to an exemption from registration in accordance with Rule 144 or
Rule 904 under the Securities Act or pursuant to an effective registration
statement under the Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B hereto); or (C) if such
beneficial interest is being transferred in reliance on another exemption from
the registration requirements of the Securities Act, a certification to that
effect from the transferor (in substantially the form of Exhibit B hereto) and
an Opinion of Counsel from the transferee or transferor reasonably acceptable to
the Company and to the Registrar to the effect that such transfer is in
compliance with the Securities Act, in which case the Trustee or the Note
Custodian, at the direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between the Depository and the
Note Custodian, cause the aggregate principal amount of Global Notes to be
reduced accordingly and, following such reduction, the Company shall execute
and, upon receipt of an authentication order in accordance with Section 2.2
hereof, the Trustee shall authenticate and deliver to the transferee a
Definitive Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Global Note pursuant to this Section 2.6(d) shall be registered in
such names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (f) of this Section 2.6), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of Depository.
If at any time: (i) the Depository for the Notes notifies the Company that the
Depository is unwilling or unable to continue as Depository for the Global Notes
and a successor Depository for the Global Notes is not appointed by the Company
within 90 days after delivery of such notice; or (ii) the Company, at its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of Definitive Notes under this Indenture, then the Company shall execute, and
the Trustee shall, upon receipt of an
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<PAGE> 33
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(g) Legends. (i) Except as permitted by the following paragraphs
(ii) and (iii), each Note certificate evidencing Global Notes and Definitive
Notes (and all Notes issued in exchange therefor or substitution thereof) shall
bear legends in substantially the following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED
BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."
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<PAGE> 34
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note) pursuant
to Rule 144 under the Securities Act or pursuant to an effective registration
statement under the Securities Act: (A) in the case of any Transfer Restricted
Note that is a Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Note for a Definitive Note that does not bear
the first legend set forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Note; and (B) in the case of any Transfer
Restricted Note represented by a Global Note, such Transfer Restricted Note
shall not be required to bear the first legend set forth in (i) above, but shall
continue to be subject to the provisions of Section 2.6(c) hereof; provided,
however, that with respect to any request for an exchange of a Transfer
Restricted Note that is represented by a Global Note for a Definitive Note that
does not bear the first legend set forth in (i) above, which request is made in
reliance upon Rule 144, the Holder thereof shall certify in writing to the
Registrar that such request is being made pursuant to Rule 144 (such
certification to be substantially in the form of Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation of the
Exchange Offer, the Company shall issue and, upon receipt of an authentication
order in accordance with Section 2.2 hereof, the Trustee shall authenticate
Series B Notes in exchange for Series A Notes accepted for exchange in the
Exchange Offer, which Series B Notes shall not bear the first legend set forth
in (i) above, and the Registrar shall rescind any restriction on the transfer of
such Notes, in each case unless the Holder of such Series A Notes is either (A)
a broker-dealer, (B) a Person participating in the distribution of the Series A
Notes or (C) a Person who is an affiliate (as defined in Rule 144A) of the
Company.
(h) Cancellation and/or Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for Definitive
Notes, redeemed, repurchased or cancelled, all Global Notes shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Notes Custodian, at the direction of the Trustee, to reflect such
reduction.
(i) General Provisions Relating to Transfers and Exchanges. (i)
To permit registrations of transfers and exchanges, the Company shall execute
and the Trustee shall authenticate Definitive Notes and Global Notes at the
Registrar's request.
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(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to cover any transfer tax or similar governmental charge payable
in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchange or transfer pursuant to Sections 4.7
and 4.8 hereto).
(iii) The Registrar shall not be required to register the
transfer of or exchange any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of transfer or exchange of Definitive Notes or Global Notes shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Definitive Notes or Global
Notes surrendered upon such registration of transfer or exchange.
(v) The Company shall not be required: (A) to issue, to register
the transfer of or to exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for redemption under
Section 3.2 hereof and ending at the close of business on the day of selection;
or (B) to register the transfer of or to exchange any Note so selected for
redemption in whole or in part, except the unredeemed portion of any Note being
redeemed in part; or (C) to register the transfer of or to exchange a Note
between a record date and the next succeeding interest payment date.
(vi) Prior to due presentment for the registration of a transfer
of any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and interest on such Notes,
and neither the Trustee, any Agent nor the Company shall be affected by notice
to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.2 hereof.
Section 2.7 Replacement Notes. If any mutilated Note is
surrendered to the Trustee or the Company, and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note, the Company
shall issue and the Trustee, upon the written order of the Company signed by two
Officers of the Company, shall authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is
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sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company
and shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes. The Notes outstanding at any time
are all the Notes authenticated by the Trustee except for those cancelled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.9 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under
Section 4.1 hereof, it ceases to be outstanding and interest on it ceases to
accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.9 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that a Trustee knows are so owned
shall be so disregarded.
Section 2.10 Temporary Notes. Until definitive Notes are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Notes upon a written order of the Company signed by two Officers of
the Company.
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Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes and
as shall be reasonably acceptable to the Trustee. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive Notes in
exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
Section 2.11 Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall destroy cancelled Notes (subject to the record
retention requirement of the Exchange Act). Certification of the destruction of
all cancelled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation.
Section 2.12 Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.1 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.1 Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.7 hereof, it
shall furnish to the Trustee, at least 30 days (unless a shorter period is
acceptable to the Trustee) but not more than 60 days before a redemption date,
an Officers' Certificate setting forth (i) the clause of this Indenture pursuant
to which the redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption price.
Section 3.2 Selection of Notes to be Redeemed. If less than all
of the Notes are to be redeemed at any time, the Trustee shall select the Notes
to be redeemed among the Holders of the Notes in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot
or in accordance with any other method the Trustee considers fair and
appropriate. In the event of partial redemption by lot, the particular Notes to
be redeemed shall be selected, unless otherwise provided herein, not less than
30 nor more than 60 days prior to the redemption date by the Trustee from the
outstanding Notes not previously called for redemption.
The Trustee 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 and portions of
Notes selected shall be in amounts of $1,000 or integral multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not an integral
multiple of $1,000, shall be redeemed. Except as provided in the preceding
sentence, provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
Section 3.3 Notice of Redemption. Subject to the provisions of
Section 3.9 hereof, at least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date:
(b) the redemption price;
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<PAGE> 39
(c) 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 upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.3 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.5 Deposit of Redemption Price. One Business Day prior
to the redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
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If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.1 hereof.
Section 3.6 Notes Redeemed In Part. Upon surrender of a Note that
is redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.7 Optional Redemption.(a) Except as set forth in clause
(b) of this Section 3.7, the Company shall not have the option to redeem the
Notes pursuant to this Section 3.7 prior to June 1, 2000. Thereafter, the
Company shall have the option to redeem the Notes, in whole or in part, at the
redemption prices (expressed as percentages of principal amount) set forth below
plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the
applicable redemption date, if redeemed during the twelve-month period beginning
on June 1 of the )-cars indicated below:
<TABLE>
<CAPTION>
Year Percentage
<S> <C>
2000............................................104.944%
2001............................................103.708%
2002............................................102.472%
2003............................................101.236%
2004............................................100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section
3.7, at any time prior to June 1, 1998, the Company may (but shall not have the
obligation to) redeem up to 33 1/3% of the original aggregate principal amount
of Notes at a redemption price of 110.125% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon to the redemption
date, with the Net Proceeds of an Equity Offering; provided that at least 66
2/3% of the aggregate principal amount of the Notes originally issued remain
outstanding immediately after the occurrence of
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<PAGE> 41
such redemption; and provided, further, that such redemption shall occur within
60 days of the date of the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Section 3.1 through 3.6 hereof.
Section 3.8 No Mandatory Redemption. The Company shall not be
required to make mandatory redemption payments with respect to the Notes.
ARTICLE 4
COVENANTS
Section 4.1 Payment of Notes. The Company shall pay or cause to
be paid the principal of, premium, if any, and interest on the Notes on the
dates and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if other
than the Company or a Subsidiary thereof, holds as of 10:00 a.m, Eastern Time on
the due date money deposited by the Company in immediately available funds and
designated for and sufficient to pay all principal, premium, if any, and
interest then due. The Company shall pay all Liquidated Damages, if any, in the
same manner on the dates and in the amounts set forth in the Registration Rights
Agreement.
The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal at the rate
equal to 1% per annum in excess of the then applicable interest rate on the
Notes to the extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable grace period)
at the same rate to the extent lawful.
Section 4.2 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee.
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The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, the City of New York for such purposes. The Company shall
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3 hereof.
Section 4.3 Reports. (a) Whether or not required by the rules and
regulations of the SEC, so long as any Notes are outstanding, the Company shall
furnish to all Holders (i) all quarterly and annual financial information that
would be required to be contained in a filing with the SEC on Forms 10-Q and
10-K if the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants and (ii) all reports that would be required to
be filed with the SEC on Form 8-K if the Company were required to file such
reports. In addition, whether or not required by the rules and regulations of
the SEC, at any time after the Company files the registration statement with
respect to the Exchange Offer, the Company shall file a copy of all such
information with the SEC for public availability (unless the SEC will not accept
such a filing) and shall promptly make such information available to all
securities analysts and prospective investors upon request.
(b) For so long as any Transfer Restricted Notes remain
outstanding, Company and the Subsidiary Guarantors shall furnish to all Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
Section 4.4 Compliance Certificate. (a) The Company shall deliver
to the Trustee, within 90 days after the end of each fiscal year, an Officers'
Certificate stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
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<PAGE> 43
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.3(a) hereof shall be
accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification 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 or Article Five hereof 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) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.5 Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.6 Stay, Extension and Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of
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any such law, and covenants that it shall not, by resort to any such law,
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.7 Change of Control. Upon the occurrence of a "Change
of Control" each Holder of Notes shall have the right to require the Company to
repurchase all or any part (equal to $1,000 or an integral multiple thereof) of
such Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at an offer price in cash equal to 101% of the aggregate
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon to the date of purchase (the "Change of Control Payment"). Within 30
days following any Change of Control, the Company shall mail a notice to each
Holder describing the transaction or transactions that constitute the Change of
Control and offering to repurchase Notes pursuant to the procedures required by
this Indenture and described in such notice. 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 the Notes as a result of a
Change of Control.
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent shall promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the Trustee shall
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount to any unpurchased portion of
the Notes surrendered, if any; provided that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. Prior to complying
with the provisions of this covenant, but in any event within 90 days following
a Change of Control, the Company shall either repay all outstanding Senior
Indebtedness or obtain the requisite consents, if any, under all agreements
governing outstanding Senior Indebtedness to permit the repurchase of Notes
required by this covenant. The Company shall publicly announce the results of
the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
Section 4.8 Asset Sales. The Company shall not, and shall not
permit any of its Subsidiaries to, engage in an Asset Sale in excess of
$1,000,000 unless (i) the
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<PAGE> 45
Company (or the Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value, and in the case
of a lease of assets, a lease providing for rent and other conditions which are
no less favorable to the Company (or the Subsidiary, as the case may be) in any
material respect than the then prevailing market conditions (evidenced in each
case by a resolution of the Board of Directors of such entity set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests sold or otherwise disposed of, and (ii) at least 75% (100% in the case
of lease payments) of the consideration therefor received by the Company or such
Subsidiary is in the form of cash or Cash Equivalents, provided that the amount
of (x) any liabilities (as shown on the Company's or such Subsidiary's most
recent balance sheet or in the notes thereto, excluding contingent liabilities
and trade payables), of the Company or any Subsidiary (other than liabilities
that are by their terms subordinated to the Notes or any Guarantee thereof) that
are assumed by the transferee of any such assets and (y) any notes or other
obligations received by the Company or any such Subsidiary from such transferee
that are promptly, but in no event more than 30 days after receipt, converted by
the Company or such Subsidiary into cash (to the extent of the cash received),
shall be deemed to be cash for purposes of this provision.
The Company or any of its Subsidiaries may apply such Net
Proceeds, at its option, (a) to permanently reduce Senior Term Debt, (b) to
permanently reduce Senior Revolving Debt (and to correspondingly reduce
commitments with respect thereto), (c) to commit, within 270 days after the
consummation of an Asset Sale, to the acquisition of another business or the
acquisition of other long-term assets, in each case, in the same or a similar
line of business as the Company or any of its Subsidiaries was engaged in on the
date of this Indenture or any reasonable extensions or expansions thereof;
provided, that any Net Proceeds that are committed to be used are so used within
360 days of such Asset Sale, or (d) to reimburse the Company or its Subsidiaries
for expenditures made, and costs incurred, to repair, rebuild, replace or
restore property subject to loss, damage or taking to the extent that the Net
Proceeds consist of insurance proceeds received on account of such loss, damage
or taking. Pending the final application of any such Net Proceeds, the Company
may temporarily reduce Senior Revolving Debt or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." When the aggregate amount of Excess Proceeds exceeds $5,000,000, the
Company shall be required to make an offer to all Holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes that may be
purchased out of the Excess Proceeds, at an offer price in cash in an amount
equal to 100% of the principal amount thereof plus accrued and unpaid interest
and Liquidated Damages thereon to the date of purchase, in accordance with the
procedures
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set forth in this Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to this Section 4.8 (the "Offer Amount") or,
if less than the Offer Amount has been tendered, all Notes tendered in response
to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and
on or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders, 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 Asset Sale
Offer. The Asset Sale Offer shall be made to all Holders. The notice, which
shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 4.8 and the length of time the Asset Sale Offer shall remain
open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Asset Sale Offer shall cease
to accrete or accrue interest after the Purchase Date;
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(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and
may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
(g) that Holders shall be entitled to withdraw their election if
the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note the Holder delivered for
purchase and a statement that such Holder is withdrawing his election to
have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered
by Holders exceeds the Offer Amount, the Company shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of
$1,000, or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 4.8. The Company, the Depository or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company, shall promptly issue a new Note, and
the Trustee, upon written request from the Company, shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount
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equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Section 4.9 Restricted Payments. The Company shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly: (i) declare or
pay any dividend or make any distribution on account of the Company's or any of
its Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company) (other
than dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or dividends or distributions payable to the
Company or any Wholly Owned Subsidiary of the Company), (ii) purchase, redeem or
otherwise acquire or retire for value any Equity Interests of the Company or any
direct or indirect parent of the Company or other Affiliate or Subsidiary of the
Company (other than any such Equity Interests owned by the Company or any Wholly
Owned Subsidiary of the Company that is a Guarantor), (iii) make any principal
payment on, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is pari passu with or subordinated to the Notes
(other than Notes), except at final maturity, other than through the purchase or
acquisition by the Company of Indebtedness through the issuance in exchange
therefor of Equity Interests (other than Disqualified Stock); or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.10 hereof; and
(c) such Restricted Payment, together with the aggregate of all
other Restricted Payments made by the Company and its Subsidiaries after
the date of this Indenture (excluding Restricted Payments permitted by
clauses (ii) and (iv) of the next succeeding paragraph), is less than
the sum of (i) $5,000,000, plus (ii) 50% of the Consolidated Net Income
of the Company for the period (taken
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as one accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the Company's
most recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted Payment (or, if
such Consolidated Net Income for such period is a deficit, less 100% of
such deficit), plus (iii) 100% of the aggregate net cash proceeds
received by the Company from the issue or sale since the date of this
Indenture of Equity Interests of the Company or of debt securities of
the Company that have been converted into such Equity Interests (other
than Equity Interests (or convertible debt securities) sold to a
Subsidiary or an Unrestricted Subsidiary of the Company and other than
Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (iv) 100% of any dividends received by the
Company or a Wholly Owned Subsidiary that is a Guarantor after the date
of this Indenture from an Unrestricted Subsidiary of the Company, plus
(v) 100% of the cash proceeds realized upon the sale of any Unrestricted
Subsidiary (less the amount of any reserve established for purchase
price adjustments and less the maximum amount of any indemnification or
similar contingent obligation for the benefit of the purchaser, any of
its Affiliates or any other third party in such sale, in each case as
adjusted for any permanent reduction in any such amount on or after the
date of such sale, other than by virtue of a payment made to such
person) following the date of this Indenture, plus (vi) to the extent
that any Restricted Investment that was made after the date of this
Indenture is sold for cash or otherwise liquidated or repaid for cash,
the amount of cash proceeds received with respect to such Restricted
Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) if no Default or Event of Default shall have occurred and be
continuing (and shall not have been waived) or shall occur as a consequence
thereof, the payment by the Company of a transaction fee to Partners at the
closing of the Offering and of a management fee to Partners in an amount not to
exceed $800,000 in any year and the reimbursement by the Company of Partners'
reasonable out-of-pocket expenses; provided, however, that the obligation of the
Company to pay such management fee will be subordinated to the payment of all
Obligations with respect to the Notes (and any Subsidiary Guarantee thereof);
(iii) the making of any Restricted Investment in exchange for, or out of the
proceeds of, the substantially concurrent sale (other than to a Subsidiary of
the Company) of Equity Interests of the Company (other than Disqualified Stock);
provided, that any net cash proceeds that are utilized for any such Restricted
Investment, and any Net Income resulting therefrom, shall be excluded from
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clauses (c)(ii) and (c)(iii) of the preceding paragraph; (iv) the redemption,
repurchase, retirement or other acquisition of any Equity Interests of the
Company in exchange for, or out of the proceeds of, the substantially concurrent
sale (other than to a Subsidiary of the Company) of other Equity Interests of
the Company (other than any Disqualified Stock); provided that any net cash
proceeds that are utilized for any such redemption, repurchase, retirement or
other acquisition, and any Net Income resulting therefrom, shall be excluded
from clauses (c)(ii) and (c)(iii) of the preceding paragraph; (v) the
defeasance, redemption or repurchase of pari passu or subordinated Indebtedness
with the net cash proceeds from an incurrence of Permitted Refinancing
Indebtedness or the substantially concurrent sale (other than to a Subsidiary of
the Company) of Equity Interests of the Company (other than Disqualified Stock);
provided, that any net cash proceeds that are utilized for any such defeasance,
redemption or repurchase, and any Net Income resulting therefrom, shall be
excluded from clauses (c)(ii) and (c)(iii) of the preceding paragraph; (vi) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Subsidiary of the Company held by any
member of the Company's (or any of its Subsidiaries') management pursuant to any
management agreement or stock option agreement, provided that the aggregate
price paid for all such repurchased, redeemed, acquired or retired Equity
Interests shall not exceed $1,000,000 in any fiscal year or $5,000,000 in the
aggregate (net of the cash proceeds received by the Company from subsequent
reissuances of such Equity Interests to new members of management), and no
Default or Event of Default shall have occurred and be continuing immediately
after such transactions; (vii) payments of principal and interest with respect
to the Cash Retention Notes; and (viii) the acquisition by a Receivables
Subsidiary in connection with a Qualified Receivables Transaction of Equity
Interests of a trust or other person established by such Receivables Subsidiary
to effect such Qualified Receivables Transaction.
The Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under the first paragraph of this covenant. All such outstanding Investments
will be deemed to constitute Investments in an amount equal to the greatest of
(x) the net book value of such Investments at the time of such designation, (y)
the fair market value of such Investments at the time of such designation and
(z) the original fair market value of such Investments at the time they were
made. Such designation will only be permitted if such Restricted Payment would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
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The amount of all Restricted Payments (other than cash) shall be
the fair market value (evidenced by a resolution of the Board of Directors set
forth in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. 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 is
permitted and setting forth the basis upon which the calculation required by
this Section 4.9 were computed, which calculations may be based upon the
Company's latest available financial statements.
Section 4.10 Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company shall not, and shall not permit any of its Subsidiaries and
Unrestricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Indebtedness) and that the Company will not issue any
Disqualified Stock and will not permit any of its Subsidiaries and Unrestricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Indebtedness) or issue shares
of Disqualified Stock and the Company's Subsidiaries that are Guarantors may
incur Indebtedness and issue preferred stock if: (i) the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional Indebtedness is incurred or such Disqualified Stock is
issued would have been at least 2 to 1, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been incurred, or the Disqualified Stock had been
issued, as the case may be, at the beginning of such four-quarter period, and
(ii) no Default or Event of Default shall have occurred and be continuing or
would occur as a consequence thereof; provided, that no Guarantee may be
incurred pursuant to this paragraph, unless the guaranteed Indebtedness is
incurred by the Company or a Subsidiary pursuant to this paragraph.
The foregoing provisions will not apply to:
(i) the incurrence by the Company of Senior Term Debt and Senior
Revolving Debt and letters of credit (and Guarantees thereof by
Subsidiaries that are Guarantors) in an aggregate principal amount at
any time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the Company
and its Subsidiaries thereunder) not to exceed an amount equal to
$90,000,000, less the aggregate amount of all Net Proceeds
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of Asset Sales applied to permanently reduce the outstanding amount or
the commitments with respect to such Indebtedness pursuant to Section
4.8 hereof;
(ii) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Company of Indebtedness represented
by the Notes and by the Subsidiaries of Indebtedness represented by the
Subsidiary Guarantees;
(iv) the incurrence by the Company or any of its Subsidiaries of
Indebtedness represented by Capital Lease Obligations, mortgage
financings or Purchase Money Obligations, in each case incurred for the
purpose of financing all or any part of the purchase price or cost of
construction or improvement of property used in the business of the
Company or such Subsidiary, in an aggregate principal amount not to
exceed $10,000,000 at any time outstanding;
(v) the incurrence by the Company or any of its Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or
refund, Indebtedness that was permitted by this Indenture to be
incurred;
(vi) the incurrence by the Company or any of its Subsidiaries of
intercompany Indebtedness between or among the Company and any of its
Wholly Owned Subsidiaries or between or among any Wholly Owned
Subsidiaries; provided, however, that (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than a Wholly Owned Subsidiary and (ii) any sale
or other transfer of any such Indebtedness to a Person that is not
either the Company or a Wholly Owned Subsidiary shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the Company or
such Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of its Subsidiaries
that are Guarantors of Hedging Obligations that are incurred for the
purpose of fixing or hedging interest rate risk with respect to any
floating rate Indebtedness that is permitted by this Indenture to be
incurred;
(viii) the incurrence by the Company or any of its Subsidiaries
that are Guarantors of Indebtedness (in addition to Indebtedness
permitted by any other
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clause of this paragraph) in an aggregate principal amount at any time
outstanding not to exceed the sum of $10,000,000;
(ix) the incurrence by Subsidiaries that are not Guarantors of
(i) Indebtedness in an aggregate amount not to exceed $20,000,000 (in
addition to Indebtedness permitted by any other clause of this
paragraph); provided, that (A) after giving pro forma effect to the
incurrence thereof, the Company could incur $1.00 of Indebtedness under
the first paragraph of this Section 4.10, and (B) and such Indebtedness
is not subordinated in right of payment to any other Indebtedness and
that such Indebtedness is secured by a Lien on property of the
Subsidiary that incurs such Indebtedness; and (ii) other Indebtedness in
an aggregate amount not to exceed $12,500,000;
(x) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness
ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event
shall be deemed to constitute an incurrence of Indebtedness by a
Subsidiary of the Company;
(xi) Indebtedness incurred by the Company or any of its
Subsidiaries that is a Guarantor arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from guarantees of letters of credit, surety bonds or performance bonds
securing the performance of the Company or any of its Subsidiaries
incurred by any person acquiring all or a portion of such business,
assets of a Subsidiary of the Company for the purpose of financing such
acquisition, in a principal amount not to exceed 25% of the gross
proceeds (with proceeds other than cash or Cash Equivalents being valued
at the fair market value thereof as determined by the Board of Directors
of the Company in good faith) actually received by the Company or any of
its Subsidiaries in connection with such disposition; and
(xii) the incurrence by a Receivables Subsidiary of Indebtedness
in a Qualified Receivables Transaction that is without recourse to the
Company or to any Subsidiary of the Company or their assets (other than
such Receivables Subsidiary and its assets), and is not guaranteed by
any such person.
Notwithstanding any other provision of this covenant, a Guarantee
of Indebtedness permitted by the terms of this Indenture at the time such
Indebtedness was incurred will not constitute a separate incurrence of
Indebtedness.
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Section 4.11 Liens. The Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, except Permitted Liens.
Section 4.12 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Subsidiary to (i)(a) pay dividends or make any other distributions to the
Company or any of its Subsidiaries (1) on its Capital Stock or (2) with respect
to any other interest or participation in, or measured by, its profits, or (b)
pay any indebtedness owed to the Company or any of its Subsidiaries, (ii) make
loans or advances to the Company or any of its Subsidiaries or (iii) transfer
any of its properties or assets to the Company or any of its Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness as in effect on the date of this Indenture, (b) the Credit
Agreement as in effect as of the date of this Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the date of this Indenture, (c) this Indenture and the
Notes, (d) applicable law, (e) any instrument governing Acquired Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries as
in effect at the time of such acquisition (except to the extent such Acquired
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
EBITDA of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (f) by reason of
customary non-assignment provisions in leases and licenses entered into in the
ordinary course of business and consistent with past practices, (g) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (h) agreements relating to the financing of the
acquisition of real or tangible personal property acquired after the date of
this Indenture, provided, that such encumbrance or restriction relates only to
the property which is acquired and in the case of any encumbrance or restriction
that constitutes a Lien, such Lien constitutes a Permitted Lien as set forth in
clause (xi) of the definition of "Permitted Lien," (i) Indebtedness or other
contractual requirements of a Receivables Subsidiary in
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connection with a Qualified Receivables Transaction, provided that such
restrictions apply only to such Receivables Subsidiary, (j) any restriction or
encumbrance contained in contracts for sale of assets permitted by this
Indenture in respect of the assets being sold pursuant to such contract, (k)
Senior Indebtedness permitted to be incurred under this Indenture and incurred
after the date of this Indenture, provided, that such encumbrances or
restrictions in such Indebtedness are no more onerous than the restrictions
contained in the Credit Agreement on the date of this Indenture, (l)
Indebtedness of Subsidiaries that are not Guarantors incurred under clause (x)
of Section 4.10 hereof or (m) Permitted Refinancing Indebtedness, provided that
the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive than those contained in the
agreements governing the Indebtedness being refinanced.
Section 4.13 Limitation on Layering Debt. The Company shall not
incur, create, issue, assume, guarantee or otherwise become liable for any
Indebtedness that is subordinate or junior in right of payment to any Senior
Indebtedness and senior in any respect in right of payment to the Notes. No
Guarantor shall incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is subordinate or junior in right of payment to
the Guarantor Senior Indebtedness and senior in any respect in right of payment
to the Subsidiary Guarantees.
Section 4.14 Transactions with Affiliates. The Company shall not,
and shall not permit any of its Subsidiaries to, sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "Affiliate Transaction"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Subsidiary than those that would have been obtained in a comparable
transaction by the Company or such Subsidiary with an unrelated Person and (ii)
the Company delivers to the Trustee (a) with respect to any Affiliate
Transaction entered into after the date of this Indenture involving aggregate
consideration in excess of $1,000,000, a resolution of the Board of Directors
set forth in an Officers' Certificate certifying that such Affiliate Transaction
complies with clause (i) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors
and (b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $5,000,000, an opinion as to the fairness to the
Company or such Subsidiary of such Affiliate Transaction from a financial point
of view issued by an investment banking firm of national standing, provided that
the following shall not be deemed to be Affiliate Transactions: (w) the
provision of administrative or management services by the
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Company or any of its officers to any of its Subsidiaries in the ordinary course
of business consistent with past practice, (x) any employment agreement entered
into by the Company or any of its Subsidiaries in the ordinary course of
business and consistent with the past practice of the Company or such
Subsidiary, (y) transactions between or among the Company and/or its Wholly
Owned Subsidiaries or transactions between a Receivables Subsidiary and any
Person in which the Receivables Subsidiary has an Investment and (z)
transactions permitted by Section 4.9 hereof.
Section 4.15 Additional Subsidiary Guarantees. All Subsidiaries
of the Company (other than a Receivables Subsidiary and the U.K. Holding
Subsidiaries) substantially all of whose assets are located in the United States
or that conduct substantially all of their business in the United States shall
be Guarantors. In addition, Company shall not, and shall not permit any of the
Guarantors to, make any Investment in any Subsidiary that is not a Guarantor
unless either (i) such Investment is permitted by Section 4.9 hereof, or (ii)
such Subsidiary executes a Subsidiary Guarantee and delivers an opinion of
counsel in accordance with the provisions of this Indenture.
Section 4.16 Corporate Existence. Subject to Article 5 hereof,
the Company shall do or cause to be done all things necessary to preserve and
keep in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
ARTICLE 5
SUCCESSORS
Section 5.1 Merger, Consolidation, or Sale of Assets. Neither the
Company nor the Guarantor shall in a single transaction or series of related
transactions consolidate or merge with or into (whether or not the Company or
the Guarantor is the surviving corporation) or sell, assign, transfer, lease,
convey or otherwise dispose of all or substantially all of its properties or
assets in one or more related transactions, to another corporation, Person or
entity (other than a merger of the Company with and into the Guarantor) unless
(i) the Company or the Guarantor is the surviving
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corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company or the Guarantor) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company or the Guarantor) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company or the Guarantor, as the case
may be, pursuant to a supplemental indenture under the Notes, the Subsidiary
Guarantee and this Indenture in a form reasonably satisfactory to the Trustee,
(iii) immediately after such transaction, no Default or Event of Default exists
and (iv) the Company, the Guarantor or the entity or Person formed by or
surviving any such consolidation or merger (if other than the Company or the
Guarantor), or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made (A) shall have Consolidated Net Worth
(immediately after the transaction) equal to or greater than the Consolidated
Net Worth of the Company or the Guarantor, as the case may be, immediately
preceding the transaction and (B) shall, at the time of such transaction and
after giving pro forma effect thereto as if such transaction had occurred at the
beginning of the applicable four-quarter period, be permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph in Section 4.10 hereof.
Section 5.2 Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, lease, conveyance or
other disposition of all or substantially all of the assets of the Company or
the Guarantor in accordance with Section 5.1 hereof, the successor corporation
formed by such consolidation or into or with which the Company or Guarantor is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" or the
"Guarantor," as the case may be, shall refer instead to the successor
corporation and not to the Company or the Guarantor), and may exercise every
right and power of the Company or the Guarantor under this Indenture with the
same effect as if such successor Person had been named as the Company or the
Guarantor herein; provided, however, that the predecessor of the Company or the
predecessor of the Guarantor shall not be relieved from the obligation to pay
the principal of and interest on the Notes except in the case of a sale of all
of the Company's or the Guarantor's assets that meets the requirements of
Section 5.1 hereof.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Note
when the same becomes due and payable and the Default continues for a
period of 30 days, whether or not such payment is prohibited by the
provisions of Article 10 hereof;
(2) the Company defaults in the payment of the principal of or
premium, if any, on any Note when the same becomes due and payable at
maturity, upon redemption or otherwise, whether or not such payment is
prohibited by the provisions of Article 10 hereof;
(3) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or
performed pursuant to Section 4.7, 4.8, 4.9 or 4.10 hereof, which
failure remains uncured for 30 days;
(4) the Company fails to comply with any of its other agreements
or covenants in or provisions of, the Notes or this Indenture and the
Default continues for the period and after the notice specified below;
(5) a default occurs under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of
its Subsidiaries (other than a Receivables Subsidiary) (or the payment
of which is Guaranteed by the Company or any of its Subsidiaries),
whether such Indebtedness or Guarantee now exists or shall be created
hereafter, which default (a) is caused by a failure to pay principal of
or premium, if any, or interest on such Indebtedness prior to the
expiration of the grace period provided in such Indebtedness (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 such
Indebtedness, together with the principal amount of any other
Indebtedness as to which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5,000,000 or
more;
(6) a final judgment or final judgments for the payment of money
(not fully covered by insurance) are entered by a court or courts of
competent
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jurisdiction against the Company or any of its Significant Subsidiaries
and such judgment or judgments remain undischarged for a period (during
which execution shall not be effectively stayed) of 60 days, provided
that the aggregate of all such undischarged judgments exceeds
$5,000,000;
(7) any Guarantee shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor, shall deny or disaffirm its obligations under its Subsidiary
Guarantee;
(8) the Company or any of its Significant Subsidiaries pursuant
to or within the meaning of any Bankruptcy Law:
(a) commences a voluntary case,
(b) consents to the entry of an order for relief against
it in an involuntary case,
(c) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(d) makes a general assignment for the benefit of its
creditors, or
(e) generally is not paying its debts as they become due,
or
(9) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(a) is for relief against the Company or any Subsidiary in
an involuntary case,
(b) appoints a Custodian of the Company or any Subsidiary
or for all or substantially all of the property of the Company
or any Subsidiary, or
(c) orders the liquidation of the Company or any
Subsidiary,
and the order or decree remains unstayed and in effect for 60
consecutive days.
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The term "Bankruptcy Law" means title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law.
An Event of Default shall not be deemed to have occurred under
clause (3), (5) or (6) until the Trustee shall have received written notice from
the Company or any of the Holders or unless a Responsible Officer shall have
knowledge of such Event of Default. A Default under clause (4) is not an Event
of Default until the Trustee notifies the Company, or the Holders of at least
25% in principal amount of the then outstanding Notes notify the Company and the
Trustee, of the Default and the Company does not cure the Default within 60 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
Section 6.2 Acceleration. If an Event of Default (other than an
Event of Default specified in clauses (8) and (9) of Section 6.1 relating to the
Company, any Significant Subsidiary or any group of Subsidiaries that, taken
together, would constitute a Significant Subsidiary) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
principal amount of the then outstanding Notes by written notice to the Company
and the Trustee may declare the unpaid principal of and any accrued interest on
all the Notes to be due and payable. Upon such declaration the principal and
interest shall be due and payable immediately (together with the premium
referred to in Section 6.1, if applicable). If an Event of Default specified in
clause (8) or (9) of Section 6.1 relating to the Company, any Significant
Subsidiary or any group of Subsidiaries that, taken together, would constitute a
Significant Subsidiary occurs, such an amount 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. The Holders of a majority in principal amount of the
then outstanding Notes by written notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal or interest that has become due solely because of the acceleration)
have been cured or waived.
Section 6.3 Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and 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
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the Trustee or any Holder of a Note 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. All remedies are cumulative
to the extent permitted by law.
Section 6.4 Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration). Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.5 Control by Majority. Holders of a majority in
principal amount of the then outstanding Notes may direct the time, method and
place of conducting any proceeding for exercising any remedy available to the
Trustee or exercising any trust or power conferred on it. However, the Trustee
may refuse to follow any direction that conflicts with law or this Indenture
that the Trustee determines may be unduly prejudicial to the rights of other
Holders of Notes or that may involve the Trustee in personal liability.
Section 6.6 Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
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(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.7 Rights of Holders of Notes to Receive Payments.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(a) or (b) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest 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 6.9 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
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agents and counsel, and any other amounts due the Trustee under Section 7.7
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.7 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. 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, 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
pursuant to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal and Liquidated Damages, if any), and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium and
Liquidated Damages, if any, and interest, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes 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 a Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section does not apply to a
suit
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by the Trustee, a suit by a Holder of a Note pursuant to Section 6.7 hereof, or
a suit by Holders of more than 10% in principal amount of the then outstanding
Notes.
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee. (a) If 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, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(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) The Trustee may not be relieved from liabilities 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;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(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 6.5 hereof.
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(d) Whether or not therein expressly so provided, every provision
of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee. (a) The Trustee may conclusively
rely upon any document believed by it to be genuine and to have been signed or
presented by the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(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 it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(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 or direction
of any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
that might be incurred by it in compliance with such request or direction.
(g) Except with respect to Section 4.1 herein, the Trustee shall
have no duty to inquire as to the performance of the Company's covenants in
Article 4 hereof. In addition, the Trustee shall not be deemed to have knowledge
of any Default or Event of Default except (i) any Event of Default occurring
pursuant to Sections 6.1(l), 6.1(2) and 4.1 or (ii) any Default or Event of
Default of which the Trustee shall have received written notification or
obtained actual knowledge.
Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.5 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to Holders of Notes a notice of the Default or Event of Default within 90
days after it occurs. Except in the case of a Default or Event of Default in
payment of principal of, premium, if any, or interest on any Note, the Trustee
may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the
interests of the Holders of the Notes.
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Section 7.6 Reports by Trustee to Holders of the Notes. Within 60
days after each May 15 beginning with the May 15 following the date of this
Indenture, and for so long as Notes remain outstanding, the Trustee shall mail
to the Holders of the Notes a brief report dated as of such reporting date that
complies with TIA Section 313(a) (but if no event described in TIA Section
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA Section
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders
of Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed in accordance with TIA Section 313(d).
The Company shall promptly notify the Trustee when the Notes are listed on any
stock exchange.
Section 7.7 Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all
losses, liabilities or expenses incurred by it arising out of or in connection
with the acceptance or administration of its duties under this Indenture,
including the costs and expenses of enforcing this Indenture against the Company
(including this Section 7.7) and defending itself against any claim (whether
asserted by the Company or any Holder or any other person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent any such loss, liability or expense may be
attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel, The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
The obligations of the Company under this Section 7.7 shall
survive the satisfaction and discharge of this Indenture.
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To secure the Company's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.1(8) or (9) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.8 Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section.
The Trustee may resign in writing at any time and be discharged
from the trust hereby created by so notifying the Company. The Holders of Notes
of a majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property, or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of the Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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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 Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There shall at all
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
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ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article Eight.
Section 8.2 Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.2,
the Company shall, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 hereof and the
other Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.4 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, and interest on such Notes when
such payments are due, (b) the Company's obligations with respect to such Notes
under Article 2 and Section 4.2 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.2
notwithstanding the prior exercise of its option under Section 8.3 hereof.
Section 8.3 Covenant Defeasance. Upon the Company's exercise
under Section 8.1 hereof of the option applicable to this Section 8.3, the
Company shall, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, be released from its obligations under the covenants
contained in Sections 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13 and 4.14 hereof with
respect to the outstanding Notes on and after the date the conditions set forth
below are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of
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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, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.1 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.1 hereof of the option applicable to this Section 8.3 hereof, subject to the
satisfaction of the conditions set forth in Section 8.4 hereof. Sections 6.1(5)
through 6.1(7) hereof shall not constitute Events of Default.
Section 8.4 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.2 or
8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest on the outstanding Notes on
the stated date for payment thereof or on the applicable redemption
date, as the case may be;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that (A)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
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(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the
United States reasonably acceptable to the Trustee confirming that the
Holders of the outstanding Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such Covenant Defeasance
and will be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness all or a portion
of the proceeds of which will be used to defease the Notes pursuant to
this Article Eight concurrently with such incurrence) or insofar as
Section 6.1(8) or 6.1(9) hereof is concerned, at any time in the period
ending on the 91st day after the date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not result
in a breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an opinion of
counsel to the effect that on the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the
Company or with the intent of defeating, hindering, delaying or
defrauding any other creditors of the Company; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.5 Deposited Money and Government Securities to be Held
in Trust; Other Miscellaneous Provisions. Subject to Section 8.6 hereof, all
money and
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non-callable Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in respect of the
outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding 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
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.4 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.4(a) hereof), are in excess of the amount thereof that
would then be required to be deposited to effect an equivalent Legal Defeasance
or Covenant Defeasance.
Section 8.6 Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, Liquidated Damages or interest on
any Note and remaining unclaimed for two years after such principal, and
premium, if any, or interest has become due and payable shall be paid to the
Company on its request or (if then held by the Company) shall be discharged from
such trust, and the Holder of such Note shall thereafter, as a secured creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in the New York
Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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Section 8.7 Reinstatement. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 9.2 or 8.3 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 9.2 or 8.3 hereof, as the case may be, provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any Note following 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 held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes. Notwithstanding
Section 9.2 of this Indenture, the Company and the Trustee may amend or
supplement this Indenture or the Notes without the consent of any Holder of a
Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations to
the Holders of the Notes in the case of a merger or consolidation
pursuant to Article Five hereof;
(d) to provide for additional Guarantors as set forth in Section
4.15;
(e) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not adversely
affect the legal rights hereunder of any Holder of the Note; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental
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Indenture, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders of Notes. Except as provided
below in this Section 9.2, the Company and the Trustee may amend or supplement
this Indenture (including Sections 4.7 and 4.8 hereof) and the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding (including consents obtained
in connection with a tender offer or exchange offer for the Notes), and, subject
to Sections 6.4 and 6.7 hereof, any existing Default or Event of Default (other
than a Default or Event of Default in the payment of the principal of, premium,
if any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of
its Board of Directors authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid,
and upon receipt by the Trustee of the documents described in Section 7.2
hereof, the Trustee shall join with the Company in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes 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 amended or
supplemental Indenture or waiver. Subject
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to Sections 6.4 and 6.7 hereof, the Holders of a majority in aggregate principal
amount of the Notes then outstanding may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or alter or waive any of the provisions with respect to the
redemption of the Notes, except as provided above with respect to
Sections 4.7 and 4.8 hereof;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note,
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in aggregate principal amount of the then outstanding Notes and
a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes; or
(g) make any change in Section 6.4 or 6.7 hereof or in the
foregoing amendment and waiver provisions.
Section 9.3 Compliance with Trust Indenture Act. Every amendment
or supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental Indenture that complies with the TIA as then in effect.
Section 9.4 Revocation and Effect of Consents. Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder of a Note 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
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notation of the consent is not made on any Note. However, any such Holder of a
Note or subsequent Holder of a Note may revoke the consent as to its Note if the
Trustee receives written notice of revocation before the date the waiver,
supplement or amendment becomes effective. An amendment, supplement or waiver
becomes effective in accordance with its terms and thereafter binds every
Holder.
Section 9.5 Notation on or Exchange of Notes. The Trustee may
place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue
and the Trustee shall authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.6 Trustee to Sign Amendments, etc. The Trustee shall
sign any amended or supplemental Indenture authorized pursuant to this Article
Nine if the amendment or supplement does not adversely affect the rights,
duties, liabilities or immunities of the Trustee. The Company may not sign an
amendment or supplemental Indenture until the Board of Directors approves it. In
executing any amended or supplemental Indenture, the Trustee shall be entitled
to receive and (subject to Section 7.1) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that the
execution of such amended or supplemental Indenture is authorized or permitted
by this Indenture.
ARTICLE 10
SUBORDINATION
Section 10.1 Agreement to Subordinate. The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Note is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full of all Senior
Indebtedness (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Indebtedness. This Article 10 shall constitute a
continuing offer to all Persons who become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness.
Section 10.2 Liquidation; Dissolution; Bankruptcy. Upon any
distribution to creditors of the Company in a liquidation or dissolution of the
Company or in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding
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relating to the Company or its property, in an assignment for the benefit of
creditors or any marshaling of the Company's assets and liabilities:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of all Obligations due in respect of such Senior
Indebtedness (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Indebtedness)
before Holders shall be entitled to receive any payment with respect to
the Notes (except that Holders may receive (i) securities that are
subordinated to at least the same extent as the Notes to (a) Senior
Indebtedness and (b) any securities issued in exchange for Senior
Indebtedness and (ii) payments and other distributions made from any
defeasance trust created pursuant to Section 8.1 hereof); and
(2) until all Obligations with respect to Senior Indebtedness (as
provided in subsection (1) above) are paid in full, any distribution to
which Holders would be entitled but for this Article shall be made to
holders of Senior Indebtedness (except that Holders may receive
securities that are subordinated to at least the same extent as the
Notes to (a) Senior Indebtedness and (b) any securities issued in
exchange for Senior Indebtedness), as their interests may appear.
Section 10.3 Default on Designated Senior Indebtedness. The
Company may not make any payment or distribution to the Trustee or any Holder in
respect of Obligations with respect to the Notes and may not acquire from the
Trustee or any Holder any Notes for cash or property (other than (i) securities
that are subordinated to at least the same extent as the Notes to (a) Senior
Indebtedness and (b) any securities issued in exchange for Senior Indebtedness
and (ii) payments and other distributions made from any defeasance trust created
pursuant to Section 8.1 hereof) until all principal and other Obligations with
respect to the Senior Indebtedness have been paid in full if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Indebtedness occurs and is
continuing beyond any applicable grace period in the agreement,
indenture or other document governing such Designated Senior
Indebtedness; or
(ii) a default, other than a payment default, on Designated
Senior Indebtedness occurs and is continuing that then permits holders
of the Designated Senior Indebtedness to accelerate its maturity and the
Trustee receives a notice of the default (a "Payment Blockage Notice")
from a Person
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who may give it pursuant to Section 10.11 hereof. If the Trustee
receives any such Payment Blockage Notice, no subsequent Payment
Blockage Notice shall be effective for purposes of this Section 10.3
unless and until at least 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice. No
nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.3(ii)
hereof, 179 days pass after notice is received if the maturity of such
Designated Senior Indebtedness has not been accelerated,
if this Article 10 otherwise permits the payment, distribution or acquistion at
the time of such payment or acquisition.
Section 10.4 Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
Section 10.5 When Distribution Must Be Paid Over. In the event
that the Trustee or any Holder receives any payment of any Obligations with
respect to the Notes at a time when the Trustee or such Holder, as applicable,
has actual knowledge that such payment is prohibited by Section 10.3 hereof,
such payment shall be held by the Trustee or such Holder, in trust for the
benefit of, and shall be paid forthwith over and delivered, upon written
request, to, the holders of Senior Indebtedness as their interests may appear or
their Representative under the indenture or other agreement (if any) pursuant to
which Senior Indebtedness may have been issued, as their respective interests
may appear, for application to the payment of all Obligations with respect to
Senior Indebtedness remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform only such obligations on the part of the Trustee as are
specifically set forth in this Article 10, and no implied covenants or
obligations with
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respect to the holders of Senior Indebtedness shall be read into this Indenture
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness, and shall not be liable to any such
holders if the Trustee shall pay over or distribute to or on behalf of Holders
or the Company or any other Person money or assets to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article 10, except if
such payment is made as a result of the willful misconduct or gross negligence
of the Trustee.
Section 10.6 Notice by Company. The Company shall promptly notify
the Trustee and the Paying Agent of any facts known to the Company that would
cause a payment of any Obligations with respect to the Notes to violate this
Article 10, but failure to give such notice shall not affect the subordination
of the Notes to the Senior Indebtedness as provided in this Article 10.
Section 10.7 Subrogation. After all Senior Indebtedness is paid
in full and until the Notes are paid in full, Holders shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Indebtedness to receive distributions applicable
to Senior Indebtedness to the extent that distributions otherwise payable to the
Holders have been applied to the payment of Senior Indebtedness. A distribution
made under this Article 10 to holders of Senior Indebtedness that otherwise
would have been made to Holders is not, as between the Company and Holders, a
payment by the Company on the Notes.
Section 10.8 Relative Rights. This Article 10 defines the
relative rights of Holders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Holders, the obligation of
the Company, which is absolute and unconditional, to pay principal of
and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors of the
Company other than their rights in relation to holders of Senior
Indebtedness; or
(3) prevent the Trustee or any Holder from exercising its
available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Indebtedness to receive
distributions and payments otherwise payable to Holders.
If the Company fails because of this Article 10 to pay principal
of or interest on a Note on the due date, the failure is still a Default or
Event of Default.
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Section 10.9 Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Section 10.10 Distribution or Notice to Representative. Whenever
a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Article
10.
Section 10.11 Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article 10. Only the Company or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.7 hereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
Any Agent may do the same with like rights.
Section 10.12 Authorization to Effect Subordination. Each Holder
of a Note by the Holder's acceptance thereof authorizes and directs the Trustee
on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a
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proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.9 hereof at least 30 days before the expiration of the
time to file such claim, the Representative is hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Notes.
Section 10.13 Amendments. The provisions of this Article 10 shall
not be amended or modified in a manner materially adverse to the holders of
Senior Indebtedness without the written consent of the holders of all Designated
Senior Indebtedness.
ARTICLE 11
SUBSIDIARY GUARANTEES
Section 11.1 Subsidiary Guarantees. Subject to the provisions of
this Article 11, each Guarantor, jointly and severally, hereby unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, that: (a) the principal of,
and premium, if any, and interest on the Notes will be duly and punctually paid
in full when due, whether at maturity, by acceleration or otherwise, and
interest on overdue principal, and premium, if any, and (to the extent permitted
by law) interest on any interest, if any, on the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder or under the Notes
(including fees, expenses or other) will be promptly paid in full or performed,
all in accordance with the terms hereof; and (b) in case of any extension of
time of payment or renewal of any Notes or any of such other obligations, the
same will be promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by acceleration
or otherwise. Failing payment when due of any amount so guaranteed or failing
performance of any other obligation of the Company to the Holders, for whatever
reason, each Guarantor will be obligated to pay, or to perform or to cause the
performance of, the same immediately. An Event of Default under this Indenture
or the Notes shall constitute an event of default under this Subsidiary
Guarantee, and shall entitle the Holders of Notes to accelerate the obligations
of each Guarantor hereunder in the same manner and to the same extent as the
obligations of the Company. Each Guarantor hereby agrees that its obligations
hereunder shall be unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Indenture, the absence of any action to
enforce the same, any waiver or consent by any Holder of the Notes with respect
to any thereof, the entry of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives and relinquishes: (a) any right to require the Trustee, the Holders or
the Company (each, a "Benefitted Party") to
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proceed against the Company, the Subsidiaries or any other Person or to proceed
against or exhaust any security held by a Benefitted Party at any time or to
pursue any other remedy in any secured party's power before proceeding against
the Guarantors; (b) any defense that may arise by reason of the incapacity, lack
of authority, death or disability of any other Person or Persons or the failure
of a Benefitted Party to file or enforce a claim against the estate (in
administration, bankruptcy or any other proceeding) of any other Person or
Persons; (c) demand, protest and notice of any kind (except as expressly
required by this Indenture), including but not limited to notice of the
existence, creation or incurring of any new or additional Indebtedness or
obligation or of any action or non-action on the part of the Guarantors, the
Company, the Subsidiaries, any Benefitted Party, any creditor of the Guarantors,
the Company or the Subsidiaries or on the part of any other Person whomsoever in
connection with any obligations the performance of which are hereby guaranteed;
(d) any defense based upon an election of remedies by a Benefitted Party,
including but not limited to an election to proceed against the Guarantors for
reimbursement; (e) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount, nor
in other respects more burdensome than that of the principal; (f) any defense
arising because of a Benefitted Party's election, in any proceeding instituted
under the Bankruptcy Law, of the application of Section 1111(b)(2) of the
Bankruptcy Code; and (g) any defense based on any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code. The Guarantors
hereby covenant that the Subsidiary Guarantee will not be discharged except by
payment in full of all principal, premium, if any, and interest on the Notes and
all other costs provided for under this Indenture, or as provided in Section
8.1.
If any Holder or the Trustee is required by any court or
otherwise to return to either the Company or the Guarantors, or any trustee or
similar official acting in relation to either the Company or the Guarantors, any
amount paid by the Company or the Guarantors to the Trustee or such Holder, the
Subsidiary Guarantees, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each of the Guarantors agrees that it will not be
entitled to any right of subrogation in relation to the Holders in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby. Each Guarantor agrees that, as between it, on the one hand,
and the Holders of Notes and the Trustee, on the other hand, (x) the maturity of
the obligations guaranteed hereby may be accelerated as provided in Article 6
hereof for the purposes hereof, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article 6 hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by such Guarantor for the
purpose of the Subsidiary Guarantee.
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Section 11.2 Execution and Delivery of Subsidiary Guarantees. To
evidence the Subsidiary Guarantees set forth in Section 11.1 hereof, each of the
Guarantors agrees that a notation of the Subsidiary Guarantees substantially in
the form included in Exhibit B shall be endorsed on each Note authenticated and
delivered by the Trustee and that this Indenture shall be executed on behalf of
the Guarantors by the Chairman of the Board, any Vice Chairman, the President or
one of the Vice Presidents of the Guarantors, under a facsimile of its seal
reproduced on this Indenture and attested to by an Officer other than the
Officer executing this Indenture.
Each of the Guarantors agrees that the Subsidiary Guarantees set
forth in this Article 11 will remain in full force and effect and apply to all
the Notes notwithstanding any failure to endorse on each Note a notation of the
Subsidiary Guarantees.
If an Officer whose facsimile signature is on a Note no longer
holds that office at the time the Trustee authenticates the Note on which the
Subsidiary Guarantees are endorsed, the Subsidiary Guarantees shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantees
set forth in this Indenture on behalf of the Guarantors.
Section 11.3 Guarantors May Consolidate, etc., on Certain Terms.
(a) Nothing contained in this Indenture or in the Notes shall prevent any
consolidation or merger of a Guarantor with or into the Company or another
Guarantor, or shall prevent the transfer of all or substantially all of the
assets of a Guarantor to the Company or another Guarantor. Upon any such
consolidation, merger, transfer or sale, the Subsidiary Guarantee of such
Guarantor shall no longer have any force or effect.
(b) Except as set forth in Article 4, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or merger of a
Guarantor (other than the Guarantor) with or into a corporation or corporations
other than the Company or another Guarantor (whether or not affiliated with the
Guarantor), or successive consolidations or mergers in which such a Guarantor or
its successor or successors shall be a party or parties, or shall prevent the
transfer of all or substantially all of the assets of such a Guarantor, to a
corporation other than the Company or another Guarantor (whether or not
affiliated with such Guarantor) authorized to acquire and operate the same;
provided, however, that, except as provided in Section 11.4 hereof, each such
Guarantor hereby covenants and agrees that, upon any such
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consolidation, merger or transfer, the Subsidiary Guarantee endorsed on the
Notes, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by such Guarantor,
shall be expressly assumed (in the event that the Guarantor is not the surviving
corporation in the merger), by a supplemental indenture satisfactory in form to
the Trustee, executed and delivered to the Trustee, by the corporation formed by
such consolidation, or into which such Guarantor shall have been merged, or by
the corporation which shall have acquired such property. In case of any such
consolidation, merger or transfer of assets and upon the assumption by the
successor corporation, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by such Guarantor,
such successor corporation shall succeed to and be substituted for such
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
(c) The Trustee, subject to the provisions of Section 11.4
hereof, shall be entitled to receive an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any such consolidation, merger, sale or
conveyance, and any such assumption of Obligations, comply with the provisions
of this Section 11.3. Such certificate and opinion shall comply with the
provisions of Section 11.5.
Section 11.4 Releases Following Sale of Assets. Concurrently with
any sale of assets (including, if applicable, all of the Capital Stock of any
Guarantor other than the Guarantor), any Liens in favor of the Trustee in the
assets sold thereby shall be released; provided that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are treated in
accordance with the provisions of Section 4.8 hereof. If the assets sold in such
sale or other disposition include all or substantially all of the assets of any
Guarantor (other than the Guarantor) or all of the Capital Stock of any
Guarantor (other than the Guarantor) in each case, in compliance with the terms
hereof, then such Guarantor (in the event of a sale or other disposition of all
of the Capital Stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of all or substantially
all of the assets of such Guarantor) shall be released from and relieved of its
obligations under its Subsidiary Guarantee or
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<PAGE> 86
Section 11.3 hereof as the case may be; provided that in the event of an Asset
Sale, the Net Proceeds from such sale or other disposition are treated in
accordance with the provisions of Section 4.8 hereof. Upon delivery by the
Company to the Trustee of an Officers' Certificate and Opinion of Counsel, and
to the effect that such sale or other disposition was made by the Company in
accordance with the provisions of this Indenture, including without limitation
Section 4.8 hereof, the Trustee shall execute any documents reasonably required
in order to evidence the release of any such Guarantor from its obligations
under its Subsidiary Guarantee. Any Guarantor not released from its obligations
under its Subsidiary Guarantee shall remain liable for the full amount of
principal of and interest on the Notes and for the other obligations of any
Guarantor under this Indenture as provided in this Article 11.
Section 11.5 Limitation of Guarantor's Liability. Each Guarantor,
and by its acceptance hereof each Holder, hereby confirms that it is the
intention of all such parties that the guarantee by such Guarantor pursuant to
its Subsidiary Guarantee not constitute a fraudulent transfer or conveyance for
purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar federal or state law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under this Article 11
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under this Article 11, result
in the obligations of such Guarantor under the Subsidiary Guarantee of such
Guarantor not constituting a fraudulent transfer or conveyance.
Section 11.6 Application of Certain Terms and Provisions to the
Guarantor. (a) For purposes of any provision of this Indenture which provides
for the delivery by any Guarantor of an Officers' Certificate and/or an Opinion
of Counsel, the definitions of such terms in Section 1.1 shall apply to such
Guarantor as if references therein to the Company were references to such
Guarantor.
(b) Any request, direction, order or demand which by any
provision of this Indenture is to be made by any Guarantor shall be sufficient
if evidenced as described in Section 11.2 as if references therein to the
Company were references to such Guarantor.
(c) Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the holders
of Notes to
80
<PAGE> 87
or on any Guarantor may be given or served as described in Section 11.2 as if
references therein to the Company were references to such Guarantor.
(d) Upon any demand, request or application by any Guarantor to
the Trustee to take any action under this Indenture, such Guarantor shall
furnish to the Trustee such certificates and opinions as are required in Section
11.4 hereof as if all references therein to the Company were references to such
Guarantor.
Section 11.7 Subordination of Subsidiary Guarantees. The
obligations of each Guarantor under its Subsidiary Guarantee pursuant to this
Article 11 shall be junior and subordinated to the Guarantor Senior Indebtedness
of such Guarantor on the same basis as the Notes are junior and subordinated to
the Senior Indebtedness of the Company. For the purposes of the foregoing
sentence, (a) each Guarantor may make, and the Trustee and the Holders of the
Notes shall have the right to receive and/or retain, payments by any of the
Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including Article 10 hereof,
and (b) the rights and obligations of the relevant parties relative to the
Subsidiary Guarantees and the Guarantor Senior Indebtedness shall be the same as
their respective rights and obligations relative to the Notes and Senior
Indebtedness of the Company pursuant to Article 10.
ARTICLE 12
MISCELLANEOUS
Section 12.1 Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by TIA
Section 318(c), the imposed duties shall control.
Section 12.2 Notices. Any notice or communication by the Company
or the Trustee to the others is duly given if in writing and delivered in Person
or mailed by first class mail (registered or certified, return receipt
requested), telex, telecopier or overnight air courier guaranteeing next day
delivery, to the others' address:
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<PAGE> 88
If to the Company:
Day International Group, Inc.
P.O. Box 338
333 West First Street
Dayton, Ohio 45401-0338
Telecopier No.: (513) 224-7124
Attention: Chief Financial Officer
If to the Trustee:
American Bank National Association
101 East Fifth Street
St Paul, Minnesota 55101-1860
Telephone, No.: (612) 229-2600
Telecopier No.: (612) 229-6415
Attention: Corporate Trust Department
[PAGE MISSING FROM MASTER]
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.5 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 12.5 Statements Required in Certificate of Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e)
and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him
to express
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<PAGE> 89
an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 12.6 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 12.7 No Personal Liability of Directors, Officers,
Employees and Stockholders. No past, present or future director, officer,
employee, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes, this Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 12.8 GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE
SUBSIDIARY GUARANTEES.
Section 12.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 12.10 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 12.11 Severability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 12.12 Counterpart Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
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<PAGE> 90
Section 12.13 Table of Contents, Headings, etc. The Table of
Contents, Cross-Reference Table and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
84
<PAGE> 91
SIGNATURES
Dated as of June 6, 1995 DAY INTERNATIONAL GROUP, INC.
By: _______________________________
Name: Dennis R. Wolters
Title: President
Attest:
____________________________ (SEAL)
Name: Lawrence W. Ward, Jr.
Title: Secretary
Dated as of June 6, 1995 DAY INTERNATIONAL, INC.
By: _______________________________
Name: Dennis R. Wolters
Title: President
Attest:
____________________________ (SEAL)
Name: Lawrence W. Ward, Jr.
Title: Secretary
Dated as of June 6, 1995 AMERICAN BANK NATIONAL
ASSOCIATION
By: _______________________________
Name:
Title:
Attest:
____________________________ (SEAL)
Name:
Title:
85
<PAGE> 92
SIGNATURES
Dated as of June 6, 1995 DAY INTERNATIONAL GROUP, INC.
By: _______________________________
Name:
Title:
Attest:
____________________________ (SEAL)
Name:
Title:
Dated as of June 6, 1995 DAY INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
Attest:
____________________________ (SEAL)
Name:
Title:
Dated as of June 6, 1995 AMERICAN BANK NATIONAL
ASSOCIATION
By: _______________________________
Name:
Title:
Attest:
____________________________ (SEAL)
Name:
Title:
86
<PAGE> 93
Exhibit A
(Face of Note)
11 1/8 % [Series A] [Series B] Senior Subordinated Notes due 2005
No. $________
DAY INTERNATIONAL GROUP, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on June 1, 2005.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
Dated: June 6, 1995
DAY INTERNATIONAL GROUP, INC.
By: _______________________________
Name:
Title:
By: _______________________________
Name:
Title:
(SEAL)
A-1
<PAGE> 94
This is one of the [Global)
Notes referred to in the
within-mentioned Indenture:
American Bank National Association, as Trustee
By:_____________________________________
A-2
<PAGE> 95
(Back of Note)
11 1/8% [Series A] [Series B] Senior Subordinated Notes due 2005
[Unless and until it is exchanged in whole or in part for Notes
in definitive form, this Note may not be transferred except 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 or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of __________________ or
such other name as may be requested by an authorized representative of DTC (and
any payment is made to Cede & Co. or such other entity as may be 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.]1
THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED
BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
- --------
1. This paragraph should be included only if the Note is issued in global form.
A-3
<PAGE> 96
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE
UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE.
Capitalized terms used herein shall have the meanings assigned to
them in this Indenture referred to below unless otherwise indicated.
1. Interest. Day International Group, Inc., a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 11 1/8% per annum from June 6, 1995 until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on June 1 and December 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be December 1, 1995. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
A-4
<PAGE> 97
2. Method of Payment. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 15 or November
15 next preceding the Interest Payment Date, even if such Notes are cancelled
after such record date and on or before such Interest Payment Date, except as
provided in Section 2.12 of the Indenture with respect to defaulted interest.
The Notes will be payable as to principal, premium, interest and Liquidated
Damages at the office or agency of the Company maintained for such purpose
within or without the City and State of New York, or, at the option of the
Company, payment of interest and Liquidated Damages may be made by check mailed
to the Holders at their addresses set forth in the register of Holders, and
provided that payment by wire transfer of immediately available funds will be
required with respect to principal of and interest, premium and Liquidated
Damages on, all Global Notes and all other Notes the Holders of which shall have
provided wire transfer instructions to the Company or the Paying Agent. Such
payment shall be in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, American Bank National
Association, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of June 6, 1995 ("Indenture") between the Company and the Trustee. 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, as amended (15
U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms,
and Holders are referred to the Indenture and such Act for a statement of such
terms. The Notes are unsecured obligations of the Company limited to
$100,000,000 in aggregate principal amount.
5. Optional Redemption. (a) Except as set forth in clause (b) of
this Section of this Note, the Company shall not have the option to redeem the
Notes prior to June 1, 2000. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on June 1 of the
years indicated below:
A-5
<PAGE> 98
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2000..................................................... 104.944%
2001..................................................... 103.708%
2002..................................................... 102.472%
2003..................................................... 101.236%
2004..................................................... 100.000%
</TABLE>
(b) Notwithstanding the provisions of clause (a) of this Section
of the Notes, at any time prior to June 1, 1998, the Company may (but shall not
have the obligation to) redeem up to 33 1/3% of the original aggregate principal
amount of the Notes at a redemption price of 110.125 % of the principal amount
thereof, in each case plus accrued and unpaid interest and Liquidated Damages
thereon to the redemption date, with the net proceeds of an Equity Offering;
provided that at least 66 2/3% of the aggregate principal amount of Notes
originally issued remain outstanding immediately after the occurrence of such
redemption; and provided, further, that such redemption shall occur within 60
days of the date of the closing of such Equity Offering.
(c) Notice of redemption will be mailed at least 30 days but not
more than 60 days before the redemption date to each Holder whose Notes are to
be redeemed at its registered address. Notes in denominations larger than $1,000
may be redeemed in part but only in integral multiples of $1,000, unless all of
the Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
6. Mandatory Redemption. The Company shall not be required to
make mandatory redemption payments with respect to the Notes.
7. Repurchase at Option of Holder. (a) Upon the occurrence of a
Change of Control, each Holder of Notes will have the right to require the
Company to repurchase all or any part (equal to $1,000 or an integral multiple
thereof) of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to 101% of the
aggregate principal amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company will mail
a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and offering to repurchase Notes pursuant to
the procedures required by the Indenture and described in such notice. The
Company will comply with the requirements of Rule 14e-1 under the Exchange Act
and
A-6
<PAGE> 99
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control.
On the Change of Control Payment Date, the Company will, to the
extent lawful, (1) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (2) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each Holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. Prior to complying with the
provisions of this covenant, but in any event within 90 days following a Change
of Control, the Company will either repay all outstanding Senior Indebtedness or
obtain the requisite consents, if any, under all agreements governing
outstanding Senior Indebtedness to permit the repurchase of Notes required by
this covenant. The Company will publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of Control Payment
Date.
(b) The Company will not, and will not permit any of its
Subsidiaries to, engage in an Asset Sale in excess of $1,000,000 unless (i) the
Company (or the Subsidiary, as the case may be) receives consideration at the
time of such Asset Sale at least equal to the fair market value, and in the case
of a lease of assets, a lease providing for rent and other conditions which are
no less favorable to the Company (or the Subsidiary, as the case my be) in any
material respect than the then prevailing market conditions (evidenced in each
case by a resolution of the Board of Directors of such entity set forth in an
Officers' Certificate delivered to the Trustee) of the assets or Equity
Interests sold or otherwise disposed of, and (ii) at least 75% (100% in the case
of lease payments) of the consideration therefor received by the Company or such
Subsidiary is in the form of cash or Cash Equivalents; provided that the amount
of (x) any liabilities (as shown on the Company's or such Subsidiary's most
recent balance sheet or in the notes thereto, excluding contingent liabilities
and trade payables), of the Company or any Subsidiary (other than liabilities
that are by their terms subordinated to the Notes or any Guarantee thereof) that
are assumed by the transferee of any such assets and (y) any notes or other
obligations received by the Company or any such Subsidiary from such transferee
that are promptly, but in no event more than 30 days
A-7
<PAGE> 100
after receipt, converted by the Company or such Subsidiary into cash (to the
extent of the cash received), shall be deemed to be cash for purposes of this
provision.
The Company or any of its Subsidiaries may apply such Net
Proceeds, at its option, (a) to permanently reduce Senior Term Debt, (b) to
permanently reduce Senior Revolving Debt (and to correspondingly reduce
commitments with respect thereto), (c) to commit, within 270 days after the
consummation of an Asset Sale, to the acquisition of another business or the
acquisition of other long-term assets, in each case, in the same or a similar
line of business as the Company or any of its Subsidiaries was engaged in on the
date of the Indenture and reasonable extensions or expansions thereof; provided,
that any Net Proceeds that are committed to be used are so used within 360 days
of such Asset Sale, or (d) to reimburse the Company or its Subsidiaries for
expenditures made, and costs incurred, to repair, rebuild, replace or restore
property subject to loss, damage or taking to the extent that the Net Proceeds
consist of insurance proceeds received on account of such loss, damage or
taking. Pending the final application of any such Net Proceeds, the Company may
temporarily reduce Senior Revolving Debt or otherwise invest such Net Proceeds
in any manner that is not prohibited by the Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in the first sentence
of this paragraph will be deemed to constitute "Excess Proceeds." When the
aggregate amount of Excess Proceeds exceeds $5,000,000, the Company will be
required to make an offer to all Holders of Notes (an "Asset Sale Offer") to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds, at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated Damages
thereon to the date of purchase, in accordance with the procedures set forth in
the Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof exceeds the amount of Excess Proceeds, the Trustee shall select the
Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero.
8. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes my be registered and Notes my be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a
A-8
<PAGE> 101
period of 15 days before a selection of Notes to be redeemed or during the
period between a record date and the corresponding Interest Payment Date.
9. Persons Deemed Owners. The registered Holder of a Note my be
treated as its owner for all purposes.
10. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
11. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest or Liquidated Damages on the
Notes; (ii) default in payment when due of principal of or premium, if any, on
the Notes when the same become due and payable at maturity, upon redemption
(including in connection with an offer to purchase) or otherwise; (iii) failure
by the Company to comply with Section 4.7, 4.8, 4.9 or 4.10 of the Indenture,
which failure remains uncured for 30 days; (iv) failure by the Company for 60
days after notice to the Company by the Trustee or the Holders of at least 25%
in principal amount of the Notes then outstanding to comply with certain other
agreements in the Indenture or the Notes; (v) default under certain other
agreements relating to Indebtedness of the Company which default results in the
acceleration of such Indebtedness prior to its express maturity; (vi) certain
final judgments for the payment of money that remain undischarged for a period
of 60 days; (vii) a declaration that any of the Subsidiary Guarantees is
unenforceable; or (viii) certain events of bankruptcy of insolvency with respect
to the Company or any of its Significant Subsidiaries. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable. Notwithstanding the foregoing, in the case of an Event of
Default arising from certain events of bankruptcy or insolvency, all outstanding
Notes will become due and payable
A-9
<PAGE> 102
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of interest on, or the principal of, the Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
12. Subordination. The payment of principal of, premium, if any,
and interest on the Notes will be subordinated in right of payment to the prior
payment in full of Senior Indebtedness as set forth in Article 10 of the
Indenture.
13. Trustee Dealings with Company. The Trustee, in its individual
or any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
15. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
A-10
<PAGE> 103
17. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transferred Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement dated as of the date of the Indenture, between the
Company and the parties named on the signature pages thereof (the "Registration
Rights Agreement").
18. 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 and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Day International Group, Inc.
P.O. Box 338
333 West First Street
Dayton, Ohio 45401-0338
Telecopier No.: (513) 226-1855
Attention: Chief Financial Officer
A-11
<PAGE> 104
EXHIBIT B
SUBSIDIARY GUARANTEE
The Guarantor listed below (hereinafter referred to as the
"Guarantors," which term includes any successor or assign under the Indenture
(the "Indenture") and any additional Guarantors), has irrevocably and
unconditionally guaranteed (i) the due and punctual payment of the principal of,
premium, if any, and interest on the 11 1/8% Senior Subordinated Notes due 2005
(the "Notes") of Day International Group, Inc., a Delaware corporation (the
"Company"), whether at stated maturity, by acceleration or otherwise, the due
and punctual payment of interest on the overdue principal, and premium if any,
and (to the extent permitted by law) interest on any interest, if any, on the
Notes, and the due and punctual performance of all other obligations of the
Company, to the Holders or the Trustee all in accordance with the terms set
forth in Article 10 of the Indenture, (ii) in case of any extension of time of
payment or renewal of any Notes or any such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise, and (iii) the payment of any and all costs and expenses (including
reasonable attorneys' fees) incurred by the Trustee or any Holder in enforcing
any rights under this Subsidiary Guarantee.
The obligations of each Guarantor to the Holder and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 11 of the Indenture and reference is hereby made to such
Indenture for the precise terms of this Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of each Guarantor shall have any liability under this
Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This is a continuing Guarantee and shall remain in full force and
effect and shall be binding upon each Guarantor and its successors and assigns
until full and final payment of all of the Company's obligations under the Notes
and Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders, and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a Guarantee
of payment and not of collectibility.
B-1
<PAGE> 105
This Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
The Obligations of each Guarantor under its Subsidiary Guarantee
shall be limited to the extent necessary to insure that it does not constitute a
fraudulent conveyance under applicable law.
The Obligations of each Guarantor under its Subsidiary Guarantee
pursuant to Article 11 of the Indenture shall be junior and subordinated to the
Guarantor Senior Indebtedness (as defined in the Indenture) of such Guarantor on
the same basis as the Notes are junior and subordinated to the Senior
Indebtedness of the Company. For the purposes of the foregoing sentence, (a)
each Guarantor may make, and the Trustee and the Holders of the Notes shall have
the right to receive and/or retain, payments by any of the Guarantors only at
such times as they may receive and/or retain payments in respect of the Notes
pursuant to the Indenture, including Article 10 thereof, and (b) the rights and
obligations of the relevant parties relative to the Subsidiary Guarantees and
the Guarantor Senior Indebtedness shall be the same as their respective rights
and obligations relative to the Notes and Senior Indebtedness of the Company
pursuant to Article 10 of the Indenture.
THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE
INCORPORATED HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Guarantor:
DAY INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
B-2
<PAGE> 106
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:_________________________
Your Signature: ___________________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
B-3
<PAGE> 107
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.7 or 4.8 of the Indenture, check the box below:
[ ] Section 4.7 [ ] Section 4.8
If you want to elect to have only part of the Note purchased by
the Company pursuant to Section 4.7 or Section 4.8 of the Indenture, state the
amount you elect to have purchased: $___________
Date:_______________ Your Signature:______________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.: _____________________________
Signature Guarantee
B-4
<PAGE> 108
SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE(2)
The following exchanges of a part of this Global Note for
Definitive Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Note authorized officer of
Principal Amount of Principal Amount of following such decrease Trustee or Note
Date of Exchange this Global Note this Global Note (or increase) Custodian
- ----------------- -------------------- --------------------- ----------------------- ---------------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(2.) This should be included only if the Note is issued in global form.
B-5
<PAGE> 1
Exhibit 4.2
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE dated as of March 13, 1998, among DAY
INTERNATIONAL GROUP, INC., a Delaware corporation (the "Company"), DAY
INTERNATIONAL, INC., a Delaware corporation (the "Guarantor"), and FIRSTAR BANK
OF MINNESOTA, N.A., a Delaware corporation (as successor in interest to American
Bank National Association) as trustee (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company, the Guarantor and the Trustee have heretofore
executed and delivered a certain indenture, dated as of June 6, 1995 (the
"Indenture"), providing for the issuance of an aggregate principal amount of
$100,000,000 of 11 1/8% Senior Subordinated Notes due 2005 of the Company (the
"Notes");
WHEREAS, pursuant to the Indenture, the Guarantor has guaranteed the
obligations of the Company under the Notes and the Indenture;
WHEREAS, Section 9.02 of the Indenture provides that with the
consent of any holders of at least a majority in principal amount of the Notes
outstanding, the Company and the Trustee may amend or supplement the Indenture;
WHEREAS, the Company desires to amend or eliminate certain
provisions of the Indenture as hereinafter set forth;
WHEREAS, the Company has requested that the Trustee join in the
execution of this First Supplemental Indenture for the purpose of evidencing
such amendments;
WHEREAS, the execution and delivery of this First Supplemental
Indenture has been authorized by resolutions of the Boards of Directors of the
Company; and
WHEREAS, all conditions precedent and requirements necessary to make
this First Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been complied with, performed and fulfilled and
the execution and delivery hereof have been in all respects duly authorized;
<PAGE> 2
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all holders of the Securities, as follows:
ARTICLE ONE
AMENDMENTS
SECTION 1.1. Modifications of Definitions. The following additions,
deletions and alterations are hereby made in Section 1.01 of the Indenture:
(a) The following definitions in Section 1.01 of the Indenture are
hereby amended to read in their entirety as follows:
"Consolidated EBITDA" means, with respect to the Company and its
Subsidiaries for any period, the sum of, without duplication, (i) the
Consolidated Net Income for such period, plus (ii) the Fixed Charges for
such period, plus (iii) provision for taxes based on income or profits for
such period (to the extent such income or profits were included in
computing Consolidated Net Income for such period), plus (iv) consolidated
depreciation, amortization and other non-cash charges of the Company and
its Subsidiaries required to be reflected as expenses on the books and
records of the Company, minus (v) cash payments with respect to any
non-recurring, non-cash charges previously added back pursuant to clause
(iv), and (vi) excluding the impact of foreign currency translations.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash
charges of, a Subsidiary of a Person shall be added to Consolidated Net
Income to compute Consolidated EBITDA only to the extent (and in the same
proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and, except in the
case of the Guarantor, only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such
Subsidiary without prior approval (that has not been obtained), pursuant
to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable
to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not
a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly
2
<PAGE> 3
Owned Subsidiary thereof that is a Guarantor, (ii) the Net Income of any
Subsidiary (other than the Guarantor) shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles shall be excluded, (v) the Net Income of, or any dividends or
other distributions from, any Unrestricted Subsidiary, to the extent
otherwise included, shall be excluded, whether or not distributed to the
Company or one of its Subsidiaries, and (vi) all other extraordinary gains
and extraordinary losses shall be excluded.
"Credit Agreement" means (i) prior to the Closing Date, that certain
Credit Agreement, dated as of the date of this Indenture, by and among the
Company and NationsBank of Texas, N.A., as agent, and the lenders parties
thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each
case as amended, modified, renewed, refunded, replaced, restated or
refinanced from time to time and (ii) on and after the Closing Date, that
certain Senior Secured Credit Agreement, dated as of January 15, 1998,
among the Company, the several lenders from time to time thereto, Societe
Generale Securities Corporation, as Arranger and Societe Generale as
Administrative Agent, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith,
and in each case as amended, modified, renewed, refunded, replaced,
restated or refinanced from time to time.
"Existing Indebtedness" means the Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the Closing Date (including, without limitation, Indebtedness
under the Cash Retention Notes) until such amounts are repaid.
"Senior Indebtedness" means (i) the Senior Bank Debt and (ii) any
other Indebtedness permitted to be incurred by the Company under the terms
of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is subordinated in right of payment to
the Notes. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company,
3
<PAGE> 4
(x) any Indebtedness of the Company to any of its Subsidiaries, (y) any
trade payables or (z) any Indebtedness that is incurred in violation of
this Indenture.
(b) The following definitions are hereby added to Section 1.01 of
the Indenture:
"Acquisition" means GSD Acquisition Corp.'s acquisition of
approximately 93.9% of the common stock of the Company pursuant to the
terms of the Stock Purchase Agreement, dated as of December 18, 1997,
among Greenwich IV LLC, GSD Acquisition Corp. and the stockholders of the
Company, as amended.
"Closing Date" means January 16, 1998.
"GSD Senior Credit Agreement" means the Holdings Senior Credit
Agreement, dated as of January 15, 1998, among GSD Acquisition Corp., GSD
Acquisition II Corp., Societe Generale as Administrative Agent and Societe
Generale Securities Corporation as Arranger, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed,
refunded, replaced, restated or refinanced from time to time.
"Investors" means, collectively, Greenwich Street Capital Partners,
Inc. and SG Capital Partners, LLC (and their respective successors and
assigns).
"Management Agreements" means, collectively, the Consulting
Agreement, the Fee Agreement and the Indemnification Agreement, each
between the Company and Greenwich Street Capital Partners, L.P. (and its
successors and assigns thereunder), as each may be amended, supplemented,
waived or otherwise modified from time to time in accordance with the
terms thereof and of the Indenture.
"Preferred Stock" means the Preferred Stock of the Company described
in the Company's Consent Solicitation Statement, dated as of February 20,
1998, as the same may be amended from time to time.
"Senior Secured Credit Agreement" means the Senior Secured Credit
Agreement, dated as of January 15, 1998, among the Company, the several
lenders from time to time thereto, Societe Generale Securities
Corporation, as Arranger and Societe Generale as Administrative Agent,
including any related notes, guarantees, collateral documents, instruments
and agreements executed in connection therewith,
4
<PAGE> 5
and in each case as amended, modified, renewed, refunded, replaced,
restated or refinanced from time to time.
"Senior Subordinated Notes" means the Senior Subordinated Notes of
the Company described in the Company's Consent Solicitation Statement,
dated as of February 20, 1998, as the same may be amended from time to
time.
"Take-Out Securities" means, collectively, the Senior Subordinated
Notes and the Preferred Stock.
"Tax Sharing Agreement" means the Tax Sharing Agreement between the
Company and Holdings, as the same may be amended, supplemented, waived or
otherwise modified from time to time in accordance with the terms thereof
and of the Indenture.
SECTION 1.2. Modifications of Covenants. The following Sections of
the Indenture are hereby amended to read in their entirety as follows:
SECTION 4.09 RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the Company's or any of its Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company) (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or dividends or distributions payable to the Company or any Wholly Owned
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any direct or indirect parent
of the Company or other Affiliate or Subsidiary of the Company (other than any
such Equity Interests owned by the Company or any Wholly Owned Subsidiary of the
Company that is a Guarantor); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is subordinated to the Notes, except at final maturity, other than through the
purchase or acquisition by the Company of Indebtedness through the issuance in
exchange therefor of Equity Interests (other than Disqualified Stock); or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment: (a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; (b) the Company would, at
the time of such Restricted Payment and after giving pro forma effect thereto as
if such Restricted Payment had been made at the beginning of the applicable
four-quarter
5
<PAGE> 6
period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.10 hereof; and (c) such Restricted Payment, together with
the aggregate of all other Restricted Payments made by the Company and its
Subsidiaries after the date of this Indenture (excluding Restricted Payments
permitted by clauses (ii) and (iv) of the next succeeding paragraph), is less
than the sum of (i) $5,000,000, plus (ii) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period) from the beginning
of the first fiscal quarter commencing after the date of this Indenture to the
end of the Company's most recently ended fiscal quarter for which internal
financial statements are available at the time of such Restricted Payment (or,
if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (iii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of this Indenture of Equity
Interests of the Company or of debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary or an Unrestricted Subsidiary
of the Company and other than Disqualified Stock or debt securities that have
been converted into Disqualified Stock), plus (iv) 100% of any dividends
received by the Company or a Wholly Owned Subsidiary that is a Guarantor after
the date of this Indenture from an Unrestricted Subsidiary of the Company, plus
(v) 100% of the cash proceeds realized upon the sale of any Unrestricted
Subsidiary (less the amount of any reserve established for purchase price
adjustments and less the maximum amount of any indemnification or similar
contingent obligation for the benefit of the purchaser, any of its Affiliates or
any other third party in such sale, in each case as adjusted for any permanent
reduction in any such amount on or after the date of such sale, other than by
virtue of a payment made to such person) following the date of this Indenture,
plus (vi) to the extent that any Restricted Investment that was made after the
date of this Indenture is sold for cash or otherwise liquidated or repaid for
cash, the amount of cash proceeds received with respect to such Restricted
Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the making of any Restricted Investment in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided, that any net cash proceeds that are utilized for
any such Restricted Investment, and any Net Income resulting therefrom, shall be
excluded from clauses (c)(ii) and (c)(iii) of the preceding paragraph; (iii) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Company in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company (other than any Disqualified Stock); provided that any
net cash proceeds that are utilized for any such redemption, repurchase,
6
<PAGE> 7
retirement or other acquisition, and any Net Income resulting therefrom, shall
be excluded from clause (c)(ii) and (c)(iii) of the preceding paragraph; (iv)
the defeasance, redemption or repurchase of pari passu or subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided, that any net cash proceeds that are utilized for
any such defeasance, redemption or repurchase, and any Net Income resulting
therefrom, shall be excluded from clauses (c)(ii) and (c)(iii) of the preceding
paragraph; (v) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Subsidiary of the Company
held by any member of the Company's (or any of its Subsidiaries') management
pursuant to any management agreement or stock option agreement; provided that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1,000,000 in any fiscal year or $5,000,000 in
the aggregate (net of the cash proceeds received by the Company from subsequent
reissuances of such Equity Interests to new members of management), and no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction; (vi) payments of principal and interest with respect to
the Cash Retention Notes; (vii) prepayments and payments of all obligations with
respect to the GSD Senior Credit Agreement from the proceeds of any Take-Out
Securities; (viii) loans, advances, dividends or distributions by the Company to
GSD or Greenwich IV not to exceed the aggregate amount necessary to permit GSD
or Greenwich IV to (A) make payments in respect of its indemnification
obligations owing to directors, officers, employees or other Persons under its
charter or by-laws or pursuant to written agreements with any such Person, to
the extent such payments relate to the Company and its Subsidiaries, (B) pay all
reasonable fees and expenses payable by it in connection with the Acquisition,
(C) pay its other operational expenses incurred in the ordinary course of
business and not exceeding $500,000 in any fiscal year or (D) indemnify or
reimburse, or pay on behalf of, such Persons any taxes, charges or assessments
arising by reason of the liquidation of GSD Acquisition Corp., provided that the
aggregate amount of such payments under this clause (D) shall not exceed
$1,000,000; provided, however, that such loans, advances, dividends or
distributions will be excluded in subsequent calculations of the amount of
Restricted Payments; (ix) so long as no Default or Event of Default shall have
occurred and be continuing, payments by the Company or any Restricted Subsidiary
of up to $950,000 per year to the Investors plus reasonable out-of-pocket
expenses to satisfy the Company's obligations under the Management Agreements,
provided that notwithstanding the occurrence of a Default of Event of Default or
any other provision of this Indenture, all amounts under the Management
Agreements may be paid by the issuance of common stock of the Company or a
Restricted Subsidiary to the Investors; (x) payments by the Company or a
Restricted Subsidiary to satisfy its obligations under the Tax Sharing
Agreement; and (xi) the acquisition by a Receivables Subsidiary in connection
with a Qualified Receivables Transaction of Equity
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<PAGE> 8
Interests of a trust or other person established by such Receivables Subsidiary
to effect such Qualified Receivables Transaction.
The Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under the first paragraph of this covenant. All such outstanding Investments
will be deemed to constitute Investments in an amount equal to the greatest of
(x) the net book value of such Investments at the time of such designation, (y)
the fair market value of such Investments at the time of such designation and
(z) the original fair market value of such Investments at the time they were
made. Such designation will only be permitted if such Restricted Payment would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. 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 is
permitted and setting forth the basis upon which the calculations required by
this Section 4.09 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.10 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Company shall not, and shall not permit any of its Subsidiaries
and Unrestricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Indebtedness) and that the Company will not issue any
Disqualified Stock and will not permit any of its Subsidiaries and Unrestricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Indebtedness) or issue shares
of Disqualified Stock and the Company's Subsidiaries that are Guarantors may
incur Indebtedness and issue preferred stock if: (i) the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional
8
<PAGE> 9
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2 to 1, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock had been issued, as the case may be, at the
beginning of such four-quarter period; and (ii) no Default or Event of Default
shall have occurred and be continuing or would occur as a consequence thereof;
provided, that no Guarantee may be incurred pursuant to this paragraph, unless
the guaranteed Indebtedness is incurred by the Company or a Subsidiary pursuant
to this paragraph.
The foregoing provisions will not apply to: (i) the incurrence by
the Company of Senior Term Debt and Senior Revolving Debt and letters of credit
(and Guarantees thereof by Subsidiaries that are Guarantors) in an aggregate
principal amount at any time outstanding (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
and its Subsidiaries thereunder) not to exceed an amount equal to $60,000,000,
less the aggregate amount of all Net Proceeds of Asset Sales applied to
permanently reduce the outstanding amount or the commitments with respect to
such Indebtedness pursuant to Section 4.08 hereof; (ii) the incurrence by the
Company and its Subsidiaries of the Existing Indebtedness; (iii) the incurrence
by the Company of Indebtedness represented by the Notes and by the Subsidiaries
of Indebtedness represented by the Subsidiary Guarantees; (iv) the incurrence by
the Company or any of its Subsidiaries of Indebtedness represented by Capital
Lease Obligations, mortgage financings or Purchase Money Obligations, in each
case incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property used in the business of the
Company or such Subsidiary, in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; (v) the incurrence by the Company or any of
its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund, Indebtedness that was permitted by this Indenture to be incurred; (vi)
the incurrence by the Company or any of its Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Wholly Owned
Subsidiaries or between or among any Wholly Owned Subsidiaries; provided,
however, that (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than a Wholly
Owned Subsidiary and (ii) any sale or other transfer of any such Indebtedness to
a Person that is not either the Company or a Wholly Owned Subsidiary shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Subsidiary, as the case may be; (vii) the incurrence by the
Company or any of its Subsidiaries that are Guarantors of Hedging Obligations
that are incurred for the purpose of fixing or hedging interest rate risk with
respect to any floating rate Indebtedness that is permitted by this Indenture to
be incurred; (viii) the incurrence by the Company or any of its Subsidiaries
that are Guarantors of Indebtedness (in addition to Indebtedness permitted by
any other clause of this paragraph)
9
<PAGE> 10
in an aggregate principal amount at any time outstanding not to exceed the sum
of $10,000,000; (ix) the incurrence by Subsidiaries that are not Guarantors of
(i) Indebtedness in an aggregate amount not to exceed $20,000,000 (in addition
to Indebtedness permitted by any other clause of this paragraph); provided, that
(A) after giving pro forma effect to the incurrence thereof, the Company could
incur $1.00 of Indebtedness under the first paragraph of this Section 4.10, and
(B) such Indebtedness is not subordinated in right of payment to any other
Indebtedness and that such Indebtedness is secured by a Lien on property of the
Subsidiary that incurs such Indebtedness; and (ii) other Indebtedness in an
aggregate amount not to exceed $12,500,000; (x) the incurrence by the Company's
Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any
such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary,
such event shall be deemed to constitute an incurrence of Indebtedness by a
Subsidiary of the Company; (xi) Indebtedness incurred by the Company or any of
its Subsidiaries that is a Guarantor arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees of letters of credit, surety bonds or performance bonds securing the
performance of the Company or any of its Subsidiaries incurred by any person
acquiring all or a portion of such business, assets of a Subsidiary of the
Company for the purpose of financing such acquisition, in a principal amount not
to exceed 25% of the gross proceeds (with proceeds other than cash or Cash
Equivalents being valued at the fair market value thereof as determined by the
Board of Directors of the Company in good faith) actually received by the
Company or any of its Subsidiaries in connection with such disposition; (xii)
the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified
Receivables Transaction that is without recourse to the Company or to any
Subsidiary of the Company or their assets (other than such Receivables
Subsidiary and its assets), and is not guaranteed by any such person; (xiii) the
assumption by the Company and the incurrence of all of GSD's obligations under
the GSD Senior Credit Agreement; and (xiv) the incurrence of Indebtedness and
other obligations with respect to the Take-Out Securities (and Guarantees
thereof by Subsidiaries that are Guarantors).
Notwithstanding any other provision of this covenant, a Guarantee of
Indebtedness permitted by the terms of this Indenture at the time such
indebtedness was incurred will not constitute a separate incurrence of
Indebtedness.
SECTION 4.12 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (i) (a) pay dividends or make any other distributions to the Company or any
of its Subsidiaries (1) on its Capital Stock or
10
<PAGE> 11
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to the Company or any of its
Subsidiaries or (iii) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the Closing
Date, (b) the Credit Agreement as in effect as of the Closing Date, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the Closing Date, (c) this Indenture and the Notes,
(d) applicable law, (e) any instrument governing Acquired Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries as
in effect at the time of such acquisition (except to the extent such Acquired
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
EBITDA of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (f) by reason of
customary non-assignment provisions in leases and licenses entered into in the
ordinary course of business and consistent with past practices, (g) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (h) agreements relating to the financing of the
acquisition of real or tangible personal property acquired after the date of
this Indenture, provided, that such encumbrance or restriction relates only to
the property which is acquired and in the case of any encumbrance or restriction
that constitutes a Lien, such Lien constitutes a Permitted Lien as set forth in
clause (xi) of the definition of "Permitted Lien," (i) Indebtedness or other
contractual requirements of a Receivables Subsidiary in connection with a
Qualified Receivables Transaction, provided that such restrictions apply only to
such Receivables Subsidiary, (j) any restriction or encumbrance contained in
contracts for sale of assets permitted by this Indenture in respect of the
assets being sold pursuant to such contract, (k) Senior Indebtedness permitted
to be incurred under this Indenture and incurred after the date of this
Indenture, provided, that such encumbrances or restrictions in such Indebtedness
are no more onerous than the restrictions contained in the Credit Agreement on
the Closing Date, (l) Indebtedness of Subsidiaries that are not Guarantors
incurred under clause (x) of Section 4.10 hereof or (m) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
11
<PAGE> 12
SECTION 4.14 TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Subsidiary than those that would have been obtained
in a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction entered into after the date of this Indenture involving
aggregate consideration in excess of $1,000,000, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $5,000,000, an opinion as to the fairness to the
Company or such Subsidiary of such Affiliate Transaction from a financial point
of view issued by an investment banking firm of national standing; provided that
the following shall not be deemed to be Affiliate Transactions: (i) the
provision of administrative or management services by the Company or any of its
officers to any of its Subsidiaries in the ordinary course of business
consistent with past practice, (ii) any employment agreement entered into by the
Company or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (iii)
transactions between or among the Company and/or its Wholly Owned Subsidiaries
or transactions between a Receivables Subsidiary and any Person in which the
Receivables Subsidiary has an Investment, (iv) transactions permitted by Section
4.09 hereof, (v) payments made by the Company to, and agreements entered into by
the Company, with Affiliates in connection with the Acquisition, in each case to
the extent (and only to the extent) the same are described under the Section
entitled "The Acquisition and Related Transactions" set forth in the Company's
Consent Solicitation Statement, dated February 20, 1998, as the same may be
amended or supplemented from time to time, (vi) payment of compensation,
performance of indemnification or contribution obligations, or any issuance,
grant or award of stock, options or other securities, to employees, officers or
directors in the ordinary course of business, (vii) maintenance in the ordinary
course of business of benefit programs or arrangements for employees, officers
or directors, including vacation plans, health and the insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans, (viii)
loans or advances made to directors, officers or employees of the Company or any
Subsidiary, or guarantees in respect thereof or otherwise made on their behalf
(including any payments under such guarantees), (A) in respect of travel,
entertainment or moving-related expenses incurred in the ordinary course of
business, or (B) in the ordinary
12
<PAGE> 13
course of business not exceeding $500,000 in the aggregate outstanding at any
time, (ix) any other transaction arising out of agreements in existence on the
Closing Date, (x) execution, delivery and performance of the Tax Sharing
Agreement and the Management Agreements, including the ongoing payment of fees
to the Investors of up to $950,000 million per year plus reasonable
out-of-pocket expenses, and (xi) consummation of any merger of GSD Acquisition
II Corp., a Delaware corporation, with and into the Company, with the Company
continuing as the surviving corporation of such merger. The provisions of clause
(v) of the proviso in the immediately preceding sentence shall be deemed to
become effective for all purposes of the Indenture as of immediately prior to
the consummation of the Acquisition.
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS
Neither the Company nor the Guarantor shall in a single transaction
or series of related transactions consolidate or merge with or into (whether or
not the Company or the Guarantor is the surviving corporation) or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity (other than a merger of the Company with and into
the Guarantor) unless (i) the Company or the Guarantor is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company or the Guarantor) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company or the Guarantor) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company or the Guarantor, as the case
may be, pursuant to a supplemental indenture under the Notes, the Subsidiary
Guarantee and this Indenture in a form reasonably satisfactory to the Trustee,
(iii) immediately after such transaction, no Default or Event of Default exists
and (iv) except with respect to any merger of GSD Acquisition II Corp., a
Delaware corporation, with and into the Company, with the Company continuing as
the surviving corporation of such merger, the Company, the Guarantor or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company or the Guarantor), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction) equal to or
greater than the Consolidated Net Worth of the Company or the Guarantor, as the
case may be, immediately preceding the transaction and (B) shall, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph in Section
4.10 hereof.
13
<PAGE> 14
SECTION 9.04 REVOCATION AND EFFECTS OF CONSENTS
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note 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. However, except with respect to the Proposed Amendments
reflected in the First Supplemental Indenture, as described in the Consent
Solicitation Statement, dated February 20, 1998, as the same is amended or
supplemented from time to time, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 10.01 [Intentionally deleted.]
SECTION 10.02 [Intentionally deleted.]
SECTION 10.03 [Intentionally deleted.]
SECTION 10.04 [Intentionally deleted.]
SECTION 10.05 [Intentionally deleted.]
SECTION 10.06 [Intentionally deleted.]
SECTION 10.07 [Intentionally deleted.]
SECTION 10.08 [Intentionally deleted.]
SECTION 10.09 [Intentionally deleted.]
SECTION 10.10 [Intentionally deleted.]
SECTION 10.11 [Intentionally deleted.]
SECTION 10.12 [Intentionally deleted.]
SECTION 10.13 [Intentionally deleted.]
14
<PAGE> 15
ARTICLE TWO
SUBSIDIARY GUARANTEE
SECTION 2.1. Subsidiary Guarantee. The Guarantor hereby ratifies its
obligations under Article 11 of the Indenture.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.1. The Trustee assumes no responsibility for the
correctness of the recitals herein contained, which shall be taken as the
statements of the Company. The Trustee makes no representation and shall have no
responsibility as to the validity and sufficiency of this First Supplemental
Indenture or the proper authorization or the due execution hereof by the Company
or the Guarantor.
SECTION 3.2. If and to the extent that any provision of this First
Supplemental Indenture limits, qualifies or conflicts with another provision
included in this First Supplemental Indenture, or in the Indenture, which is
required to be included in this First Supplemental Indenture or the Indenture by
any of the provisions of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, as amended, such required provision shall control.
SECTION 3.3. Except as expressly amended by this First Supplemental
Indenture, the Indenture is in all respects ratified and confirmed by the
parties hereto and all the terms, conditions and provisions thereof shall remain
in full force and effect. This First Supplemental Indenture shall form a part of
the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. All covenants and
agreements in the First Supplemental Indenture shall be binding on successors
and assigns of the parties hereto.
SECTION 3.4. Nothing in this First Supplemental Indenture is
intended to or shall provide any rights to any parties other than those
expressly contemplated by this First Supplemental Indenture.
SECTION 3.5. The internal law of the State of New York shall govern
and be used to construe this First Supplemental Indenture.
15
<PAGE> 16
SECTION 3.6. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 3.7. This First Supplemental Indenture shall become
effective as of the date specified above.
16
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
DAY INTERNATIONAL GROUP, INC.
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
DAY INTERNATIONAL, INC.
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
17
<PAGE> 18
FIRSTAR BANK OF MINNESOTA,
(AS SUCCESSOR IN INTEREST TO
AMERICAN BANK NATIONAL
ASSOCIATION)
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
18
<PAGE> 1
Exhibit 4.3.1
INDENTURE
Between
DAY INTERNATIONAL GROUP, INC.
DAY INTERNATIONAL, INC.
AND
THE BANK OF NEW YORK
Dated as of March 18, 1998
<PAGE> 2
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) ...................................................... N.A.
(b).......................................................... 7.8; 7.10
(c).......................................................... N.A.
311(a).......................................................... 7.11
(b).......................................................... 7.11
(c).......................................................... N.A.
312(a).......................................................... 2.5
(b).......................................................... 12.3
(c).......................................................... 12.3
313(a).......................................................... 7.6
(b)(1)....................................................... N.A.
(b)(2)....................................................... 7.6
(c).......................................................... 12.2
(d).......................................................... 7.6
314(a).......................................................... 4.2; 4.9; 12.2
(b).......................................................... N.A.
(c)(1)....................................................... 12.4
(c)(2)....................................................... 12.4
(c)(3)....................................................... N.A.
(d).......................................................... N.A.
(e).......................................................... 12.5
(f).......................................................... 4.9
315(a)(1)....................................................... 7.1
315(a)(2)....................................................... 7.1
(b).......................................................... 7.5; 12.2
(c).......................................................... 7.1
(d).......................................................... 7.1
(e).......................................................... 6.11
316(a)(last sentence)........................................... 12.6
(a)(1)(A).................................................... 6.5
(a)(1)(B).................................................... 6.4
(a)(2)....................................................... N.A.
(b).......................................................... 6.7
(c).......................................................... 6.10
10
<PAGE> 3
317(a)(1)....................................................... 6.8
(a)(2)....................................................... 6.9
(b).......................................................... 2.4
318(a).......................................................... 12.1
N.A. means Not Applicable.
- ----------
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
11
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TABLE OF CONTENTS
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ARTICLE 1
Definitions and Incorporation by Reference................................. 1
SECTION 1.1. Definitions........................................................................ 1
SECTION 1.2. Other Definitions................................................................. 23
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.................................. 24
SECTION 1.4. Rules of Construction.............................................................. 24
ARTICLE 2
The Securities............................................... 25
SECTION 2.1. Form, Dating....................................................................... 25
SECTION 2.2. Execution and Authentication....................................................... 31
SECTION 2.3. Registrar and Paying Agent......................................................... 32
SECTION 2.4. Paying To Hold Money in Trust...................................................... 32
SECTION 2.5. Securityholder Lists............................................................... 33
SECTION 2.6. Transfer and Exchange.............................................................. 33
SECTION 2.7. Form of Certificate to be Delivered in Connection with Transfers to
Institutional Accredited Investors................................................ 36
SECTION 2.8. Form of Certificate to be Delivered in Connection with Transfers
Pursuant to Regulation S.......................................................... 38
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.................................... 39
SECTION 2.10. Outstanding Securities............................................................ 40
SECTION 2.11. Temporary Securities.............................................................. 40
SECTION 2.12. Cancellation...................................................................... 40
SECTION 2.13. Payment of Interest; Defaulted Interest........................................... 40
SECTION 2.14. Computation of Interest........................................................... 42
SECTION 2.15. CUSIP Numbers..................................................................... 42
ARTICLE 3
Redemption................................................. 42
SECTION 3.1. Notices to Trustee................................................................. 42
SECTION 3.2. Selection of Securities To Be Redeemed............................................. 42
SECTION 3.3. Notice of Redemption............................................................... 43
SECTION 3.4. Effect of Notice of Redemption..................................................... 43
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SECTION 3.5. Deposit of Redemption Price........................................................ 44
SECTION 3.6. Securities Redeemed in Part........................................................ 44
SECTION 3.7. Optional Redemption................................................................ 44
ARTICLE 4
Covenants................................................. 45
SECTION 4.1. Payment of Securities.............................................................. 45
SECTION 4.2. SEC Reports........................................................................ 45
SECTION 4.3. Limitation on Indebtedness......................................................... 45
SECTION 4.4. Limitation on Restricted Payments.................................................. 49
SECTION 4.5. Limitation on Restrictions on Distributions from Restricted
Subsidiaries...................................................................... 53
SECTION 4.6. Limitation on Sales of Assets...................................................... 55
SECTION 4.7. Limitation on Transactions with Affiliates. ...................................... 57
SECTION 4.8. Change of Control.................................................................. 58
SECTION 4.9. Compliance Certificate; Notice of Default.......................................... 60
SECTION 4.10. [Intentionally omitted............................................................ 60
SECTION 4.11. Limitation on Liens............................................................... 60
SECTION 4.12. Additional Note Guarantors........................................................ 60
SECTION 4.13. Limitation on the Sale or Issuance of Preferred Stock of Restricted
Subsidiaries...................................................................... 61
SECTION 4.14. Limitation on Layering............................................................ 61
ARTICLE 5
Successor Company............................................. 62
SECTION 5.1. When Company May Merge or Transfer Assets.......................................... 62
ARTICLE 6
Defaults and Remedies........................................... 63
SECTION 6.1. Events of Default.................................................................. 63
SECTION 6.2. Acceleration....................................................................... 65
SECTION 6.3. Other Remedies..................................................................... 65
SECTION 6.4. Waiver of Past Defaults............................................................ 65
SECTION 6.5. Control by Majority................................................................ 65
SECTION 6.6. Limitation on Suits................................................................ 66
SECTION 6.7. Rights of Holders to Receive Payment............................................... 66
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SECTION 6.8. Collection Suit by Trustee......................................................... 66
SECTION 6.9. Trustee May File Proofs of Claim................................................... 66
SECTION 6.10. Priorities........................................................................ 67
SECTION 6.11. Undertaking for Costs............................................................. 67
SECTION 6.12. Waiver of Stay or Extension Laws.................................................. 67
ARTICLE 7
Trustee.................................................. 68
SECTION 7.1. Duties of Trustee.................................................................. 68
SECTION 7.2. Rights of Trustee.................................................................. 69
SECTION 7.3. Individual Rights of Trustee....................................................... 70
SECTION 7.4. Trustee's Disclaimer............................................................... 70
SECTION 7.5. Notice of Defaults................................................................. 70
SECTION 7.6. Reports by Trustee to Holders...................................................... 71
SECTION 7.7. Compensation and Indemnity......................................................... 71
SECTION 7.8. Replacement of Trustee............................................................. 72
SECTION 7.9. Successor Trustee by Merger........................................................ 73
SECTION 7.10. Eligibility; Disqualification..................................................... 73
SECTION 7.11. Preferential Collection of Claims Against Company................................. 73
SECTION 7.12. Not Responsible for Recitals or Issuance of Securities............................ 73
ARTICLE 8 ................................................... 73
Discharge of Indenture; Defeasance ........................ 73
SECTION 8.1. Discharge of Liability on Securities; Defeasance................................... 73
SECTION 8.2. Conditions to Defeasance........................................................... 74
SECTION 8.3. Application of Trust Money......................................................... 75
SECTION 8.4. Repayment to Company............................................................... 76
SECTION 8.5. Indemnity for Government Obligations............................................... 76
SECTION 8.6. Reinstatement...................................................................... 76
ARTICLE 9
Amendments................................................. 76
SECTION 9.1. Without Consent of Holders......................................................... 76
SECTION 9.2. With Consent of Holders............................................................ 77
SECTION 9.3. Compliance with Trust Indenture Act................................................ 78
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SECTION 9.4. Effect of Amendment; Revocation and Effect of Consents and Waivers................. 78
SECTION 9.5. Notation on or Exchange of Securities.............................................. 79
SECTION 9.6. Trustee To Sign Amendments......................................................... 79
SECTION 9.7. Payment for Consent................................................................ 79
ARTICLE 10
Subordination............................................... 80
SECTION 10.1. Agreement To Subordinate.......................................................... 80
SECTION 10.2. Liquidation, Dissolution, Bankruptcy.............................................. 80
SECTION 10.3. Default on Senior Indebtedness.................................................... 80
SECTION 10.4. Acceleration of Payment of Securities............................................. 81
SECTION 10.5. When a Distribution Must Be Paid Over............................................. 81
SECTION 10.6. Subrogation....................................................................... 81
SECTION 10.7. Relative Rights................................................................... 82
SECTION 10.8. Subordination May Not Be Impaired by Company...................................... 82
SECTION 10.9. Rights of Trustee and Paying Agent................................................ 82
SECTION 10.10. Distribution or Notice to Representative......................................... 82
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit Right To
Accelerate........................................................................ 83
SECTION 10.12. Trust Moneys Not Subordinated.................................................... 83
SECTION 10.13. Trustee Entitled To Rely......................................................... 83
SECTION 10.14. Trustee To Effectuate Subordination.............................................. 83
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness......................... 83
SECTION 10.16. Reliance by Holders of Senior Indebtedness on Subordination Provisions........... 84
SECTION 10.17. Trustee's Compensation Not Prejudiced............................................ 84
ARTICLE 11
Guarantee................................................. 84
SECTION 11.1. Guarantee......................................................................... 84
SECTION 11.2. Limitation on Liability; Termination, Release and Discharge....................... 86
SECTION 11.3. Subordination..................................................................... 86
</TABLE>
iv
<PAGE> 8
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 12
Miscellaneous............................................... 87
SECTION 12.1. Trust Indenture Act Controls...................................................... 87
SECTION 12.2. Notices........................................................................... 87
SECTION 12.3. Communication by Holders with Other Holders....................................... 88
SECTION 12.4. Certificate and Opinion as to Conditions Precedent................................ 88
SECTION 12.5. Statements Required in Certificate or Opinion..................................... 89
SECTION 12.6. When Securities Disregarded....................................................... 89
SECTION 12.7. Acts of Holders; Rules by Trustee, Paying Agent and Registrar..................... 89
SECTION 12.8. Legal Holidays.................................................................... 90
SECTION 12.9. Governing Law..................................................................... 90
SECTION 12.10. No Recourse Against Others....................................................... 90
SECTION 12.11. Successors....................................................................... 90
SECTION 12.12. Multiple Originals............................................................... 90
SECTION 12.13. Table of Contents; Headings...................................................... 90
SECTION 12.14. Separability..................................................................... 90
SECTION 12.15. Benefits of Indenture............................................................ 90
</TABLE>
v
<PAGE> 9
INDENTURE dated as of March 18, 1998, between Day
International Group, Inc., a Delaware corporation (the "Company"), Day
International, Inc., a Delaware corporation ("Day") and The Bank of New York, a
New York banking corporation (the "Trustee").
For good and valuable consideration, the receipt of which is
hereby acknowledged, each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the
Company's 9 1/2% Senior Subordinated Notes due 2008 (the "Initial Securities")
and, when and if issued as provided in the Registration Rights Agreement of even
date herewith, the Company's 9 1/2% Senior Subordinated Notes due 2008, issued
in exchange for the Initial Securities (the "Exchange Securities," and together
with the Initial Securities, the "Securities").
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.1. Definitions.
The "Acquisition" means the acquisition by GSD and SG of
approximately 93.9% of the common stock of the Company (on a fully-diluted
basis) from American Industrial Partners Capital Fund, L.P., American Industrial
Partners Capital Fund II, L.P. (together, "AIP"), certain affiliates of AIP and
certain management stockholders of the Company on January 16, 1998.
"Additional Assets" means (i) any property or assets (other
than Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock of
any Person that at such time is a Restricted Subsidiary, acquired from a third
party; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
<PAGE> 10
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the then outstanding principal
amount of such Security and (ii) the excess of (A) the present value at such
time of (1) the redemption price of such Security at March 15, 2003 plus (2) all
required interest and principal payments (excluding accrued but unpaid interest)
due on such Security through March 15, 2003, computed using a discount rate
equal to the Treasury Rate plus 50 basis points, over (B) the then-outstanding
principal amount of such Security.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares, or (in the case of a Foreign Subsidiary) to the
extent required by applicable law), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of inventory,
equipment, obsolete assets or surplus personal property in the ordinary course
of business, (iii) the sale of Cash Equivalents in the ordinary course of
business, (iv) dispositions with a fair market value not exceeding $500,000 in
the aggregate in any fiscal year, (v) the sale or discount (with or without
recourse, and on commercially reasonable terms) of accounts receivable or notes
receivable arising in the ordinary course of business, or the conversion or
exchange of accounts receivable for notes receivable, (vi) the licensing of
intellectual property in the ordinary course of business, (vii) for purposes of
Section 4.6 only, a disposition subject to Section 4.4 or (viii) a disposition
of property or assets that is governed by Section 5.1.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate assumed in making calculations in accordance with FAS 13) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Exchangeable Preferred Stock, the quotient
obtained by dividing (i) the sum of the products of the numbers of years from
the date of determination to the dates of each successive scheduled principal
payment of such Indebtedness or redemption or similar payment with respect to
such Exchangeable Preferred Stock multiplied by the amount of such payment by
(ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether
outstanding on the Issue Date or thereafter incurred, payable under or in
respect of the Senior Secured Credit Facility, including without limitation
principal, premium (if any), interest
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<PAGE> 11
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company or any Restricted
Subsidiary whether or not a claim for post-filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees,
other monetary obligations of any nature and all other amounts payable
thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the
Company or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banking institutions are authorized or required by
law to close in New York City.
"Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease.
"Cash Equivalents" means any of the following: (a) securities
issued or fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof, (b) time deposits, certificates of deposit or
bankers' acceptances of (i) any lender under the Senior Credit Agreement or (ii)
any commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), (c) commercial paper rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency) and (d)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of
1940, as amended.
"Change of Control" means the occurrence of any of the
following events:
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<PAGE> 12
(i) prior to the first public offering of Voting Stock of the
Company, either (x) Permitted Holders cease to be the "beneficial
owner" or "beneficial owners" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or indirectly, of more than 35% of
the total voting power of the Voting Stock of the Company, or (y)
Permitted Holders cease to be entitled by voting power, contract or
otherwise to elect or cause the election of directors of the Company
having a majority of the total voting power of the Board of Directors,
in each case, whether as a result of issuance of securities of the
Company, any merger, consolidation, liquidation or dissolution of the
Company, any direct or indirect transfer of securities by any Permitted
Holder or otherwise (for purposes of this clause (i) and clause (ii)
below, Permitted Holders shall be deemed to beneficially own any Voting
Stock of an entity (the "specified entity" held by any other entity
(the "parent entity") so long as the Permitted Holders beneficially own
(as so defined), directly or indirectly, a majority of the Voting Stock
of the parent entity);
(ii) following the first public offering of Voting Stock of
the Company, any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in clause (i) above,
except that a Person shall be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire within one
year), directly or indirectly, of more than 35% of the Voting Stock of
the Company, provided that the Permitted Holders beneficially own (as
defined in clause (i) above), directly or indirectly, in the aggregate
a lesser percentage of the Voting Stock of the Company 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; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Day International Group, Inc., a Delaware
corporation and any successor thereto.
4
<PAGE> 13
The "Consent Solicitation" means the Company's solicitation of
consent of the registered holders of at least a majority in principal amount of
the Company's outstanding 2005 Notes to adopt the Proposed Amendments contained
in, and as defined in, the Company's Consent Solicitation Statement dated
February 20, 1998.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (ii)
Consolidated Interest Expense for such four fiscal quarters (in each case,
determined, for each fiscal quarter (or portion thereof) of the four fiscal
quarters ending prior to the Issue Date, on a pro forma basis; provided,
however, that:
(1) if the Company or any Restricted Subsidiary (x) has
Incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio is
an Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been Incurred on
the first day of such period (except that in making such computation,
the amount of Indebtedness under any revolving credit facility
outstanding on the date of such calculation shall be computed based on
(A) the average daily balance of such Indebtedness during such four
fiscal quarters or such shorter period for which such facility was
outstanding or (B) if such facility was created after the end of such
four fiscal quarters, the average daily balance of such Indebtedness
during the period from the date of creation of such facility to the
date of such calculation) and the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds
of such new Indebtedness as if such discharge had occurred on the first
day of such period, or (y) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period
that is no longer outstanding on such date of determination, or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio involves a discharge of Indebtedness (in each case other
than Indebtedness Incurred under any revolving credit facility unless
such Indebtedness has been permanently repaid), EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period,
5
<PAGE> 14
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition of any
company or any business or any group of assets constituting an
operating unit of a business, the EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets that are the subject of such Asset
Disposition for such period or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with
such Asset Disposition for such period (and, if the Capital Stock of
any Restricted Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale),
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary,
or otherwise acquired any company or any business or any group of
assets constituting an operating unit of a business, including any such
acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro
forma effect thereto (including the Incurrence of any Indebtedness) as
if such Investment or acquisition occurred on the first day of such
period, and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition of
assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is
to be given to an Asset Disposition, Investment or acquisition of assets, or any
transaction governed by the provisions of Article 5, or the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or
6
<PAGE> 15
repaid, repurchased, defeased or otherwise discharged in connection therewith,
the pro forma calculations in respect thereof shall be as determined in good
faith by a responsible financial or accounting Officer of the Company, based on
reasonable assumptions. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest expense on such Indebtedness
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term as at the date of determination in excess of 12 months). If
any Indebtedness bears, at the option of the Company or a Restricted Subsidiary,
a fixed or floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be computed by applying, at the
option of the Company or such Restricted Subsidiary, either a fixed or floating
rate. If any Indebtedness which is being given pro forma effect was Incurred
under a revolving credit facility, the interest expense on such Indebtedness
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Interest Expense" means, for any period, the
total consolidated interest expense of the Company and its Restricted
Subsidiaries, the Company and its consolidated Restricted Subsidiaries,
determined in accordance with GAAP, minus, to the extent included in such
interest expense, amortization or write-off of financing costs, and plus, to the
extent incurred by the Company and its Restricted Subsidiaries in such period
but not included in such interest expense, without duplication, (i) interest
expense attributable to Capitalized Lease Obligations and the interest component
of rent expense associated with Attributable Debt in respect of the relevant
lease giving rise thereto, determined as if such lease were a capitalized lease,
in accordance with GAAP, (ii) amortization of debt discount, (iii) interest in
respect of Indebtedness of any other Person that has been Guaranteed by the
Company or any Restricted Subsidiary, (iv) non-cash interest expense, (v) net
costs associated with Hedging Obligations, (vi) cash dividends in respect of all
Preferred Stock of the Company and its Restricted Subsidiaries and Disqualified
Stock of the Company, in each case held by Persons other than the Company or a
Restricted Subsidiary; and (vii) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest to any Person (other than the Company or any
Restricted Subsidiary) on Indebtedness Incurred by such plan or trust; provided,
however, that there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed
or paid by the Company or any Restricted Subsidiary. For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by the Company and its Subsidiaries with respect
to Interest Rate Agreements.
7
<PAGE> 16
"Consolidated Net Income" means, for any period, the
consolidated net income (loss) of the Company and its Restricted Subsidiaries,
determined in accordance with GAAP; provided, however, that there shall not be
included in such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not
a Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income
of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii) below) and (B)
the Company's equity in the net loss of such Person shall be included
to the extent of the aggregate Investment of the Company or any of its
Restricted Subsidiaries in such Person,
(ii) any net income (loss) of any Person acquired by the
Company or a Restricted Subsidiary in a pooling of interests
transaction for any period prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary that
is not a Note Guarantor if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or
the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income
of any such Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of cash that
could have been distributed by such Restricted Subsidiary during such
period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend that could have been made to
another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the net loss of such Restricted Subsidiary shall be
included to the extent of the aggregate Investment of the Company or
any of its other Restricted Subsidiaries in such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or other
disposition of any asset of the Company or its consolidated Restricted
Subsidiaries (including pursuant to any Sale/Leaseback Transaction)
that is not sold or otherwise disposed of in the ordinary course of
business,
(v) any extraordinary gain or loss, and
8
<PAGE> 17
(vi) the cumulative effect of a change in accounting
principles.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangements (including derivative agreements or arrangements) as to which such
Person is a party or a beneficiary.
"Default" means any event or condition that is, or after
notice or passage of time or both would be, an Event of Default as defined in
Section 6.1.
"Definitive Securities" means Securities that are
substantially in the form of Exhibit A or Exhibit B attached hereto that do not
include the information called for by footnote 1 thereof.
"Depository" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depository with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depository" shall mean or include such successor.
"Designated Senior Indebtedness" means (i) the Bank
Indebtedness, (ii) the 2005 Notes and (iii) any other Senior Indebtedness which,
at the date of determination, has an aggregate principal amount to or under
which, at the date of determination, the holders thereof are committed to lend
up to, at least $25.0 million and is specifically designated by the Company in
the instrument evidencing or governing such Senior Indebtedness as "Designated
Senior Indebtedness" for purposes of the Indenture.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock (other than Management Stock) that by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable at the option of the Holder) or upon the happening of any event (i)
matures or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified
Stock at the option of the Holder or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the 91st day
after the Stated Maturity of the Securities. For avoidance of doubt, the
Exchangeable Preferred Stock shall not be deemed Disqualified Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Subsidiary.
9
<PAGE> 18
"EBITDA" means, for any period, the Consolidated Net Income
for such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense and (iv) amortization of intangibles and
other non-cash charges or non-cash losses.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Debentures" means the 12 1/4% Exchange Debentures of
the Company due March 15, 2010 and any Exchange Debentures issued as payment in
kind interest thereon.
"Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Exchangeable Preferred Stock" means the 12 1/4% Senior
Exchangeable Preferred Stock of the Company due March 15, 2010 and any
Exchangeable Preferred Stock issued as payment of dividends thereon.
"Foreign Subsidiary" means (a) any Restricted Subsidiary of
the Company that is not organized under the laws of the United States of America
or any state thereof or the District of Columbia and (b) any Restricted
Subsidiary of the Company that has no material assets other than securities of
one or more Foreign Subsidiaries, and other assets relating to an ownership
interest in any such securities or Subsidiaries.
"G-IV" means Greenwich IV, LLC, a Delaware limited liability
company, and any successor in interest thereto.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated Interest
Expense," "Consolidated Net Income" and "EBITDA," all defined terms in the
Indenture to the extent used in or relating to any of the foregoing definitions,
and all ratios and computations based on any of the foregoing definitions) and
as in effect from time to time (for all other purposes of the Indenture),
including those set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as approved by a significant segment
of the accounting profession all ratios and computations based on GAAP contained
in the Indenture shall be computed in conformity with GAAP.
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<PAGE> 19
"Global Security" means a Security that is substantially in
the form of Exhibit A or Exhibit B hereto that includes the information called
for by footnote 1 thereof.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GSCP" means Greenwich Street Capital Partners, Inc., a
Delaware corporation, and any successor thereto.
"GSD" means GSD Acquisition Corp., a Delaware corporation.
"GSD Credit Facility" means a $140.0 million credit facility
provided to GSD by Societe Generale.
"GSD Liquidation" means the liquidation of GSD.
"Guarantee" means any obligation, contingent or otherwise, of
any Person directly or indirectly guaranteeing any Indebtedness or other
nonfinancial obligation of any other Person, including any such obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or such other obligation of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means the following
obligations, whether outstanding on the date of the Indenture or thereafter
issued, without duplication: (i) any Guarantee of the Bank Indebtedness by such
Note Guarantor and all other Guarantees by such Note Guarantor of Senior
Indebtedness of the Company or Guarantor Senior Indebtedness for any other Note
Guarantor; and (ii) all obligations consisting of the principal of and premium,
if any, and accrued and unpaid interest (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to the
Note Guarantor regardless of whether postfiling interest is allowed in such
proceeding) on, and fees and other amounts owing in respect of, all other
Indebtedness of
11
<PAGE> 20
the Note Guarantor, unless, in the instrument creating or evidencing the same or
pursuant to which the same is outstanding, it is expressly provided that the
obligations in respect of such Indebtedness are not senior in right of payment
to the obligations of such Note Guarantor under the Note Guarantee; provided,
however, that Guarantor Senior Indebtedness shall not include (1) any
obligations of such Note Guarantor to the Note Guarantor or any other Subsidiary
of the Note Guarantor, (2) any liability for Federal, state, local, foreign or
other taxes owed or owing by such Note Guarantor, (3) any accounts payable or
other liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of such Note Guarantor that is expressly subordinate in right
of payment to any of the Indebtedness of such Note Guarantor, including any
Guarantor Senior Subordinated Indebtedness and Guarantor Subordinated
Obligations of such Note Guarantor or (5) any Capital Stock.
"Guarantor Senior Subordinated Indebtedness" means, with
respect to a Note Guarantor, the obligations of such Note Guarantor under the
Note Guarantee and any other Indebtedness of such Note Guarantor that
specifically provides that such Indebtedness is to rank pari passu in right of
payment with the obligations of such Note Guarantor under the Note Guarantee and
is not expressly subordinated by its terms in right of payment to any
Indebtedness of such Note Guarantor which is not Guarantor Senior Indebtedness
of such Note Guarantor.
"Guarantor Subordinated Obligation" means, with respect to a
Note Guarantor, any Indebtedness of such Note Guarantor (whether outstanding on
the Issue Date or thereafter Incurred) which is expressly subordinate in right
of payment to the obligations of such Note Guarantor under the Note Guarantee
pursuant to a written agreement.
"Hedging Obligations" of any Person means the obligations of
such Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered in the Register.
"Incur" means issue, assume, enter into any Guarantee of,
incur or otherwise become liable for; provided, however, that any Indebtedness
or Capital Stock of a Person existing at the time such Person becomes a
Subsidiary (whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Subsidiary at the time it becomes a Subsidiary.
Any Indebtedness issued at a discount (including Indebtedness on which interest
is payable through the issuance of additional
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Indebtedness) shall be deemed incurred at the time of original issuance of the
Indebtedness at the initial accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date
of determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed
money,
(ii) the principal of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person (including
reimbursement obligations) in respect of letters of credit or other
similar instruments (the amount of such obligations being equal at any
time to the aggregate then undrawn and unexpired amount of such letters
of credit or other instruments plus the aggregate amount of drawings
thereunder that have not then been reimbursed),
(iv) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services (except Trade Payables),
which purchase price is due more than one year after the date of
placing such property in final service or taking final delivery and
title thereto or the completion of such services,
(v) all Capitalized Lease Obligations and Attributable Debt of
such Person,
(vi) Disqualified Stock of the Company and Preferred Stock of
a Subsidiary (to the extent held by a Person other than the Company or
a Restricted Subsidiary), but excluding, in each case, any accrued
dividends (the amount of such obligation to be equal at any time to the
maximum fixed involuntary redemption, repayment or repurchase price for
such Capital Stock, or if such Capital Stock has no such fixed price,
to the involuntary redemption, repayment or repurchase price therefor
calculated in accordance with the terms thereof as if then redeemed,
repaid or repurchased, and if such price is based upon or measured by
the fair market value of such Capital Stock, such fair market value
shall be as determined in good faith by the Board of Directors or the
board of directors of the issuer of such Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on
any asset of such Person, whether or not such Indebtedness is assumed
by such Person; provided, however, that the amount of Indebtedness of
such Person shall be the
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lesser of (A) the fair market value of such asset at such date of
determination and (B) the amount of such Indebtedness of such other
Persons,
(viii) all Indebtedness of other Persons to the extent
Guaranteed by such Person, and
(ix) to the extent not otherwise included in this definition,
net Hedging Obligations of such Person (the amount of any such
obligation to be equal at any time to the termination value of such
agreement or arrangement giving rise to such Hedging Obligation that
would be payable by such Person at such time).
The amount of Indebtedness of any Person at any date shall be
determined as set forth above or otherwise provided in this Indenture, or
otherwise in accordance with GAAP.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Initial Purchaser" means Societe Generale Securities
Corporation.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement (including derivative agreements or
arrangements) as to which such Person is party or a beneficiary.
"Investment" in any Person by any other Person means any
direct or indirect advance, loan or other extension of credit (other than to
customers, directors, officers or employees of any Person in the ordinary course
of business) or capital contribution (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) to, or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by, such Person. For purposes of the
definition of "Unrestricted Subsidiary" and Section 4.4, (i) "Investment" shall
include the portion (proportionate to the Company's equity interest in such
Subsidiary) of the fair market value of the net assets of any Subsidiary of the
Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market
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<PAGE> 23
value of the net assets of such Subsidiary at the time of such redesignation;
and (ii) any property transferred to or from an Unrestricted Subsidiary shall be
valued at its fair market value at the time of such transfer, in each case as
determined in good faith by the Board of Directors.
"Issue Date" means the date on which the Securities are
originally issued.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or other
title retention agreement or lease in the nature thereof).
"Management Agreements" means, collectively, the Consulting
Agreement, the Fee Agreement and the Indemnification Agreement, each between the
Company, GSCP and SGCP (and their permitted successors and assigns thereunder),
as each may be amended, supplemented, waived or otherwise modified from time to
time in accordance with the terms thereof and of the Indenture.
"Management Investors" means the officers, directors,
employees and other members of the management of the Company or any of its
Subsidiaries, or family members or relatives thereof, or trusts for the benefit
of any of the foregoing, or any of their heirs, executors, successors and legal
representatives, who at any date beneficially own or have the right to acquire,
directly or indirectly, Capital Stock of the Company.
"Management Stock" means Capital Stock of the Company, or
options, warrants or other rights in respect thereof, held by any of the
Management Investors.
"Moody's" means Moody's Investors Service, Inc., and its
successors.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received, but excluding any other consideration received in
the form of assumption by the acquiring person of Indebtedness or other
obligations relating to the properties or assets that are the subject of such
Asset Disposition or received in any other noncash form) therefrom, in each case
net of (i) all legal, title and recording tax expenses, commissions and other
fees and expenses incurred, and all Federal, state, provincial, foreign and
local taxes required to be paid or accrued as a liability under GAAP, as a
consequence of such Asset Disposition, (ii) all payments made, and all
installment payments required to be made, on any Indebtedness that is secured by
any assets subject to such Asset Disposition, in accordance with the terms of
any Lien upon such assets, or that must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by
15
<PAGE> 24
applicable law, be repaid out of the proceeds from such Asset Disposition, (iii)
all distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition,
or to any other Person (other than the Company or a Restricted Subsidiary)
owning a beneficial interest in the assets disposed of in such Asset Disposition
and (iv) appropriate amounts to be provided as a reserve, in accordance with
GAAP, against any liabilities associated with the assets disposed of in such
Asset Disposition and retained by the Company or any Restricted Subsidiary after
such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of
any securities of the Company or any Subsidiary by the Company or any
Subsidiary, or any capital contribution, means the cash proceeds of such
issuance, sale or contribution net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or commissions and brokerage,
consultant and other fees actually incurred in connection with such issuance,
sale or contribution and net of taxes paid or payable as a result thereof.
"Note Guarantee" means each of (i) Day's guarantee pursuant to
Section __ and (ii) any guarantee that may from time to time be executed and
delivered by a Subsidiary of the Company pursuant to Section 4.12.
"Note Guarantor" means each of (i) Day and (ii) any other
Subsidiary that has issued a Note Guarantee.
The "Offering" means the Company's offering of the Securities
and the Exchangeable Preferred Stock pursuant to the Purchase Agreement.
"Officer" means the President, Chief Financial Officer, any
Vice President, Controller or Treasurer of the Company.
"Officer's Certificate" means a certificate signed by one
Officer.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Permitted Holder" means any of the following: (i) GSCP, SGCP,
and their respective Affiliates; provided that "Permitted Holders" in any event
shall include Greenwich Street Capital Partners, L.P., Greenwich Street Capital
Offshore Fund, Ltd., The Travelers Insurance Company, The Travelers Life and
Annuity Company, TRV Employees Fund, Inc., Smith Barney Company Inc. and their
respective Affiliates; any
16
<PAGE> 25
other investment fund or vehicle managed, sponsored or advised by GSCP, the
Travelers Insurance Company, the Travelers Life and Annuity Company, Smith
Barney Company, Inc. or any of their respective Affiliates; and (ii) any Person
acting in the capacity of an underwriter in connection with a public or private
offering of the Company's capital stock.
"Permitted Investment" means an Investment by the Company or
any Restricted Subsidiary in, or consisting of, any of the following:
(i) a Restricted Subsidiary, the Company or a Person that
will, upon the making of such Investment, become a Restricted
Subsidiary;
(ii) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or transfers or
conveys all or substantially all its assets to, the Company or a
Restricted Subsidiary;
(iii) Cash Equivalents;
(iv) receivables owing to the Company or any Restricted
Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(v) securities or other Investments received as consideration
in sales or other dispositions of property or assets, including Asset
Dispositions made in compliance with Section 4.6;
(vi) securities or other Investments received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary, or as a result of foreclosure,
perfection or enforcement of any Lien, or in satisfaction of judgments,
including in connection with any bankruptcy proceeding or other
reorganization of another Person;
(vii) Investments in existence or made pursuant to legally
binding written commitments in existence on the Issue Date;
(viii) Currency Agreements, Interest Rate Agreements and
related Hedging Obligations, which obligations are Incurred in
compliance with Section 4.3;
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(ix) pledges or deposits (x) with respect to leases or
utilities provided to third parties in the ordinary course of business
or (y) otherwise described in the definition of "Permitted Liens"; and
(x) other Investments in an aggregate amount outstanding at
any time not to exceed $12.5 million.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges
not yet delinquent or the nonpayment of which in the aggregate would
not reasonably be expected to have a material adverse effect on the
Company and its Restricted Subsidiaries, or that are being contested in
good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of the Company or a
Subsidiary thereof, as the case may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations that are not overdue for a
period of more than 60 days, or that are bonded or that are being
contested in good faith and by appropriate proceedings;
(c) pledges, deposits or Liens in connection with workers'
compensation, unemployment insurance and other social security and
other similar legislation or other insurance related obligations
(including, without limitation, pledges or deposits securing liability
to insurance carriers under insurance or self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of
bids, tenders, trade, government or other contracts (other than for
borrowed money), obligations for utilities, leases, licenses, statutory
obligations, surety, judgment and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(e) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not in the aggregate materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries,
taken as a whole;
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<PAGE> 27
(f) Liens existing on, or provided for under written
arrangements existing on, the Issue Date, or (in the case of any such
Liens securing Indebtedness of the Company or any of its Subsidiaries
existing or arising under written arrangements existing on the Issue
Date) securing any Refinancing Indebtedness in respect of such
Indebtedness so long as the Lien securing such Refinancing Indebtedness
is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or under such written arrangements could
secure) the original Indebtedness;
(g) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by
any developer, landlord or other third party on property over which the
Company or any Restricted Subsidiary of the Company has easement rights
or on any leased property and subordination or similar agreements
relating thereto and (ii) any condemnation or eminent domain
proceedings affecting any real property;
(h) Liens securing Hedging Obligations Incurred in compliance
with Section 4.3;
(i) Liens arising out of judgments, decrees, orders or awards
in respect of which the Company shall in good faith be prosecuting an
appeal or proceedings for review, which appeal or proceedings shall not
have been finally terminated, or if the period within which such appeal
or proceedings may be initiated shall not have expired;
(j) leases, subleases, licenses or sublicenses to third
parties;
(k) Liens securing (x) Indebtedness Incurred in compliance
with clause (b)(i), (b)(ii), (b)(v) or (b)(vii) of Section 4.3, or
clause (b)(iv) thereof (other than Refinancing Indebtedness Incurred in
respect of Indebtedness described in paragraph (a) thereof) or (y) Bank
Indebtedness;
(l) Liens on properties or assets (1) of the Company or any
Note Guarantor securing Senior Indebtedness or Guarantor Senior
Indebtedness, (2) of any Wholly Owned Subsidiary that is not a Note
Guarantor securing Indebtedness of any Wholly Owned Subsidiary that is
not a Note Guarantor or (3) of any Restricted Subsidiary that is not a
Note Guarantor securing its Indebtedness;
(m) Liens existing on property or assets of a Person at the
time such Person becomes a Subsidiary of the Company (or at the time
the Company or a Restricted Subsidiary acquires such property or
assets); provided, however, that
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such Liens are not created in connection with, or in contemplation of,
such other Person becoming such a Subsidiary (or such acquisition of
such property or assets), and that such Liens are limited to all or
part of the same property or assets (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof) that secured
(or, under the written arrangements under which such Liens arose, could
secure) the obligations to which such Liens relate;
(n) Liens on Capital Stock of an Unrestricted Subsidiary that
secure Indebtedness or other obligations of such Unrestricted
Subsidiary;
(o) any encumbrance or restriction (including, but not limited
to, put and call agreements) with respect to Capital Stock of any joint
venture or similar arrangement pursuant to any joint venture or similar
agreement;
(p) Liens securing the Securities; and
(q) Liens securing Refinancing Indebtedness Incurred in
respect of any Indebtedness secured by, or securing any refinancing,
refunding, extension, renewal or replacement (in whole or in part) of
any other obligation secured by, any other Permitted Liens, provided
that any such new Lien is limited to all or part of the same property
or assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any
corporation means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security
plus the premium, if any, payable on the Security that is due or overdue or is
to become due at the relevant time.
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"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act (whether alone or in conjunction with any
secondary public offering).
"Public Market" means any time after a Public Equity Offering
has been consummated and either (x) at least 10% of the total issued and
outstanding common stock (or equivalent equity interests) of the Company has
been distributed by means of an effective registration statement under the
Securities Act or (y) an established public trading market otherwise exists for
any such common stock or equivalent equity interests.
"Purchase Agreement" means the Agreement, dated March 13,
1998, among the Company, the Initial Purchaser and Day, providing for the
purchase by the Initial Purchaser of $115.0 million aggregate principal amount
of the Company's 9 1/2% Senior Subordinated Notes due 2008 and $35.0 million
aggregate liquidation preference of the Company's 12 1/4% Senior Exchangeable
Preferred Stock due 2010.
"Redemption Date" means the date on which the Securities are
optionally redeemed pursuant to Section 3.7.
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," "refinanced" and
"refinancing" as used in the Indenture shall have a correlative meaning) any
Indebtedness existing on the date of the Indenture or Incurred in compliance
with the Indenture (including Indebtedness of the Company that refinances
Indebtedness of any Restricted Subsidiary (to the extent permitted in the
Indenture) and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and (iii)
such Refinancing Indebtedness is Incurred in an aggregate principal amount (or
if issued with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (x) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced, plus (y) fees, underwriting discounts, premiums
not in excess of the premiums called for in the documentation related to such
Indebtedness so refinanced and other costs and expenses incurred in connection
with such Refinancing Indebtedness; provided further, however, that Refinancing
Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that
is not a Note Guarantor that refinances
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Indebtedness of the Company or (B) Indebtedness of the Company or a Restricted
Subsidiary that refinances Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated March 18, 1998, by and among the Initial Purchaser, the Company
and Day, as such agreement may be amended, modified, or supplemented from time
to time in accordance with the terms thereof.
"Related Business" means those businesses in which the Company
or any of its Subsidiaries is engaged on the date of the Indenture, or that are
reasonably related, complementary or incidental thereto.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Restricted Period" means the 40 consecutive days beginning on
and including the later of (A) the day on which the Initial Notes are offered to
persons other than distributors (as defined in Regulation S under the Securities
Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement
Legend set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set
forth in clause (B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit
facility under the Senior Secured Credit Facility (which may include any swing
line or letter of credit facility or subfacility thereunder).
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or such Restricted Subsidiary transfers such
property to a Person and the Company or such Restricted Subsidiary leases it
from such Person, other than leases (x) between the Company and a Restricted
Subsidiary or between or (y) required to be classified and accounted for as
capitalized leases for financial reporting purposes in accordance with GAAP.
"SEC" means the Securities and Exchange Commission.
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<PAGE> 31
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depository), or any successor entity
thereto and shall initially be the Trustee.
"Senior Credit Agreement" means the senior secured credit
agreement dated as of January 15, 1998, among the Company, the several lenders
party thereto from time to time, Societe Generale Securities Corporation, as
arranger, and Societe Generale, as administrative agent, as such agreement may
be assumed by any successor in interest, and as such agreement may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise).
"Senior Indebtedness" means the following obligations, whether
outstanding on the date of the Indenture or thereafter issued, without
duplication: (i) all obligations consisting of Bank Indebtedness; (ii) all
obligations relating to the 2005 Notes; and (iii) all obligations consisting of
the principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company regardless of whether post-filing
interest is allowed in such proceeding) on, and fees and other amounts owing in
respect of, all other Indebtedness of the Company, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that the obligations in respect of such Indebtedness are
not senior in right of payment to the Securities; provided, however, that Senior
Indebtedness shall not include (1) any obligation of the Company to any
Subsidiary, (2) any liability for Federal, state, foreign, local or other taxes
owed or owing by the Company, (3) any accounts payable or other liability to
trade creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness of the
Company (or Guarantee by the Company of any Indebtedness) that is expressly
subordinate in right of payment to any other Indebtedness of the Company (or
Guarantee by the Company of any Indebtedness) or (5) any Capital Stock. If any
Designated Senior Indebtedness is disallowed, avoided or subordinated pursuant
to the provisions of Section 548 of Title 11 of the United States Code or any
applicable state fraudulent conveyance law, such Designated Senior Indebtedness
nevertheless will constitute Senior Indebtedness.
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<PAGE> 32
"Senior Secured Credit Facility" means the collective
reference to the Senior Credit Agreement, any Loan Documents (as defined
therein), any notes and letters of credit issued pursuant thereto and any
guarantee and collateral agreement, patent and trademark security agreement,
mortgages, letter of credit applications and other security agreements and
collateral documents, and other instruments and documents, executed and
delivered pursuant to or in connection with any of the foregoing, in each case
as the same may be amended, supplemented, waived or otherwise modified from time
to time, or refunded, refinanced, restructured, replaced, renewed, repaid,
increased or extended from time to time (whether in whole or in part, whether
with the original agent and lenders or other agents and lenders or otherwise,
and whether provided under the original Senior Credit Agreement or otherwise).
Without limiting the generality of the foregoing, the term "Senior Secured
Credit Facility" shall include any agreement (i) changing the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder,
(iii) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder or (iv) otherwise altering the terms and conditions
thereof.
"Senior Subordinated Indebtedness" means the Securities and
any other Indebtedness of the Company that (i) specifically provides that such
Indebtedness is to rank pari passu with the Securities or is otherwise entitled
"Senior Subordinated" Indebtedness and (ii) is not expressly subordinated by its
terms in right of payment to any Indebtedness of the Company that is not Senior
Indebtedness.
"SGCP" means SG Capital Partners, LLC, a Delaware limited
liability company.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC, as in effect on the Issue
Date.
"S&P" means Standard & Poor's Ratings Service, a division of
The McGraw-Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).
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<PAGE> 33
"Subordinated Obligation" means any Indebtedness of the
Company (whether outstanding on the date of the Indenture or thereafter
Incurred) which is expressly subordinate in right of payment to the Securities
pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other equity interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such person
or (ii) one or more Subsidiaries of such Person.
"Term Loan Facility" means the term loan facilities provided
under the Senior Secured Credit Facility.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa- 77bbbb) as in effect on the date of the Indenture, except
as provided in Section 9.3.
"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the Redemption Date to the Stated Maturity; provided, however, that
if the period from the Redemption Date to the Stated Maturity is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to the Stated Maturity
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in the Indenture until
a successor replaces it and, thereafter, means the successor.
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"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"2005 Notes" means the Company's 11 1/8% Senior Subordinated
Notes due 2005.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect from time to time in any relevant jurisdiction.
"Unrestricted Subsidiary" means (i) any Subsidiary of the
Company that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness 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, however, that either (A) the Subsidiary to be so
designated has total consolidated assets of $1,000 or less or (B) if such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.4. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could incur
at least $1.00 of additional Indebtedness under Section 4.3(a) and (y) no
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 resolution of the Company's Board of Directors giving
effect to such designation and an Officer's Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of an entity means all classes of Capital Stock
of such entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
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"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares,
or (in the case of any Foreign Subsidiary) to the extent required by applicable
law) is owned by the Company or another Wholly Owned Subsidiary.
SECTION 1.2. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" ...................................... 4.7
"Bankruptcy Law" ............................................. 6.1
"Blockage Notice" ............................................ 10.3
"Company Order" .............................................. 2.2
"covenant defeasance option" ................................. 8.1(b)
"Custodian" .................................................. 6.1
"Event of Default" ........................................... 6.1
"Excess Proceeds" ............................................ 4.6
"Exchange Securities" ........................................
Recitals
"Fairness Opinion" ........................................... 4.7
"Initial Securities" .........................................
Recitals
"legal defeasance option" .................................... 8.1(b)
"Legal Holiday" .............................................. 11.8
"Offer" ...................................................... 4.6
"Offer Period" ............................................... 4.6
"pay the Securities" ......................................... 10.3
"Paying Agent" ............................................... 2.3
"Payment Blockage Period" .................................... 10.3
"Register".................................................... 2.3
"Registrar"................................................... 2.3
"Restricted Payment" ......................................... 4.4
"Securities" .................................................
Recitals
"Securities Act" ............................................. 2.1
"Successor Company" .......................................... 5.1
SECTION 1.3. Incorporation by Reference of Trust Indenture
Act. This Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by
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reference in and made a part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company and
any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by SEC rule have
the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. (a) Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
(2) as used herein, accounting terms relating to the Company
and its Subsidiaries not defined in Section 1.1, and accounting terms
partly defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP. All computations
determining compliance with financial covenants or terms, including
definitions used therein, shall be prepared in accordance with
generally accepted accounting principles in effect at the Issue Date,
as and to the extent provided in the definition of the term "GAAP." If
at any time the computations for determining compliance with such
financial covenants or provisions relating thereto utilize generally
accepted accounting principles different than those in effect at the
Issue Date, the financial statements within which such computations are
delivered shall be accompanied by a reconciliation statement with
respect to such computations;
(3) "or" is not exclusive;
(4) "including" means including without limitation; and
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(5) words in the singular include the plural and words in the
plural include the singular.
(b) Unsecured Indebtedness is not deemed to be subordinate or
junior to Secured Indebtedness merely because it is unsecured, and Indebtedness
that is not guaranteed by a particular Person is not deemed to be subordinate or
junior to Indebtedness that is so guaranteed merely because it is not so
guaranteed.
ARTICLE 2
The Securities
SECTION 2.1. Form, Dating and Terms. (a) The Initial
Securities are being offered and sold by the Company pursuant to the Purchase
Agreement.
Initial Securities offered and sold to qualified institutional
buyers ("QIB"s) (as defined in Rule 144A ("Rule 144A") under the Securities Act
of 1933, as amended (the "Securities Act")) in the United States of America (the
"Rule 144A Securities") will be issued on the Issue Date in the form of a
permanent global Security substantially in the form of Exhibit A, which is
hereby incorporated by reference and expressly made a part of this Indenture
(the "Restricted Rule 144A Global Security"), deposited with the Trustee, as
custodian for the Depository, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Restricted Rule 144A Global Security
may be represented by more than one certificate, if so required by the
Depository's rules regarding the maximum principal amount to be represented
by a single certificate. The aggregate principal amount of the Restricted Rule
144A Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depository
or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States
of America (the "Regulation S Note") in reliance on Regulation S under the
Securities Act ("Regulation S") shall be issued in the form of a permanent
global Security substantially in the form of Exhibit A (the "Restricted
Regulation S Global Security") deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The Restricted Regulation S Global Security may be
represented by more than one certificate, if so required by the Depository's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Restricted Regulation S
Global Security may from time to time be increased or decreased by adjustments
made on the
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records of the Trustee, as custodian for the Depository or its nominee, as
hereinafter provided.
Initial Securities resold to institutional "accredited
investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act) in the United States of America (the "Institutional Accredited Investor
Note") will be issued in the form of a permanent global Security substantially
in the form of Exhibit A (the "Restricted Institutional Accredited Investor
Global Security") deposited with the Trustee, as custodian for the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The Restricted Institutional Accredited Investor Global Security may
be represented by more than one certificate, if so required by the Depository's
rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Restricted Institutional
Accredited Investor Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository or its nominee, as hereinafter provided.
Exchange Securities exchanged for interests in the Rule 144A
Note, the Regulation S Note and the Institutional Accredited Investor Note will
be issued in the form of a permanent global Note substantially in the form set
forth in Exhibit B hereto, which is hereby incorporated by reference and
expressly made a part of this Indenture, deposited with the Trustee as
hereinafter provided, with the applicable legend set forth in Section 2.1(c)
hereof (the "Exchange Global Note"). The Exchange Global Note may be represented
by more than one certificate, if so required by the Depository's rules regarding
the maximum principal amount to be represented by a single certificate.
The Restricted Rule 144A Global Security, the Restricted
Regulation S Global Security, the Exchange Global Note and the Restricted
Institutional Accredited Investor Global Security are sometimes collectively
herein referred to as the "Global Securities."
The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Note Register or (ii) wire
transfer or other electronic funds transfer to an account located in the United
States maintained by the payee, provided that the payee has given the Trustee
appropriate wire instructions at least 15 days before the relevant payment date.
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The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, in addition to those set forth on
Exhibits A and B. The Company and the Trustee shall approve the forms of the
Securities and any notation, endorsement or legend on them. Each Security shall
be dated the date of its authentication. The terms of the Securities set forth
in Exhibit A and Exhibit B are part of the terms of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in
fully registered form, without coupons, and only in denominations of $1,000 and
any integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial
Security is sold under an effective registration statement or (ii) an Initial
Security is exchanged for an Exchange Security in connection with an effective
registration statement, in each case pursuant to the Registration Rights
Agreement, (A) such Restricted Rule 144A Global Security and the Restricted
Institutional Accredited Investor Global Security shall bear the following
legend (the "Private Placement Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR
TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO
YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST
DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE
COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
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FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED
INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM PRINCIPAL
AMOUNT OF $250,000 OF SECURITIES, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT TO
CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUSTEE A
LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A-1 TO
THE OFFERING MEMORANDUM DATED MARCH 13, 1998. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH HEREON RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. THIS
LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE."; and
(B) the Restricted Regulation S Global Security shall bear the
following legend (the "Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"),
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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 IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR
THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN
OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE
SECURITIES ACT ("REGULATION S"), (2) AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY
PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO
A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT
THAT IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT
TO CLAUSE (E), TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUSTEE A
LETTER FROM THE TRANSFEREE
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SUBSTANTIALLY IN THE FORM OF ANNEX A-1 TO THE OFFERING MEMORANDUM DATED
MARCH 13, 1998. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN
THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH HEREON RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE. THIS LEGEND WILL BE
REMOVED ON APRIL 26, 1998. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION", "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.".
The Global Securities, whether or not an Initial Security,
shall bear the following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
(d) Book-Entry Provisions. (1) This Section 2.1(d) shall apply
only to Global Securities deposited with the Trustee, as custodian for the
Depository.
(2) Each Global Security initially shall (x) be registered in
the name of the Depository for such Global Security or the nominee of such
Depository, (y) be delivered
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to the Trustee as custodian for such Depository and (z) bear legends as set
forth in Section 2.1(c).
(3) Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository or by the Trustee as the
custodian of the Depository or under such Global Security, 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 such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of the Depository governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
(4) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (e) of this
Section to beneficial owners who are required to hold Definitive Securities (as
defined below), the Security Trustee shall reflect on its books and records the
date and a decrease in the principal amount of such Global Security in an amount
equal to the principal amount of the beneficial interest in the Global Security
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Definitive Securities of like tenor and
amount.
(5) In connection with the transfer of an entire Global
Security to beneficial owners pursuant to subsection (e) of this Section, such
Global Security 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 such Global Security, an equal aggregate
principal amount of Definitive Securities of authorized denominations.
(e) Definitive Securities. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain Definitive
Securities in exchange for their beneficial interests in a Global Security upon
written request in accordance with the Depository's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or the Depository
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depository is required to be so registered in order to act as Depository,
and in each case a successor depositary is
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not appointed by the Company within 90 days of such notice or, (ii) the Company
executes and delivers to the Trustee and Registrar an Officers' Certificate
stating that such Global Security shall be so exchangeable or (iii) an Event of
Default has occurred and is continuing and the Registrar has received a request
from the Depository.
(f) Any Definitive Security delivered in exchange for an
interest in a Global Security pursuant to Section 2.1(d)(iv) and (v) shall,
except as otherwise provided by paragraph (c) of Section 2.6, bear the
applicable legend regarding transfer restrictions applicable to the Definitive
Security set forth in Section 2.1(c).
(g) The registered holder of a Global Security may grant
proxies and otherwise authorize any person, including Agent Members and persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
SECTION 2.2. Execution and Authentication. An Officer shall
sign the Securities for the Company by manual or facsimile signature. If an
Officer whose signature is on a Security no longer holds that office at the time
the Trustee authenticates the Security, the Security shall be valid
nevertheless.
A Security shall not be valid until an authorized signatory of
the Trustee manually authenticates the Security. The signature of the Trustee on
a Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Trustee shall authenticate and make available
for delivery: (1) Initial Securities for original issue in an aggregate
principal amount of $115.0 million and (2) Exchange Securities for issue only in
a Registered Exchange Offer pursuant to the Registration Rights Agreement, and
only in exchange for Initial Securities of an equal principal amount, in each
case upon a written order of the Company signed by two Officers or by an Officer
and either an Assistant Treasurer or an Assistant Secretary of the Company (the
"Company Order"). Such Company Order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities or
Exchange Securities. The aggregate principal amount of Securities outstanding at
any time may not exceed $115.0 million except as provided in Section 2.9.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate
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Securities whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent.
In case the Company or any Note Guarantor (if any), pursuant
to Article 5, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Note Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 2.2 in exchange
or substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them,
shall provide for the exchange of all Securities at the time outstanding for
Securities authenticated and delivered in such new name.
SECTION 2.3. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Register").
The Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Registrar, Paying Agent or co-registrar not a party to this Indenture,
which shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of each such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.7. The
Company or any of its domestically incorporated
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Wholly-Owned Subsidiaries may act as Paying Agent, Registrar, co-registrar or
transfer agent.
The Company initially appoints the Trustee as Registrar and
Paying Agent for the Securities.
The Company initially appoints The Depository Trust Company to
act as Depository with respect to the Global Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least
10:00 a.m (New York City time) on the date on which any principal of or interest
on any Security is due and payable, the Company shall deposit with the Paying
Agent a sum sufficient to pay such principal or interest when due. The Company
shall require each Paying Agent (other than the Trustee) to agree in writing
that such Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by such Paying Agent for the payment of principal of
or interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve
in as current a form as is reasonably practicable the most recent list available
to it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any
proposed transfer of a Rule 144A Note or an Institutional Accredited Investor
Note prior to the date which is two years after the later of the date of
original issue and the last date on which the Company or any affiliate of the
Company was the owner of such Notes (or any predecessor thereto) (the "Resale
Restriction Termination Date"):
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<PAGE> 47
(1) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB
shall be made upon the representation of the transferee that it is
purchasing the Security 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, 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;
(2) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an
institutional accredited investor shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.7 hereof from the proposed transferee and, if
requested by the Company or the Trustee, the delivery of an opinion of
counsel, certification and/or other information satisfactory to each of
them; and
(3) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.7 hereof
from the proposed transferee and, if requested by the Company or the
Trustee, the delivery of an opinion of counsel, certification and/or
other information satisfactory to each of them.
(b) The following provisions shall apply with respect to any
proposed transfer of a Regulation S Note prior to the expiration of the
Restricted Period:
(1) a transfer of a Regulation S Note or a beneficial
interest therein to a QIB shall be made upon the representation of the
transferee that it is purchasing the Security 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, 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
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A;
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<PAGE> 48
(2) a transfer of a Regulation S Note or a beneficial
interest therein to an institutional accredited investor shall be made
upon receipt by the Trustee or its agent of a certificate substantially
in the form set forth in Section 2.7 hereof from the proposed
transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other
information satisfactory to each of them; and
(3) a transfer of a Regulation S Note or a beneficial
interest therein to a Non-U.S. Person shall be made upon receipt by the
Trustee or its agent of a certificate substantially in the form set
forth in Section 2.8 hereof from the proposed transferee and, if
requested by the Company or the Trustee, receipt by the Trustee or its
agent of an opinion of counsel, certification and/or other information
satisfactory to each of them.
After the expiration of the Restricted Period, interests in
the Regulation S Note may be transferred without requiring certification set
forth in Section 2.8 or any additional certification.
(c) Restricted Securities Legend. Upon the transfer, exchange
or replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing the
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear such Restricted Securities Legend unless there is delivered to the
Registrar an Opinion of Counsel to the effect that neither such legend nor the
related restrictions on transfer are required in order to maintain compliance
with the provisions of the Securities Act.
(d) The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 2.1 or this
Section 2.6. 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.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
(1) To permit registrations of transfers and exchanges, the
Company shall, subject to the other terms and conditions of this
Article II, execute and the Trustee shall authenticate Definitive
Securities and Global Securities at the Registrar's or co-registrar's
request.
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<PAGE> 49
(2) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charges payable upon
exchange or transfer).
(3) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning (1) 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities and ending at the close of
business on the day of such mailing or (2) 15 Business Days before an
interest payment date and ending on such interest payment date.
(4) Prior to the due presentation for registration of transfer
of any Security, the Company, the Trustee, the Paying Agent, the
Registrar or any co-registrar may deem and treat the person in whose
name a Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and interest on
such Security and for all other purposes whatsoever, whether or not
such Security is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall be affected by
notice to the contrary.
(5) All Securities issued upon any transfer or exchange
pursuant to the terms of this Indenture shall evidence the same debt
and shall be entitled to the same benefits under this Indenture as the
Securities surrendered upon such transfer or exchange.
(f) No Obligation of the Trustee. (1) The Trustee shall have
no responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice or
the payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
in respect of the Securities shall be given or made only to or upon the order of
the registered Holders (which shall be the Depository or its nominee in the case
of a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through the Depository subject to the applicable rules
and procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
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<PAGE> 50
(2) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depository
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 2.7. Form of Certificate to be Delivered in Connection
with Transfers to Institutional Accredited Investors.
[Date]
Day International Group, Inc.
130 West 2nd Street, Suite 1700
Dayton, Ohio 45402
Attention:
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the __% Senior Subordinated Notes due 2008 (the "Notes") of
Day International Group, Inc. (the "Company").
Upon transfer, the Notes would be registered in the name of
the new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act")) purchasing for our own account or for the account of
such an institutional
42
<PAGE> 51
"accredited investor" at least $250,000 principal amount of the Notes, and we
are acquiring the Notes not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risk of our investment in the Notes and we invest in
or purchase securities similar to the Notes in the normal course of our
business. We and any accounts for which we are acting are each able to bear the
economic risk of our or its investment.
2. We understand that the Notes have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after the
later of the date of original issue and the last date on which the Company or
any affiliate of the Company was the owner of such Notes (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement which has been declared effective under
the Securities Act ("Rule 144A"), (c) in a transaction complying with the
requirements of Rule 144A under the Securities Act, to a person we reasonably
believe is a qualified institutional buyer under Rule 144A (a "QIB") that
purchases for its own account or for the account of a QIB and to whom notice is
given that the transfer is being made in reliance on Rule 144A, (d) pursuant to
offers and sales that occur outside the United States within the meaning of
Regulation S under the Securities Act, (e) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act that is purchasing for its own account or for the account of such
an institutional "accredited investor," in each case in a minimum principal
amount of Notes of $250,000 or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (e) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to the Company and the Trustee, which
shall provide, among other things, that the transferee is an institutional
"accredited investor" (within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) and that it is acquiring such Notes for investment
purposes and not for distribution in violation of the Securities Act. Each
purchaser acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer prior to the Resale Termination Date of the
Notes pursuant to clauses (d), (e) or (f) above to require the delivery of an
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<PAGE> 52
opinion of counsel, certifications and/or other information satisfactory to the
Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
SECTION 2.8. Form of Certificate to be Delivered in Connection
with Transfers Pursuant to Regulation S.
[Date]
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention:
Re: Day International Group, Inc.
__% Senior Subordinated Notes due 2008
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(a) the offer of the Securities was not made to a person in
the United States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States or (ii) 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;
(c) 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; and
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<PAGE> 53
(d) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
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.
Very truly yours,
[Name of Transferor]
By:____________________________
- ------------------------------
Authorized Signature Signature Medallion
Guaranteed
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities.
If a mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and the Trustee to
protect the Company, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any loss that any of them may suffer if a Security is
replaced, then, in the absence of notice to the Company, any Note Guarantor or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
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<PAGE> 54
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay all amounts due and payable on such
Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Note Guarantor and any
other obligor upon the Securities, whether or not the mutilated, destroyed, lost
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 2.10. Outstanding Securities. Securities outstanding
at any time are all Securities authenticated by the Trustee except for those
canceled by it, those delivered to it for cancellation and those described in
this Section as not outstanding. A Security does not cease to be outstanding in
the event the Company or an Affiliate of the Company holds the Security.
If a Security is replaced or paid pursuant to Section 2.9, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that such Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in
accordance with this Indenture, on a maturity date money sufficient to pay all
principal and interest payable on that date with respect to the Securities
maturing and the Paying Agent is not prohibited from paying such money to the
Securityholders on that date pursuant to the terms of this Indenture, then on
and after that date such Securities will cease to be outstanding and interest on
them will cease to accrue.
SECTION 2.11. Temporary Securities. Until Definitive
Securities are ready for delivery, the Company may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Company
considers appropriate for
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<PAGE> 55
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate Definitive Securities. After the preparation of
Definitive Securities, the temporary Securities shall be exchangeable for
Definitive Securities upon surrender of the temporary Securities at any office
or agency maintained by the Company for that purpose and such exchange shall be
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute, and the Trustee shall
authenticate and make available for delivery in exchange therefor, one or more
Definitive Securities representing an equal principal amount of Securities.
Until so exchanged, the Holder of temporary Securities shall in all respects be
entitled to the same benefits under this Indenture as a holder of Definitive
Securities.
SECTION 2.12. Cancellation. The Company at any time may
deliver Securities to the Trustee for cancellation. The Registrar and the Paying
Agent shall forward to the Trustee any Securities surrendered to them for
registration of transfer, exchange or payment. The Trustee and no one else shall
cancel all Securities surrendered for registration of transfer, exchange,
payment or cancellation. The Company may not issue new Securities to replace
Securities it has paid or delivered to the Trustee for cancellation.
SECTION 2.13. Payment of Interest; Defaulted Interest.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any interest payment date shall be paid to the Person in whose
name such Security (or one or more predecessor Securities) is registered at the
close of business on the regular record date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the regular
record date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date
(not less than 30 days after such notice) of the proposed payment (the
"Special
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<PAGE> 56
Interest Payment Date"), and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the Special Interest Payment Date and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date and Special Interest Payment Date therefor
to be given in the manner provided for in Section 10.2, not less than
10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date and
Special Interest Payment Date therefor having been so given, such
Defaulted Interest shall be paid on the Special Interest Payment Date
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 2.14. Computation of Interest. Interest on the
Securities shall be computed on the basis of a 360-day year of twelve 30-day
months.
SECTION 2.15. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use) and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption
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<PAGE> 57
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company will promptly notify the Trustee of
any change in the "CUSIP" numbers.
ARTICLE 3
Redemption
SECTION 3.1. Notices to Trustee. If the Company elects to
redeem Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for
in this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officer's
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. Any such notice may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
SECTION 3.2. Selection of Securities To Be Redeemed. If fewer
than all the Securities are to be redeemed, the Trustee shall select the
Securities to be redeemed on a pro rata basis, by lot or by a method that
complies with applicable legal and securities exchange requirements, if any, and
that the Trustee considers, in its sole discretion, fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the Trustee selects shall be
in amounts of $1,000 or a whole multiple of $1,000. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company promptly
in writing of the Securities or portions of Securities to be redeemed.
SECTION 3.3. Notice of Redemption. At least 30 days but not
more than 60 days before a date for redemption of Securities, the Company shall
mail a notice of redemption by first-class mail to each Holder of Securities to
be redeemed.
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The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such
redemption payment or the Paying Agent is prohibited from making such
payment pursuant to the terms of this Indenture, interest on Securities
(or portion thereof) called for redemption ceases to accrue on and
after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.4. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest, if any, to the redemption
date; provided that if the redemption date is after a regular record date and on
or prior to the interest payment date, the accrued interest shall be payable to
the Securityholder of the redeemed Securities registered on
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the relevant record date. Failure to give notice or any defect in the notice to
any Holder shall not affect the validity of the notice to any other Holder.
SECTION 3.5. Deposit of Redemption Price. On or prior to 10:00
a.m. on the redemption date, the Company shall deposit with the Paying Agent
(or, if the Company or a Subsidiary is the Paying Agent, shall segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions of Securities called for redemption which have been delivered by the
Company to the Trustee for cancellation, and from and after such date (unless
the Company defaults in making such redemption payment) interest on such
Securities shall cease to accrue.
SECTION 3.6. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.7. Optional Redemption. (a) Except as set forth in
this Section 3.7, the Securities may not be redeemed pursuant to this Section
3.7(a) at the option of the Company prior to March 15, 2003. On and after that
date, the Company may redeem the Securities in whole at any time or in part from
time to time at the following redemption prices (expressed in percentages of
principal amount), plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) if redeemed during
the 12-month period beginning on or after March 15 of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Period Price
- ---------------- --------------
<S> <C>
............................................................... 2003
............................................................... 104.750%
............................................................... 2004
............................................................... 103.167%
............................................................... 2005
............................................................... 101.583%
............................................................... 2006 and thereafter
............................................................... 100.000%
</TABLE>
(b) Notwithstanding the foregoing, at any time and from time
to time prior to March 15, 2001, the Company may redeem in the aggregate up to
33 1/3% of the
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<PAGE> 60
original aggregate principal amount of the Securities with the proceeds of one
or more Public Equity Offerings by the Company following which there is a Public
Market, at a redemption price (expressed as a percentage of principal amount) of
109.50% plus accrued interest, if any, to the redemption date (subject to the
right of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date); provided, however, that at least 66 2/3%
of the original aggregate principal amount of the Securities must remain
outstanding after each such redemption.
(c) At any time on or prior to March 15, 2003, the Securities
may be redeemed as a whole at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event more than 180 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
ARTICLE 4
Covenants
SECTION 4.1. Payment of Securities. The Company shall promptly
pay the principal of and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if on such date the Trustee or the
Paying Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
rate specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.2. SEC Reports. Notwithstanding that the Company may
not be required to be or remain subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act, the Company will file (if then permitted to do
so) with the SEC and provide (whether or not so filed with the SEC) the Trustee
and Securityholders and prospective Securityholders (upon request) with the
annual reports and the information, documents and other reports, which are
specified in Sections 13 and 15(d) of the Exchange Act. The Company also will
comply with the other provisions of TIA Section 314(a).
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Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 4.3. Limitation on Indebtedness. (a) The Company will
not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness;
provided, however, that the Company and the Note Guarantors may Incur
Indebtedness if on the date of the Incurrence of such Indebtedness the
Consolidated Coverage Ratio would be greater than 2.00:1.00.
(b) Notwithstanding Section 4.3(a), the Company and, where
indicated, its Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness of the Company Incurred pursuant to the
Senior Secured Credit Facility in a maximum principal amount not to
exceed at any time (A) an aggregate principal amount of $40.0 million
under the Term Loan Facility less the aggregate amount of all scheduled
repayments of principal, or mandatory prepayments of principal with Net
Available Cash from Asset Dispositions, applied to permanently reduce
the Indebtedness outstanding under the Term Loan Facility, plus (in the
case of any refinancing thereof) the aggregate amount of fees,
underwriting discounts, premiums and other costs and expenses incurred
in connection with such refinancing, and (B) an aggregate principal
amount outstanding at any time under the Revolving Credit Facility not
to exceed $20.0 million less the amount of all mandatory prepayments of
principal with Net Available Cash from Asset Dispositions, applied to
permanently reduce the commitments under the Revolving Credit Facility,
plus (in the case of any refinancing thereof) the aggregate amount of
fees, underwriting discounts, premiums and other costs and expenses
incurred in connection with such refinancing;
(ii) Indebtedness of Foreign Subsidiaries for working capital
purposes and any Guarantees in respect thereof, the aggregate principal
amount of which Indebtedness outstanding at any time does not exceed,
as to all such Foreign Subsidiaries, $15.0 million;
(iii) Indebtedness (A) of the Company to any Restricted
Subsidiary and (B) of any Wholly Owned Subsidiary to the Company or any
Restricted Subsidiary; provided, however, (x) in the case of clause
(A), any such Indebtedness is subordinated to the Securities and (y)
any subsequent issuance or
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transfer of any Capital Stock or any other event that results in any
such Wholly Owned Subsidiary ceasing to be a Wholly Owned Subsidiary or
any other subsequent transfer of any such Indebtedness (except to the
Company or a Wholly Owned Subsidiary) will be deemed, in each case, an
Incurrence of Indebtedness by the Company or such Restricted
Subsidiary, as the case may be;
(iv) Indebtedness represented by the Securities and the
issuance of the Exchangeable Preferred Stock in the amount issued on
the Issue Date, and any Indebtedness (other than the Indebtedness
described in clause 4.3(b)(i), (ii) or (iii) above) outstanding on the
date of the Indenture and any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this clause 4.3(b)(iv) or
Section 4.3(a) above (excluding the exchange of Exchangeable Preferred
Stock for Exchange Debentures in accordance with the terms of the
Certificate of Designation (as defined in the Purchase Agreement) for
such Exchangeable Preferred Stock as in effect on the Issue Date;
(v) Indebtedness of the Company or any Restricted Subsidiary
(A) to finance or refinance the deferred purchase price of newly
acquired property of the Company and its Subsidiaries used in the
ordinary course of business of the Company and its Subsidiaries
(provided such purchase money financing is entered into within six
months of the acquisition of such property), and any Refinancing
Indebtedness with respect thereto, and (B) in the form of Capitalized
Lease Obligations or Attributable Debt, and any Refinancing
Indebtedness with respect thereto, in an aggregate amount (based on, in
the case of clause (A), the remaining balance of the obligations
therefor on the books of the Company and its Restricted Subsidiaries)
not in excess, at any one time outstanding, of $10,0 million:
(vi) Indebtedness of the Company or any Restricted Subsidiary
(which may comprise Bank Indebtedness) in an aggregate principal amount
at any one time outstanding not in excess of $10.0 million;
(vii) Indebtedness represented by the Note Guarantees and
Guarantees of Indebtedness Incurred pursuant to clause 4.3(b)(i) or
(iii) above;
(viii) Guarantees (A) by any Note Guarantor of Senior
Indebtedness, (B) by the Company or any Note Guarantor of Guarantor
Senior Indebtedness or (C) by any Wholly Owned Subsidiary that is not a
Note Guarantor of Indebtedness of any Wholly Owned Subsidiary that is
not a Note Guarantor;
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(ix) Indebtedness (A) arising by reason of any Lien created or
permitted to exist by Section 4.11, including any Indebtedness of any
Note Guarantor arising by reason of any Lien granted by such Person to
secure Senior Indebtedness, or of the Company or any Note Guarantor
arising by reason of any Lien granted by such Person to secure
Guarantor Senior Indebtedness, or (B) of any Restricted Subsidiary that
is not a Note Guarantor arising by reason of any Lien granted by such
Person to secure Indebtedness of any Restricted Subsidiary that is not
a Note Guarantor;
(x) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring of a check, draft or similar instrument of
such Person drawn against insufficient funds, provided that such
Indebtedness is extinguished within five Business Days of its
incurrence;
(xi) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities, or obligations in respect of
purchase price adjustments, in connection with the acquisition or
disposition of assets, other than guarantees of Indebtedness incurred
by any Person acquiring such assets for the purpose of financing such
acquisition; provided, however, that (A) such Indebtedness is not
reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet
will not be deemed to be reflected on such balance sheet for purposes
of this clause (A)) and (B) the maximum Indebtedness Incurred in
connection with such disposition shall at no time exceed the gross
proceeds being measured at the time received by the Company and its
Restricted Subsidiary in connection with such disposition (which
proceeds would include assumed Indebtedness of the Company or any
Restricted Subsidiary and, with respect to any other non-cash proceeds
of any such disposition, the fair market value at the time of receipt
of such proceeds and without giving effect to any subsequent changes in
value);
(xii) Indebtedness in respect of (A) commercial letters of
credit, or other letters of credit or other similar instruments or
obligations, issued in connection with liabilities incurred in the
ordinary course of business (including those issued to governmental
entities in connection with self-insurance under applicable workers'
compensation statutes), or (B) surety, judgment, appeal, performance
and other similar bonds, instruments or obligations provided in the
ordinary course of business;
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(xiii) Indebtedness under Hedging Obligations; provided,
however, that such Hedging Obligations are entered into for bona fide
hedging purposes and are in the ordinary course of business;
(xiv) Indebtedness (A) of the Company consisting of Guarantees
of up to an aggregate principal amount of $500,000 of borrowings by
Management Investors in connection with the purchase of Capital Stock
of the Company by such Management Investors or (B) of the Company or
any Restricted Subsidiary consisting of guarantees in respect of loans
or advances made to officers or employees of the Company or any
Restricted Subsidiary, or guarantees otherwise made on their behalf,
(1) in respect of travel, entertainment and moving-related expenses
incurred in the ordinary course of business, or (2) in the ordinary
course of business not exceeding $500,000 in the aggregate outstanding
at any time;
(xv) Indebtedness of any Restricted Subsidiary that is
Indebtedness of another Person assumed by such Restricted Subsidiary in
connection with its acquisition of assets from such Person (other than
Indebtedness Incurred in connection with, or in contemplation of, such
acquisition) and any Refinancing Indebtedness with respect thereto;
provided, however, that at the time of such acquisition of assets the
Company shall have been able to Incur at least an additional $1.00 of
Indebtedness under Section 4.3(a) above after giving effect to such
acquisition;
(xvi) Indebtedness of a Restricted Subsidiary issued and
outstanding on or prior to the date on which such Restricted Subsidiary
was acquired by the Company (other than Indebtedness Incurred (A) as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company or (B)
otherwise in connection with, or in contemplation of, such acquisition)
and any Refinancing Indebtedness with respect thereto; provided,
however, that on the date of any such acquisition the Company shall
have been able to Incur at least $1.00 of Indebtedness under Section
4.3(a) above after giving effect to such acquisition;
(xvii) Exchangeable Preferred Stock issued as payment in kind
dividends on the Exchangeable Preferred Stock outstanding on the Issue
Date or issued subsequent to the Issue Date as dividends permitted
pursuant to this Section 4.3(b)(xvii), to the extent such dividends are
made pursuant to the terms of the Certificate of Designation for such
Exchangeable Preferred Stock as in effect on the Issue Date, on any
Preferred Stock issued in exchange for the Exchangeable
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Preferred Stock, or any dividends on such Preferred Stock to the extent
such dividends are made pursuant to the terms of the Certificate of
Designation of such Preferred Stock;
(xviii) Indebtedness of the Company in respect of Exchange
Debentures issued as payment in kind interest on Exchange Debentures
issued on the exchange of Exchangeable Preferred Stock, to the extent
such interest payments are made pursuant to the terms of the Exchange
Debenture Indenture; and
(xix) Indebtedness arising from the assumption of the
obligations of GSD under the GSD Credit Facility; provided that the
proceeds of the Offerings are applied to repay all amounts outstanding
under the GSD Credit Facility.
(c) Notwithstanding the foregoing, the Company will not Incur
any Indebtedness pursuant to any provision of Section 4.3(b) above that permits
Refinancing Indebtedness in respect of Indebtedness constituting Subordinated
Obligations, if the proceeds of such Refinancing Indebtedness are used, directly
or indirectly, to refinance such Subordinated Obligations, unless such
Refinancing Indebtedness will be subordinated to the Securities to at least the
same extent as such Subordinated Obligations, provided that this subsection (c)
shall not apply to Refinancing Indebtedness in respect of Indebtedness referred
to in clause (xix) of the foregoing Section 4.3(b).
(d) For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant to
and in compliance with, this covenant, (i) any other obligation of the obligor
on such Indebtedness arising under any Guarantee, Lien or letter of credit
supporting such Indebtedness shall be disregarded to the extent that such
Guarantee, Lien or letter of credit secures the principal amount of such
Indebtedness; (ii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in any clause of Section 4.3(b)
above, the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses; and (iii) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with GAAP.
(e) For purposes of determining compliance with any
Dollar-denominated restriction on the Incurrence of Indebtedness denominated in
a foreign currency, the Dollar-equivalent principal amount of such Indebtedness
Incurred pursuant thereto shall be calculated based on the relevant currency
exchange rate in effect on the date of such calculation.
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SECTION 4.4. Limitation on Restricted Payments. (a) The
Company shall not, and shall not permit any Restricted Subsidiary, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company) except (x) dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) and (y) dividends or distributions payable to the Company or any
Restricted Subsidiary (and, if the Restricted Subsidiary making such dividend or
distribution is not a Wholly Owned Subsidiary, to its other shareholders on no
more than a pro rata basis, measured by value), (ii) purchase, redeem, retire or
otherwise acquire for value any Capital Stock of the Company held by Persons
other than the Company or another Restricted Subsidiary, (iii) purchase,
repurchase, redeem, defease or otherwise acquire or retire for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase, redemption or
other acquisition of Subordinated Obligations in anticipation of satisfying a
sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of acquisition) or (iv) make any Investment
(other than a Permitted Investment) in any Person (any such dividend,
distribution, purchase, redemption, repurchase, defeasance, other acquisition,
retirement or Investment being herein referred to as a "Restricted Payment") if
at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company could not incur at least an additional $1.00
of Indebtedness under Section 4.3(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments (the amount so expended, if other than in
cash, to be determined in good faith by the Company's Board of
Directors whose determination shall be conclusive and evidenced by a
resolution of the Company's Board of Directors) declared or made
subsequent to the date of the Indenture would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during
the period (treated as one accounting period) from the end of
the most recent fiscal quarter ending prior to the Issue Date
to the end of the most recent fiscal quarter ending prior to
the date of such Restricted Payment for which consolidated
financial statements of the Company are available (or, in case
such Consolidated Net Income shall be a deficit, minus 100% of
such deficit);
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(B) the aggregate Net Cash Proceeds received by the
Company either (x) as capital contributions to the Company
after the Issue Date or (y) from the issuance or sale of its
Capital Stock (other than Disqualified Stock) subsequent to
the Issue Date (other than an issuance or sale to a Restricted
Subsidiary of the Company);
(C) the amount by which Indebtedness of the Company
is reduced on the Company's balance sheet upon the conversion
or exchange (other than by a Restricted Subsidiary of the
Company) subsequent to the Issue Date, of any Indebtedness of
the Company or its Restricted Subsidiaries convertible or
exchangeable for Capital Stock (other than Disqualified Stock)
of the Company (less the amount of any cash, or other property
(other than Capital Stock), distributed by the Company upon
such conversion or exchange), plus the amount of any cash or
other property received by the Company or any Restricted
Subsidiary upon such conversion or exchange;
(D) the amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from (i)
repayments of the principal of loans or advances or other
transfers of assets to the Company or any Restricted
Subsidiary from any Unrestricted Subsidiary or (ii) the
redesignation of Unrestricted Subsidiaries as Restricted
Subsidiaries (valued in each case as provided in the
definition of "Investment"), not to exceed in the case of any
such Unrestricted Subsidiary the aggregate amount of
Investments (other than Permitted Investments) made by the
Company or any Restricted Subsidiary in such Unrestricted
Subsidiary after the Issue Date; and
(E) in the case of disposition or repayment of any
Investment constituting a Restricted Payment (without
duplication of any amount deducted in calculating the amount
of Investments at any time outstanding included in the amount
of Restricted Payments), an amount equal to the lesser of the
return of capital or repayment with respect to such Investment
and the initial amount of such Investment, in either case,
less the cost of the disposition of such Investment.
(b) The provisions of Section 4.4(a) will not prohibit:
(i) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Capital Stock of the Company or
Subordinated Obligations made by exchange (including any such exchange
pursuant to the exercise of a
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conversion right or privilege in connection with which cash is paid in
lieu of the issuance of fractional shares) for, or out of the proceeds
of the substantially concurrent sale of, Capital Stock of the Company
(other than Disqualified Stock and other than Capital Stock issued or
sold to a Subsidiary or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries) or a
substantially concurrent capital contribution to the Company; provided,
however, that (A) such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent
calculations of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale or capital contribution shall be excluded in
subsequent calculations under clause (B) of Section 4.4(a);
(ii) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent
sale of, Subordinated Obligations of the Company that is permitted to
be Incurred pursuant to Section 4.3; provided, however, that such
purchase, redemption, repurchase, defeasance, retirement or other
acquisition shall be excluded in subsequent calculations of the amount
of Restricted Payments;
(iii) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.6; provided,
however, that such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent
calculations of the amount of Restricted Payments;
(iv) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Subordinated Obligations upon a
Change of Control to the extent required by the agreement governing
such Subordinated Obligations but only if the Company shall have
complied with Section 4.8 and purchased all Securities tendered
pursuant to the offer to repurchase all the Securities required
thereby, prior to purchasing or repaying such Subordinated Obligations;
provided, however, that (A) the purchase price (stated as a percentage
of principal amount or issue price plus accrued original issue
discount, if less) of such Subordinated Obligations shall not be
greater than the price (stated as a percentage of principal amount) of
the Securities pursuant to any such offer to repurchase the Securities
in the event of a Change of Control, and (B) any such purchase,
redemption, repurchase, defeasance, retirement or other acquisition
shall be included in subsequent calculations of the amount of
Restricted Payments;
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(v) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with Section 4.4(a); provided, however, that such
dividends shall be included in subsequent calculations of the amount of
Restricted Payments;
(vi) a Restricted Payment to pay for the repurchase or other
acquisition or retirement of Capital Stock or options, warrants or
other rights in respect thereof, or payments by the Company to
repurchase or otherwise acquire Capital Stock or options, warrants or
other rights in respect thereof, in each case from Management
Investors, such payments not to exceed an amount equal to $500,000 in
any fiscal year and $2.5 million in the aggregate (plus the Net Cash
Proceeds received by the Company since the Issue Date as a capital
contribution from the sale to Management Investors of Capital Stock or
options, warrants or other rights in respect thereof); provided,
however, that such payments will be included in subsequent calculations
of the amount of Restricted Payments;
(vii) payments by the Company or any Restricted Subsidiary (x)
pursuant to the Management Agreements and (y) to G-IV, GSCP and SGCP
and their respective Affiliates, not to exceed an amount necessary to
permit each such Person, as the case may be, to (A) pay its costs
(including all professional fees and expenses) incurred to comply with
its reporting obligations under federal or state laws or under this
Indenture or the Certificate of Designation or the Exchange Debenture
indenture, including any reports filed with respect to the Securities
Act, Exchange Act or the respective rules and regulations promulgated
thereunder, to the extent such costs relate to the Company and its
Subsidiaries, (B) make payments in respect of its indemnification
obligations of such Persons owing to directors, officers, employees or
other Persons under their charters or by-laws or pursuant to written
agreements with any such Person, to the extent such payments relate to
the Company and its Subsidiaries, (C) pay all reasonable out-of-pocket
expenses incurred in connection with the Acquisition, the Consent
Solicitation, the Offerings and related transactions, and (D) indemnify
or reimburse, or pay on behalf of, such Persons any taxes, charges or
assessments arising by reason of their ownership of Capital Stock of
the Company and the GSD Liquidation, so long as the GSD Liquidation
occurs promptly after the consummation of the Offerings; provided,
however, that such payments will be excluded in subsequent calculations
of the amount of Restricted Payments;
(viii) the payment by the Company of dividends on the common
stock of the Company following an initial public offering of such
common stock, in an amount not to exceed in any fiscal year 6% of the
net proceeds received by the
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Company from such public offering; provided, however, that such
dividends will be included in subsequent calculations of the amount of
Restricted Payments;
(ix)(a) the issuance by the Company of shares of Exchangeable
Preferred Stock as dividends paid in kind on the Exchangeable Preferred
Stock and (b) commencing March 15, 2003, the payment of cash dividends
by the Company on the Exchangeable Preferred Stock or on any Preferred
Stock issued in exchange for the Exchangeable Preferred Stock, or any
dividends on any such Preferred Stock to the extent such dividends are
made pursuant to the terms of the Certificate of Designation of such
Preferred Stock, so long as the Company would be able to Incur, on a
pro forma basis, an additional $1.00 of Indebtedness under Section
4.3(a) above; provided, however, that such cash dividends will be
included in subsequent calculations of the amount of Restricted
Payments; and
(x) the exchange of Exchangeable Preferred Stock for Exchange
Debentures in accordance with the terms of the Exchangeable Preferred
Stock contained as part of the Certificate of Designation for such
Exchangeable Preferred Stock as in effect on the Issue Date; provided,
however, that the Company may only effect such exchange so long as the
Company would be able to Incur, on a pro forma basis, an additional
$1.00 of Indebtedness under Section 4.3(a) above; provided further,
however, that the principal amount of any such Exchange Debentures will
be excluded in subsequent calculations of the amount of Restricted
Payments;
provided, that in the case of clauses (vi) and (viii) no Default or Event of
Default shall have occurred or be continuing at the time of such payment after
giving effect thereto; provided, further, that the ongoing annual fees of up to
$950,000 payable pursuant to the Management Agreements shall not be made if a
Default or an Event of Default has occurred or is continuing at the time of such
payment.
SECTION 4.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except:
(1) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the date of the Indenture (including,
without limitation, the Senior Secured Credit Facility and the 2005
Notes);
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(2) any encumbrance or restriction with respect to a
Restricted Subsidiary (x) pursuant to an agreement relating to any
Indebtedness Incurred by a Restricted Subsidiary prior to the date on
which such Restricted Subsidiary was acquired by the Company, or of
another Person that is assumed by the Company or a Restricted
Subsidiary in connection with the acquisition of assets from, or merger
or consolidation with, such Person (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company, or such
acquisition of assets, merger or consolidation) and outstanding on the
date of such acquisition, merger or consolidation or (y) pursuant to
any agreement (not relating to any Indebtedness) in existence when a
Person becomes a Subsidiary of the Company or when such agreement is
acquired by the Company or any Subsidiary thereof, that is not created
in contemplation of such Person becoming such a Subsidiary or such
acquisition (for purposes of this clause (2), if another Person is the
Successor Company, any Subsidiary or agreement thereof shall be deemed
acquired or assumed, as the case may be, by the Company when such
Person becomes the Successor Company);
(3) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement (a "Refinancing
Agreement") effecting a refinancing of Indebtedness Incurred pursuant
to, or that otherwise extends, renews, refinances or replaces, an
agreement referred to in clause (1) or (2) of this Section 4.5 or this
clause (3) (an "Initial Agreement") or contained in any amendment to an
Initial Agreement; provided, however, that the encumbrances and
restrictions contained in any such Refinancing Agreement or amendment
are no less favorable to the Holders of the Securities taken as a whole
than encumbrances and restrictions contained in the Initial Agreement
or Initial Agreements to which such Refinancing Agreement or amendment
relates (as conclusively determined in good faith by the Board of
Directors);
(4) any encumbrance or restriction (A) that restricts in a
customary manner the subletting, assignment or transfer of any property
or asset that is subject to a lease, license or similar contract, or
the assignment or transfer of any lease, license or other contract, (B)
by virtue of any transfer of, agreement to transfer, option or right
with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by the Indenture,
(C) contained in mortgages, pledges or other security agreements
securing Indebtedness of a Restricted Subsidiary to the extent such
encumbrance or restrictions restrict the transfer of the property
subject to such mortgages, pledges or other security agreements or (D)
pursuant to customary provisions restricting
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dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary;
provided, however, that, in each case, such encumbrance or restriction
relates to, and restricts dealings with, only the property or asset
that is the subject of such encumbrance or restriction;
(5) any restriction with respect to a Restricted Subsidiary
(or any of its property or assets) imposed pursuant to an agreement
entered into for the direct or indirect sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted
Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition;
(6) any encumbrance or restriction on the transfer of property
or assets required by any regulatory authority having jurisdiction over
the Company or any Restricted Subsidiary or any of their businesses;
and
(7) any encumbrance or restriction pursuant to an agreement
relating to any foreign Indebtedness Incurred, or any sale of
receivables, by a Foreign Subsidiary, provided that no such
Indebtedness, in any one case, exceeds $10.0 million.
SECTION 4.6. Limitation on Sales of Assets. (a) The Company
will not, and will not permit any Restricted Subsidiary to, make any
Asset Disposition unless
(i) the Company or such Restricted Subsidiary receives
consideration (including by way of relief from, or by any other Person
assuming responsibility for, any liabilities, contingent or otherwise)
at the time of such Asset Disposition at least equal to the fair market
value of the shares and assets subject to such Asset Disposition, as
such fair market value may be determined (and shall be determined, to
the extent such Asset Disposition or any series of related Asset
Dispositions involves aggregate consideration in excess of $1.0
million) in good faith by the Board of Directors, whose determination
shall be conclusive (including as to the value of all noncash
consideration),
(ii) at least 75% of the consideration therefor (excluding, in
the case of an Asset Disposition of assets, any consideration by way of
relief from, or by any other Person assuming responsibility for, any
liabilities, contingent or otherwise, which are not Indebtedness)
received by the Company or such Restricted Subsidiary is in the form of
cash, and
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(iii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) as follows:
(A) first, either (x) to the extent the Company
elects (or is required by the terms of any Senior Indebtedness
or Indebtedness (other than Exchangeable Preferred Stock) of a
Restricted Subsidiary), to prepay, repay or purchase Senior
Indebtedness or such Indebtedness of a Restricted Subsidiary
(in each case other than Indebtedness owed to the Company or a
Restricted Subsidiary) within 365 days after the date of such
Asset Disposition or (y) to the extent the Company or such
Restricted Subsidiary elects, to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the
Company or another Restricted Subsidiary) within 365 days from
the date of such Asset Disposition, or, if such reinvestment
in Additional Assets is a project authorized by the Board of
Directors that will take longer than such 365 days to
complete, so long as such project is completed within two
years of the receipt of the Net Available Cash from such Asset
Sale;
(B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause (A)
(such balance, the "Excess Proceeds"), to make an offer to
purchase Securities and (to the extent required by the terms
thereof) any other Senior Subordinated Indebtedness, pursuant
and subject to the conditions of the Indenture and the
agreements governing such other Indebtedness, at a purchase
price of 100% of the principal amount thereof (or accreted
value, as applicable) plus accrued and unpaid interest to the
purchase date; and
(C) third, to the extent of the balance of such Net
Available Cash after application in accordance with clauses
(A) and (B) above, to fund (to the extent consistent with any
other applicable provision of the Indenture) any general
corporate purpose (including the repayment of any Subordinated
Obligations);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A)(x) or (B) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this covenant, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available
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Cash in accordance with this covenant except to the extent that the aggregate
Net Available Cash from all Asset Dispositions that is not applied in accordance
with this covenant exceeds $5.0 million. If the aggregate principal amount (or
accreted value, as applicable) of Securities and Senior Subordinated
Indebtedness validly tendered and not withdrawn in connection with an offer
pursuant to clause (B) above exceeds the Excess Proceeds, the Excess Proceeds
will be apportioned between the Securities and such Senior Subordinated
Indebtedness, with the portion of the Excess Proceeds payable in respect of the
Securities to equal the lesser of (x) the Excess Proceeds amount multiplied by a
fraction, the numerator of which is the outstanding principal amount of the
Securities and the denominator of which is the sum of the outstanding principal
amount of the Securities and the outstanding principal amount (or accreted
value, as applicable) of the relevant Senior Subordinated Indebtedness, and (y)
the aggregate principal amount of Securities validly tendered and not withdrawn.
For the purposes of this covenant, the following are deemed to
be cash: (w) Cash Equivalents, (x) the assumption of Indebtedness of the Company
(other than Disqualified Stock of the Company) or any Restricted Subsidiary and
the release of the Company or such Restricted Subsidiary from all liability on
such Indebtedness in connection with such Asset Disposition, (y) Indebtedness of
any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result
of such Asset Disposition, to the extent that the Company and each other
Restricted Subsidiary is released from any Guarantee of such Indebtedness in
connection with such Asset Disposition and (z) securities received by the
Company or any Restricted Subsidiary from the transferee that are promptly
converted by the Company or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to clause 4.6(a)(iii)(B) above, the Company will
be required to purchase Securities tendered pursuant to an offer by the Company
for the Securities (the "Offer") at a purchase price of 100% of their principal
amount plus accrued and unpaid interest to the Purchase Date in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in the Indenture. If the aggregate purchase price of the Securities tendered
pursuant to the Offer is less than the Net Available Cash allotted to the
purchase of the Securities, the remaining Net Available Cash will be available
to the Company for use in accordance with clause 4.6(a)(iii)(B) above (to repay
Senior Subordinated Indebtedness) or clause 4.6(a)(iii)(C) above. The Company
shall not be required to make an Offer for Securities pursuant to this covenant
if the Net Available Cash available therefor (after application of the proceeds
as provided in clauses 4.6(a)(iii)(A) above) is less than $5.0 million for any
particular Asset Disposition (which lesser amounts shall be carried forward for
purposes of determining whether an Offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition).
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(c) The Company will comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.6. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.6 by virtue
thereof.
SECTION 4.7. Limitation on Transactions with Affiliates. (a)
The Company will not, and will not permit any Restricted Subsidiary to, directly
or indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") on terms (i) that taken as a whole are less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (ii) that, in the event such Affiliate
Transaction involves an aggregate amount in excess of $1.0 million, are not in
writing and have not been approved by a majority of the members of the Board of
Directors having no material personal financial interest in such Affiliate
Transaction, or in the event there are no such members, as to which the Company
has not obtained a Fairness Opinion (as hereinafter defined). In addition, any
transaction involving aggregate payments or other transfers by the Company and
its Restricted Subsidiaries in excess of $5.0 million will also require an
opinion (a "Fairness Opinion") from an independent investment banking firm or
appraiser, as appropriate, of national prominence, to the effect that the terms
of such transaction taken as a whole are either (i) no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not an Affiliate or (ii) fair to the Company or such Restricted
Subsidiary, as the case may be, from a financial point of view.
(b) The provisions of Section 4.7(a) shall not prohibit (i)
any Restricted Payment permitted by Section 4.4, any Permitted Investment, or
any other transaction specifically excluded from the definition of the term
"Restricted Payment," (ii) the performance of the Company's or Restricted
Subsidiary's obligations under any employment contract, collective bargaining
agreement, employee benefit plan, related trust agreement or any other similar
arrangement heretofore or hereafter entered into in the ordinary course of
business, (iii) payment of compensation, performance of indemnification or
contribution obligations, or any issuance, grant or award of stock, options or
other securities, to employees, officers or directors in the ordinary course of
business, (iv) maintenance in the ordinary course of business of benefit
programs or arrangements for employees, officers or directors, including
vacation plans, health and
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the insurance plans, deferred compensation plans, and retirement or savings
plans and similar plans, (v) any transaction between the Company and a
Restricted Subsidiary or between Restricted Subsidiaries, (vi) loans or advances
made to directors, officers or employees of the Company or any Restricted
Subsidiary, or guarantees in respect thereof or otherwise made on their behalf
(including any payments under such guarantees), (A) in respect of travel,
entertainment or moving-related expenses incurred in the ordinary course of
business, or (B) in the ordinary course of business not exceeding $500,000 in
the aggregate outstanding at any time, (vii) guarantees of borrowings by
Management Investors in connection with the purchase of Capital Stock of the
Company by such Management Investors, which guarantees are permitted by Section
4.3, and payments thereunder, (viii) the assumption of GSD's obligations under
the GSD Credit Facility, and the incurrence and payment of all fees and expenses
payable in connection with the Acquisition, the Offerings and related
transactions, (ix) any other transaction arising out of agreements in existence
on the Issue Date, (x) execution, delivery and performance of the Management
Agreements, including but not limited to the ongoing payment of fees to GSCP and
SGCP of up to $950,000 per year plus reasonable out of pocket expenses, (xi) any
commercial or other business transaction in the ordinary course of business with
any Permitted Holder or any Affiliate thereof, on terms that taken as a whole
are no less favorable to the Company and its Restricted Subsidiaries than those
that could be obtained at the time in arm's-length dealings with a Person who is
not an Affiliate of the Company, and (xii) any transaction between the Company
or any Restricted Subsidiary and any Affiliate of the Company controlled by the
Company that is a joint venture or similar entity primarily engaged in a Related
Business so long as such transaction is in the ordinary course of business and
is on terms that are not materially less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person.
SECTION 4.8. Change of Control. (a) Upon the occurrence of a
Change of Control, each Securityholder shall have the right to require the
Company to repurchase all or any part of such Holder's Securities at a purchase
price in cash equal to 101% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of repurchase (subject to the right of
Holders of record on the relevant record date to receive interest due on the
relevant interest payment date), provided, however, that notwithstanding the
occurrence of a Change of Control, the Company shall not be obligated to
purchase the Securities pursuant to this Section 4.8 in the event that it has
exercised its right to redeem all the Securities under Section 3.7 hereof.
In the event that at the time of such Change of Control the
terms of the Bank Indebtedness restrict or prohibit the repurchase of Securities
pursuant to this Section, then prior to the mailing of the notice to Holders
provided for in Section 4.8(b)
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below but in any event within 30 days following any Change of Control (unless
the Company has exercised its right to redeem all the Securities under Section
3.7 hereof), the Company shall (i) repay in full all Bank Indebtedness or offer
to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each
lender who has accepted such offer or (ii) obtain the requisite consent under
the agreements governing the Bank Indebtedness to permit the repurchase of the
Securities as provided for in Section 4.8(b) below.
(b) Unless the Company has exercised its right to redeem all
the Securities under Section 3.7 hereof, within 30 days following any Change of
Control (or at the Company's option, prior to such Change of Control but after
the public announcement thereof) (except as provided in the proviso to the first
sentence of Section 4.8(a)), the Company shall mail a notice to each Holder with
a copy to the Trustee stating: (1) that a Change of Control has occurred or will
occur and that such Holder has (or upon such occurrence will have) the right to
require the Company to purchase such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on a record date to receive interest on the relevant interest payment
date); (2) the circumstances and relevant facts and financial information
regarding such Change of Control; (3) the repurchase date (which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed); (4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Securities purchased and
(5) that if such offer is made prior to such Change of Control, payment is
conditioned on the occurrence of such Change of Control.
(c) Holders electing to have a Security purchased shall be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section shall be delivered to the Trustee for cancellation,
and the Company shall pay the purchase price plus accrued and unpaid interest,
if any, to the Holders entitled thereto.
(e) The Company shall comply, to the extent applicable, with
the requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant to
this Section 4.8.
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To the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 4.8, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 4.8 by virtue thereof.
SECTION 4.9. Compliance Certificate; Notice of Default. The
Company shall deliver to the Trustee within 120 days after the end of each
fiscal year of the Company an Officer's Certificate signed by the principal
executive, principal financial or principal accounting officer of the Company
complying with Section 314(a)(4) of the TIA and stating that a review of its
activities and the activities of its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officer with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture (without regard to notice requirements or
periods of grace) and further stating, as to each Officer signing such
certificate, whether or not the signer knows of any failure by the Company or
any Subsidiary of the Company to comply with any conditions or covenants in this
Indenture, and, if such signer does know of such a failure to comply, the
certificate shall describe such failure with particularity and describe what
actions, if any, the Company proposes to take with respect to such failure. The
Company shall file with the Trustee written notice of the occurrence of any
Default or Event of Default, their status and what action the Company is taking
or proposes to take in respect thereof, within 30 days after the occurrence
thereof.
SECTION 4.10. [Intentionally omitted.]
SECTION 4.11. Limitation on Liens. The Company shall not, and
shall not permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Lien (other than Permitted Liens) on any of its property or
assets (including Capital Stock of any other Person), whether owned on the date
of the Indenture or thereafter acquired, securing any Indebtedness that is not
Senior Indebtedness or Guarantor Senior Indebtedness (the "Initial Lien"),
unless contemporaneously therewith effective provision is made to secure the
Indebtedness due under the Indenture and the Securities or, in respect of Liens
on any Restricted Subsidiary's property or assets, any Note Guarantee of such
Restricted Subsidiary, equally and ratably with such obligation for so long as
such obligation is so secured by such Initial Lien. Any such Lien thereby
created in favor of the Securities or any such Note Guarantee will be
automatically and unconditionally released and discharged upon (i) the release
and discharge of the Initial Lien to which it relates, or (ii) any sale,
exchange or transfer to any Person not an Affiliate of the Company of the
property or assets secured by such Initial Lien, or of all of the Capital Stock
held by the Company or any Restricted Subsidiary in, or all or substantially all
the assets of, any Restricted Subsidiary creating such Lien.
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SECTION 4.12. Additional Note Guarantors. (a) If the Company
or any of its Domestic Subsidiaries shall acquire or create another Domestic
Subsidiary that is a Significant Subsidiary, then the Company, the Trustee and
such newly acquired or created Domestic Subsidiary shall execute and deliver a
supplemental indenture evidencing such Note Guarantee and deliver an Opinion of
Counsel, in accordance with the terms of this Indenture. The Company will also
have the right to cause any Restricted Subsidiary so to become a Note Guarantor.
Each Note Guarantee will be limited to an amount not to exceed the maximum
amount that can be Guaranteed by that Subsidiary without rendering the Note
Guarantee, as it relates to such Subsidiary, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. Such Note Guarantee may be
substantially in the form of Exhibit C hereto or in such other form as may be
reasonably satisfactory to the Trustee and the Company.
(b) Except as provided in the applicable Note Guarantee, no
Note Guarantor may consolidate or merge with into (whether or not such Note
Guarantor is the surviving Person) another Person unless (i) the Person formed
by or surviving any such consolidation or merger (if other than a Note Guarantor
or the Company) assumes all the obligations of such Note Guarantor under the
Note Guarantee and the Indenture pursuant to a supplemental indenture, in form
reasonably satisfactory to the Trustee, and (ii) if such merger or consolidation
is with a Person other than the Company or a Restricted Subsidiary, (x)
immediately after such transaction, no Default or Event of Default exists and
(y) the Company will, at the time of such transaction after giving pro forma
effect thereto, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to Section 4.3(a).
SECTION 4.13. Limitation on the Sale or Issuance of Preferred
Stock of Restricted Subsidiaries. The Company (i) will not, and will not permit
any Restricted Subsidiary of the Company to transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than the Company or a Wholly Owned Subsidiary) and (ii) will not
permit any Restricted Subsidiary to issue any of its Capital Stock (other than
to management of such Restricted Subsidiary and, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Wholly Owned Subsidiary, unless (a) after any such
transfer, conveyance, sale, lease, disposition or issuance, such Restricted
Subsidiary continues to be a Restricted Subsidiary and (b) the net cash proceeds
from such transfer, conveyance, sale, lease, disposition or issuance, are
applied in accordance with Section 4.6; provided, however, that this provision
shall not prohibit (x) the transfer, conveyance, sale, lease or other
disposition of all of the Capital Stock of any Restricted Subsidiary or the
retention of Preferred Stock which is not Disqualified Stock in connection with
any such transfer, conveyance, sale, lease or other disposition, (y) the
transfer, conveyance,
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sale, lease or other disposition of Preferred Stock of a Subsidiary in
compliance with Section 4.6 and (z) the issuance or sale of any Preferred Stock
of a Restricted Subsidiary if such issuance or sale would be in compliance with
Section 4.3.
SECTION 4.14. Limitation on Layering. The Company shall not
Incur any Indebtedness if such Indebtedness is expressly subordinate in right of
payment to any Senior Indebtedness unless such Indebtedness is Senior
Subordinated Indebtedness or is contractually subordinated in right of payment
to Senior Subordinated Indebtedness. No Note Guarantor shall Incur any
Indebtedness if such Indebtedness is expressly subordinate in right of payment
to any Guarantor Senior Indebtedness of such Note Guarantor unless such
Indebtedness is Guarantor Senior Subordinated Indebtedness of such Note
Guarantor or is contractually subordinated in right of payment to Guarantor
Senior Subordinated Indebtedness of such Note Guarantor. Unsecured Indebtedness
is not deemed to be subordinate or junior to Secured Indebtedness merely because
it is unsecured, and Indebtedness that is not guaranteed by a particular Person
is not deemed to be subordinate or junior to Indebtedness that is so guaranteed
merely because it is not so guaranteed.
ARTICLE 5
Successor Company
SECTION 5.1. When Company May Merge or Transfer Assets. The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") will be a Person organized and existing under the
laws of the United States of America, any State thereof or the District
of Columbia and the Successor Company (if not the Company) will
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form reasonably satisfactory to the
Trustee, all the obligations of the Company under the Securities and
the Indenture; (ii) immediately after giving effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Restricted Subsidiary as a result of such
transaction as having been Incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default will
have occurred and be continuing; (iii) immediately after giving pro
forma effect to such transaction, the Successor Company would be able
to Incur an additional $1.00 of Indebtedness under Section 4.3(a); (iv)
each Note Guarantor (other than any party to any such merger)
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shall have delivered a written instrument in form and substance
reasonably satisfactory to the Trustee confirming its Note Guarantee;
and (v) the Company will have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each to the effect that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with the Indenture, provided that (x) in giving such
opinion such counsel may rely on such officer's certificate as to any
matters of fact (including without limitation as to compliance with the
foregoing clauses (ii) and (iii)), and (y) no Opinion of Counsel will
be required for a consolidation, merger or transfer described in the
last paragraph of this Section 5.1. Any Indebtedness that becomes an
obligation of the Company or any Restricted Subsidiary (or that is
deemed to be Incurred by any Restricted Subsidiary that becomes a
Restricted Subsidiary) as a result of such transaction undertaken in
compliance with this covenant, and any Refinancing Indebtedness with
respect thereto, shall be deemed to have been Incurred in compliance
with Section 4.3.
The Successor Company will succeed to, and be substituted for,
and may exercise every right and power of, the Company under the
Indenture, and thereafter the predecessor Company shall be relieved of
all obligations and covenants under this Agreement, except that, in the
case of a conveyance, transfer or lease of all or substantially all its
assets, the predecessor Company will not be released from the
obligation to pay the principal of and interest on the Securities.
Notwithstanding Section 5.1(ii) and (iii), (1) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (2) the Company may merge with an
Affiliate incorporated or organized for the purpose of reincorporating or
reorganizing the Company in another jurisdiction to realize tax or other
benefits.
ARTICLE 6
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs
if:
(1) the Company defaults in any payment of interest on any
Security when the same becomes due and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal of
any Security when the same becomes due at its Stated Maturity, upon
optional redemption,
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upon required repurchase, upon declaration or otherwise, whether or not
such payment shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.1;
(4) the Company fails to comply with Section 4.2, 4.3, 4.4,
4.5, 4.6, 4.7, 4.8, 4.11, 4.12, 4.13 or 4.14 (other than a failure to
purchase Securities when required under Section 4.6 or 4.8) and such
failure continues for 30 days after the notice specified below;
(5) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in (1),
(2), (3) or (4) above) and such failure continues for 60 days after the
notice specified below;
(6) any Note Guarantor fails to comply with its obligations
under any Note Guarantee to which such Note Guarantor is a party, after
any applicable grace period;
(7) Indebtedness of the Company or any Significant Subsidiary
is not paid within any applicable grace period after final maturity or
the acceleration by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $5.0
million or its foreign currency equivalent at the time;
(8) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief
against it in an involuntary case;
(C) consents to the appointment of a Custodian of it
or for any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(9) any judgment or decree for the payment of money (net of
any insurance or indemnity payments actually received in respect
thereof prior to or
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within 60 days from the entry thereof, or to be received in respect
thereof in the event any appeal thereof shall be unsuccessful) in
excess of $5.0 million or its foreign currency equivalent at the time
is entered against the Company or any Significant Subsidiary that is
not discharged, or bonded or insured by a third Person and either (A)
an enforcement proceeding has been commenced upon such judgment or
decree or (B) there is a period of 60 days following the entry of such
judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed; or
(10) any Note Guarantee by a Note Guarantor which is a
Significant Subsidiary shall cease to be in full force and effect
(except as contemplated by the terms thereof or of this Indenture) or
any such Note Guarantor shall deny or disaffirm its obligations in
writing under this Indenture or any Note Guarantee and such Default
continues for 10 days after the notice specified below.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code,
or any similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of
Default until the Trustee or the Holders of at least 25% in principal amount of
the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after
the occurrence thereof, written notice in the form of an Officer's Certificate
of any Event of Default under clause (6) above and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9) above, its status and what action the Company is taking
or proposes to take with respect thereto.
SECTION 6.2. Acceleration. If an Event of Default (other than
an Event of Default specified in Section 6.1(8) with respect to the Company)
occurs and is continuing, the Trustee by notice to the Company, or the Holders
of at least a majority in principal amount of the outstanding Securities by
notice to the Company and the Trustee,
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may declare the principal of and accrued but unpaid interest on all the
Securities to be due and payable. Upon such a declaration, such principal and
interest shall be due and payable immediately. If an Event of Default specified
in Section 6.1(8) with respect to the Company occurs and is continuing, the
principal of and interest on all the Securities shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Securityholders. The Holders of a majority in principal
amount of the outstanding Securities by notice to the Trustee may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has become due solely
because of acceleration. No such rescission shall affect any subsequent Default
or impair any right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and
is continuing, the Trustee may pursue any available remedy to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a
majority in principal amount of the outstanding Securities by notice to the
Trustee may waive an existing Default and its consequences except (i) a Default
in the payment of the principal of or interest on a Security or (ii) a Default
in respect of a provision that under Section 9.2 cannot be amended without the
consent of each Securityholder affected. When a Default is waived, it is deemed
cured, but no such waiver shall extend to any subsequent or other Default or
impair any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.1, that the Trustee determines is unduly prejudicial to the
rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction.
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Prior to taking any action hereunder, the Trustee shall be entitled to
indemnification satisfactory to it in its sole discretion against all losses and
expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. A Securityholder may not
pursue any remedy with respect to this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice stating
that an Event of Default is continuing;
(2) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60
days after receipt of the request and the offer of security or
indemnity; and
(5) the Holders of a majority in principal amount of the
outstanding Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.7. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
to receive payment of principal of and premium (if any) and interest on the
Securities held by such Holder, on or after the respective due dates expressed
in the Securities, or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of
Default specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee
may recover judgment in its own name and as trustee of an express trust against
the Company for the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful) and the amounts provided for in
Section 7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents and take such other
actions,
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including participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, as may be necessary or advisable in order to
have the claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, any Subsidiary or Note Guarantor, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and its counsel, and any other amounts
due the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Senior Indebtedness to the extent
required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section. At least 15 days before
such record date, the Trustee shall mail to each Securityholder and the Company
a notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Company, a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 or a suit by Holders of more than 10% in principal
amount of the Securities.
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SECTION 6.12. Waiver of Stay or Extension Laws. The Company
(to the extent it may lawfully do so) shall not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not hinder, delay or impede
the execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
ARTICLE 7
Trustee
SECTION 7.1. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.1;
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(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b) and (c) of this Section 7.1.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated
from other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
SECTION 7.2. Rights of Trustee. Subject to Section 7.1: (a)
The Trustee may rely on any document believed by it to be genuine and to have
been signed or presented by the proper person. The Trustee need not investigate
any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
the Officer's Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys or agents and
shall not be responsible for the misconduct or negligence of any attorney or
agent appointed with due care.
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(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and
the advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Securities
at the time outstanding, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney, during reasonable business
hours and subject to executing a confidentiality undertaking in customary form
with respect to confidential and/or proprietary information of the Company;
provided, however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in the making
of such investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expense or liability
as a condition to so proceeding.
(g) The Trustee shall not be deemed to have knowledge of any
default or fact the occurrence of which requires the Trustee to take any action
(other than a payment default hereunder) unless a Trust Officer actually knows
of such default or fact.
(h) The Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably believed by
it to be authorized or within the discretion or rights or powers conferred upon
it by this Indenture; and
(i) The Trustee shall not be deemed to have notice of any
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such an
Event of Default is received by the Trustee at the Corporate Trust Office of the
Trustee, and such notice references the Securities and this Indenture.
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(j) Upon request of the Trustee, the Company shall make
reasonable efforts to execute and deliver such further instruments and do such
further acts as may be reasonably necessary to carry out more effectively the
purpose of this Indenture. The parties hereto agree that the purpose of this
provision shall be for administrative purposes only.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Trust Officer of the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 90 days after it
occurs. Except in the case of a Default in payment of principal of or premium
(if any) or interest on any Security (including payments pursuant to the
mandatory redemption provisions of such Security, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders.
SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each March 15 beginning with the March 15 following the date
of this Indenture (and in any event prior to May 15 in each year), but only upon
the occurrence within the previous 12 months of any events specified in TIA
Section 313(a), the Trustee shall mail to each Securityholder a brief report
dated as of March 15 that complies with TIA Section 313(a). The Trustee shall
also comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
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SECTION 7.7. Compensation and Indemnity. The Company shall pay
to the Trustee, Paying Agent and Registrar from time to time such compensation
as shall be agreed in writing between the Company and the Trustee for its
services. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee upon request for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee, Paying Agent, Registrar, and
each of their officers, directors, agents and employees (each in their
respective capacities), for and hold each of them harmless against any and all
loss, demand, claim, liability or expense (including reasonable attorneys' fees
and expenses) incurred by them without negligence or bad faith on their part in
connection with the acceptance or administration of this trust and the
performance of their duties hereunder. The Trustee, Paying Agent and Registrar
shall notify the Company of any claim for which they may seek indemnity promptly
upon obtaining actual knowledge thereof; provided that any failure so to notify
the Company shall not relieve the Company of its indemnity obligations hereunder
except to the extent the Company shall have been adversely affected thereby. The
Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the Company's expense in the defense. Such indemnified
parties may have separate counsel and the Company shall pay the fees and
expenses of such counsel; provided that the Company shall not be required to pay
such fees and expenses if it assumes such indemnified parties' defense and, in
such indemnified parties' reasonable judgment, there is no conflict of interest
between the Company and such parties in connection with such defense. The
Company need not pay for any settlement made without its written consent. The
Company need not reimburse any expense or indemnify against any loss, liability
or expense incurred by an indemnified party through any indemnified party's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section,
the Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section
shall survive the discharge of this Indenture or the resignation or removal of
the Trustee. When the Trustee, Paying Agent or Registrar incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.
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SECTION 7.8. Replacement of Trustee. The Trustee may resign at
any time by so notifying the Company in writing. The Holders of a majority in
principal amount of the outstanding Securities may remove the Trustee by so
notifying the Company and the Trustee and may appoint a successor Trustee with
the consent of the Company, which shall not be unreasonably withheld. The
Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the outstanding Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee or the
Holders of 10% in principal amount of the outstanding Securities may petition
any court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
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Notwithstanding the replacement of the Trustee pursuant to
this Section 7.8, the Company's obligations under Section 7.7 shall continue for
the benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall
at all times satisfy the requirements of TIA Section 310(a). The Trustee shall
have a combined capital and surplus of at least $50.0 million as set forth in
its most recent published annual report of condition. The Trustee shall comply
with TIA Section 310(b); provided, however, that there shall be excluded from
the operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
Company. The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION 7.12. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities. The Trustee
or any Authenticating Agent shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
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ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance.
(a) When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.9) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds or U.S.
Government Obligations on which payment of principal and interest when due will
be sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.9), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.1(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officer's Certificate and an Opinion of Counsel and at
the cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any
time may terminate (i) all its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under Sections 4.2
(subject to any requirement of the TIA), 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.11,
4.12, 4.13, 4.14, 5.1 (iii) and the operation of Sections 6.1(4), 6.1(6), 6.1(7)
(with respect to Subsidiaries of the Company only), 6.1(8) (with respect to
Subsidiaries of the Company only) and 6.1(9) ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.1(4),
6.1(6), 6.1(7), 6.1(8) (but only with respect to certain bankruptcy events of a
Significant Subsidiary), 6.1(9) or 6.1(10) or because of the failure of the
Company to comply with (iii) of Section 5.1. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Note Guarantor will be
automatically and unconditionally released and discharged from all of its
obligations under its Note Guarantee.
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Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, Sections 2.3,
2.4, 2.5, 2.6, 2.7, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive until the
Securities have been paid in full. Thereafter, Sections 7.7, 8.4 and 8.5 shall
survive.
SECTION 8.2. Conditions to Defeasance. The Company may
exercise its legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal,
premium (if any) and interest on the Securities to maturity or
redemption, as the case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be sufficient to pay principal and interest
when due on all the Securities to maturity or redemption, as the case
may be;
(3) 90 days pass after the deposit is made and during the
90-day period no Default specified in Section 6.1(7) or (8) with
respect to the Company occurs which is continuing at the end of the
period;
(4) the deposit does not constitute a material default under
any other material agreement binding on the Company and is not
prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel
to the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(6) in the case of the legal defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(i) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Indenture there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for federal income tax purposes as a result of
such
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defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(7) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(8) the Company delivers to the Trustee an Officer's
Certificate and an Opinion of Counsel, each to the effect that all
conditions precedent under this Section 8.2 to the defeasance and
discharge of the Securities as contemplated by this Article 8 have been
complied with; provided that in giving such opinion such counsel may
rely on such Officer's Certificate as to any matters of fact (including
without limitation as to compliance with the foregoing clauses (1),
(2), (3) and (4)).
Either defeasance option may be exercised to any redemption
date or to the maturity date for the Securities. Before or after a deposit, the
Company may make arrangements reasonably satisfactory to the Trustee for the
redemption of Securities at a future date in accordance with Article 3.
SECTION 8.3. Application of Trust Money. The Trustee shall
hold in trust money or U.S. Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.4. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon written request any excess
money or securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee
and the Paying Agent shall pay to the Company upon written request any money
held by them for the payment of principal or interest that remains unclaimed for
two years, and, thereafter, Securityholders entitled to the money must look to
the Company for payment as general unsecured creditors and all liability of the
Trustee or the Paying Agent with respect to such trust money shall thereupon
cease.
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SECTION 8.5. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations other than
any tax, fee or other charge that by law is for the account of the
Securityholders.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.1. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article 5, or otherwise to provide for the
assumption by a successor of the obligations of the Company under the
Indenture;
(3) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to provide that any Indebtedness that becomes or will
become an obligation of the Successor Company pursuant to a transaction
governed by the
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provisions of Article 5 (and that is not a Subordinated Obligation) is
Senior Subordinated Indebtedness for the purposes of this Indenture;
(5) to add Guarantees with respect to the Securities;
(6) to secure the Securities;
(7) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(8) to comply with any requirements of the SEC in connection
with qualifying this Indenture under the TIA; or
(9) to make any change that does not adversely affect the
rights of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.2. With Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to any
Securityholder but with the consent of, and compliance with any provision of
this Indenture or the Securities may be waived by, the Holders of at least a
majority in principal amount of the outstanding Securities. However, without the
consent of each Securityholder affected, an amendment may not:
(1) reduce the principal amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for payment of
interest on any Security;
(3) reduce the principal of or extend the Stated Maturity of
any Security;
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(4) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(5) make any Security payable in money other than that stated
in the Security;
(6) make any change in Article 10 that adversely affects the
rights of any Securityholder;
(7) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(8) release any Note Guarantor from any of its obligations
under its Note Guarantee or the Indenture (other than in accordance
with the terms of the Note Guarantee or the Indenture), or amend the
provisions of the Indenture relating to the release of Note Guarantors
(other than any releases pursuant to the terms of the Note Guarantee of
the Indenture); or
(9) make any change to this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every
amendment to this Indenture or the Securities shall comply with the TIA as then
in effect.
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SECTION 9.4. Effect of Amendment; Revocation and Effect of
Consents and Waivers. Upon the execution of any amendment under this Article 9,
this Indenture shall be modified in accordance therewith, and such amendment
shall form a part of this Indenture for all purposes. A consent to an amendment
or a waiver by a Holder of a Security shall bind the Holder and every subsequent
Holder of that Security or portion of the Security that evidences the same debt
as the consenting Holder's Security, even if notation of the consent or waiver
is not made on the Security. However, any such Holder or subsequent Holder may
revoke the consent or waiver as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the date the
instrument providing for the amendment or waiver is signed by the parties
thereto. After an amendment or waiver becomes effective, it shall bind every
Securityholder. An amendment or waiver becomes effective once the requisite
number of consents are received by the Company or the Trustee.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 180 days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of any amendment or waiver.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall
sign any amendment authorized pursuant to this Article 9 if the amendment does
not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it. In signing such
amendment the Trustee shall be entitled to receive indemnity reasonably
satisfactory to it and to receive, and (subject to Section 7.1) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
each to the effect that such amendment is authorized or permitted by this
Indenture and complies with the provisions hereof (including Section 9.3);
provided that
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in giving such opinion such counsel may rely on such Officer's Certificate as to
any matters of fact.
SECTION 9.7. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame, and subject to the terms and conditions, set forth in
solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
Subordination
SECTION 10.1. Agreement To Subordinate. The Company agrees,
and each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment in full
(when due) of all existing and future Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness. The Securities shall in all respects rank pari passu with all
existing and future Senior Subordinated Indebtedness of the Company and will be
senior in right of payment to all existing and future Subordinated Obligations
of the Company. The Securities shall also be subordinated in right of payment,
to the extent and in the manner provided in this Article 10, to the prior
payment in full (when due) of all existing and future Secured Indebtedness to
the extent of the value of the assets securing such Indebtedness. For purposes
of these subordination provisions, the Indebtedness evidenced by the Securities
is deemed to include the liquidated damages payable pursuant to the provisions
set forth in the Securities and the Exchange and Registration Rights Agreement.
All provisions of this Article 10 shall be subject to Section 10.12.
SECTION 10.2. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company upon a total or partial
liquidation or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
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(1) holders of Senior Indebtedness shall be entitled to
receive payment in full of the Senior Indebtedness before
Securityholders shall be entitled to receive any payment of principal
of or interest on the Securities; and
(2) until the Senior Indebtedness is paid in full, any payment
or distribution to which Securityholders would be entitled but for this
Article 10 shall be made to holders of Senior Indebtedness as their
interests may appear.
SECTION 10.3. Default on Senior Indebtedness. The Company may
not pay the principal of, or premium (if any) or interest on the Securities or
make any deposit pursuant to Section 8.1 and may not purchase, redeem or
otherwise retire any Securities (collectively, "pay the Securities") if (i) any
Senior Indebtedness is not paid when due in cash or Cash Equivalents or (ii) any
other default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless, in either case,
(x) the default has been cured or waived and any such acceleration has been
rescinded in writing or (y) such Senior Indebtedness has been paid in full in
cash or Cash Equivalents; provided, however, that the Company may pay the
Securities without regard to the foregoing if the Company and the Trustee
receive written notice approving such payment from the Representative of the
Designated Senior Indebtedness with respect to which either of the events in
clause (i) or (ii) of this sentence has occurred and is continuing. In addition,
during the continuance of any default (other than a default described in clause
(i) or (ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
such Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (i) by written notice to the Trustee and the
Company from the Person or Persons who gave such Blockage Notice, (ii) because
such Designated Senior Indebtedness has been discharged or repaid in full or
(iii) because the default giving rise to such Blockage Notice is no longer
continuing). Notwithstanding the provisions described in the immediately
preceding sentence (but subject to the provisions contained in the first
sentence of this Section), unless the holders of such Designated Senior
Indebtedness or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, the Company may resume payments
on the Securities after the end of such Payment Blockage Period. Not more than
one Blockage Notice may be given in any consecutive 360-day period, irrespective
of the number of defaults with respect to Designated Senior Indebtedness during
such period; provided, however, that if any Blockage Notice within such 360-day
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period is given by or on behalf of any holders of Designated Senior Indebtedness
(other than Bank Indebtedness), the Representative of Bank Indebtedness may give
another Blockage Notice within such period; provided further, however, that in
no event may the total number of days during which any Payment Blockage Period
or Periods is in effect exceed 179 days in the aggregate during any 360
consecutive day period.
SECTION 10.4. Acceleration a Payment of Securities. If payment
of the Securities is accelerated because of an Event of Default, the Company or
the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness (or their Representative) of the acceleration. If any Designated
Senior Indebtedness is outstanding, the Company may not pay the Securities until
five Business Days after such holders or the Representative of the Designated
Senior Indebtedness receive notice of such acceleration and, thereafter, may pay
the Securities only if this Article 10 otherwise permits payment at that time.
SECTION 10.5. When a Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of the provisions of
Article 10 should not have been made to them, the Securityholders who receive
the distribution shall hold it in trust for holders of Senior Indebtedness and
pay it over to them as their interests may appear.
SECTION 10.6. Subrogation. After all Senior Indebtedness is
paid in full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under this
Article 10 to holders of Senior Indebtedness which otherwise would have been
made to Securityholders is not, as between the Company and Securityholders, a
payment by the Company on Senior Indebtedness.
SECTION 10.7. Relative Rights. This Article 10 defines the
relative rights of Securityholders and holders of Senior Indebtedness prior to
the Subordination Termination Date. Nothing in this Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising
its available remedies upon a Default, subject to the rights of holders
of Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
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SECTION 10.8. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.9. Rights of Trustee and Paying Agent. The Company
shall give prompt written notice to the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect
of the Securities. Failure to give such notice shall not affect the
subordination of the Securities to Senior Indebtedness. Notwithstanding Section
10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice. The Trustee shall be entitled to rely on the
delivery to it of a written notice by a Person representing himself or itself to
be a holder of any Senior Indebtedness (or a Representative of such holder) to
establish that such notice has been given by a holder of such Senior
Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold
Senior Indebtedness with the same rights it would have if it were not Trustee.
The Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.7.
SECTION 10.10. Distribution or Notice to Representative.
Whenever a distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or
Limit Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article 10 shall not be construed
as preventing the occurrence of a Default. Nothing in this Article 10 shall have
any effect on the right of the Securityholders or the Trustee to accelerate the
maturity of the Securities.
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SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 8 by the Trustee for
the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article 10, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness of the Company or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or
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assets to which any holders of Senior Indebtedness shall be entitled by virtue
of this Article 10 or otherwise. With respect to the holders of Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants or obligations as are specifically set forth in this Article 10 and no
implied covenants or obligations with respect to holders of Senior Indebtedness
shall be read into this Indenture against the Trustee.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
SECTION 10.17. Trustee's Compensation Not Prejudiced. Nothing
in this Article shall apply to amounts due to the Trustee pursuant to other
sections of this Indenture.
ARTICLE 11
Guarantee
SECTION 11.1. Guarantee. Day hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Note Guarantor, to each Holder of the Securities (a)
the full and punctual payment when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, of principal of and interest on the
Securities and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under this
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"). Day further agrees (to the extent permitted by law)
that the Obligations may be extended or renewed, in whole or in part, without
notice or further assent from it, and that it will remain bound under this
Article 11 notwithstanding any extension or renewal of any Obligation.
To the extent permitted by applicable law, (i) Day waives
presentation to, demand of payment from and protest to the Company of any of the
Obligations and also waives notice of protest for nonpayment, (ii) Day waives
notice of any default under the
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Securities or the Obligations and (iii) the obligations of Day hereunder shall
not be affected by (a) the failure of any Holder to assert any claim or demand
or to enforce any right or remedy against the Company or any other person under
this Indenture, the Securities or any other agreement or otherwise; (b) any
extension or renewal of any thereof; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of this Indenture, the Securities
or any other agreement; or (d) the failure of any Holder to exercise any right
or remedy against any other Guarantor of the Obligations.
Day further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and, to the extent permitted by applicable law, waives any right
to require that any resort be had by any Holder to any security held for payment
of the Obligations.
Except as otherwise provided herein or under applicable law,
the obligations of Day hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than payment of the
Obligations in full), including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense of setoff,
counterclaim, recoupment or termination whatsoever or by reason of the
invalidity, illegality or unenforceability of the Obligations or otherwise.
Without limiting the generality of the foregoing, to the extent permitted by
applicable law, the obligations of Day herein shall not be discharged or
impaired or otherwise affected by the failure of any Holder to assert any claim
or demand or to enforce any remedy under the Indenture, the Securities or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of Day or would
otherwise operate as a discharge of Day as a matter of law or equity.
Day further agrees that, subject to Section 11.2(b) hereof,
its Guarantee herein shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of principal of or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder has at law or in equity against Day by virtue
hereof, upon the failure of the Company to pay the principal of or interest on
any Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to perform or comply with any other
Obligation, Day hereby promises to and will, upon receipt of written demand by
the Trustee or the Holders of a majority in principal amount
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of the then outstanding Securities (the "Majority Securityholders"), forthwith
pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of
(i) the unpaid principal amount of such Obligations then due and owing, (ii)
accrued and unpaid interest on such Obligations then due and owing (but only to
the extent not prohibited by law) and (iii) all other monetary Obligations of
the Company to the Holders then due and owing.
Day agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Obligations guarantied
hereby until payment in full of all Obligations. Day further agrees (to the
extent permitted by applicable law) that, as between Day, on the one hand, and
the Holders, on the other hand, (x) the maturity of the Obligations guarantied
hereby may be accelerated for the purposes of Day's Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guarantied hereby, and (y) in the
event of any declaration of acceleration of such Obligations, such Obligations
(whether or not due and payable) shall forthwith become due and payable by Day
for the purposes of this Section.
Day also agrees to pay any and all reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or the
Holders in enforcing any rights under this Section.
SECTION 11.2. Limitation on Liability; Termination, Release
and Discharge. (a) Any term or provision of this Guarantee to the contrary
notwithstanding, the maximum aggregate amount of the Obligations guarantied
hereunder by Day shall not exceed the maximum amount that can be hereby
guarantied without rendering this Guarantee, as it relates to Day, voidable
under applicable law, including without limitation applicable law relating to
fraudulent conveyance or fraudulent transfer or affecting the rights or remedies
of creditors generally.
(b) This Guarantee shall terminate and be of no further force
or effect, and Day shall automatically and unconditionally be released and
discharged from all liabilities and obligations in respect hereof, upon (w)
payment in full of the principal amount of all outstanding Securities (whether
by payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other monetary Obligations then due and owing, (x) the
merger or consolidation of Day with and into the Company or another Note
Guarantor that is the surviving Person in such merger or consolidation, or (y)
the exercise by the Company of its legal defeasance option or its covenant
defeasance option, or (z) the sale or other transfer (i) by Day of all or
substantially all of its assets or (ii) by the Company or a Restricted
Subsidiary of all of the capital stock or other equity interests in Day held by
the Company or such Restricted
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Subsidiary, to a Person that is not an Affiliate of the Company; provided,
however, that, in the case of this clause (z), (1) any such sale or transfer is
made in accordance with the terms of this Indenture (including Section 4.6
hereof), and (2) all obligations of Day under, and all of its guarantees of, and
all of its pledges of assets or other security interests which secure, any Bank
Indebtedness of the Company shall also terminate upon such release, sale or
transfer (other than with respect to any such Indebtedness that is assumed by
any Person that is not an Affiliate of the Company). Upon notice to the Trustee
that any such payment, merger, consolidation, exercise, sale or transfer has
occurred or is occurring, the Trustee shall execute all agreements and
instruments confirming and acknowledging such termination, release and discharge
as may be reasonably requested by Day.
SECTION 11.3. Subordination. Day agrees, and each
Securityholder by accepting a Security agrees, that (a) the obligations of Day
under this Guarantee are subordinated in right of payment to the prior payment
in full (when due) of all existing and future Guarantor Senior Indebtedness of
Day, including without limitation any Guarantee by Day of the Bank Indebtedness
or of any Senior Indebtedness of the Company or of any Guarantor Senior
Indebtedness of any other Note Guarantor, to the extent and in the matter
provided in Article 10 hereof (as if Day were the Company for purposes of such
Article 10 and all defined terms used therein, and the Guarantor Senior
Indebtedness of the Guarantor were Senior Indebtedness), and Day is made subject
to such provisions, and (b) such subordination is for the benefit of and
enforceable by the holders of Guarantor Senior Indebtedness of Day.
ARTICLE 12
Miscellaneous
SECTION 12.1. Trust Indenture Act Controls. If any provision
of this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
SECTION 12.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Day International Group, Inc.
130 West 2nd Street, Suite 1700
Dayton, Ohio 45402
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Attention of: David B. Freimuth
with a copy to:
Greenwich Street Capital Partners
388 Greenwich St., 36th Floor
New York, New York 10013
Attention of: Alfred C. Eckert III
and:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention of: Andrew L. Sommer, Esq.
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention of: Corporate Trust Trustee Administration
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed to a Securityholder shall
be mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
All notices and communications shall be deemed to be duly
given: at the time delivered, if personally delivered, or five Business Days
after being deposited into the mail, if mailed. All notices may be waived by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such
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notice for all purposes of this Indenture. Failure to mail a notice or
communication to a Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders. If a notice or communication
is mailed in the manner provided above, it is duly given, whether or not the
addressee receives it.
SECTION 12.3. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and their agents shall have
the protection of TIA Section 312(c).
SECTION 12.4. Certificate and Opinion as to Conditions
Precedent. Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee:
(1) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of such
counsel, all such conditions precedent have been complied with,
provided that in giving such opinion such counsel may rely on any
Officer's Certificate or certificate of a public official as to any
matters of fact; and
provided, further, that, in the case of any such application or request as to
which the furnishing of any Officer's Certificate or Opinion of Counsel is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
SECTION 12.5. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a covenant or
condition provided for in this Indenture shall include:
(1) a statement to the effect that the individual or counsel
making such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
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<PAGE> 112
(3) a statement to the effect that, in the opinion of such
individual or counsel, such individual or counsel has made such
examination or investigation as is necessary to enable such individual
or counsel to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual or counsel, such covenant or condition has been complied
with;
provided that an Opinion of Counsel can rely as to matters of fact on an
Officer's Certificate or certificates of public officials.
SECTION 12.6. When Securities Disregarded. In determining
whether the Holders of the required principal amount of Securities have
concurred in any direction, waiver or consent, Securities owned by the Company
or by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company shall be disregarded and
deemed not to be outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities which a Trust Officer of the Trustee actually knows
are so owned shall be so disregarded. Also, subject to the foregoing, only
Securities outstanding at the time shall be considered in any such
determination.
SECTION 12.7. Acts of Holders; Rules by Trustee, Paying Agent
and Registrar. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by a
specified percentage in principal amount of the Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such specified percentage of Holders in person or by agent duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. The Trustee
may make reasonable rules for action by or a meeting of Securityholders not
inconsistent with the foregoing. The Registrar and the Paying Agent may make
reasonable rules for their functions.
SECTION 12.8. Legal Holidays. A "Legal Holiday" is a Saturday,
a Sunday or a day on which commercial banking institutions (including, without
limitation, the Federal Reserve System) are authorized or required by law to
close in New York City. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
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<PAGE> 113
SECTION 12.9. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York, without giving effect to applicable principles of conflicts of law to
the extent that the application of the law of another jurisdiction would be
required thereby.
SECTION 12.10. No Recourse Against Others. A director,
officer, employee or stockholder, as such, of the Company or a Note Guarantor
shall not have any liability for any obligations of the Company or any Note
Guarantor under the Securities, this Indenture or any Note Guarantee or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release shall be part of the consideration for
the issue of the Securities.
SECTION 12.11. Successors. All agreements of the Company in
this Indenture and the Securities shall bind its successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 12.12. Multiple Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement. One signed copy is enough to
prove this Indenture.
SECTION 12.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not
intended to be considered a part hereof and shall not modify or restrict any of
the terms or provisions hereof.
SECTION 12.14. Separability. In case any provision of this
Indenture, the Securities or the Note Guarantees shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 12.15. Benefits of Indenture. Nothing in this
Indenture, the Securities or any Note Guarantee, expressed or implied, shall
give to any Person, other than the parties hereto and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
IN WITNESS WHEREOF, the parties have caused this Indenture to
be duly executed as of the date first written above.
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DAY INTERNATIONAL GROUP, INC.
By:
Name:
Title:
DAY INTERNATIONAL, INC.
By:
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
Name:
Title:
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<PAGE> 115
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Applicable Restricted Securities Legend]
[Depository Legend, if applicable]
9 1/2% SENIOR SUBORDINATED NOTE DUE 2008
CUSIP No.________
$[ ]
Day International Group, Inc., a Delaware corporation,
promises to pay to [ ], or registered assigns, the principal sum of $[ ] on
March 15, 2008.
Interest Payment Dates: each March 15 and September 15.
Record Dates: each March 1 and September 1.
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<PAGE> 116
Additional provisions of this Security are set forth on the
other side of this Security.
DAY INTERNATIONAL GROUP, INC.
by
Dated: March 18, 1998
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture
by
,
Authorized Signatory
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<PAGE> 117
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
9 1/2% Senior Subordinated Note due 2008
1. Interest
Day International Group, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will use its best efforts to have the Exchange Offer Registration Statement and,
if applicable, a Shelf Registration Statement (each a "Registration Statement")
declared effective by the Commission as promptly as practicable after the filing
thereof. If (i) the Exchange Offer Registration Statement is not filed with the
Commission on or prior to 60 days after the Issue Date; (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is not declared effective within 150 days after the Issue Date; (iii) the
Exchange Offer is not consummated on or prior to 165 days after the Issue Date;
(iv) the Shelf Registration Statement required to be filed in response to a
change in law or the applicable interpretations of the Commission's staff is not
filed with the Commission within 60 days after the publication of the change in
law or interpretation or (v) the Shelf Registration Statement is filed and
declared effective within 150 days after the Issue Date but shall thereafter
cease to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
or amended Registration Statement filed and declared effective (each such event
referred to in clauses (i) through (v), a "Registration Default"), then as
liquidated damages, (x) the interest rate borne by the Transfer Restricted
Securities (as defined below), with respect to the first 90-day period
immediately following the occurrence of any Registration Default will increase
by an amount equal to $.05 per week per $1,000 aggregate principal amount of
Transfer Restricted Securities held by such Holder and (y) the interest rate
borne by the Transfer Restricted Securities will increase by an additional $.05
per week per $1,000 aggregate principal amount of Transfer Restricted Securities
with respect to each subsequent 90-day period until all Registration Defaults
shall have been cured, up to a maximum increase in the interest rate of $.30 per
week per $1,000 aggregate principal amount of Transfer Restricted Securities
held by such Holder. Following the cure of all Registration Defaults, the
accrual of liquidated damages will cease. "Transfer Restricted Securities" means
each Security or Exchange Security until (i) the date on which such Security or
Exchange Security has been exchanged for a freely transferrable Exchange
Security in the Exchange Offer, (ii) the date on which such Security or Exchange
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Security or Exchange Security is distributed to the public pursuant
to Rule 144 under the Securities Act or is salable pursuant to Rule 144(k) under
the Securities Act. Notwithstanding anything to the contrary in this paragraph,
the Company shall not be required to pay liquidated damages to the holder of
Transfer Restricted Securities if
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<PAGE> 118
such holder: (a) failed to comply with its obligations to make the
representations in the second to last paragraph of Section 1 of the Registration
Rights Agreement; or (b) failed to provide the information required to be
provided by it, if any, pursuant to Section 4(m) of the Registration Rights
Agreement. The Trustee shall have no responsibility with respect to the
determination of the amount of any such liquidated damages.
The Company will pay interest semiannually on March 15, and
September 15 of each year. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from March 18, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at the
rate borne by the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may, at its option,
pay principal and interest (i) by check payable in such money or (ii) by wire
transfer of immediately available funds to such account as may be designated by
a Holder at least 15 days prior to the relevant payment date and as specified in
the books of the Registrar. It may mail an interest check to a Holder's
registered address.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of March 18, 1998 (as amended or supplemented from time to time, "Indenture"),
between the Company, Day International, Inc., and the Trustee. The terms of the
Securities include those stated in the
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<PAGE> 119
Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on
the date of the Indenture (the "TIA"). Terms defined in the Indenture and not
defined herein have the meanings ascribed thereto in the Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the
Company limited to $115.0 million aggregate principal amount at any one time
outstanding (subject to Section 2.9 of the Indenture). This Security is one of
the Initial Securities referred to in the Indenture. The Securities include the
Initial Securities and any Exchange Securities issued in exchange for the
Initial Securities pursuant to the Indenture. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the issuance of debt by
the Company, the payment of dividends and other distributions and acquisitions
or retirements of the Company's Capital Stock and Subordinated Obligations, the
incurrence by the Company and its Restricted Subsidiaries of Liens on its
property and assets which do not equally and ratably secure the Securities, the
sale or transfer of assets and Subsidiary Stock, investments by the Company,
consolidations, mergers and transfers of all or substantially all of the
Company's assets and transactions with Affiliates. In addition, the Indenture
limits the ability of the Company and its Restricted Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. Optional Redemption
Except as set forth in the next two paragraphs, the Securities
may not be redeemed pursuant to this paragraph 5 at the option of the Company
prior to March 15, 2003. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus accrued
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date), if redeemed during the 12-month period beginning on
March 15 of the years set forth below:
<TABLE>
<CAPTION>
Redemption
Period Price
- -------------------- ------------
<S> <C>
2003.................................................. 104.750 %
2004.................................................. 103.167 %
2005.................................................. 101.583 %
2006 and thereafter................................... 100.000 %
</TABLE>
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<PAGE> 120
Notwithstanding the foregoing, at any time and from time to
time prior to March 15, 2001, the Company may redeem in the aggregate up to 33
1/3% of the original aggregate principal amount of the Securities with the
proceeds of one or more Public Equity Offerings by the Company following which
there is a Public Market, at a redemption price (expressed as a percentage of
principal amount) of 109.5% plus accrued interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 66 2/3% of the original aggregate principal amount of the
Securities must remain outstanding after each such redemption.
At any time on or prior to March 15, 2003, the Securities may
also be redeemed as a whole at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event more than 180 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
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 Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price in cash equal to 101% of the principal amount of the Securities
to be repurchased plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the Indenture; provided, however, that
notwithstanding the occurrence of a Change of Control, the Company shall not be
obligated to purchase the Securities pursuant to this paragraph 7 in the event
that it has exercised its option to redeem all of the Securities under paragraph
5.
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<PAGE> 121
8. Subordination
The Securities are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give effect
to such provisions and appoints the Trustee as attorney-in-fact for such
purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before the mailing of a notice of redemption
of Securities to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes, subject to provisions for record dates with
respect to payment of interest.
11. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee money or U.S. Government Obligations
for the payment of principal of and interest on the Securities to redemption or
maturity, as the case may be.
13. Amendment, Waiver
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<PAGE> 122
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the consent of the Holders
of at least a majority in principal amount outstanding of the Securities and
(ii) any default or noncompliance with any provision may be waived with the
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add Guarantees with respect to the Securities, or to secure the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company, or to provide that any Indebtedness that becomes or
will become an obligation of the Successor Company pursuant to Article 5 (and
that is not a Subordinated Obligation) is Senior Subordinated Indebtedness for
the purposes of the Indenture, or to comply with any request of the SEC in
connection with qualifying the Indenture under the TIA, or to make any other
change that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default
in any payment of interest on any Security when due, continued for 30 days, (ii)
a default in the payment of principal of any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise, whether or not such payment is prohibited by Article 10 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 5.1 of the Indenture, (iv) the failure by the Company to comply for 30
days after notice with certain of its obligations under Article 4 of the
Indenture (in each case, other than a failure to purchase Securities), (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Securities or the Indenture, (vi) the failure by any
Note Guarantor to comply with its obligations under any Note Guarantee to
which such Note Guarantor is a party, after any applicable grace period, (vii)
the failure by the Company or any Significant Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or its
foreign currency equivalent (the "cross acceleration provision"), (viii) certain
events of bankruptcy, insolvency or reorganization of the Company or a
Significant Subsidiary (the "bankruptcy provisions"), (ix) the rendering of any
judgment or decree for the payment of money in an amount (net of any insurance
or indemnity payments actually received in respect thereof prior to or within 60
days from the entry thereof, or to be received in respect thereof in the event
any appeal thereof shall be unsuccessful) in excess of $5.0 million or its
foreign currency equivalent against the Company or a Significant Subsidiary that
is not discharged, or bonded or insured by a third Person, if (A) an enforcement
proceeding thereon is commenced or (B) such judgment or decree remains
outstanding for a period of 60 days following such judgment or decree and is not
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<PAGE> 123
discharged, waived or stayed (the "judgment default provision") or (x) the
failure of any Note Guarantee by a Note Guarantor which is a Significant
Subsidiary to be in full force and effect (except as contemplated by the terms
thereof or of the Indenture) or the denial or disaffirmation in writing by any
such Note Guarantor of its obligations under the Indenture or any Note Guarantee
if such Default continues for 10 days. If an Event of Default (other than a
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company) occurs and is continuing, the Trustee or the Holders of at least
a majority in principal amount of the outstanding Securities may declare the
principal of and accrued but unpaid interest on all the Securities to be due and
payable immediately. Certain events of bankruptcy, insolvency, or reorganization
are Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the outstanding Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if and
so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or a Note Guarantor shall not have any liability for any obligations of
the Company or any Note Guarantor under the Securities, the Indenture or any
Note Guarantee or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. Authentication
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<PAGE> 124
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Governing Law.
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
DAY INTERNATIONAL GROUP, INC.
130 WEST 2ND STREET, SUITE 1700
DAYTON, OHIO 45402
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<PAGE> 125
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_____________________________________________________
(Print or type assignee's name, address and zip code)
_____________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint _______________________ agent to transfer this Security
on the books of the Company. The agent may substitute another to act for him.
_______________________________________________________________________________
Date:____________________ Your Signature:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years after the
later of the date of original issuance of such Securities and the last date, if
any, on which such Securities were owned by the Company or any Affiliate of the
Company, the undersigned confirms that such Securities are being:
CHECK ONE BOX BELOW:
1[ ] acquired for the undersigned's own account, without transfer;
or
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2[ ] transferred to the Company; or
3[ ] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act");
or
4[ ] transferred pursuant to an effective registration statement
under the Securities Act; or
5[ ] transferred pursuant to and in compliance with Regulation S
under the Securities Act that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter appears as Section 2.8 of
the Indenture); or
6[ ] transferred 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 appears as Section 2.7 of the Indenture);
or
7[ ] transferred 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 Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request 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, such as the exemption provided by Rule 144
under such Act.
------------------------------
Signature
Signature Guarantee:
- ------------------------- ------------------------------
(Signature must be guaranteed) Signature
- ---------------------------------------------------------------
118
<PAGE> 127
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Rule 17Ad-15 under the Exchange Act.
TO BE COMPLETED BY PURCHASER IF (a) 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.
Dated: NOTICE: To be executed by an executive officer
119
<PAGE> 128
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
Day International, Inc. hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Note Guarantor, to each Holder of the Securities (a)
the full and punctual payment when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, of principal of and interest on the
Securities and all other monetary obligations of the Company under this
Indenture and the Securities and (b) the full and punctual performance within
applicable grace periods of all other obligations of the Company under the
Indenture and the Securities (all the foregoing being hereinafter collectively
called the "Obligations"), all in accordance with Article 11 of the Indenture
and this Security.
Day agrees, and each Securityholder by accepting a Security
agrees, that (a) the obligations of Day under this Guarantee are subordinated in
right of payment to the prior payment in full (when due) of all existing and
future Guarantor Senior Indebtedness of Day, including without limitation any
Guarantee by Day of the Bank Indebtedness or of any Senior Indebtedness of the
Company or of any Guarantor Senior Indebtedness of any other Note Guarantor, to
the extent and in the matter provided in Article 10 of the Indenture (as if Day
were the Company for purposes of such Article 10 and all defined terms used
therein, and the Guarantor Senior Indebtedness of the Guarantor were Senior
Indebtedness), and Day is made subject to such provisions, and (b) such
subordination is for the benefit of and enforceable by the holders of Guarantor
Senior Indebtedness of Day.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
120
<PAGE> 129
This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
DAY INTERNATIONAL, INC.
By: ________________________________________
121
<PAGE> 130
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following such signatory of Trustee or
Exchange Global Security Global Security decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
122
<PAGE> 131
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.6 or 4.8 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.6 or 4.8 of the Indenture, state
the amount: $
Date: Your Signature:
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
123
<PAGE> 132
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
[Depository Legend, if applicable]
DAY INTERNATIONAL GROUP, INC.
9 1/2% SENIOR SUBORDINATED NOTE DUE 2008, [SERIES A]
No. CUSIP No.________
$[ ]
DAY INTERNATIONAL GROUP, INC., a Delaware corporation,
promises to pay to [ ], or registered assigns, the principal sum of $[ ]
on March 15, 2008.
Interest Payment Dates: each March 15 and September 15.
Record Dates: each March 1 and September 1.
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<PAGE> 133
Additional provisions of this Security are set forth on the other side of
this Security.
DAY INTERNATIONAL GROUP, INC.
by
____________________________________
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture
by
______________________________
Authorized Signatory
2
<PAGE> 134
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
9 1/2% Senior Subordinated Note due 2008, [Series A]
1. Interest
Day International Group, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually on March 15 and September 15 of each year.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from March 18, 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the March 1 or September 1 next preceding the interest
payment date even if Securities are canceled after the record date and on or
before the interest payment date. Holders must surrender Securities to a Paying
Agent to collect principal payments. The Company will pay principal and interest
in money of the United States that at the time of payment is legal tender for
payment of public and private debts. However, the Company may, at its option,
pay principal and interest (i) by check payable in such money or (ii) by wire
transfer of immediately available funds to such account as may be designated by
the Holder at least 15 days prior to the relevant payment date and as specified
in the books of the Registrar. It may mail an interest check to a Holder's
registered address.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as
of March , 1998 (as amended or supplemented from time to time, "Indenture"),
between the Company and the
3
<PAGE> 135
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the
"TIA"). Terms defined in the Indenture and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such terms,
and Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are general unsecured obligations of the
Company limited to $115.0 million aggregate principal amount at any one time
outstanding (subject to Section 2.9 of the Indenture). This Security is one of
the Exchange Securities referred to in the Indenture. The Securities include the
Initial Securities and any Exchange Securities issued in exchange for the
Initial Securities pursuant to the Indenture. The Initial Securities and the
Exchange Securities are treated as a single class of securities under the
Indenture. The Indenture imposes certain limitations on the issuance of debt by
the Company, the payment of dividends and other distributions and acquisitions
or retirements of the Company's Capital Stock and Subordinated Obligations, the
incurrence by the Company and its Restricted Subsidiaries of Liens on its
property and assets which do not equally and ratably secure the Securities, the
sale or transfer of assets and Subsidiary Stock, investments by the Company,
consolidations, mergers and transfers of all or substantially all of the
Company's assets and transactions with Affiliates. In addition, the Indenture
limits the ability of the Company and its Restricted Subsidiaries to restrict
distributions and dividends from Restricted Subsidiaries.
5. Optional Redemption
Except as set forth in the next two paragraphs, the Securities
may not be redeemed pursuant to this paragraph 5 at the option of the Company
prior to March 15, 2003. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus accrued
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date), if redeemed during the 12-month period beginning on
March 15 of the years set forth below:
<TABLE>
<CAPTION>
Period Redemption
- ------ Price
----------
<S> <C>
2003........................................................... 104.750 %
2004........................................................... 103.167 %
2005........................................................... 101.583 %
2006 and thereafter............................................ 100.000 %
</TABLE>
2
<PAGE> 136
Notwithstanding the foregoing, at any time and from time to
time prior to March 15, 2001, the Company may redeem in the aggregate up to 33
1/3% of the original aggregate principal amount of the Securities with the
proceeds of one or more Public Equity Offerings by the Company following which
there is a Public Market, at a redemption price (expressed as a percentage of
principal amount) of 109.5% plus accrued interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that at least 66 2/3% of the original aggregate principal amount of the
Securities must remain outstanding after each such redemption.
At any time on or prior to March 15, 2003, the Securities may
also be redeemed as a whole at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days prior notice
(but in no event more than 180 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
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 Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Indenture, to cause
the Company to repurchase all or any part of the Securities of such Holder at a
purchase price in cash equal to 101% of the principal amount of the Securities
to be repurchased plus accrued and unpaid interest, if any, to the date of
repurchase (subject to the right of holders of record on the relevant record
date to receive interest due on the related interest payment date) as provided
in, and subject to the terms of, the
3
<PAGE> 137
Indenture; provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to purchase the Securities pursuant
to this paragraph 7 in the event that it has exercised its option to redeem all
of the Securities under paragraph 5.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as
defined in the Indenture. To the extent provided in the Indenture, Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Indenture and authorizes the Trustee to give effect
to such provisions and appoints the Trustee as attorney-in-fact for such
purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Indenture. The Registrar may require
a Holder, among other things, to furnish appropriate endorsements or transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer of or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes, subject to the provisions for record dates with
respect to payment of interest.
11. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Indenture
if the Company deposits with the Trustee
4
<PAGE> 138
money or U.S. Government Obligations for the payment of principal of and
interest on the Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i)
the Indenture or the Securities may be amended with the consent of the Holders
of at least a majority in principal amount outstanding of the Securities and
(ii) any default or noncompliance with any provision may be waived with the
consent of the Holders of a majority in principal amount outstanding of the
Securities. Subject to certain exceptions set forth in the Indenture, without
the consent of any Securityholder, the Company and the Trustee may amend the
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Indenture, or to provide for
uncertificated Securities in addition to or in place of certificated Securities,
or to add Guarantees with respect to the Securities, or to secure the
Securities, or to add additional covenants or surrender rights and powers
conferred on the Company, or to provide that any Indebtedness that becomes or
will become an obligation of the Successor Company pursuant to Article 5 of the
Indenture (and that is not a Subordinated Obligation) is Senior Subordinated
Indebtedness for the purposes of the Indenture or to comply with any request of
the SEC in connection with qualifying the Indenture under the Act, or to make
certain changes in the subordination provisions, or to make any change that does
not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) a default
in any payment of interest on any Security when due, continued for 30 days, (ii)
a default in the payment of principal of any Security when due at its Stated
Maturity, upon optional redemption, upon required repurchase, upon declaration
or otherwise, whether or not such payment is prohibited by Article 10 of the
Indenture, (iii) the failure by the Company to comply with its obligations under
Section 5.1 of the Indenture, (iv) the failure by the Company to comply for 30
days after notice with certain of its obligations under Article 4 of the
Indenture (in each case, other than a failure to purchase Securities), (v) the
failure by the Company to comply for 60 days after notice with its other
agreements contained in the Securities or the Indenture, (vi) the failure by any
Note Guarantor to comply with its obligations under any Note Guarantee to which
such Note Guarantor is a party, after any applicable grace period, (vii) the
failure by the Company or any Significant Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or its
foreign currency equivalent (the "cross acceleration provision"), (viii) certain
events of bankruptcy,
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<PAGE> 139
insolvency or reorganization of the Company or a Significant Subsidiary (the
"bankruptcy provisions"), (ix) the rendering of any judgment or decree for the
payment of money in an amount (net of any insurance or indemnity payments
actually received in respect thereof prior to or within 60 days from the entry
thereof, or to be received in respect thereof in the event any appeal thereof
shall be unsuccessful) in excess of $5.0 million or its foreign currency
equivalent against the Company or a Significant Subsidiary that is not
discharged, or bonded or insured by a third Person, if (A) an enforcement
proceeding thereon is commenced or (B) such judgment or decree remains
outstanding for a period of 60 days following such judgment or decree and is not
discharged, waived or stayed (the "judgment default provision") or (x) the
failure of any Note Guarantee by a Note Guarantor which is a Significant
Subsidiary to be in full force and effect (except as contemplated by the terms
thereof or of the Indenture) or the denial or disaffirmation in writing by any
such Note Guarantor of its obligations under the Indenture or any Note Guarantee
if such Default continues for 10 days. If an Event of Default (other than a
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company) occurs and is continuing , the Trustee or the Holders of at
least a majority in principal amount of the outstanding Securities may declare
the principal of and accrued but unpaid interest on all the Securities to be due
and payable immediately. Certain events of bankruptcy, insolvency, or
reorganization are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable indemnity
or security. Subject to certain limitations, Holders of a majority in principal
amount of the outstanding Securities may direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of principal or interest) if and
so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of the Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were
not Trustee.
16. No Recourse Against Others
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<PAGE> 140
A director, officer, employee or stockholder, as such, of the
Company or a Note Guarantor shall not have any liability for any obligations of
the Company or any Note Guarantor under the Securities, the Indenture or any
Note Guarantee or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Governing Law.
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE INDENTURE WHICH
HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO:
7
<PAGE> 141
DAY INTERNATIONAL GROUP, INC.
130 WEST 2ND STREET, SUITE 1700
DAYTON, OHIO 45402
8
<PAGE> 142
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
_______________________________________________________________________
(Print or type assignee's name, address and zip code)
_______________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint __________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
Date: _______________ Your Signature ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.
9
<PAGE> 143
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The undersigned Guarantor hereby fully, unconditionally and irrevocably
guarantees, as primary obligor and not merely as surety, jointly and severally
with each other Note Guarantor, to each Holder of the Securities (a) the full
and punctual payment when due, whether at Stated Maturity, by acceleration, by
redemption or otherwise, of principal of and interest on the Securities and all
other monetary obligations of the Company under this Indenture and the
Securities and (b) the full and punctual performance within applicable grace
periods of all other obligations of the Company under the Indenture and the
Securities (all the foregoing being hereinafter collectively called the
"Obligations"), all in accordance with Article 11 of the Indenture and this
Security.
The undersigned Guarantor agrees, and each Securityholder by accepting a
Security agrees, that (a) the obligations of the Guarantor under this Guarantee
are subordinated in right of payment to the prior payment in full (when due) of
all existing and future Guarantor Senior Indebtedness of the Guarantor,
including without limitation any Guarantee by the Guarantor of the Bank
Indebtedness or of any Senior Indebtedness of the Company or of any Guarantor
Senior Indebtedness of any other Note Guarantor, to the extent and in the matter
provided in Article 10 of the Indenture (as if Day were the Company for purposes
of such Article 10 and all defined terms used therein, and the Guarantor Senior
Indebtedness of the Guarantor were Senior Indebtedness), and the Guarantor is
made subject to such provisions, and (b) such subordination is for the benefit
of and enforceable by the holders of Guarantor Senior Indebtedness of the
Guarantor.
This Guarantee shall not be valid or obligatory for any purpose until the
certificate of authentication on the Security upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
10
<PAGE> 144
This Guarantee shall be governed by and construed in accordance with the laws of
the State of New York, without giving effect to applicable principles of
conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
[GUARANTOR]
By: ________________________________________
11
<PAGE> 145
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been made:
[TO BE ATTACHED TO GLOBAL SECURITIES]
<TABLE>
<CAPTION>
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following such signatory of Trustee or
Exchange Global Security Global Security decrease or increase Securities Custodian
<S> <C> <C> <C> <C>
</TABLE>
12
<PAGE> 146
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.6 or 4.8 of the Indenture, check the box:
/ /
If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Indenture, state the amount: $
Date:
Your Signature: _______________________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee: __________________________________________
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
1
<PAGE> 147
EXHIBIT C
FORM OF SUPPLEMENTAL INDENTURE
This Supplemental Indenture, dated as of [__________] (this
"Supplemental Indenture" or "Guarantee"), among [name of Note Guarantor] (the
"Guarantor"), [Company] (together with its successors and assigns, the
"Company"), [each other then existing Note Guarantor under the Indenture
referred to below,] and The Bank of New York, a New York banking corporation, as
Trustee (the "Trustee") under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed
and delivered an Indenture, dated as of March 18, 1998 (as amended,
supplemented, waived or otherwise modified, the "Indenture"), providing for the
issuance of an aggregate principal amount of $115.0 million of 9 1/2% Senior
Subordinated Notes due 2008 of the Company (the "Securities");
WHEREAS, Section 4.12 of the Indenture provides that under
certain circumstances the Company is required to cause the Guarantor to execute
and deliver to the Trustee a supplemental indenture pursuant to which the
Guarantor shall unconditionally guarantee all of the Company's obligations under
the Securities pursuant to a Note Guarantee on the terms and conditions set
forth herein; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee
and the Company are authorized to execute and deliver this Supplemental
Indenture to amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor, the Company[, the other Note Guarantors] and the
Trustee mutually covenant and agree for the equal and ratable benefit of the
holders of the Securities as follows:
ARTICLE I
Definitions
SECTION 1.1 Defined Terms. As used in this Guarantee, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined, except that the term "Holders" in this Guarantee shall refer to
the term "Holders" as defined in the Indenture and
1
<PAGE> 148
the Trustee acting on behalf or for the benefit of such holders. The words
"herein," "hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
ARTICLE II
Guarantee
SECTION 2.1 Guarantee. The Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Note Guarantor, to each Holder of
the Securities (a) the full and punctual payment when due, whether at Stated
Maturity, by acceleration, by redemption or otherwise, of principal of and
interest on the Securities and all other monetary obligations of the Company
under the Indenture and the Securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
the Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Obligations"). The Guarantor further agrees (to the
extent permitted by law) that the Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, and that it will
remain bound under this Article II notwithstanding any extension or renewal of
any Obligation.
To the extent permitted by applicable law, (i) the Guarantor
waives presentation to, demand of payment from and protest to the Company of any
of the Obligations and also waives notice of protest for nonpayment (ii), the
Guarantor waives notice of any default under the Securities or the Obligations
and (iii) the obligations of the Guarantor hereunder shall not be affected by
(a) the failure of any Holder to assert any claim or demand or to enforce any
right or remedy against the Company or any other person under the Indenture, the
Securities or any other agreement or otherwise; (b) any extension or renewal of
any thereof; (c) any rescission, waiver, amendment or modification of any of the
terms or provisions of the Indenture, the Securities or any other agreement; or
(d) the failure of any Holder to exercise any right or remedy against any other
Guarantor of the Obligations.
The Guarantor further agrees that its Guarantee herein
constitutes a guarantee of payment, performance and compliance when due (and not
a guarantee of collection) and, to the extent permitted by applicable law,
waives any right to require that any resort be had by any Holder to any security
held for payment of the Obligations.
Except as otherwise provided herein or under applicable law,
the obligations of the Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or
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<PAGE> 149
termination for any reason (other than payment of the Obligations in full),
including any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to any defense of setoff, counterclaim, recoupment or
termination whatsoever or by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, to the extent permitted by applicable law, the
obligations of the Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under the Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of the Guarantor or would
otherwise operate as a discharge of the Guarantor as a matter of law or equity.
The Guarantor further agrees that, subject to Section 2.2(b)
hereof, its Guarantee herein shall continue to be effective or be reinstated, as
the case may be, if at any time payment, or any part thereof, of principal of or
interest on any Obligation is rescinded or must otherwise be restored by any
Holder upon the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder has at law or in equity against the Guarantor by
virtue hereof, upon the failure of the Company to pay the principal of or
interest on any Obligation when and as the same shall become due, whether at
maturity, by acceleration, by redemption or otherwise, or to perform or comply
with any other Obligation, the Guarantor hereby promises to and will, upon
receipt of written demand by the Trustee or the Holders of a majority in
principal amount of the then outstanding Securities (the "Majority
Securityholders"), forthwith pay, or cause to be paid, in cash, to the Holders
an amount equal to the sum of (i) the unpaid principal amount of such
Obligations then due and owing, (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law)
and (iii) all other monetary Obligations of the Company to the Holders then due
and owing.
The Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any Obligations
guarantied hereby until payment in full of all Obligations. The Guarantor
further agrees (to the extent permitted by applicable law) that, as between such
Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity
of the Obligations guarantied hereby may be accelerated for the purposes of such
Guarantor's Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Obligations
guarantied hereby, and (y) in the event of any declaration of acceleration of
such Obligations, such Obligations (whether or not due and
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payable) shall forthwith become due and payable by such Guarantor for the
purposes of this Section.
The Guarantor also agrees to pay any and all reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee or
the Holders in enforcing any rights under this Section.
SECTION 2.2 Limitation on Liability; Termination, Release and
Discharge. (a) Any term or provision of this Guarantee to the contrary
notwithstanding, the maximum aggregate amount of the Obligations guarantied
hereunder by the Guarantor shall not exceed the maximum amount that can be
hereby guarantied without rendering this Guarantee, as it relates to such
Guarantor, voidable under applicable law, including without limitation
applicable law relating to fraudulent conveyance or fraudulent transfer or
affecting the rights or remedies of creditors generally.
(b) This Guarantee shall terminate and be of no further force
or effect, and the Guarantor shall automatically and unconditionally be released
and discharged from all liabilities and obligations in respect hereof, upon (w)
payment in full of the principal amount of all outstanding Securities (whether
by payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other monetary Obligations then due and owing, (x) the
merger or consolidation of the Guarantor with and into the Company or another
Note Guarantor that is the surviving Person in such merger or consolidation, or
(y) the exercise by the Company of its legal defeasance option or its covenant
defeasance option, or (z) the sale or other transfer (i) by the Guarantor of all
or substantially all of its assets or (ii) by the Company or a Restricted
Subsidiary of all of the capital stock or other equity interests in the
Guarantor held by the Company or such Restricted Subsidiary, to a Person that is
not an Affiliate of the Company; provided, however, that, in the case of this
clause (z), (1) any such sale or transfer is made in accordance with the terms
of the Indenture (including Section 4.6 thereof), and (2) all obligations of the
Guarantor under, and all of its guarantees of, and all of its pledges of assets
or other security interests which secure, any Bank Indebtedness of the Company
shall also terminate upon such release, sale or transfer (other than with
respect to any such Indebtedness that is assumed by any Person that is not an
Affiliate of the Company). Upon notice to the Trustee that any such payment,
merger, consolidation, exercise, sale or transfer has occurred or is occurring,
the Trustee shall execute all agreements and instruments confirming and
acknowledging such termination, release and discharge as may be reasonably
requested by the Guarantor, and the Trustee shall return the original Guarantee
to the Guarantor.
ARTICLE III
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Subordination
SECTION 3.1 Subordination. The Guarantor agrees, and each
Securityholder by accepting a Security agrees, that (a) the obligations of the
Guarantor under this Guarantee are subordinated in right of payment to the prior
payment in full (when due) of all existing and future Guarantor Senior
Indebtedness of the Guarantor, including without limitation any Guarantee by the
Guarantor of the Bank Indebtedness or of any Senior Indebtedness of the Company
or of any Guarantor Senior Indebtedness of any other Note Guarantor, to the
extent and in the matter provided in Article 10 of the Indenture (as if the
Guarantor were the Company for purposes of such Article 10 and all defined terms
used therein, and the Guarantor Senior Indebtedness of the Guarantor were Senior
Indebtedness), and this Guarantor is made subject to such provisions (which are
hereby incorporated herein by reference), and (b) such subordination is for the
benefit of and enforceable by the holders of Guarantor Senior Indebtedness of
the Guarantor.
ARTICLE IV
Miscellaneous
SECTION 4.1 Notices. All notices and other communications
pertaining to this Guarantee or any Security shall be in writing and shall be
deemed to have been duly given upon the receipt thereof. Such notices shall be
delivered by hand, or mailed, certified or registered mail with postage prepaid
(a) if to the Guarantor, at its address set forth below, with a copy to the
Company as provided in the Indenture for notices to the Company, and (b) if to
the Holders or the Trustee, as provided in the Indenture. The Guarantor by
notice to the Trustee may designate additional or different addresses for
subsequent notices to or communications with the Guarantor.
SECTION 4.2 Parties. Nothing expressed or mentioned in this
Guarantee is intended or shall be construed to give any Person, firm or
corporation, other than the Holders and the Trustee and the holders of any
Guarantor Senior Indebtedness, any legal or equitable right, remedy or claim
under or in respect of this Guarantee or any provision herein contained.
SECTION 4.3 Governing Law. This Agreement shall be governed by
the laws of the State of New York, without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
SECTION 4.4 Severability Clause. In case any provision in this
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining
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provisions shall not in any way be affected or impaired thereby and such
provision shall be ineffective only to the extent of such invalidity, illegality
or unenforceability.
SECTION 4.5 Waivers and Remedies. Neither a failure nor a
delay on the part of the Holders or the Trustee in exercising any right, power
or privilege under this Guarantee shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise of any
right, power or privilege. The rights, remedies and benefits of the Holders and
the Trustee herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Guarantee or
at law, in equity, by statute or otherwise.
SECTION 4.6 Successors and Assigns. Subject to Section 2.2(b)
hereof, (a) this Guarantee shall be binding upon and inure to the benefit of the
Guarantor, the Trustee, any other parties hereto, the Holders and their
respective successors and assigns and (b) in the event of any transfer or
assignment of rights by any Holder, the rights and privileges conferred upon
that party in this Guarantee and in the Securities shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions of this Guarantee and the Indenture.
SECTION 4.7 Modification, etc. Subject to the provisions of,
and except as otherwise provided in, Article 9 of the Indenture (including
without limitation Section 9.1 thereof), no modification, amendment or waiver of
any provision of this Guarantee, nor the consent to any departure by the
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and consented to by the Majority Securityholders, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which it was given. No notice to or demand on the Guarantor in any case
shall entitle such Guarantor or any other guarantor to any other or further
notice or demand in the same, similar or other circumstances.
SECTION 4.8 Entire Agreement. This Guarantee is intended by
the parties to be a final expression of their agreement in respect of the
subject matter contained herein and, together with the Indenture, supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
SECTION 4.9 Ratification of Indenture; Supplemental Indentures
Part of Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby.
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The Trustee makes no representation or warranty as to the validity or
sufficiency of this Supplemental Indenture.
SECTION 4.10 Counterparts. The parties hereto may sign one or
more copies of this Supplemental Indenture in counterparts, all of which
together shall constitute one and the same agreement.
SECTION 4.11 Headings. The headings of the Articles and the
sections in this Guarantee are for convenience of reference only and shall not
be deemed to alter or affect the meaning or interpretation of any provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first above written.
[NAME OF GUARANTOR],
By:
__________________________________________
Name:
Title:
Address:
[COMPANY]
By:
__________________________________________
Name:
Title:
[Add signature block for any other existing Note
Guarantor]
THE BANK OF NEW YORK, as Trustee
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<PAGE> 154
By:
__________________________________________
Name:
Title:
8
<PAGE> 1
REGISTRATION RIGHTS AGREEMENT Exhibit 4.4
March 18, 1998
SOCIETE GENERALE SECURITIES CORPORATION
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
DAY INTERNATIONAL GROUP, INC., a Delaware corporation (the
"Company"), proposes to issue and sell to you (the "Initial Purchaser"), upon
the terms set forth in a purchase agreement dated March 13, 1997 (the "Purchase
Agreement"), $115,000,000 principal amount of its 9 1/2% Senior Subordinated
Notes due 2008 (the "Notes") and 35,000 shares of its 12 1/4% Senior
Exchangeable Preferred Stock due 2010 (Liquidation Preference $1,000 per share)
(the "Preferred Stock"). The Notes are to be issued pursuant to an Indenture
dated as of March 18, 1998 (the "Indenture") to be entered into among the
Company, the subsidiary listed on the signature page to the Purchase Agreement
(the "Guarantor") and The Bank of New York, as trustee (the "Trustee"). Pursuant
to the terms of the Company's Certificate of Designations for the Preferred
Stock (the "Certificate of Designations"), the Preferred Stock shall be
exchangeable, in whole and not in part, at the option of the Company, into 12
1/4% Exchange Debentures due 2010 (the "Debentures," together with the Notes and
the Preferred Stock, the "Securities"), which, when issued, shall be issued
pursuant to the provisions of an indenture (the "Debenture Indenture") between
the Company and The Bank of New York, as trustee (the "Debenture Trustee").
Payment of principal and interest on the Notes will be unconditionally
guaranteed (the "Guarantee"), jointly and severally, on a senior subordinated
basis by the Guarantor. Capitalized terms used but not specifically defined
herein have the respective meanings ascribed thereto in the Purchase Agreement.
As an inducement to the Initial Purchaser to enter into the Purchase Agreement
and in satisfaction of a condition to your obligations thereunder, the Company
agrees with you, for the benefit of the holders (including the Initial
Purchaser) of the Securities (collectively, the "Holders"), as follows:
<PAGE> 2
1. Registered Exchange Offer. The Company shall prepare and, not
later than 60 days following the date of issuance of the Notes and the Preferred
Stock by the Company to the Initial Purchaser, or, if applicable, the date of
issuance of the Debentures by the Company to the Holders (in each case, the
"Issue Date"), the Company and the Guarantor shall file with the Commission a
registration statement (the "Exchange Offer Registration Statement") on Form S-1
or Form S-4, if the use of such form is then available, or on an appropriate
form under the Securities Act with respect to a registered exchange offer (the
"Exchange Offer") to the Holders to issue and deliver to such Holders: (i) in
exchange for the Notes, a like aggregate principal amount of debt securities of
the Company (the "Exchange Notes"), (ii) in exchange for the Preferred Stock, a
like aggregate liquidation preference of equity securities of the Company (the
"Exchange Preferred Stock") or (iii) in exchange for the Debentures, a like
aggregate principal amount of debt securities of the Company (the "Exchange
Debentures," together with the Exchange Notes and the Exchange Preferred Stock,
the "Exchange Securities"), as applicable, with such Exchange Securities being
identical in all material respects to the corresponding Securities, except for
the transfer restrictions relating to the Securities. The Company shall use its
best efforts to cause the Exchange Offer Registration Statement to (a) be
declared effective under the Securities Act no later than 150 days after the
Issue Date and (b) be consummated as promptly as practicable, but in any event
no later than 165 days after the Issue Date. The Company also shall keep the
Exchange Offer Registration Statement effective for not less than 30 business
days (or longer, if required by applicable law) after the date notice of the
Exchange Offer is mailed to the Holders (such period being called the "Exchange
Offer Registration Period").
The Exchange Notes will be issued under the Indenture or an
indenture (the "Exchange Notes Indenture") among the Company, the Guarantor and
the Trustee or such other bank or trust company reasonably satisfactory to you,
as trustee (the "Exchange Notes Trustee"), with such indenture to be identical
in all material respects to the Indenture except for the transfer restrictions
relating to the Notes (as described above). The Exchange Debentures will be
issued under the Debenture Indenture or an indenture (the "Exchange Debenture
Indenture") between the Company and the Debenture Trustee or such other bank or
trust company reasonably satisfactory to you, as trustee (the "Exchange
Debenture Trustee"), with such indenture to be identical in all material
respects to the Debenture Indenture except for the transfer restrictions
relating to the Debentures (as described above). The Exchange Preferred Stock
will be issued under the Certificate of Designations or a certificate of
designations (the "Exchange Certificate of Designations") by the Company, with
such certificate of designations to be identical in all material respects to the
Certificate of Designations except for the transfer restrictions relating to the
Preferred Stock (as described above).
2
<PAGE> 3
As soon as practicable after the effectiveness of the Exchange
Offer Registration Statement, the Company shall commence the Exchange Offer, it
being the objective of such Exchange Offer to enable each Holder electing to
exchange Securities for Exchange Securities (assuming that such Holder (a) is
not (i) an affiliate of the Company within the meaning of the Securities Act or
(ii) an Exchanging Dealer (as defined below) not complying with the requirements
of the next sentence, (b) acquires the Exchange Securities in the ordinary
course of such Holder's business and (c) has no arrangements or understandings
with any person to participate in the distribution of the Exchange Securities)
and to trade such Exchange Securities from and after their receipt without any
limitations or restrictions under the Securities Act and without material
restrictions under the securities laws of the several states of the United
States. The Company, the Initial Purchaser and each Exchanging Dealer (as
defined below) acknowledge that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, (i) each Holder which is
a broker-dealer electing to exchange Securities, acquired for its own account as
a result of market making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing the information set forth in Annex A hereto on the cover, in Annex B
hereto in the "Exchange Offer Procedures" section and the "Purpose of the
Exchange Offer" section, and in Annex C hereto in the "Plan of Distribution"
section of such prospectus in connection with a sale of any such Exchange
Securities received by such Exchanging Dealer pursuant to the Exchange Offer and
(ii) if the Initial Purchaser elects to sell Exchange Securities acquired in
exchange for Securities constituting any portion of an unsold allotment it is
required to deliver a prospectus containing the information required by Items
507 or 508 of Regulation S-K under the Securities Act, as applicable, in
connection with such a sale.
In connection with the Exchange Offer, the Company shall:
(a) mail to each Holder a copy of the prospectus forming part of
the Exchange Offer Registration Statement, together with an appropriate
letter of transmittal and related documents;
(b) keep the Exchange Offer open for not less than 30 days after
the date notice of the Exchange Offer is mailed to the Holders (or longer
if required by applicable law);
(c) utilize the services of a Depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York;
3
<PAGE> 4
(d) permit Holders to withdraw tendered Securities at any time
prior to the close of business, New York time, on the last business day on
which the Exchange Offer shall remain open; and
(e) otherwise comply in all respects with all laws applicable to
the Exchange Offer.
As soon as practicable after the close of the Exchange Offer, the
Company shall:
(a) accept for exchange all Securities tendered and not validly
withdrawn pursuant to the Exchange Offer;
(b) deliver to the transfer agent (for the Preferred Stock) (the
"Transfer Agent"), the Trustee or the Debenture Trustee, as applicable, for
cancellation all Securities so accepted for exchange; and
(c) cause the Transfer Agent, the Trustee or the Exchange Notes
Trustee, as the case may be, or, if applicable, the Debenture Trustee or
the Exchange Debenture Trustee, as the case may be, promptly to
authenticate and deliver to each Holder of Securities, Exchange Securities
equal in principal amount or liquidation preference, as applicable, to the
Securities of such Holder so accepted for exchange.
The Company and the Guarantor shall use their best efforts to keep
the Exchange Offer Registration Statement effective and to amend and supplement
the prospectus contained therein in order to permit such prospectus to be used
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided that (i) in the case where
such prospectus and any amendment or supplement thereto must be delivered by an
Exchanging Dealer, such period shall be the lesser of 180 days and the date on
which all Exchanging Dealers have sold all Exchange Securities held by them and
(ii) the Company shall make such prospectus and any amendment or supplement
thereto available to any broker-dealer for use in connection with any resale of
any Exchange Securities for a period of not less than 90 days after the
consummation of the Exchange Offer.
The Certificate of Designations or the Exchange Certificate of
Designations, as the case may be; the Indenture or the Exchange Notes Indenture,
as the case may be; or, if applicable, the Debenture Indenture or the Exchange
Debenture Indenture, as the case may be, shall provide that each general type of
Securities and the corresponding Exchange Securities thereto shall vote and
consent together on all matters as one class
4
<PAGE> 5
and that none of each general type of Securities or the corresponding Exchange
Securities will have the right to vote or consent as a separate class on any
matter.
Interest or dividends, as the case may be, on each Exchange
Security issued pursuant to the Exchange Offer will accrue from the last
interest or dividend payment date on which interest or dividends were paid on
the Securities surrendered in exchange therefor or, if no interest or dividends
have been paid on the Securities, from the date of original issue of the
Securities.
Each Holder participating in the Exchange Offer shall be required
to represent to the Company that at the time of the consummation of the Exchange
Offer (i) any Exchange Securities received by such Holder will be acquired in
the ordinary course of business, (ii) such Holder will have no arrangements or
understanding with any person to participate in the distribution of the
Securities or the Exchange Securities within the meaning of the Securities Act
and (iii) such Holder is not an affiliate of the Company within the meaning of
the Securities Act, or if it is an affiliate, it will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
Notwithstanding any other provisions hereof, the Company will
ensure that (i) any Exchange Offer Registration Statement and any amendment
thereto and any prospectus forming part thereof and any supplement thereto
complies in all material respects with the Securities Act and the rules and
regulations thereunder, (ii) any Exchange Offer Registration Statement and any
amendment thereto does not, when it becomes effective, 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 not misleading and
(iii) any prospectus forming part of any Exchange Offer Registration Statement,
and any supplement to such prospectus, does not include, as of the consummation
of the Exchange Offer, an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
2. Shelf Registration. If (i) because of any change in law or
applicable interpretations thereof by the Commission the Company is not
permitted to effect the Exchange Offer as contemplated by Section 1 hereof, or
(ii) for any other reason the Exchange Offer is not consummated within 165 days
after the Issue Date, or (iii) the Initial Purchaser so requests with respect to
Securities not eligible to be exchanged for Exchange Securities in the Exchange
Offer and held by it following the consummation of the Exchange Offer, or (iv)
any applicable law or interpretations do not permit any Holder to participate in
the Exchange Offer, or (v) any Holder that participates in the Exchange
5
<PAGE> 6
Offer does not receive freely transferable Exchange Securities in exchange for
tendered Securities, or (vi) the Company so elects, then the following
provisions shall apply:
(a) The Company and the Guarantor shall use their best efforts to
as promptly as practicable file with the Commission and thereafter shall use
their best efforts to cause to be declared effective a shelf registration
statement on an appropriate form under the Securities Act relating to the offer
and sale of the Transfer Restricted Securities (as defined below) by the Holders
from time to time in accordance with the methods of distribution set forth in
such registration statement (hereafter, a "Shelf Registration Statement" and,
together with any Exchange Offer Registration Statement, a "Registration
Statement").
(b) The Company and the Guarantor shall use their best efforts to
keep the Shelf Registration Statement continuously effective in order to permit
the prospectus forming part thereof to be usable by Holders for a period of
three years from the Issue Date or such shorter period that will terminate when
all the Securities and Exchange Securities covered by the Shelf Registration
Statement (i) have been sold pursuant to the Shelf Registration Statement or
(ii) are distributed to the public pursuant to Rule 144 under the Securities Act
or are saleable pursuant to Rule 144(k) under the Securities Act (in any such
case, such period being called the "Shelf Registration Period"). The Company and
the Guarantor shall be deemed not to have used their reasonable best efforts to
keep the Shelf Registration Statement effective during the requisite period if
they voluntarily take any action that would result in Holders of Securities or
Exchange Securities covered thereby not being able to offer and sell such
Securities or Exchange Securities during that period, unless such action is
required by applicable law.
(c) Notwithstanding any other provisions hereof, the Company and
the Guarantor will ensure that (i) any Shelf Registration Statement and any
amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Securities Act and the rules
and regulations thereunder, (ii) any Shelf Registration Statement and any
amendment thereto (in either case, other than with respect to information
included therein in reliance upon or in conformity with written information
furnished to the Company by or on behalf of any Holder specifically for use
therein (the "Holders' Information")) does not, when it becomes effective,
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 not
misleading and (iii) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus (in either case, other than
with respect to Holders' Information), does not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
6
<PAGE> 7
3. Liquidated Damages. (a) The parties hereto agree that the
Holders of Securities will suffer damages if the Company and the Guarantor fail
to fulfill their obligations under Section 1 or Section 2, as applicable, and
that it would not be feasible to ascertain the extent of such damages.
Accordingly, if (i) the applicable Registration Statement is not filed with the
Commission on or prior to 60 days after the Issue Date, (ii) the Exchange Offer
Registration Statement or the Shelf Registration Statement, as the case may be,
is not declared effective within 150 days after the Issue Date (or in the case
of a Shelf Registration Statement required to be filed in response to a change
in law or the applicable interpretations of Commission's Staff, if later, within
60 days after publication of the change in law or interpretation), (iii) the
Exchange Offer is not consummated on or prior to 165 days after the Issue Date,
or (iv) the Shelf Registration Statement is filed and declared effective within
150 days after the Issue Date (or in the case of a Shelf Registration Statement
required to be filed in response to a change in law or the applicable
interpretations of Commission's Staff, if later, within 60 days after
publication of the change in law or interpretation) but shall thereafter cease
to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), then as liquidated
damages, (x) the interest rate borne by the Transfer Restricted Securities (as
defined below), with respect to the first 90-day period immediately following
the occurrence of any Registration Default will increase by an amount equal to
$.05 per week per $1,000 aggregate principal amount of Transfer Restricted
Securities held by such Holder and (y) the interest rate borne by the Transfer
Restricted Securities will increase by an additional $.05 per week per $1,000
aggregate principal amount of Transfer Restricted Securities with respect to
each subsequent 90-day period until all Registration Defaults shall have been
cured, up to a maximum increase in the interest rate of $.30 per week per $1,000
aggregate principal amount of Transfer Restricted Securities held by such
Holder. Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease. "Transfer Restricted Securities" means each
Security or Exchange Security until (i) the date on which such Security or
Exchange Security has been exchanged for a freely transferrable Exchange
Security in the Exchange Offer, (ii) the date on which such Security or Exchange
Security has been effectively registered under the Securities Act and disposed
of in accordance with the Shelf Registration Statement or (iii) the date on
which such Security or Exchange Security is distributed to the public pursuant
to Rule 144 under the Securities Act or is salable pursuant to Rule 144(k) under
the Securities Act. Notwithstanding anything to the contrary in this Section
3(a), the Company shall not be required to pay liquidated damages to the holder
of Transfer Restricted Securities if such holder: (a) failed to comply with its
obligations to make the representations in the second to last paragraph of
Section 1; or (b) failed to provide the information required to be provided by
it, if any, pursuant to Section 4(m).
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<PAGE> 8
(b) The Company shall notify the Transfer Agent and the Paying
Agent under the Certificate of Designations, the Trustee and the Paying Agent
under the Indenture and, if applicable, the Debenture Trustee and the Paying
Agent under the Debenture, immediately upon the happening of each and every
Registration Default. The Company shall pay the liquidated damages due on the
Transfer Restricted Securities by depositing with the respective Paying Agents
(which may not be the Company for these purposes), in trust, for the benefit of
the Holders thereof, prior to 10:00 a.m., New York City time on the next
interest or dividend payment date, as applicable, specified by the Certificate
of Designations, the Indenture, the Debenture Indenture and the Securities, sums
sufficient to pay the liquidated damages then due. The liquidated damages due
shall be payable on each interest or dividend payment date specified by the
Certificate of Designations, the Indenture or, if applicable, the Debenture
Indenture to the record holder entitled to receive the interest and dividend
payments to be made on such date. Each obligation to pay liquidated damages
shall be deemed to accrue from and including the applicable Registration
Default.
(c) The parties hereto agree that the liquidated damages provided
for in this Section 3 constitute a reasonable estimate of and are intended to
constitute the sole damages that will be suffered by holders of Transfer
Restricted Securities by reason of the failure of (i) the Shelf Registration
Statement or the Exchange Offer Registration Statement, as the case may be, to
be filed (ii) the Exchange Offer Registration Statement to be declared effective
and the Exchange Offer to be consummated (iii) the Shelf Registration Statement
to be declared effective or (iv) the Shelf Registration Statement to again
become effective, in each case to the extent required by this Agreement.
4. Registration Procedures. In connection with any Registration
Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to you, prior to the filing
thereof with the Commission, a copy of the Registration Statement and each
amendment thereof and each supplement, if any, to the prospectus included
therein and shall use reasonable best efforts to reflect in each such document,
when so filed with the Commission, such comments as you reasonably may propose;
(ii) include the information set forth in Annex A hereto on the cover, in Annex
B hereto in the "Exchange Offer Procedures" section and the "Note Purpose of the
Exchange Offer" section and in Annex C hereto in the "Plan of Distribution"
section of the prospectus forming a part of the Exchange Offer Registration
Statement, and include the information set forth in Annex D hereto in the Letter
of Transmittal delivered pursuant to the Exchange Offer; and (iii) if requested
by the Initial Purchaser, include the information required by Items 507 or 508
of Regulation S-K under the Securities Act, as applicable, in the prospectus
forming a part of the Exchange Offer Registration Statement.
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<PAGE> 9
(b) The Company shall advise you, each Exchanging Dealer and the
Holders (if applicable) and, if requested by such person, confirm such advice in
writing (which advice pursuant to clauses (ii)-(iv) hereof shall be accompanied
by an instruction to suspend the use of the prospectus until the requisite
changes have been made):
(i) when any Registration Statement and any amendment thereto has been
filed with the Commission and when such Registration Statement or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to any Registration Statement or the prospectus included
therein or for additional information;
(iii) of the issuance by the Commission of any stop order
suspending the effectiveness of any Registration Statement or the
initiation of any proceeding for that purpose;
(iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities or the
Exchange Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(v) of the happening of any event that requires the making of
any changes in any Registration Statement or the prospectus so that, as
of such date, the statements therein are not misleading and do not omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
The Company will make every reasonable effort to obtain the
withdrawal at the earliest possible time of any order suspending the
effectiveness of any Registration Statement.
(c) The Company will furnish to each Holder of Transfer
Restricted Securities included within the coverage of any Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Holder so requests in writing, all
exhibits (including those incorporated by reference).
(d) The Company will, during the Shelf Registration Period,
promptly deliver to each Holder of Transfer Restricted Securities included
within the coverage of any Shelf Registration Statement, without charge, as many
copies of the prospectus
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<PAGE> 10
(including each preliminary prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and the Company consents to the use of the prospectus or any amendment
or supplement thereto by each of the selling Holders of Transfer Restricted
Securities in connection with the offering and sale of the Transfer Restricted
Securities covered by the prospectus or any amendment or supplement thereto.
(e) The Company will furnish to each Exchanging Dealer and the
Initial Purchaser and to any other Holder who so requests, without charge, at
least one copy of the Exchange Offer Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Exchanging Dealer, Initial Purchaser or any such Holder so requests
in writing, all exhibits (including those incorporated by reference).
(f) The Company will, during the Exchange Offer Registration
Period, promptly deliver to each Exchanging Dealer or the Initial Purchaser, as
applicable, without charge, as many copies of the prospectus included within the
coverage of the Exchange Offer Registration Statement and any amendment or
supplement thereto as such Exchanging Dealer or the Initial Purchaser, as
applicable, may reasonably request for delivery by (i) such Exchanging Dealer in
connection with a sale of Exchange Securities received by it pursuant to the
Exchange Offer or (ii) the Initial Purchaser in connection with a sale of
Exchange Securities received by it in exchange for Securities constituting any
portion of an unsold allotment; and the Company consents to the use of the
prospectus or any amendment or supplement thereto by any such Exchanging Dealer
or the Initial Purchaser, as applicable, as aforesaid.
(g) Prior to any public offering of Securities or Exchange
Securities pursuant to any Registration Statement, the Company will use its
reasonable best efforts to register or qualify or cooperate with the Holders of
Securities included therein and its counsel in connection with the registration
or qualification of such securities for offer and sale under the securities or
blue sky laws of such jurisdictions as any such Holder 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 Securities or Exchange
Securities covered by such Registration Statement; provided, however, 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.
(h) The Company will cooperate with the Holders of Securities or
Exchange Securities to facilitate the timely preparation and delivery of
certificates representing Securities or Exchange Securities to be sold pursuant
to any Registration
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<PAGE> 11
Statement free of any restrictive legends and in such denominations and
registered in such names as Holders may request in writing prior to sales of
Securities or Exchange Securities pursuant to such Registration Statement.
(i) If any event contemplated by paragraphs (b)(ii) through (v)
above occurs during the period in which the Company is required to maintain an
effective Registration Statement, the Company will promptly 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 Securities or purchasers of Exchange Securities
from a Holder, the prospectus will not include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(j) Not later than the effective date of the applicable
Registration Statement, the Company will provide a CUSIP number for the Exchange
Securities and provide the applicable trustee with printed certificates for the
Securities or Exchange Securities, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(k) The Company and the Guarantor will comply with all applicable
rules and regulations of the Commission and will make generally available to the
Company's security holders as soon as practicable after the effective date of
the applicable Registration Statement an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act; provided that in no event
shall such earnings statement be delivered later than 45 days after the end of a
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 the applicable Registration Statement, which statements shall cover such
12-month period.
(l) The Company will cause the Indenture or the Exchange Notes
Indenture, as the case may be, or, if applicable, the Debenture Indenture or the
Exchange Debenture Indenture, as the case may be, to be qualified under the
Trust Indenture Act as required by applicable law in a timely manner, and the
Company will cause the Certificate of Designations or the Exchange Certificate
of Designations, as the case may be, to be filed and effective with the
appropriate authorities.
(m) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities as the Company may from time to time reasonably
require for
11
<PAGE> 12
inclusion in such Registration Statement, and the Company may exclude from such
registration the Transfer Restricted Securities of any Holder that unreasonably
fails to furnish such information within a reasonable time after receiving such
request.
(n) In the case of a Shelf Registration Statement, each Holder of
Transfer Restricted Securities to be registered pursuant thereto agrees by
acquisition of such Transfer Restricted Securities that, upon receipt of any
notice from the Company pursuant to Section 4(b)(ii) through (iv) hereof, such
Holder will discontinue disposition of such Transfer Restricted Securities until
such Holder's receipt of copies of the supplemental or amended prospectus
contemplated by Section 4(i) hereof, or until advised in writing (the "Advice")
by the Company that the use of the applicable prospectus may be resumed. If the
Company shall give any notice under Section 4(b)(ii) through (v) during the
period that the Company is required to maintain an effective Registration
Statement (the "Effectiveness Period"), such Effectiveness Period shall be
extended by the number of days during such period from and including the date of
the giving of such notice to and including the date when each seller of Transfer
Restricted Securities covered by such Registration Statement shall have received
(x) the copies of the supplemental or amended prospectus contemplated by Section
4(i) (if an amended or supplemental prospectus is required) or (y) the Advice
(if no amended or supplemental prospectus is required).
(o) In the case of a Shelf Registration Statement, the Company
shall enter into such customary agreements (including, if requested, an
underwriting agreement in customary form) and take all such other action, if
any, as Holders of a majority in aggregate principal amount of the Securities
and Exchange Securities being sold or the managing underwriters (if any) shall
reasonably request in order to facilitate any disposition of Securities or
Exchange Securities pursuant to such Shelf Registration Statement.
(p) In the case of a Shelf Registration Statement, the Company
shall (i) make reasonably available for inspection by a representative of, and
Special Counsel (as defined below) acting for, Holders of a majority in
aggregate principal amount or aggregate liquidation preference, as the case may
be, of the Securities and Exchange Securities being sold and any underwriter
participating in any disposition of Securities or Exchange Securities pursuant
to such Shelf Registration Statement, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its subsidiaries
and (ii) use its reasonable best efforts to have its officers, directors,
employees, accountants and counsel supply all relevant information reasonably
requested by such representative, Special Counsel or any such underwriter (an
"Inspector") in connection with such Shelf Registration Statement.
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<PAGE> 13
(q) In the case of a Shelf Registration Statement, the Company
shall, if requested by Holders of a majority in aggregate principal amount or
aggregate liquidation preference, as the case may be, of the Securities and
Exchange Securities being sold, their Special Counsel or the managing
underwriters (if any) in connection with such Shelf Registration Statement, use
its reasonable best efforts to cause (i) its counsel to deliver an opinion
relating to the Shelf Registration Statement and the Securities or Exchange
Securities, as applicable, in customary form, (ii) its officers to execute and
deliver all customary documents and certificates requested by Holders of a
majority in aggregate principal amount of the Securities and Exchange Securities
being sold, their Special Counsel or the managing underwriters (if any) and
(iii) its independent public accountants to provide a comfort letter in
customary form, subject to receipt of appropriate documentation as contemplated,
and only if permitted, by Statement of Auditing Standards No. 72.
5. Registration Expenses. The Company and the Guarantor will bear
all expenses incurred in connection with the performance of their obligations
under Sections 1, 2, 3 and 4 hereof and the Company and the Guarantor will
reimburse the Initial Purchaser and the Holders for the reasonable fees and
disbursements of one firm of attorneys chosen by the Holders of a majority in
aggregate principal amount or aggregate liquidation preference, as the case may
be, of the Securities and the Exchange Securities to be sold pursuant to each
Registration Statement (the "Special Counsel") acting for the Initial Purchaser
or Holders in connection therewith.
6. Indemnification. (a) Indemnification of Holders. In the event
of a Shelf Registration Statement or in connection with any prospectus delivery
pursuant to an Exchange Offer Registration Statement by an Exchanging Dealer or
the Initial Purchaser, as applicable, the Company and the Guarantor, jointly and
severally, shall indemnify and hold harmless each Holder (including, without
limitation, any such Initial Purchaser or Exchanging Dealer), their respective
officers, directors and employees and each person, if any, who controls such
Holder within the meaning of the Securities Act (collectively referred to for
the purposes of this Section 6 as a Holder) against any loss, claim, damage or
liability, joint or several, or any action in respect thereof (including,
without limitation, any loss, claim, damage, liability or action relating to
purchases and sales of Securities or Exchange Securities), to which that Holder
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in any such
Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state in any such Registration Statement or any prospectus forming part thereof
or in any amendment or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse each Holder
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<PAGE> 14
for any legal or other expenses reasonably incurred by that Holder in connection
with investigating or preparing to defend or defending against or appearing as a
third party witness in connection with any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that the foregoing
indemnification agreement with respect to any preliminary prospectus shall not
inure to the benefit of any Holder from whom the person asserting any such loss,
claim, damage or liability purchased Securities or Exchange Securities, if (i) a
copy of the preliminary prospectus (as then amended or supplemented) was
required by law to be delivered to such person at or prior to the written
confirmation of the sale of Securities or Exchange Securities to such person,
(ii) a copy of the final prospectus (as then amended or supplemented) was not
sent or given to such person by or on behalf of such Holder and (iii) the final
prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability, unless, in the case of (i), (ii)
and (iii) occurring, such failure to deliver the final prospectus was a result
of non-compliance by the Company of Section 1 hereunder; and further provided,
however, that the Company and the Guarantor shall not be liable in any such case
to the extent that any such loss, claim, damage, liability or action arises out
of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus or Registration
Statement or any such amendment or supplement in reliance upon and in conformity
with any Holders' Information.
(b) Indemnification of Company, Guarantor, Directors and Officers.
In the event of a Shelf Registration Statement, each Holder, severally and not
jointly, agrees to indemnify and hold harmless the Company and the Guarantor,
their respective directors, and each person, if any, who controls the Company or
Guarantor within the meaning of the Securities Act (collectively referred to for
the purposes of this Section 6 as the Company), against any loss, claim, damage
or liability, joint or several, or any action in respect thereof, to which the
Company or the Guarantor may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of or is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in a preliminary prospectus or such Registration
Statement or in any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each case
only to the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
any Holders' Information furnished to the Company by or on behalf of that Holder
specifically for use therein, and shall reimburse the Company or the Guarantor
for any legal or other expenses reasonably incurred by the Company or the
Guarantor in connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred; provided
however, that no such Holder shall be
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<PAGE> 15
liable for any indemnity claims hereunder in excess of the amount of net
proceeds received by such Holder from the sale of Securities or Exchange
Securities pursuant to such Shelf Registration Statement.
(c) Actions; Notification. Promptly after receipt by an
indemnified party under this Section 6 of notice of any claim or the
commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under this Section 6,
notify the indemnifying party in writing of the claim or the commencement of
that action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 6 except to the extent it has been materially prejudiced by such
failure; and, provided, further, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 6. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party 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 at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions 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 at any time for all such indemnified
parties, which firm shall be designated in writing by the Holders of a majority
in aggregate principal amount of the Securities or Exchange Securities, as the
case may be, if the
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<PAGE> 16
indemnified parties under this Section 6 consist of any Holder or any of their
respective officers, employees or controlling persons, or by the Company, if the
indemnified parties under this Section 6 consist of the Company or the Guarantor
or any of their respective directors, officers, employees or controlling
persons. Each indemnified party, as a condition of the indemnity agreements
contained in Sections 6(a) and 6(b), shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action or
claim. Subject to the provisions of Section 6(d) below, no indemnifying party
shall be liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but if
settled with its written consent or if there be a final judgment for the
plaintiff in any such action, the indemnifying party agrees to indemnify and
hold harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested that an indemnifying party
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by this Section 6 effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the request for reimbursement, (ii) such indemnifying
party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying
party shall not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) Contribution. If the indemnification provided for in this
Section 6 is unavailable or insufficient to hold harmless an indemnified party
under Section 6(a) or (b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company and the Guarantor on the
one hand and a Holder with respect to the sale by such Holder of Securities or
Exchange Securities on the other or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantor on the one
hand and such Holder on the other with respect to the statements or omissions
which resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantor on the one hand and a Holder
on the other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Securities or
Exchange Securities (before deducting expenses) received by the Company and the
Guarantor as set
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<PAGE> 17
forth on the cover of the Offering Memorandum bear to the total proceeds
received by such Holder with respect to its sale of Securities or Exchange
Securities. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company and the Guarantor on the one hand or to any Holders'
Information supplied by such Holder on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company and the Holders agree
that it would not be just and equitable if contributions pursuant to this
Section 6(e) were to be determined by pro rata allocation (even if the Holders
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 6(e) shall be deemed to include, for purposes
of this Section 6(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6(e), no Holder shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities or Exchange Securities sold by such Holder to any
purchaser exceeds the amount of any damages which such Holder has otherwise paid
or become liable to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Any Holder's obligations to contribute as provided in this Section
6(e) are several and not joint.
The obligations of the Company, the Guarantor and the Holders in
this Section 6 are in addition to any other liability which the Company, the
Guarantor or the Holders as the case may be, may otherwise have.
7. Rules 144 and 144A. The Company shall file the reports required
to be filed by it under the Securities Act and the Exchange Act in a timely
manner and, if at any time the Company is not required to file such reports, it
will, upon the written request of any Holder of Transfer Restricted Securities,
make publicly available other information so long as necessary to permit sales
of such Holder's securities pursuant to Rules 144 and 144A. The Company
covenants that it will take such further action as any Holder of Transfer
Restricted Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Transfer Restricted Securities
without registration under the Securities Act within the limitation of the
exemptions provided by
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<PAGE> 18
Rules 144 and 144A (including, without limitation, the requirements of Rule
144A(d)(4)). Upon the written request of any Holder of Transfer Restricted
Securities, the Company shall deliver to such Holder a written statement as to
whether it has complied with such requirements. Notwithstanding the foregoing,
nothing in this Section 7 shall be deemed to require the Company to register any
of its securities pursuant to the Exchange Act.
8. Underwritten Registrations. If any of the Transfer Restricted
Securities covered by any Shelf Registration Statement are to be sold in an
underwritten offering, the investment banker or investment bankers and manager
or managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount or aggregate liquidation preference, as
the case may be, of such Transfer Restricted Securities included in such
offering, subject to the consent of the Company (which shall not be unreasonably
withheld or delayed), and such Holders shall be responsible for all underwriting
commissions and discounts in connection therewith.
9. 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 and Holders of a majority in aggregate liquidation preference,
as the case may be, of the Securities and the Exchange Securities, taken as a
single class. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of the Holders of Securities or Exchange Securities whose Securities or
Exchange Securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by Holders of a majority in aggregate principal amount or aggregate liquidation
preference, as the case may be, of the Securities or Exchange Securities being
sold by such Holders pursuant to such Registration Statement.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
9(b), which address initially is, with respect to each Holder, the
address of such Holder maintained by the Registrar under the Indenture,
the Debenture Indenture or the Certificate of Designations, as the case
may be, with a copy in like manner to Societe Generale Securities
Corporation;
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(2) if to you, initially at your address set forth in the Purchase
Agreement; and
(3) if to the Company or the Guarantor, initially at the address
of the Company set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; one business day
after being delivered to a next-day air courier; five business days after being
deposited in the mail; and when receipt is acknowledged by the recipient's
telecopier machine, if telecopied.
(c) Successors and Assigns. This Agreement shall be binding upon
the Company and the Guarantor and their respective successors and assigns.
(d) Counterparts. This Agreement may be executed in any number of
counterparts (which may be delivered in original form or by telecopies) and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
(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; Submission to Jurisdiction.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(g) No Inconsistent Agreements. The Company has not and shall not,
on or after the date of this Agreement, enter into any agreement that is
inconsistent with the rights granted to the holders of Transfer Restricted
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The Company has not previously entered into any agreement which remains in
effect granting any registration rights with respect to any of its debt
securities to any person. Without limiting the generality of the foregoing,
without the written consent of the holders of a majority in aggregate principal
amount of the then outstanding Transfer Restricted Securities, the Company shall
not grant to any person the right to request the Company to register any debt
securities of the Company under the Securities Act unless the rights so granted
are not in conflict or inconsistent with the provisions of the Agreement.
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<PAGE> 20
(h) No Piggyback on Registrations. Neither the Company, nor any of
its security holders (other than the holders of Transfer Restricted Securities
in such capacity) shall have the right to include any securities of the Company
in any Shelf Registration or Exchange Offer other than Transfer Restricted
Securities.
(i) Severability. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
(j) Remedies. In the event of a breach by the Company or the
Guarantor, or by any holder of Transfer Restricted Securities, of any of their
obligations under this Agreement, each holder of Transfer Restricted Securities
or the Company and the Guarantor, as the case may be, in addition to being
entitled to exercise all rights granted by law, including recovery of damages
(other than the recovery of damages for a breach by the Company of its
obligations under Sections 1 or 2 hereof for which liquidated damages have been
paid pursuant to Section 3 hereof), will be entitled to specific performance of
its rights under this Agreement. The Company, the Guarantor and each holder of
Transfer Restricted Securities agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agree that, in the event of any
action for specific performance in respect of such breach, it shall waive the
defense that a remedy at law would be adequate.
20
<PAGE> 21
Please confirm that the foregoing correctly sets forth the
agreement among the Company and you.
Very truly yours,
DAY INTERNATIONAL GROUP, INC.
By:
Name:
Title:
DAY INTERNATIONAL, INC.
By:
Name:
Title:
Accepted in New York, New York
SOCIETE GENERALE SECURITIES CORPORATION
By:
-----------------------------------
Name:
Title:
21
<PAGE> 22
ANNEX A
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Securities where
such Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Company has agreed that, for a
period of 90 days after the Expiration Date (as defined herein), it will make
this Prospectus available to any broker-dealer for use in connection with any
such resale. See "Plan of Distribution."
22
<PAGE> 23
ANNEX B
Each broker-dealer that receives Exchange Securities for its own
account in exchange for Securities, where such Securities were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."
23
<PAGE> 24
ANNEX C
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Securities where such Securities were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 90 days after the Expiration Date, it will make this
Prospectus, as amended or supplemented, available to any broker-dealer for use
in connection with any such resale. In addition, until _______________, 199_,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.(1)
The Company will not receive any proceeds from any sale of
Exchange Securities by broker-dealers. Exchange Securities received by
broker-dealers for their own account pursuant to the Exchange Offer may be sold
from time to time in one or more transactions in the over-the-counter market, in
negotiated transactions, through the writing of options on the Exchange
Securities or a combination of such methods of resale, at market prices
prevailing at the time of resale, at prices related to such prevailing market
prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such broker-dealer or the
purchasers of any such Exchange Securities. Any broker-dealer that resells
Exchange Securities that were received by it for its own account pursuant to the
Exchange Offer and any broker or dealer that participates in a distribution of
such Exchange Securities may be deemed to be an "underwriter" within the meaning
of the Securities Act and any profit on any such resale of Exchange Securities
and any commission or concessions received by any such persons may be deemed to
be underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 90 days after the Expiration Date the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of
- --------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.
24
<PAGE> 25
Transmittal. The Company has agreed to pay all expenses incident to the Exchange
Offer (including the expenses of one counsel for the Holders of the Securities)
other than commissions or concessions of any broker-dealers and will indemnify
the Holders of the Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
25
<PAGE> 26
ANNEX D
/ / CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND
10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS
THERETO.
Name:
------------------------------------------------
Address:
-----------------------------------------------
-----------------------------------------------
If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Securities that were acquired as
a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
26
<PAGE> 1
DAY INTERNATIONAL GROUP, INC. Exhibit 4.5.1
March 18, 1998
CERTIFICATE OF DESIGNATION OF THE POWERS, PREFERENCES AND
RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF
12 1/4% SENIOR EXCHANGEABLE PREFERRED STOCK DUE 2010 AND
QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS THEREOF
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Day International Group, Inc. (the "Company"), a corporation organized
and existing under the General Corporation Law of the State of Delaware, does
hereby certify that, pursuant to authority conferred upon the board of directors
of the Company (the "Board of Directors") by its Certificate of Incorporation,
as amended (hereinafter referred to as the "Certificate of Incorporation"), and
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware, said Board of Directors, by unanimous written consent dated
March 16, 1998, duly approved and adopted the following resolution (the
"Resolution"):
RESOLVED, that, pursuant to the authority vested in the Board of
Directors by its Certificate of Incorporation, the Board of Directors does
hereby create, authorize and provide for the issue of 12 1/4% Senior
Exchangeable Preferred Stock, par value $0.01 per share, with a
liquidation preference of $1,000.00 per share, consisting of up to 105,000
shares, having the designations, preferences, relative, participating,
optional and other special rights and the qualifications, limitations and
restrictions thereof that are set forth in the Certificate of
Incorporation and in this Resolution as follows:
(a) Designation. There is hereby created out of the authorized and
unissued shares of preferred stock of the Company a series of preferred stock
designated as the "12 1/4% Senior Exchangeable Preferred Stock" (the
"Exchangeable Preferred Stock"). The number of shares constituting such series
shall be 105,000 shares of Exchangeable Preferred Stock, consisting of an
initial issuance of 35,000 shares of Exchangeable Preferred Stock, plus up to
35,000 additional shares of Exchangeable Preferred Stock which may be issued
pursuant to paragraph (c) hereof in exchange for the shares of Exchangeable
Preferred Stock initially issued, plus up to 35,000 additional shares of
Exchangeable Preferred Stock which may be issued to pay dividends on the
Exchangeable Preferred Stock if the Company elects to pay dividends in
additional shares
<PAGE> 2
of Exchangeable Preferred Stock. The liquidation preference of the Exchangeable
Preferred Stock shall be $1,000.00 per share.
(b) Rank. The Exchangeable Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company, rank (i) senior to all classes of common stock of the Company
(the "Common Stock") and each other class of Capital Stock or series of
Preferred Stock of the Company hereafter created by the Board of Directors the
terms of which do not expressly provide that it ranks on a parity with the
Exchangeable Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company (collectively
referred to with the Common Stock of the Company as "Junior Securities"), and
(ii)(A) on a parity with each series of Preferred Stock existing on the date
hereof the terms of which do not expressly provide that it ranks junior to any
Exchangeable Preferred Stock as to dividend distributions and distributions upon
the liquidation, winding-up and dissolution of the Company, and (B) any class of
Capital Stock or series of Preferred Stock hereafter created by the Board of
Directors, the terms of which expressly provide that such class or series shall
rank on a parity with the Exchangeable Preferred Stock as to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company (collectively referred to as "Parity Securities"); provided that
any such Parity Securities in clause (ii)(B) above that were not approved by the
Holders in accordance with paragraph (f)(ii)(A) hereof (to the extent such
approval is required) shall be deemed to be Junior Securities and not Parity
Securities.
(c) Dividends.
(i) Beginning on the Exchangeable Preferred Stock Issue Date, the Holders
of the outstanding shares of Exchangeable Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of funds
legally available therefor, dividends on each share of Exchangeable Preferred
Stock, at a rate per annum equal to 12 1/4% of the liquidation preference per
share of the Exchangeable Preferred Stock. All dividends shall be cumulative,
whether or not earned or declared, on a daily basis from the Issue Date and
shall be payable quarterly in arrears on each Dividend Payment Date, commencing
on the first Dividend Payment Date after the Issue Date. Dividends may be paid,
at the Company's option, on any Dividend Payment Date occurring on or before
March 15, 2003 either in cash or by the issuance of additional fully paid and
non-assessable shares of Exchangeable Preferred Stock (including fractional
shares) having an aggregate liquidation preference equal to the amount of such
dividends (rounded to the nearest whole cent). In the event that on or prior to
March 15, 2003 dividends are declared and paid through the issuance of
additional fully paid and non-assessable shares of Exchangeable Preferred Stock
as provided in the previous sentence, such dividends
2
<PAGE> 3
shall be deemed paid in full and shall not accumulate. Each distribution in the
form of a dividend (whether in cash or in additional shares of Exchangeable
Preferred Stock) shall be payable to Holders of record as they appear on the
stock register of the Company on such record dates, not less than 10 nor more
than 60 days preceding the related Dividend Payment Date, as shall be fixed by
the Board of Directors. Dividends shall cease to accumulate in respect of shares
of the Exchangeable Preferred Stock on the Exchange Date or on the date of their
earlier redemption unless the Company shall have failed to issue the appropriate
aggregate principal amount of Exchange Debentures (as defined in paragraph
(g)(i)(A) hereof) in respect of the Exchangeable Preferred Stock on the Exchange
Date or shall have failed to pay the relevant redemption price on the date filed
for redemption.
(ii) All dividends paid with respect to shares of the Exchangeable
Preferred Stock pursuant to paragraph (c)(i) shall be paid pro rata to the
Holders entitled thereto.
(iii) Nothing herein contained shall in any way or under any circumstances
be construed or deemed to require the Board of Directors to declare, or the
Company to pay or set apart for payment, any dividends on shares of the
Exchangeable Preferred Stock at any time.
(iv) Dividends on account of arrears for any past Dividend Period and
dividends in connection with any optional redemption pursuant to paragraph
(e)(i) may be declared and paid at any time, without reference to any regular
Dividend Payment Date, to Holders of record on such date, not more than 45 days
prior to the payment thereof, as may be fixed by the Board of Directors.
(v) No full dividends shall be declared by the Board of Directors or paid
or funds set apart for payment of dividends by the Company on any Parity
Securities for any period unless full cumulative dividends shall have been or
contemporaneously are declared, and paid in full or declared, and (in the case
of dividends payable in cash) a sum in cash set apart sufficient for such
payment, on the Exchangeable Preferred Stock for all Dividend Periods
terminating on or prior to the date of payment of such full dividends on such
Parity Securities. If any dividends are not paid in full, as aforesaid, upon the
shares of the Exchangeable Preferred Stock and any other Parity Securities, all
dividends declared upon shares of the Exchangeable Preferred Stock and any other
Parity Securities shall be declared pro rata so that the amount of dividends
declared per share on the Exchangeable Preferred Stock and such Parity
Securities shall in all cases bear to each other the same ratio that accrued
dividends per share on the Exchangeable Preferred Stock and such Parity
Securities bear to each other.
3
<PAGE> 4
(vi) (A) Holders of shares of the Exchangeable Preferred Stock shall be
entitled to receive the dividends provided for in paragraph (c)(i) hereof in
preference to and in priority over any dividends upon any of the Junior
Securities.
(B) So long as any shares of Exchangeable Preferred Stock are outstanding,
the Company shall not declare, pay or set apart for payment any dividend on any
of the Junior Securities or make any payment on account of, or set apart for
payment money for a sinking or other similar fund for, the purchase, redemption
or other retirement of, any of the Junior Securities or any warrants, rights,
calls or options exercisable for or convertible into any of the Junior
Securities, or make any distribution in respect thereof, either directly or
indirectly, and whether in cash, obligations or shares of the Company or other
property (other than dividends on Junior Securities paid in additional shares of
Junior Securities), and shall not permit any corporation or other entity
directly or indirectly controlled by the Company to purchase or redeem any of
the Junior Securities or any such warrants, rights, calls or options unless full
cumulative dividends determined in accordance herewith have been paid in full on
the Exchangeable Preferred Stock.
(C) So long as any shares of Exchangeable Preferred Stock are outstanding,
the Company shall not make any payment on account of, or set apart for payment
money for a sinking or other similar fund for, the purchase, redemption or other
retirement of, any of the Parity Securities or any warrants, rights, calls or
options exercisable for or convertible into any of the Parity Securities, and
shall not permit any corporation or other entity directly or indirectly
controlled by the Company to purchase or redeem any of the Parity Securities or
any such warrants, rights calls or options unless the dividends determined in
accordance herewith on the Exchangeable Preferred Stock have been paid in full.
(vii) Dividends payable on shares of the Exchangeable Preferred Stock for
any period less than a year shall be computed on the basis of a 360-day year of
twelve 30-day months and the actual number of days elapsed in the period for
which payable. If any Dividend Payment Date occurs on a day that is not a
Business Day, any accrued dividends otherwise payable on such Dividend Payment
Date shall be paid on the next succeeding Business Day.
(viii) (A) If (1) the Company fails to file an Exchange Offer Registration
Statement or a Shelf Registration Statement on or prior to 60 days after the
Issue Date, (2) such Exchange Offer Registration Statement or Shelf Registration
Statement, as the case may be, fails to become effective within 150 days after
the Issue Date (or in the case of a Shelf Registration Statement required to be
filed in response to a change in law or the applicable interpretations of
Commission's Staff, if later, within 60 days after publication of the change in
law or the interpretation), (3) the Exchange Offer is not consummated on or
prior to 165 days of the Issue Date, or (4) the Shelf Registration Statement is
filed and
4
<PAGE> 5
declared effective within 150 days after the Issue Date (or in the case of Shelf
Registration Statement required to be filed in response to a change in law or
the applicable interpretations of Commission's Staff, if later, within 45 days
after publication of the change in law or interpretation) but shall thereafter
cease to be effective (at any time that the Company is obligated to maintain the
effectiveness thereof) without being succeeded within 30 days by an additional
Registration Statement filed and declared effective (each such event referred to
in clauses (1) through (4), a "Registration Default"), then, as liquidated
damages, additional dividends (the "Additional Dividends") shall become payable
with respect to the Exchangeable Preferred Stock as set forth in paragraphs (B),
(C) and (D) below, respectively.
(B) With respect to the first 90-day period immediately following the
occurrence of a Registration Default, Additional Dividends shall be payable on
the Exchangeable Preferred Stock by increasing the dividend rate set forth in
paragraph (c)(i) hereof by an amount equal to $.05 per week per $1,000 aggregate
liquidation preference of Exchangeable Preferred Stock held by a Holder of
Exchangeable Preferred Stock
(C) With respect to each subsequent 90-day period until all Registration
Defaults shall have been cured, Additional Dividends shall be payable on the
Exchangeable Preferred Stock by increasing the dividend rate set forth in
paragraph (c)(i) hereof by an additional $.05 per week per $1,000 aggregate
liquidation preference of Exchangeable Preferred Stock until all Registration
Defaults shall have been cured, up to a maximum increase in the dividend rate of
$.30 per week per $1,000 aggregate liquidation preference of Exchangeable
Preferred Stock held by such Holder of Exchangeable Preferred Stock.
(D) Following the cure of all Registration Defaults, the accrual of
liquidated damages will cease.
(d) Liquidation Preference.
(i) Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Company, the Holders of shares of Exchangeable
Preferred Stock then outstanding shall be entitled to be paid, out of the assets
of the Company available for distribution to its stockholders, $1,000.00 per
share of Exchangeable Preferred Stock, plus an amount in cash equal to all
accumulated and unpaid dividends thereon to the date fixed for liquidation,
dissolution or winding-up (including an amount equal to a prorated dividend for
the period from the last Dividend Payment Date to the date fixed for
liquidation, dissolution or winding-up), before any payment shall be made or any
assets distributed to the holders of any of the Junior Securities, including,
without limitation, Common Stock of the Company. Except as provided in the
preceding sentence, Holders of shares of Exchangeable Preferred Stock shall not
be entitled to any distribution in the
5
<PAGE> 6
event of liquidation, dissolution or winding-up of the affairs of the Company.
If, upon any voluntary or involuntary liquidation, dissolution or winding-up of
the Company, the assets of the Company are not sufficient to pay in full the
liquidation preference payable to the Holders of outstanding shares of the
Exchangeable Preferred Stock and all Parity Securities, then the holders of all
such shares shall share equally and ratably in such distribution of assets of
the Company in proportion to the full liquidation preferences plus accumulated
and unpaid dividends which would be payable on such distribution if the amount
to which the Holders of outstanding shares of Exchangeable Preferred Stock and
the holders of outstanding shares of all Parity Securities are entitled were
paid such amounts in full.
(ii) After payment of the full amount of the liquidation preferences and
all accumulated and unpaid dividends to which they are entitled, the holders of
shares of the Exchangeable Preferred Stock shall not be entitled to any further
participation in any distribution of assets of the Company.
(iii) For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Company nor the consolidation or merger of the Company with or into one or more
corporations shall be deemed to be a liquidation, dissolution or winding-up of
the affairs of the Company (unless such sale, conveyance, exchange or transfer
is in connection with a dissolution or winding-up of the business of the
Company).
(e) Redemption.
(i) Optional Redemption. (A) The Company may (subject to contractual and
other restrictions with respect thereto and the legal availability of funds
therefor), at the option of the Company, redeem at any time on or after March
15, 2003, from any source of funds legally available therefor, in whole or in
part, in the manner provided in paragraph (e)(iii) hereof, any or all of the
shares of the Exchangeable Preferred Stock, at the redemption prices (expressed
as a percentage of the liquidation preference thereof) set forth below plus,
without duplication, an amount in cash equal to all accumulated and unpaid
dividends per share (including an amount in cash equal to a prorated dividend
for the period from the Dividend Payment Date immediately prior to the
Redemption Date to the Redemption Date) (the "Optional Redemption Price"), if
redeemed during the 12-month period beginning on March 15 of each of the
calendar years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---- ----------
<S> <C>
2003....................................................106.125%
</TABLE>
6
<PAGE> 7
<TABLE>
<S> <C>
2004....................................................104.083%
2005....................................................102.042%
2006 and thereafter.....................................100.000%
</TABLE>
provided that no optional redemption pursuant to this paragraph (e)(i)(A) shall
be authorized or made (1) unless prior thereto full unpaid cumulative dividends
for all Dividend Periods terminating on or prior to the Redemption Date and for
an amount equal to a prorated dividend for the period from the Dividend Payment
Date immediately prior to the Redemption Date to the Redemption Date shall have
been or immediately prior to the Redemption Notice (as defined in paragraph
(e)(iii)(A) hereof) are declared and paid in cash or declared and a sum set
apart sufficient for such cash payment on the Redemption Date, on the
outstanding shares of the Exchangeable Preferred Stock or (2) at less than 101%
of the liquidation preference of the Exchangeable Preferred Stock at any time
when the Company is making an Offer (as defined in paragraph (h)(ii) hereof) or
purchasing shares of Exchangeable Preferred Stock under an Offer in accordance
with the provisions of paragraph (h) hereof.
(B) In addition, at any time and from time to time prior to March 15,
2001, the Company may redeem, in the manner provided in paragraph (e)(iii)
hereof, shares of the Exchangeable Preferred Stock, in whole or in part, at the
option of the Company, at a redemption price equal to 112.25% of the liquidation
preference thereof plus, without duplication, an amount in cash equal to all
accumulated and unpaid dividends per share (including an amount in cash equal to
a prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date) (the "Contingent Redemption
Price"), with the proceeds of a Public Equity Offering following which there is
a Public Market, provided that such redemption occurs within 180 days after
consummation of such Public Equity Offering; and provided, further, that no
optional redemption pursuant to this paragraph (e)(i)(B) shall be authorized or
made unless prior thereto full unpaid cumulative dividends for all Dividend
Periods terminating on or prior to the Redemption Date and for an amount equal
to a prorated dividend for the period from the Dividend Payment Date immediately
prior to the Redemption Date to the Redemption Date shall have been or
immediately prior to the Redemption Notice are declared and paid in cash or
declared and a sum set apart sufficient for such cash payment on the Redemption
Date, on the outstanding shares of the Exchangeable Preferred Stock.
(C) In the event of a redemption of only a portion of the then outstanding
shares of the Exchangeable Preferred Stock, the Company shall effect such
redemption as it determines, pro rata according to the number of shares held by
each Holder of the Exchangeable Preferred Stock or by lot, as may be determined
by the Company in its sole discretion, except that the Company may redeem such
shares held by any Holders of
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<PAGE> 8
fewer than 100 shares (or shares held by Holders who would hold less than 100
shares as a result of such redemption), without regard to any pro rata
redemption requirement.
(ii) Mandatory Redemption. On March 15, 2010, the Company shall redeem
(subject to the legal availability of funds therefor) from any source of funds
legally available therefor, in the manner provided in paragraph (e)(iii) hereof,
all of the shares of the Exchangeable Preferred Stock then outstanding at a
redemption price equal to the then effective liquidation preference per share,
plus an amount in cash equal to all accumulated and unpaid dividends per share
(including an amount equal to a prorated dividend for the period from the
Redemption Date immediately prior to the Redemption Date to the Redemption Date)
(the "Mandatory Redemption Price").
(iii) Procedures for Redemption. (A) At least 30 days and not more than 60
days prior to the date fixed for any redemption of the Exchangeable Preferred
Stock, written notice (the "Redemption Notice") shall be given by first-class
mail, postage prepaid, to each Holder of record on the record date fixed for
such redemption of the Exchangeable Preferred Stock at such Holder's address as
the same appears on the stock register of the Company, provided that no failure
to give such notice nor any deficiency therein shall affect the validity of the
procedure for the redemption of any shares of Exchangeable Preferred Stock to be
redeemed except as to the Holder or Holders to whom the Company has failed to
give said notice or except as to the Holder or Holders whose notice was
defective. The Redemption Notice shall state:
(1) whether the redemption is pursuant to paragraph (e)(i)(A), (e)(i)(B)
or (e)(ii) hereof;
(2) the Optional Redemption Price, the Contingent Redemption Price or
the Mandatory Redemption Price, as the case may be;
(3) whether all or less than all the outstanding shares of the
Exchangeable Preferred Stock are to be redeemed and the total number
of shares of the Exchangeable Preferred Stock being redeemed;
(4) the number of shares of Exchangeable Preferred Stock held, as of the
appropriate record date, by the Holder that the Company intends to
redeem;
(5) the date fixed for redemption;
(6) that the Holder is to surrender to the Company, at the place or
places where certificates for shares of Exchangeable Preferred Stock
are to be surrendered for redemption, in the manner and at the price
designated, the certificate or
8
<PAGE> 9
certificates representing the shares of Exchangeable Preferred Stock
to be redeemed; and
(7) that dividends on the shares of the Exchangeable Preferred Stock to
be redeemed shall cease to accrue on such Redemption Date unless the
Company defaults in the payment of the Optional Redemption Price,
the Contingent Redemption Price or the Mandatory Redemption Price,
as the case may be.
(B) Each Holder of Exchangeable Preferred Stock shall surrender the
certificate or certificates representing such shares of Exchangeable Preferred
Stock to the Company, duly endorsed, in the manner and at the place designated
in the Redemption Notice, and on the Redemption Date the full Optional
Redemption Price, Contingent Redemption Price or Mandatory Redemption Price, as
the case may be, for such shares shall be payable in cash to the Person whose
name appears on such certificate or certificates as the owner thereof, and each
surrendered certificate shall be canceled and retired. In the event that less
than all of the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(C) Unless the Company defaults in the payment in full of the applicable
redemption price, dividends on the Exchangeable Preferred Stock called for
redemption shall cease to accumulate on the Redemption Date, and the Holders of
such redemption shares shall cease to have any further rights with respect
thereto on the Redemption Date, other than the right to receive the Optional
Redemption Price, the Contingent Redemption Price or the Mandatory Redemption
Price, as the case may be, without interest.
(f) Voting Rights.
(i) The Holders of shares of the Exchangeable Preferred Stock, except as
otherwise required under the laws of the State of Delaware or as set forth in
paragraphs (ii) and (iii) below and in paragraph (m) hereof, shall not be
entitled or permitted to vote on any matter required or permitted to be voted
upon by the stockholders of the Company.
(ii) (A) So long as any shares of the Exchangeable Preferred Stock are
outstanding, the Company shall not authorize the issuance of any class of Parity
Securities without the affirmative vote or consent of Holders of at least 50% of
the then outstanding shares of Exchangeable Preferred Stock, voting or
consenting, as the case may be, separately as one class, given in person or by
proxy, either in writing or by resolution adopted at an annual or special
meeting, except that without the approval of Holders of the Exchangeable
Preferred Stock, the Company may (1) authorize or issue
9
<PAGE> 10
additional shares of Exchangeable Preferred Stock pursuant to paragraph (c)
hereof, and (2) authorize or issue shares of Parity Securities in exchange for,
or the proceeds of which are used to redeem or repurchase, any or all shares of
Exchangeable Preferred Stock or other Parity Securities then outstanding.
(B) So long as any shares of the Exchangeable Preferred Stock are
outstanding, the Company shall not amend this Certificate of Designation so as
to affect adversely the specified rights, preferences, privileges or voting
rights of Holders of shares of Exchangeable Preferred Stock or, except as
provided in paragraph (f)(ii)(A) above, to authorize the issuance of any
additional shares of Exchangeable Preferred Stock without the affirmative vote
or consent of Holders of a least 50% of the outstanding shares of Exchangeable
Preferred Stock, voting or consenting, as the case may be, separately as one
class, given in person or by proxy, either in writing or by resolution adopted
at an annual or special meeting.
(C) Prior to the exchange of Exchangeable Preferred Stock for Exchange
Debentures, the Company shall not amend or modify the indenture for the Exchange
Debentures in the form as executed on the Issue Date (the "Exchange Debenture
Indenture") (except as expressly provided therein) without the affirmative vote
or consent of Holders of at least a majority of the shares of Exchangeable
Preferred Stock then outstanding, voting or consenting, as the case may be,
separately as one class, given in person or by proxy, either in writing or by
resolution adopted at an annual or special meeting.
(D) Except as set forth in paragraph (f)(ii)(A) above, (1) the creation,
authorization or issuance of any shares of any Junior Securities or Parity
Securities, (2) the decrease in the amount of authorized capital stock of any
class, including the Exchangeable Preferred Stock, or (3) the increase in the
amount of authorized capital stock of any class of Junior Securities shall not
require the consent of Holders of Exchangeable Preferred Stock and shall not,
unless not complying with paragraph (f)(ii)(A), be deemed to affect adversely
the rights, preferences, privileges or voting rights of Holders of shares of
Exchangeable Preferred Stock.
(iii) (A) If (1) dividends on the Exchangeable Preferred Stock are in
arrears and unpaid (and, in the case of dividends payable after March 15, 2003,
are not paid in cash) for four consecutive quarterly periods (a "Dividend
Default"); (2) the Company fails to discharge any redemption obligation of the
Exchangeable Preferred Stock when required (a "Redemption Default"), whether or
not the Company is permitted to do so by the terms of the Senior Secured Credit
Facility, the 2005 Notes, the Notes or any other obligations of the Company; (3)
the Company fails to make an Offer to purchase all outstanding shares of
Exchangeable Preferred Stock following a Change of Control if such Offer to
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purchase is required to be made pursuant to paragraph (h) hereof or fails to
purchase shares of Exchangeable Preferred Stock from holders who elect to have
such shares purchased pursuant to such Offer (a "Change of Control Default"),
whether or not the Company is permitted to do so by the terms of any the Senior
Secured Credit Facility, the 2005 Notes, the Notes or any other obligation of
the Company; (4) the Company breaches or violates one of the provisions set
forth in paragraph (m) hereof and the breach or violation continues for a period
of 60 days or more after the Company receives notice thereof specifying the
default from holders of at least 25% of the Exchangeable Preferred Stock then
outstanding (a "Restriction Default"); or (5) a default occurs on the
obligations to pay principal of, interest on or any other payment obligation on
one or more classes of Indebtedness of the Company or any Subsidiary of the
Company within any applicable grace period after final maturity (a "Payment
Default"), whether such Indebtedness exists on the Issue Date or is incurred
thereafter, or any other Payment Default occurs on one or more such classes of
Indebtedness and such class or classes of Indebtedness are declared due and
payable prior to their respective maturities, and the amount of such
Indebtedness unpaid at final maturity or declared due and payable exceeds, in
the aggregate, $5,000,000 or its foreign currency equivalent, then, in any such
case, the number of directors constituting the Board of Directors shall be
adjusted as set forth in the Certificate of Incorporation to permit the Holders
of the majority of the then outstanding Exchangeable Preferred Stock, voting
separately as one class, to elect two directors. Subject to paragraph
(f)(iii)(B) below, Holders of a majority of the issued and outstanding shares of
the Exchangeable Preferred Stock, voting separately as one class, shall have the
exclusive right to elect two directors at a meeting therefor called upon
occurrence of such Dividend Default, Redemption Default, Change of Control
Default, Restriction Default or Payment Default, as the case may be, and at
every subsequent meeting at which the terms of office of the directors so
elected by the Holders of the Exchangeable Preferred Stock expire (other than as
described in paragraph (f)(iii)(B) below). Each such event described in clauses
(1), (2), (3), (4) and (5) is a "Voting Rights Triggering Event."
(B) The right of the Holders of Exchangeable Preferred Stock voting
separately as one class to elect members of the Board of Directors as set forth
in paragraph (f)(iii)(A) above shall continue until such time as (1) in the
event such right arises due to a Dividend Default, all accumulated dividends
that are in arrears on the Exchangeable Preferred Stock are paid in full (and,
in the case of Dividends payable after March 15, 2003, are paid in cash); and
(2) in the event such right arises due to a Redemption Default, a Change of
Control Default, a Restriction Default or a Payment Default, the Company
remedies any such failure, breach or default, at which time the term of any
directors elected pursuant to paragraph (f)(iii)(A) shall terminate, subject
always to the same provisions for the renewal and divestment of such special
voting rights in the case of any future Voting Rights Triggering Event. At any
time after voting power to elect directors shall have become vested and be
continuing in the Holders of shares of the
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Exchangeable Preferred Stock pursuant to this paragraph (f)(iii), or if
vacancies shall exist in the offices of directors elected by the Holders of
shares of the Exchangeable Preferred Stock, a proper officer of the Company may,
and upon the written request of the Holders of record of at least 10% of the
shares of Exchangeable Preferred Stock then outstanding addressed to the
Secretary of the Company shall, call a special meeting of the Holders of
Exchangeable Preferred Stock, for the purpose of electing the directors which
such Holders are entitled to elect. If such meeting shall not be called by the
proper officer of the Company within 20 days after personal service of said
written request upon the Secretary of the Company, or within 20 days after
mailing the same within the United States by certified mail, addressed to the
Secretary of the Company at its principal executive offices, then the Holders of
record of at least 20% of the outstanding shares of the Exchangeable Preferred
Stock may designate in writing one of their numbers to call such meeting at the
expense of the Company, and such meeting may be called by the Person so
designated upon the notice required for the annual meeting of stockholders of
the Company and shall be held at the place for holding the annual meetings of
stockholders or such other place in the United States as shall be designated in
such notice. Notwithstanding the provisions of this paragraph (f)(iii)(B), no
such special meeting shall be called if any such request is received less than
30 days before the date fixed for the next ensuing annual or special meeting of
stockholders of the Company. Any Holder of shares of the Exchangeable Preferred
Stock so designated shall have, and the Company shall provide, access to the
lists of Holders of shares of the Exchangeable Preferred Stock for purposes of
calling a meeting pursuant to the provisions of this paragraph (f)(iii)(B).
(C) At any meeting held for the purpose of electing directors at which the
Holders of Exchangeable Preferred Stock shall have the right, voting separately
as one class, to elect directors as aforesaid, the presence in person or by
proxy of the Holders of at least a majority of the outstanding Exchangeable
Preferred Stock shall be required to constitute a quorum of such Exchangeable
Preferred Stock.
(D) Any vacancy occurring in the office of a director elected by the
Holders of shares of the Exchangeable Preferred Stock may be filled by the
remaining director elected by the Holders of shares of the Exchangeable
Preferred Stock unless and until such vacancy shall be filled by the Holders of
shares of the Exchangeable Preferred Stock.
(iv) In any case in which the Holders of shares of the Exchangeable
Preferred Stock shall be entitled to vote pursuant to this paragraph (f) or
pursuant to the laws of the State of Delaware, each Holder of shares of the
Exchangeable Preferred Stock shall be entitled to one vote for each share of
Exchangeable Preferred Stock held.
(g) Exchange.
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(i) Requirements. (A) The Company may at its option exchange all, but not
less than all, of the then outstanding shares of Exchangeable Preferred Stock
into the Company's 12 1/4% Subordinated Exchange Debentures due 2010 (the
"Exchange Debentures") on any Dividend Payment Date, provided that on the date
of such exchange: (1) there shall be no material contractual impediments to such
exchange; (2) such exchange would comply with the Delaware General Corporation
Law); (3) either (a) a registration statement relating to the Exchange
Debentures shall have been declared effective under the Securities Act of 1933,
as amended (the "Securities Act"), prior to such exchange and shall continue to
be in effect on the date of such exchange or (b)(i) the Company shall have
obtained a written opinion of counsel that an exemption from the registration
requirements of the Securities Act is available for such exchange and that upon
receipt of such Exchange Debentures pursuant to such exchange, made in
accordance with such exemption, the holders (assuming such holder is not an
Affiliate of the Company) thereof shall not be subject to any restrictions
imposed by the Securities Act upon the resale thereof and (ii) such exemption is
relied upon by the Company for such exchange; (4) the Indenture under which the
Exchange Debentures are to be issued (the "Exchange Debenture Indenture") and
the Trustee thereunder shall have been qualified under the Trust Indenture Act
of 1939, as amended; (5) immediately after giving effect to such exchange, no
Default or Event of Default (each as defined in the Exchange Debenture
Indenture) would exist under the Exchange Debenture Indenture; and (6) the
Company shall have delivered to the Trustee a written Opinion of Counsel, dated
the date of exchange, regarding the satisfaction of the conditions set forth in
clauses (1), (3) and (4), provided that in rendering such opinion (such counsel
may rely, as to matters of fact, on an officer's certificate). In the event that
the issuance of the Exchange Debentures is not permitted on the date of exchange
or any of the conditions set forth in clauses (1) through (6) of the preceding
sentence are not satisfied on the date of exchange, the Company shall use its
best efforts to satisfy such conditions and effect such exchange as soon as
practicable.
The Company shall send a written notice (the "Exchange Notice") of
exchange by mail to each Holder, which notice shall state: (v) that the Company
is exercising its option to exchange the Exchangeable Preferred Stock for
Exchange Debentures pursuant to this Certificate of Designation; (w) the date
fixed for exchange (the "Exchange Date"), which date shall not be less than 30
days nor more than 60 days following the date on which the Exchange Notice is
mailed (except as provided in the last sentence of this paragraph); (x) that the
Holder is to surrender to the Company, at the place or places where certificates
for shares of Exchangeable Preferred Stock are to be surrendered for exchange,
in the manner designated in the Exchange Notice, the certificate or certificates
representing the shares of Exchangeable
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<PAGE> 14
Preferred Stock to be exchanged; (y) that dividends on the shares of
Exchangeable Preferred Stock to be exchanged shall cease to accrue on the
Exchange Date whether or not certificates for shares of Exchangeable Preferred
Stock are surrendered for exchange on the Exchange Date unless the Company shall
default in the delivery of Exchange Debentures; and (z) that interest on the
Exchange Debentures shall accrue from the Exchange Date whether or not
certificates for shares of Exchangeable Preferred Stock are surrendered for
exchange on the Exchange Date. On the Exchange Date, if the conditions set forth
in clauses (1) through (6) above are satisfied, the Company shall issue Exchange
Debentures in exchange for the Exchangeable Preferred Stock as provided in the
next paragraph.
(B) Upon any exchange pursuant to paragraph (g)(i)(A), Exchange Debentures
shall be issued in exchange for Exchangeable Preferred Stock, in registered form
without coupons, in a principal amount equal to the liquidation preference
thereof, plus an amount in cash equal to all accumulated and unpaid dividends
(including a prorated dividend for the period from the immediately preceding
Dividend Payment Date to the Exchange Date). Exchange Debentures will be issued
in principal amounts of $1,000 and integral multiples thereof to the extent
possible, and will also be issued in principal amounts of less than $1,000 so
that each Holder of Exchangeable Preferred Stock will receive certificates
representing the entire amount of Exchange Debentures to which his shares of
Exchangeable Preferred Stock entitle him, provided that the Company may, at its
option, pay cash in lieu of issuing an Exchange Debenture in a principal amount
of less than $1,000.
(ii) Procedure for Exchange. (A) On or before the date fixed for exchange,
each Holder of Exchangeable Preferred Stock shall surrender the certificate or
certificates representing such shares of Exchangeable Preferred Stock, in the
manner and at the place designated in the Exchange Notice. The Company shall
cause the Exchange Debentures to be executed on the Exchange Date and, upon
surrender in accordance with the Exchange Notice of the certificates for any
shares of Exchangeable Preferred Stock so exchanged (properly endorsed or
assigned for transfer, if the notice shall so state), such shares shall be
exchanged by the Company into Exchange Debentures. The Company shall pay
interest on the Exchange Debentures at the rate and on the dates specified
therein from the Exchange Date.
(B) If notice has been mailed as aforesaid, and if before the Exchange
Date (1) the Exchange Debenture Indenture shall have been duly executed and
delivered by the Company and the Trustee and (2) all Exchange Debentures
necessary for such exchange shall have been duly executed by the Company and
delivered to the Trustee with irrevocable instructions to authenticate the
Exchange Debentures necessary for such exchange, then on the Exchange Date,
dividends shall cease to accrue on the outstanding shares of Exchangeable
Preferred Stock and all of the rights of the Holders of shares of the
Exchangeable Preferred Stock as stockholders of the Company shall cease (except
the right to receive Exchange Debentures), and the Person or Persons entitled to
receive the
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<PAGE> 15
Exchange Debentures issuable upon exchange shall be treated for all purposes as
the registered holder or holders of such Exchange Debentures as of the date of
exchange.
(h) Change of Control.
(i) (A) Upon the occurrence of a Change of Control, each Holder of
Exchangeable Preferred Stock shall have the right to require the Company to
purchase all or any part of such Holder's Exchangeable Preferred Stock pursuant
to an offer (an "Offer") at a purchase price in cash equal to 101% of the
aggregate liquidation preference thereof plus, without duplication, an amount in
cash equal to all accumulated and unpaid dividends per share (including an
amount in cash equal to a prorated dividend for the period from the Dividend
Payment Date immediately prior to the repurchase date to the repurchase date),
if any, to the repurchase date (subject to the right of Holders of Exchangeable
Preferred Stock of record on the relevant record date to receive dividends due
on the relevant Dividends Payment Date); provided, however, that notwithstanding
the occurrence of a Change of Control, the Company shall not be obligated to
purchase the Exchangeable Preferred Stock pursuant to this paragraph (h) in the
event that it has exercised its right to redeem all of the Exchangeable
Preferred Stock under paragraph (e)(i) hereof.
(B) In the event that at the time of such Change of Control the terms of
the Bank Indebtedness restrict or prohibit the repurchase of Exchangeable
Preferred Stock pursuant to this paragraph (h), then prior to the mailing of the
notice to Holders of Exchangeable Preferred Stock provided for in paragraph
(h)(ii) below but in any event within 30 days following any Change of Control
(unless the Company has exercised its right to redeem all the Exchangeable
Preferred Stock under paragraph (e)(i) hereof), the Company shall (1) repay in
full all Bank Indebtedness or offer to repay in full all Bank Indebtedness and
repay the Bank Indebtedness of each lender who has accepted such offer or (2)
obtain the requisite consent under the agreements governing the Bank
Indebtedness to permit the repurchase of the Exchangeable Preferred Stock as
provided for in paragraph (h)(ii) below.
(ii) Unless the Company has exercised its rights to redeem all the
Exchangeable Preferred Stock under paragraph (e)(i) hereof within 30 days
following any Change of Control (or, at the Company's option, prior to such
Change of Control but after the public announcement thereof), the Company shall
mail a notice to each Holder of Exchangeable Preferred Stock stating: (A) that a
Change of Control has occurred or will occur and that such Holder of
Exchangeable Preferred Stock has (or upon such occurrence will have) the right
to require the Company to purchase such Holder's Exchangeable Preferred Stock at
a purchase price in cash equal to 101% of the aggregate liquidation preference
thereof, plus an amount in cash equal to all accumulated and unpaid dividends
per share
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<PAGE> 16
(including an amount in cash equal to a prorated dividend for the period from
the Dividend Payment Date immediately prior to the repurchase date to the
repurchase date),if any, to the repurchase date (subject to the right of the
Holders of Exchange Preferred Stock of record on a record date to receive
dividends on the relevant Dividend Payment Date); (B) the circumstances and
relevant facts and financial information regarding such Change of Control; (C)
the repurchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed); (D) the instructions determined by
the Company, consistent with this paragraph (h), that a Holder of Exchangeable
Preferred Stock must follow in order to have its Exchangeable Preferred Stock
purchased; and (E) that, if such Offer made prior to such Change of Control,
payment is conditioned on occurrence of such Change of Control.
(iii) (A) Holders of Exchangeable Preferred Stock electing to have shares
of Exchangeable Preferred Stock purchased shall be required to surrender
Exchangeable Preferred Stock, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders of Exchangeable Preferred Stock shall be
entitled to withdraw their election if the transfer agent or the Company
receives not later than one Business Day prior to the purchase date a facsimile
transmission or letter setting forth the name of the Holder of Exchangeable
Preferred Stock, the liquidation preference of the Exchangeable Preferred Stock
which was delivered for purchase by the Holder of Exchangeable Preferred Stock
and a statement that such Holder of Exchangeable Preferred Stock is withdrawing
his election to have such Exchangeable Preferred Stock purchased.
(B) On the repurchase date, all shares of Exchangeable Preferred Stock
purchased by the Company under this paragraph (h) shall be delivered to the
Trustee for cancellation, and the Company shall pay the purchase price plus
accumulated and unpaid dividends, if any, to the Holders entitled thereto.
(C) Unless the Company defaults in the payment for the shares of
Exchangeable Preferred Stock tendered pursuant to the Offer, dividends shall
cease to accrue with respect to the shares of Exchangeable Preferred Stock
tendered and all rights of Holders of such tendered shares shall terminate,
except for the right to receive payment therefor, on the purchase date.
(iv) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) under the Exchange Act and any securities laws and
regulations, in connection with the repurchase of Exchangeable Preferred Stock
pursuant to this paragraph (h). To the extent that the provisions of any
securities laws or regulations conflict with provisions of this paragraph (h),
the Company will comply with the
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<PAGE> 17
applicable securities laws and regulations and it will not be deemed to have
breached its obligations under this paragraph (h) by virtue thereof.
(i) Conversion or Exchange. The Holders of shares of Exchangeable
Preferred Stock shall not have any rights hereunder to convert such shares into
or exchange such shares for shares of any other class or classes or of any other
series of any class or classes of Capital Stock of the Company.
(j) Preemptive Rights. No shares of Exchangeable Preferred Stock shall
have any rights of preemption whatsoever as to any securities of the Company, or
any warrants, rights or options issued or granted with respect thereto,
regardless of how such securities or such warrants, rights or options may be
designated, issued or granted.
(k) Reissuance of Exchangeable Preferred Stock. Shares of Exchangeable
Preferred Stock that have been issued and reacquired in any manner, including
shares purchased or redeemed or exchanged, shall (upon compliance with any
applicable provisions of the laws of Delaware) have the status of authorized but
unissued shares of Preferred Stock of the Company undesignated as to series and
may be designated or redesignated and issued or reissued, as the case may be, as
part of any series of Preferred Stock of the Company, provided that any issuance
of such shares as Exchangeable Preferred Stock must be in compliance with the
terms hereof.
(l) Business Day. If any payment, redemption or exchange shall be required
by the terms hereof to be made on a day that is not a Business Day, such
payment, redemption or exchange shall be made on the immediately succeeding
Business Day.
(m) Certain Additional Provisions.
(i) Merger or Consolidation. Without the consent of Holders of a majority
of the outstanding shares of Exchangeable Preferred Stock, voting as a separate
class, the Company shall not consolidate or merge with or into, or convey,
transfer or lease all or substantially all of its assets to, any Person unless
(A) the resulting, transferee or surviving Person (the "Successor Company") will
be a Person organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia; (B) the Exchangeable
Preferred Stock shall be converted into or exchanged for and shall become shares
of the Successor Company having in respect of such successor, transferee or
resulting corporation substantially the same powers, preferences and relative
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereon that the Exchangeable Preferred Stock had
immediately prior to such transaction; (C) immediately after such transaction,
no Voting Rights Triggering Event, and no event that after the giving of notice
or lapse of time or both would become a
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<PAGE> 18
Voting Rights Triggering Event, shall have occurred and be continuing; (D)
immediately after giving effect to such transaction (and treating any
Indebtedness which becomes any obligation of the Successor Company or any
Restricted Subsidiary as a result of such transaction as having been Incurred by
the Successor Company or such Restricted Subsidiary at the time of such
transaction) no Default will have occurred and be continuing; and (E) prior to
the consummation of any such proposed transaction, the Company shall have
delivered to the transfer agent an Officers' Certificate and an opinion of
counsel, to the effect that such transaction complies with the terms of the
Certificate of Designation and that all conditions precedent to such transaction
have been satisfied; provided, that (x) in giving such opinion such counsel may
rely on such officer's certificate as to any matters of fact (including without
limitation as to compliance with the foregoing clauses (C) and (D)), and (y) no
Opinion of Counsel will be required for a consolidation, merger or transfer
described in the last paragraph of this paragraph (m)(i). Any Indebtedness that
becomes an obligation of the Company or any Restricted Subsidiary (or that is
deemed to be Incurred by any Restricted Subsidiary that becomes a Restricted
Subsidiary) as a result of such transaction undertaken in compliance with this
covenant, and any Refinancing Indebtedness with respect thereto, shall be deemed
to have been Incurred in compliance with paragraph (m)(v)(B).
Notwithstanding the preceding paragraph, (1) any Restricted Subsidiary may
consolidate with, merge into or transfer all or part of its properties and
assets to the Company and (2) the Company may merge with an Affiliate
incorporated or organized for the purpose of reincorporating or reorganizing the
Company in another jurisdiction to realize tax or other benefits.
(ii) Junior Payments. The Company shall not, directly or indirectly, (A)
declare or pay any dividend or make any distribution on account of any Junior
Securities (other than dividends or distributions payable in Junior Securities
(other than Disqualified Stock)), (B) purchase, redeem or otherwise acquire or
retire for value any Junior Securities or (C) make any Investment (other than
Permitted Investment) in any Person (all such dividends, distributions,
purchases, redemptions, acquisitions, retirements and Investments being
collectively referred to as "Junior Payments"), if, at the time of such Junior
Payment:
(x) a Voting Rights Triggering Event shall have occurred and be continuing
or would occur as a consequence thereof; or
(y) all dividends on the Exchangeable Preferred Stock payable on Dividend
Payment Dates after March 15, 2003, have not been declared and paid in cash.
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<PAGE> 19
Notwithstanding the foregoing, this Certificate of Designation shall not
prohibit as Junior Payments:
(1) any purchase, redemption, repurchase, defeasance, retirement or other
acquisition of Junior Securities or Parity Securities made by exchange
(including any such exchange pursuant to the exercise of a conversion right or
privilege in connection with which cash is paid in lieu of the issuance of
fractional shares) for, or out of the proceeds of the substantially concurrent
sale of, Junior Securities or Parity Securities of the Company (other than
Disqualified Stock and other than Capital Stock issued or sold to a Subsidiary
or an employee stock ownership plan or other trust established by the Company or
any of its Subsidiaries) or a substantially concurrent capital contribution to
the Company;
(2) any purchase, redemption, repurchase, defeasance, retirement or other
acquisition of Junior Securities or Parity Securities upon a Change of Control
to the extent required by the agreement governing such Junior Securities or
Parity Securities but only if the Company shall have complied with paragraph (h)
and purchased all Exchangeable Preferred Stock tendered pursuant to the offer to
repurchase all the Exchangeable Preferred Stock required thereby, prior to
purchasing or repaying such Junior Securities or Parity Securities; provided,
however, that the purchase price (stated as a percentage of liquidation
preference) of such Junior Securities or Parity Securities shall not be greater
than the price for such purchase set forth in the instrument pursuant to which
such Junior Securities or Parity Securities were issued.
(3) dividends paid within 60 days after the date of declaration thereof if
at such date of declaration such dividend would have complied with this
Certificate of Designation, including without limitation this paragraph (m)(ii).
(4) a Junior Payment to pay for the repurchase or other acquisition or
retirement of Junior Securities or Parity Securities or options, warrants or
other rights in respect thereof, or payments by the Company to repurchase or
otherwise acquire Junior Securities or Parity Securities or options, warrants or
other rights in respect thereof, in each case from Management Investors, such
payments not to exceed an amount equal to $500,000 in any fiscal year and $2.5
million in the aggregate (plus the Net Cash Proceeds received by the Company
since the Issue Date as a capital contribution from the sale to Management
Investors of Junior Securities or Parity Securities or options, warrants or
other rights in respect thereof); and
(5) payments by the Company or any Restricted Subsidiary (x) pursuant to
the Management Agreements and (y) to G-IV, GSCP and SGCP and their respective
Affiliates, not to exceed an amount necessary to permit each such Person, as the
case may
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be, to (A) pay its costs (including all professional fees and expenses) incurred
to comply with its reporting obligations under federal or state laws or under
the Indenture or this Certificate of Designation, including any reports filed
with respect to the Securities Act, Exchange Act or the respective rules and
regulations promulgated thereunder, to the extent such costs relate to the
Company and its Subsidiaries, (B) make payments in respect of its
indemnification obligations of such Persons owing to directors, officers,
employees or other Persons under their charters or by-laws or pursuant to
written agreements with any such Person, to the extent such payments relate to
the Company and its Subsidiaries, (C) pay all reasonable out-of-pocket expenses
incurred in connection with the Acquisition, the Consent Solicitation, the
Offerings and related transactions, and (D) indemnify or reimburse, or pay on
behalf of, such Persons any taxes, charges or assessments arising by reason of
their ownership of Capital Stock of the Company and the GSD Liquidation, so long
as the GSD Liquidation occurs promptly after the consummation of the Offerings;
(iii) Transactions with Affiliates.
(A) The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into or conduct any transaction or series of
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") on terms (1) that taken as a whole are less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (2) that, in the event such Affiliate
Transaction involves an aggregate amount in excess of $1.0 million, are not in
writing and have not been approved by a majority of the members of the Board of
Directors having no material personal financial interest in such Affiliate
Transaction, or in the event there are no such members, as to which the Company
has not obtained a Fairness Opinion (as hereinafter defined). In addition, any
transaction involving aggregate payments or other transfers by the Company and
its Restricted Subsidiaries in excess of $5.0 million will also require an
opinion (a "Fairness Opinion") from an independent investment banking firm or
appraiser, as appropriate, of national prominence, to the effect that the terms
of such transaction taken as a whole are either (x) no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not an Affiliate or (y) fair to the Company or such Restricted
Subsidiary, as the case may be, from a financial point of view.
(B) The provisions of paragraph (m)(ii)(A) shall not prohibit (1) any
Junior Payment permitted by paragraph (m)(ii), any Permitted Investment, or any
other transaction specifically excluded from the definition of the term "Junior
Payment," (2) the
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performance of the Company's or Restricted Subsidiary's obligations under any
employment contract, collective bargaining agreement, employee benefit plan,
related trust agreement or any other similar arrangement heretofore or hereafter
entered into in the ordinary course of business, (3) payment of compensation,
performance of indemnification or contribution obligations, or any issuance,
grant or award of stock, options or other securities, to employees, officers or
directors in the ordinary course of business, (4) maintenance in the ordinary
course of business of benefit programs or arrangements for employees, officers
or directors, including vacation plans, health and the insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans, (5) any
transaction between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries, (6) loans or advances made to directors, officers or
employees of the Company or any Restricted Subsidiary, or guarantees in respect
thereof or otherwise made on their behalf (including any payments under such
guarantees), (x) in respect of travel, entertainment or moving-related expenses
incurred in the ordinary course of business, or (y) in the ordinary course of
business not exceeding $500,000 in the aggregate outstanding at any time, (7)
guarantees of borrowings by Management Investors in connection with the purchase
of Capital Stock of the Company by such Management Investors, which guarantees
are permitted by paragraph (m)(v)(B), and payments thereunder, (8) the
assumption of GSD's obligations under the GSD Credit Facility, and the
incurrence and payment of all fees and expenses payable in connection with the
Acquisition, the Offerings and related transactions, (9) any other transaction
arising out of agreements in existence on the Issue Date, (10) execution,
delivery and performance of the Management Agreements, including but not limited
to the ongoing payment of fees to GSCP and SGCP of up to $950,000 per year plus
reasonable out of pocket expenses, (11) any commercial or other business
transaction in the ordinary course of business with any Permitted Holder or any
Affiliate thereof, on terms that taken as a whole are no less favorable to the
Company and its Restricted Subsidiaries than those that could be obtained at the
time in arm's-length dealings with a Person who is not an Affiliate of the
Company, and (12) any transaction between the Company or any Restricted
Subsidiary and any Affiliate of the Company controlled by the Company that is a
joint venture or similar entity primarily engaged in a Related Business so long
as such transaction is in the ordinary course of business and is on terms that
are not materially less favorable to the Company or the relevant Restricted
Subsidiary than those that would have been obtained in a comparable transaction
by the Company or such Restricted Subsidiary with an unrelated Person.
(iv) Reports. Whether or not required by the rules and regulations of the
Commission, so long as any shares of Exchangeable Preferred Stock are
outstanding, the Company will furnish to the Holders of Exchangeable Preferred
Stock, within 15 days after it is or would have been required to file such with
the Commission, (A) all quarterly and annual financial information that would be
required to be contained in a filing with
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the Commission on Forms 10-Q and 10-K if the Company were required to file such
Forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants and (B) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company was required to file such reports. In addition, whether or
not required by the rules and regulations of the Commission, the Company will
file a copy of all such information and reports with the Commission for public
availability (unless the Commission will not accept such a filing) and make such
information available to securities analysts and prospective investors upon
request. In addition, the Company has agreed that, for so long as any shares of
Exchangeable Preferred Stock remain outstanding, it will furnish to the Holders
and to securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.
(v) Limitation on Indebtedness. (A) The Company will not, and will not
permit any Restricted Subsidiary to, Incur any Indebtedness; provided, however,
that the Company and its Restricted Subsidiaries may Incur Indebtedness if on
the date of the Incurrence of such Indebtedness the Consolidated Coverage Ratio
would be greater than 2.00:1.00.
(B) Notwithstanding paragraph (m)(v)(A), the Company and, where
indicated, its Restricted Subsidiaries may Incur the following Indebtedness:
(1) Indebtedness of the Company Incurred pursuant to the Senior
Secured Credit Facility in a maximum principal amount not to exceed at any
time (a) an aggregate principal amount of $40.0 million under the Term
Loan Facility less the aggregate amount of all scheduled repayments of
principal, or mandatory prepayments of principal, applied to permanently
reduce the Indebtedness outstanding under the Term Loan Facility, plus (in
the case of any refinancing thereof) the aggregate amount of fees,
underwriting discounts, premiums and other costs and expenses incurred in
connection with such refinancing, and (b) an aggregate principal amount
outstanding at any time under the Revolving Credit Facility not to exceed
$20.0 million less the amount of all mandatory prepayments of principal,
applied to permanently reduce the commitments under the Revolving Credit
Facility, plus (in the case of any refinancing thereof) the aggregate
amount of fees, underwriting discounts, premiums and other costs and
expenses incurred in connection with such refinancing;
(2) Indebtedness of Foreign Subsidiaries for working capital
purposes and any Guarantees in respect thereof, the aggregate principal
amount of which
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Indebtedness outstanding at any time does not exceed, as to all such
Foreign Subsidiaries, $15.0 million;
(3) Indebtedness (a) of the Company to any Restricted Subsidiary and
(b) of any Wholly Owned Subsidiary to the Company or any Restricted
Subsidiary; provided, however, that (x) in the case of clause (a), any
such Indebtedness is junior to the Exchangeable Preferred Stock and (y)
any subsequent issuance or transfer of any Capital Stock or any other
event that results in any such Wholly Owned Subsidiary ceasing to be a
Wholly Owned Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Company or a Wholly Owned Subsidiary) will be
deemed, in each case, an Incurrence of Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(4) Indebtedness represented by the Notes and the issuance of the
Exchangeable Preferred Stock in the amount issued on the Issue Date, and
any Indebtedness (other than the Indebtedness described in clauses
(m)(v)(B)(1), (2) or (3) above) outstanding on the date of the Indenture
and any Refinancing Indebtedness Incurred in respect of any Indebtedness
described in this clause (m)(v)(B)(4) or paragraph (m)(v)(A) above
(excluding the exchange of Exchangeable Preferred Stock for Exchange
Debentures in accordance with the terms of this Certificate of Designation
for such Exchangeable Preferred Stock as in effect on the Issue Date);
(5) Indebtedness of the Company or any Restricted Subsidiary (a) to
finance or refinance the deferred purchase price of newly acquired
property of the Company and its Subsidiaries used in the ordinary course
of business of the Company and its Subsidiaries (provided such purchase
money financing is entered into within six months of the acquisition of
such property), and any Refinancing Indebtedness with respect thereto, and
(b) in the form of Capitalized Lease Obligations or Attributable Debt, and
any Refinancing Indebtedness with respect thereto, in an aggregate amount
(based on, in the case of clause (a), the remaining balance of the
obligations therefor on the books of the Company and its Restricted
Subsidiaries) not in excess, at any one time outstanding, of $10.0
million;
(6) Indebtedness of the Company or any Restricted Subsidiary (which
may comprise Bank Indebtedness) in an aggregate principal amount at any
one time outstanding not in excess of $10.0 million;
(7) Indebtedness represented by the Note Guarantees and Guarantees
of Indebtedness Incurred pursuant to clause (m)(v)(B)(1), (3) or (4)
above;
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(8) Guarantees (A) by any Restricted Subsidiary of Indebtedness, of
any other Restricted Subsidiary or (B) by any Wholly Owned Subsidiary that
is not a Restricted Subsidiary of Indebtedness of any Wholly Owned
Subsidiary that is not a Restricted Subsidiary;
(9) Indebtedness (A) arising by reason of any Lien created or
permitted to exist in compliance with Section 4.11 of the Exchange
Debenture Indenture as if such covenant is in effect on the date of such
Incurrence of Indebtedness (without consideration of whether the Exchange
Debenture Indenture is in effect), including any Indebtedness of any
Exchange Debenture Guarantor arising by reason of any Lien granted by such
Person to secure Exchange Debenture Senior Indebtedness, or of the Company
or any Exchange Debenture Guarantor arising by reason of any Lien granted
by such Person to secure Exchange Debenture Guarantor Senior Indebtedness,
or (B) of any Restricted Subsidiary that is not an Exchange Debenture
Guarantor arising by reason of any Lien granted by such Person to secure
Indebtedness of any Restricted Subsidiary that is not an Exchange
Debenture Guarantor;
(10) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring of a check, draft or similar instrument of such
Person drawn against insufficient funds, provided that such Indebtedness
is extinguished within five Business Days of its incurrence;
(11) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities, or obligations in respect of
purchase price adjustments, in connection with the acquisition or
disposition of assets, other than guarantees of Indebtedness incurred by
any Person acquiring such assets for the purpose of financing such
acquisition; provided, however, that (x) such Indebtedness is not
reflected on the balance sheet of the Company or any Restricted
Subsidiaries (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet will
not be deemed to be reflected on such balance sheet for purposes of this
clause (x)) and (y) the maximum Indebtedness Incurred in connection with
such disposition shall at no time exceed the gross proceeds being measured
at the time received by the Company and its Restricted Subsidiaries in
connection with such disposition (which proceeds would include assumed
Indebtedness of the Company or any Restricted Subsidiary and, with respect
to any other non-cash proceeds of any such disposition, the fair market
value at the time of receipt of such proceeds and without giving effect to
any subsequent changes in value);
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(12) Indebtedness in respect of (A) commercial letters of credit, or
other letters of credit or other similar instruments or obligations,
issued in connection with liabilities incurred in the ordinary course of
business (including those issued to governmental entities in connection
with self-insurance under applicable workers' compensation statutes), or
(B) surety, judgment, appeal, performance and other similar bonds,
instruments or obligations provided in the ordinary course of business;
(13) Indebtedness under Hedging Obligations; provided, however, that
such Hedging Obligations are entered into for bona fide hedging purposes
and are in the ordinary course of business;
(14) Indebtedness (A) of the Company consisting of Guarantees of up
to an aggregate principal amount of $500,000 of borrowings by Management
Investors in connection with the purchase of Capital Stock of the Company
by such Management Investors or (B) of the Company or any Restricted
Subsidiary consisting of guarantees in respect of loans or advances made
to officers or employees of the Company or any Restricted Subsidiary, or
guarantees otherwise made on their behalf, (x) in respect of travel,
entertainment and moving-related expenses incurred in the ordinary course
of business, or (y) in the ordinary course of business not exceeding
$500,000 in the aggregate outstanding at any time;
(15) Indebtedness of any Restricted Subsidiary that is Indebtedness
of another Person assumed by such Restricted Subsidiary in connection with
its acquisition of assets from such Person (other than Indebtedness
Incurred in connection with, or in contemplation of, such acquisition) and
any Refinancing Indebtedness with respect thereto; provided, however, that
at the time of such acquisition of assets the Company shall have been able
to Incur at least an additional $1.00 of Indebtedness under paragraph
(m)(v)(A) above after giving effect to such acquisition;
(16) Indebtedness of a Restricted Subsidiary issued and outstanding
on or prior to the date on which such Restricted Subsidiary was acquired
by the Company (other than Indebtedness Incurred (x) as consideration in,
or to provide all or any portion of the funds or credit support utilized
to consummate, the transaction or series of related transactions pursuant
to which such Restricted Subsidiary became a Restricted Subsidiary or was
acquired by the Company or (y) otherwise in connection with, or in
contemplation of, such acquisition) and any Refinancing Indebtedness with
respect thereto; provided, however, that on the date of any such
acquisition the Company shall have been able to Incur at least $1.00 of
Indebtedness under paragraph (m)(v)(A) above after giving effect to such
acquisition;
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(17) Exchangeable Preferred Stock issued as payment in kind
dividends on the Exchangeable Preferred Stock outstanding on the Issue
Date or issued subsequent to the Issue Date as dividends permitted
pursuant to this paragraph (m)(v)(B)(17), to the extent such dividends are
made pursuant to the terms hereof for such Exchangeable Preferred Stock as
in effect on the Issue Date;
(18) Indebtedness arising from the assumption of the obligations of
GSD under the GSD Credit Facility; provided that the proceeds of the
Offerings are applied to repay all amounts outstanding under the GSD
Credit Facility.
(C) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this covenant, (1) any other obligation of the obligor on such
Indebtedness arising under any Guarantee, Lien or letter of credit supporting
such Indebtedness shall be disregarded to the extent that such Guarantee, Lien
or letter of credit secures the principal amount of such Indebtedness; (2) in
the event that Indebtedness meets the criteria of more than one of the types of
Indebtedness described in any clause of paragraph (m)(v)(B), the Company, in its
sole discretion, shall classify such item of Indebtedness and only be required
to include the amount and type of such Indebtedness in one of such clauses; and
(3) the amount of Indebtedness issued at a price that is less than the principal
amount thereof shall be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.
(D) For purposes of determining compliance with any Dollar-denominated
restriction on the Incurrence of Indebtedness denominated in a foreign currency,
the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant
thereto shall be calculated based on the relevant currency exchange rate in
effect on the date of such calculation.
(n) Definitions. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:
The "Acquisition" means the acquisition by GSD and SG of approximately
93.9% of the common stock of the Company (on a fully-diluted basis) from
American Industrial Partners Capital Fund, L.P., American Industrial Partners
Capital Fund II, L.P. (together, "AIP"), certain affiliates of AIP and certain
management stockholders of the Company on January 16, 1998.
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"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock of
any Person that at such time is a Restricted Subsidiary, acquired from a third
party; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"Additional Dividends" has the meaning specified in paragraph
(c)(viii)(A).
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" means any sale, lease, transfer or other disposition
of shares of Capital Stock of a Restricted Subsidiary (other than directors'
qualifying shares, or (in the case of a Foreign Subsidiary) to the extent
required by applicable law), property or other assets (each referred to for the
purposes of this definition as a "disposition") by the Company or any of its
Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of inventory,
equipment, obsolete assets or surplus personal property in the ordinary course
of business, (iii) the sale of Cash Equivalents in the ordinary course of
business, (iv) dispositions with a fair market value not exceeding $500,000 in
the aggregate in any fiscal year, (v) the sale or discount (with or without
recourse, and on commercially reasonable terms) of accounts receivable or notes
receivable arising in the ordinary course of business, or the conversion or
exchange of accounts receivable for notes receivable, (vi) the licensing of
intellectual property in the ordinary course of business, or (vii) a disposition
of property or assets that is governed by paragraph (m)(i).
"Attributable Debt" in respect of a Sale/Leaseback Transaction means, as
at the time of determination, the present value (discounted at the interest rate
assumed in making calculations in accordance with FAS 13) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
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"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Exchangeable Preferred Stock, the quotient obtained by dividing
(i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Exchangeable Preferred Stock multiplied by the amount of such payment by (ii)
the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding on the
Issue Date or thereafter incurred, payable under or in respect of the Senior
Secured Credit Facility, including without limitation principal, premium (if
any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Restricted Subsidiary whether or not a claim for post-filing interest is allowed
in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees, other monetary obligations of any nature and all other amounts
payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banking institutions are authorized or required by law to close
in New York City.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease.
"Cash Equivalents" means any of the following: (a) securities issued or
fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits, certificates of deposit or bankers'
acceptances of (i) any lender under the Senior Credit Agreement or (ii) any
commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the
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equivalent thereof by Moody's (or if at such time neither is issuing ratings,
then a comparable rating of another nationally recognized rating agency), (c)
commercial paper rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's (or if at such time neither is issuing
ratings, then a comparable rating of another nationally recognized rating
agency) and (d) investments in money market funds complying with the risk
limiting conditions of Rule 2a-7 or any successor rule of the SEC under the
Investment Company Act of 1940, as amended.
"Change of Control" means the occurrence of any of the following events:
(i) prior to the first public offering of Voting Stock of the
Company, either (x) Permitted Holders cease to be the "beneficial owner"
or "beneficial owners" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company, or (y) Permitted Holders
cease to be entitled by voting power, contract or otherwise to elect or
cause the election of directors of the Company having a majority of the
total voting power of the Board of Directors, in each case, whether as a
result of issuance of securities of the Company, any merger,
consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by any Permitted Holder or otherwise (for
purposes of this clause (i) and clause (ii) below, Permitted Holders shall
be deemed to beneficially own any Voting Stock of an entity (the
"specified entity" held by any other entity (the "parent entity") so long
as the Permitted Holders beneficially own (as so defined), directly or
indirectly, a majority of the Voting Stock of the parent entity);
(ii) following the first public offering of Voting Stock of the
Company, any "Person" (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes
the beneficial owner (as defined in clause (i) above, except that a Person
shall be deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire within one year), directly or indirectly,
of more than 35% of the Voting Stock of the Company, provided that the
Permitted Holders beneficially own (as defined in clause (i) above),
directly or indirectly, in the aggregate a lesser percentage of the Voting
Stock of the Company 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; or
(iii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the shareholders of the Company was approved by
a vote of a majority of
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the directors of the Company then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission.
"Company" means Day International Group, Inc., a Delaware corporation
and any successor thereto.
The "Consent Solicitation" means the Company's solicitation of
consent of the registered holders of at least a majority in principal amount of
the Company's outstanding 2005 Notes to adopt the Proposed Amendments contained
in, and as defined in, the Company's Consent Solicitation Statement dated
February 20, 1998, as supplemented or amended.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (ii)
Consolidated Interest Expense for such four fiscal quarters (in each case,
determined, for each fiscal quarter (or portion thereof) of the four fiscal
quarters ending prior to the Issue Date, on a pro forma basis; provided,
however, that:
(1) if the Company or any Restricted Subsidiary (x) has Incurred any
Indebtedness since the beginning of such period that remains outstanding
on such date of determination or if the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio is an Incurrence of
Indebtedness, EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Indebtedness as if such Indebtedness had been Incurred on the first day of
such period (except that in making such computation, the amount of
Indebtedness under any revolving credit facility outstanding on the date
of such calculation shall be computed based on (A) the average daily
balance of such Indebtedness during such four fiscal quarters or such
shorter period for which such facility was outstanding or (B) if such
facility was created after the end of such four fiscal quarters, the
average daily balance of such Indebtedness during the period from the date
of creation of such facility to the date of such calculation) and the
discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first
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day of such period, or (y) has repaid, repurchased, defeased or otherwise
discharged any Indebtedness since the beginning of the period that is no
longer outstanding on such date of determination, or if the transaction
giving rise to the need to calculate the Consolidated Coverage Ratio
involves a discharge of Indebtedness (in each case other than Indebtedness
Incurred under any revolving credit facility unless such Indebtedness has
been permanently repaid), EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving effect on a pro forma basis
to such discharge of such Indebtedness, including with the proceeds of
such new Indebtedness, as if such discharge had occurred on the first day
of such period,
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition of any company
or any business or any group of assets constituting an operating unit of a
business, the EBITDA for such period shall be reduced by an amount equal
to the EBITDA (if positive) directly attributable to the assets that are
the subject of such Asset Disposition for such period or increased by an
amount equal to the EBITDA (if negative) directly attributable thereto for
such period and Consolidated Interest Expense for such period shall be
reduced by an amount equal to the Consolidated Interest Expense directly
attributable to any Indebtedness of the Company or any Restricted
Subsidiary repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted Subsidiaries in
connection with such Asset Disposition for such period (and, if the
Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness
of such Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after
such sale),
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary, or
otherwise acquired any company or any business or any group of assets
constituting an operating unit of a business, including any such
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period, and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into the
Company or any Restricted Subsidiary since the beginning of such period)
shall have made any Asset Disposition or any Investment or acquisition of
assets that would have required an
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adjustment pursuant to clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such period, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition of assets
occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given
to an Asset Disposition, Investment or acquisition of assets, or any transaction
governed by the provisions of paragraph (m)(i), or the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or repaid, repurchased, defeased or
otherwise discharged in connection therewith, the pro forma calculations in
respect thereof shall be as determined in good faith by a responsible financial
or accounting Officer of the Company, based on reasonable assumptions. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest expense on such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement applicable to
such Indebtedness if such Interest Rate Agreement has a remaining term as at the
date of determination in excess of 12 months). If any Indebtedness bears, at the
option of the Company or a Restricted Subsidiary, a fixed or floating rate of
interest and is being given pro forma effect, the interest expense on such
Indebtedness shall be computed by applying, at the option of the Company or such
Restricted Subsidiary, either a fixed or floating rate. If any Indebtedness
which is being given pro forma effect was Incurred under a revolving credit
facility, the interest expense on such Indebtedness shall be computed based upon
the average daily balance of such Indebtedness during the applicable period.
"Consolidated Interest Expense" means, for any period, the total
consolidated interest expense of the Company and its Restricted Subsidiaries,
the Company and its consolidated Restricted Subsidiaries, determined in
accordance with GAAP, minus, to the extent included in such interest expense,
amortization or write-off of financing costs, and plus, to the extent incurred
by the Company and its Restricted Subsidiaries in such period but not included
in such interest expense, without duplication, (i) interest expense attributable
to Capitalized Lease Obligations and the interest component of rent expense
associated with Attributable Debt in respect of the relevant lease giving rise
thereto, determined as if such lease were a capitalized lease, in accordance
with GAAP, (ii) amortization of debt discount, (iii) interest in respect of
Indebtedness of any other Person that has been Guaranteed by the Company or any
Restricted Subsidiary, (iv) non-cash interest expense, (v) net costs associated
with Hedging Obligations, (vi) cash dividends in respect of all Preferred Stock
of the Company and its Restricted Subsidiaries and Disqualified Stock of the
Company, in each case held by Persons other than the Company or a Restricted
Subsidiary; and (vii) the cash contributions to any employee stock
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ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest to any Person (other than the Company or any
Restricted Subsidiary) on Indebtedness Incurred by such plan or trust; provided,
however, that there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed
or paid by the Company or any Restricted Subsidiary. For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by the Company and its Subsidiaries with respect
to Interest Rate Agreements.
"Consolidated Net Income" means, for any period, the consolidated net
income (loss) of the Company and its Restricted Subsidiaries, determined in
accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the limitations contained
in clause (iv) below, the Company's equity in the net income of any such
Person for such period shall be included in such Consolidated Net Income up
to the aggregate amount of cash actually distributed by such Person during
such period to the Company or a Restricted Subsidiary as a dividend or
other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in the net loss of such
Person shall be included to the extent of the aggregate Investment of the
Company or any of its Restricted Subsidiaries in such Person,
(ii) any net income (loss) of any Person acquired by the Company or a
Restricted Subsidiary in a pooling of interests transaction for any period
prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary that is not a
Exchange Debenture Guarantor if such Restricted Subsidiary is subject to
restrictions, directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Company, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of
any such Restricted Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash that could have
been distributed by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary as a dividend (subject, in the
case of a dividend that could have been made to another Restricted
Subsidiary, to the limitation contained in this clause) and (B) the net
loss of such Restricted Subsidiary shall be included to the
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extent of the aggregate Investment of the Company or any of its other
Restricted Subsidiaries in such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or other disposition of any
asset of the Company or its consolidated Restricted Subsidiaries (including
pursuant to any Sale/Leaseback Transaction) that is not sold or otherwise
disposed of in the ordinary course of business,
(v) any extraordinary gain or loss, and
(vi) the cumulative effect of a change in accounting principles.
"Consolidated Net Worth" of a Person at any date means the amount by
which the assets of such Person and its consolidated Restricted Subsidiaries
(less any revaluation or other write-up subsequent to the date of the Exchange
Debenture Indenture in any such assets (other than write-ups resulting from
foreign currency translations and write-ups of tangible assets of a going
concern business made within twelve months after the acquisition of such
business)) exceed the sum of (a) the total liabilities of such Person and its
consolidated Restricted Subsidiaries, plus (b) any Disqualified Stock of such
Person or any consolidated Restricted Subsidiaries of such Person issued to any
Person other than such Person or a wholly-owned Restricted Subsidiary of such
Person, in each case determined in accordance with GAAP.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement or arrangements
(including derivative agreements or arrangements) as to which such Person is a
party or a beneficiary.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default under the applicable
agreement.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock (other than Management Stock) that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable at the option of the Holder) or upon the happening of any event (i)
matures or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified
Stock at the option of the Holder or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the 91st day
after the Stated Maturity of the Securities. For avoidance of doubt, the
Exchangeable Preferred Stock shall not be deemed Disqualified Stock.
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"Dividend Payment Date" means March 15, June 15, September 15 and
December 15 of each year.
"Dividend Period" means the Initial Dividend Period and, thereafter,
each Quarterly Dividend Period.
"Domestic Subsidiary" means any Restricted Subsidiary of the Company
other than a Foreign Subsidiary.
"EBITDA" means, for any period, the Consolidated Net Income for such
period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense and (iv) amortization of intangibles and
other non-cash charges or non-cash losses.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Debentures" means the 12 1/4% Subordinated Exchange Debentures
of the Company due March 15, 2010 and any Exchange Debentures issued as payment
in kind interest thereon.
"Exchange Debenture Guarantee" means any guarantee that may from time to
time be executed and delivered by a Subsidiary of the Company pursuant to
Section 4.12 of the Exchange Debenture Indenture.
"Exchange Debenture Guarantor" means any Subsidiary that has issued an
Exchange Debenture Guarantee.
"Exchange Debenture Indenture" means the Indenture, dated as of March
18, 1998, between the Company, Day International, Inc., and The Bank of New
York, as Trustee, under which Exchange Debentures may be issued, and which the
provisions thereof shall be effective only upon an exchange made in accordance
with paragraph (g) hereof.
"Exchange Offer" shall have the meaning set forth in the Registration
Rights Agreement.
"Exchangeable Preferred Stock" means the 12 1/4% Senior Exchangeable
Preferred Stock of the Company due March 15, 2010 and any Exchangeable Preferred
Stock issued as payment of dividends thereon.
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"Foreign Subsidiary" means (a) any Restricted Subsidiary of the Company
that is not organized under the laws of the United States of America or any
state thereof or the District of Columbia and (b) any Restricted Subsidiary of
the Company that has no material assets other than securities of one or more
Foreign Subsidiaries, and other assets relating to an ownership interest in any
such securities or Subsidiaries.
"G-IV" means Greenwich IV, LLC, a Delaware limited liability company,
and any successor in interest thereto.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated Interest
Expense," "Consolidated Net Income" and "EBITDA," all defined terms in this
Certificate of Designation to the extent used in or relating to any of the
foregoing definitions, and all ratios and computations based on any of the
foregoing definitions) and as in effect from time to time (for all other
purposes of this Certificate of Designation), including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
all ratios and computations based on GAAP contained in the Certificate of
Designation shall be computed in conformity with GAAP.
"GSCP" means Greenwich Street Capital Partners, Inc., a Delaware
corporation and its successors.
"GSD" means GSD Acquisition Corp., a Delaware Corporation.
"GSD Credit Facility" means a $140.0 million credit facility provided to
GSD by Societe Generale.
"Holder" means a holder of shares of Exchangeable Preferred Stock.
"Incur" means issue, assume, enter into any Guarantee of, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Any
Indebtedness issued at a discount (including Indebtedness on which interest is
payable through the issuance of additional Indebtedness) shall be deemed
incurred at the time of original issuance of the Indebtedness at the initial
accreted amount thereof.
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"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed money,
(ii) the principal of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person (including
reimbursement obligations) in respect of letters of credit or other similar
instruments (the amount of such obligations being equal at any time to the
aggregate then undrawn and unexpired amount of such letters of credit or other
instruments plus the aggregate amount of drawings thereunder that have not then
been reimbursed),
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which purchase
price is due more than one year after the date of placing such property in final
service or taking final delivery and title thereto or the completion of such
services,
(v) all Capitalized Lease Obligations and Attributable Debt of such
Person,
(vi) Disqualified Stock of the Company and Exchangeable Preferred Stock
of a Subsidiary (to the extent held by a Person other than the Company or a
Restricted Subsidiary), but excluding, in each case, any accrued dividends (the
amount of such obligation to be equal at any time to the maximum fixed
involuntary redemption, repayment or repurchase price for such Capital Stock, or
if such Capital Stock has no such fixed price, to the involuntary redemption,
repayment or repurchase price therefor calculated in accordance with the terms
thereof as if then redeemed, repaid or repurchased, and if such price is based
upon or measured by the fair market value of such Capital Stock, such fair
market value shall be as determined in good faith by the Board of Directors or
the board of directors of the issuer of such Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed by such Person;
provided, however, that the amount of Indebtedness of such Person shall be the
lesser of (A) the fair market value of such asset at such date of determination
and (B) the amount of such Indebtedness of such other Persons,
(viii) All Indebtedness of other Persons to the extent Guaranteed by
such Person, and
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(ix) to the extent not otherwise included in this definition, net
Hedging Obligations of such Person (the amount of any such obligation to be
equal at any time to the termination value of such agreement or arrangement
giving rise to such Hedging Obligation that would be payable by such Person at
such time).
The amount of Indebtedness of any Person at any date shall be determined
as set forth above, or otherwise in accordance with GAAP.
"Indenture" means the Indenture, dated as of March 18, 1998 relating to
the Notes, among the Company, Day International, Inc. and The Bank of New York.
"Initial Dividend Period" means the dividend period commencing on the
Issue Date and ending on the day before the first Dividend Payment Date to occur
thereafter.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement (including derivative agreements or arrangements) as to which
such Person is party or a beneficiary.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers,
directors, officers or employees of any Person in the ordinary course of
business) or capital contribution (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) to, or any purchase or acquisition of Capital Stock, Indebtedness
or other similar instruments issued by, such Person. For purposes of the
definition of "Unrestricted Subsidiary" and paragraph (m)(ii), (i) "Investment"
shall include the portion (proportionate to the Company's equity interest in
such Subsidiary) of the fair market value of the net assets of any Subsidiary of
the Company at the time that such Subsidiary is designated an Unrestricted
Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a
Restricted Subsidiary, the Company shall be deemed to continue to have a
permanent "Investment" in an Unrestricted Subsidiary in an amount (if positive)
equal to (x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith by the
Board of Directors.
"Issue Date" means the date on which the Exchangeable Preferred Stock is
originally issued by the Company under this Certificate of Designations.
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"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Management Agreements" means, collectively, the Consulting Agreement,
the Fee Agreement and the Indemnification Agreement, each between the Company,
GSCP and SGCP (and their permitted successors and assigns thereunder), as each
may be amended, supplemented, waived or otherwise modified from time to time in
accordance with the terms thereof and of the Exchange Debenture Indenture.
"Management Investors" means the officers, directors, employees and
other members of the management of the Company or any of its Subsidiaries, or
family members or relatives thereof, or trusts for the benefit of any of the
foregoing, or any of their heirs, executors, successors and legal
representatives, who at any date beneficially own or have the right to acquire,
directly or indirectly, Capital Stock of the Company.
"Management Stock" means Capital Stock of the Company, or options,
warrants or other rights in respect thereof, held by any of the Management
Investors.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Net Cash Proceeds," with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, means the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance, sale or
contribution and net of taxes paid or payable as a result thereof.
"Notes" means the Notes issued under the Indenture.
"Note Guarantee" means any guarantee that may from time to time be
executed and delivered by a Subsidiary of the Company pursuant to Section 4.12
of the Indenture.
"Note Guarantor" means any Subsidiary that has issued a Note Guarantee.
The "Offering" means the Company's offering of the 9 1/2% Senior
Subordinated Notes due 2008 and the Exchangeable Preferred Stock pursuant to the
Purchase Agreement.
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"Offering Memorandum" means the Offering Memorandum, dated March 13,
1997, relating to the offering and placement of the Notes and Exchangeable
Preferred Stock.
"Officer" means the President, Chief Financial Officer, any Vice
President, Controller or Treasurer of the Company.
"Officer's Certificate" means a certificate signed by one Officer.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Transfer Agent. The counsel may be an employee of
or counsel to the Company or the Transfer Agent.
"Permitted Holder" means any of the following: (i) GSCP, SGCP, and their
respective Affiliates; provided that "Permitted Holders" in any event shall
include Greenwich Street Capital Partners, L.P., Greenwich Street Capital
Offshore Fund, Ltd., The Travelers Insurance Company, The Travelers Life and
Annuity Company, TRV Employees Fund, Inc., Smith Barney Company Inc. and their
respective Affiliates; any other investment fund or vehicle managed, sponsored
or advised by Greenwich Street Capital Partners, Inc., the Travelers Insurance
Company, the Travelers Life and Annuity Company, Smith Barney Company, Inc. or
any of their respective Affiliates; and (ii) any Person acting in the capacity
of an underwriter in connection with a public or private offering of the
Company's capital stock.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in, or consisting of, any of the following:
(i) a Restricted Subsidiary, the Company or a Person that will, upon the
making of such Investment, become a Restricted Subsidiary;
(ii) another Person if as a result of such Investment such other Person
is merged or consolidated with or into, or transfers or conveys all or
substantially all its assets to, the Company or a Restricted Subsidiary;
(iii) Cash Equivalents;
(iv) receivables owing to the Company or any Restricted Subsidiary, if
created or acquired in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; provided, however,
that such trade terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable under the
circumstances;
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(v) any Investments received as non-cash consideration in sales or other
dispositions of property or assets, including Asset Dispositions made in
compliance with [Section 4.6 of the Exchange Debenture Indenture] as if
such covenant is in effect on the date of such Investment (without
consideration of whether the Exchange Debenture Indenture is in effect);
(vi) securities or other Investments received in settlement of debts
created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary, or as a result of foreclosure, perfection or
enforcement of any Lien, or in satisfaction of judgments, including in
connection with any bankruptcy proceeding or other reorganization of
another Person;
(vii) Investments in existence or made pursuant to legally binding
written commitments in existence on the Issue Date;
(viii) Currency Agreements, Interest Rate Agreements and related Hedging
Obligations, which obligations are Incurred in compliance with paragraph
(m)(v)(B)(13);
(ix) pledges or deposits (x) with respect to leases or utilities
provided to third parties in the ordinary course of business or (y)
otherwise described in the definition of "Permitted Liens"; and
(x) other Investments in an aggregate amount outstanding at any time not
to exceed $12.5 million.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges not yet
delinquent or the nonpayment of which in the aggregate would not reasonably
be expected to have a material adverse effect on the Company and its
Restricted Subsidiaries, or that are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are
maintained on the books of the Company or a Subsidiary thereof, as the case
may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
in respect of obligations that are not overdue for a period of more than 60
days, or that are bonded or that are being contested in good faith and by
appropriate proceedings;
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(c) pledges, deposits or Liens in connection with workers' compensation,
unemployment insurance and other social security and other similar
legislation or other insurance related obligations (including, without
limitation, pledges or deposits securing liability to insurance carriers
under insurance or self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of bids,
tenders, trade, government or other contracts (other than for borrowed
money), obligations for utilities, leases, licenses, statutory obligations,
surety, judgment and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business;
(e) easements (including reciprocal easement agreements), rights-of-way,
building, zoning and similar restrictions, utility agreements, covenants,
reservations, restrictions, encroachments, changes, and other similar
encumbrances or title defects incurred, or leases or subleases granted to
others, in the ordinary course of business, which do not in the aggregate
materially interfere with the ordinary conduct of the business of the
Company and its Subsidiaries, taken as a whole;
(f) Liens existing on, or provided for under written arrangements
existing on, the Issue Date, or (in the case of any such Liens securing
Indebtedness of the Company or any of its Subsidiaries existing or arising
under written arrangements existing on the Issue Date) securing any
Refinancing Indebtedness in respect of such Indebtedness so long as the
Lien securing such Refinancing Indebtedness is limited to all or part of
the same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or under such
written arrangements could secure) the original Indebtedness;
(g) (i) mortgages, liens, security interests, restrictions, encumbrances
or any other matters of record that have been placed by any developer,
landlord or other third party on property over which the Company or any
Restricted Subsidiary of the Company has easement rights or on any leased
property and subordination or similar agreements relating thereto and (ii)
any condemnation or eminent domain proceedings affecting any real property;
(h) Liens securing Hedging Obligations Incurred in compliance with
paragraph (m)(v)(B)(13);
(i) Liens arising out of judgments, decrees, orders or awards in respect
of which the Company shall in good faith be prosecuting an appeal or
proceedings for review,
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which appeal or proceedings shall not have been finally terminated, or
if the period within which such appeal or proceedings may be initiated
shall not have expired;
(j) leases, subleases, licenses or sublicenses to third parties;
(k) Liens securing (x) Indebtedness Incurred in compliance with clause
(1), (2), (5) or (7) of paragraph (m)(v)(B), or clause (4) thereof (other
than Refinancing Indebtedness Incurred in respect of Indebtedness described
in paragraph (a) thereof) or (y) Bank Indebtedness;
(l) Liens on properties or assets (1) of the Company or any Note
Guarantor securing Senior Indebtedness or Guarantor Senior Indebtedness,
(2) of any Wholly Owned Subsidiary that is not a Note Guarantor securing
Indebtedness of any Wholly Owned Subsidiary that is not a Note Guarantor or
(3) of any Restricted Subsidiary that is not a Note Guarantor securing its
Indebtedness;
(m) Liens existing on property or assets of a Person at the time such
Person becomes a Subsidiary of the Company (or at the time the Company or a
Restricted Subsidiary acquires such property or assets); provided, however,
that such Liens are not created in connection with, or in contemplation of,
such other Person becoming such a Subsidiary (or such acquisition of such
property or assets), and that such Liens are limited to all or part of the
same property or assets (plus improvements, accessions, proceeds or
dividends or distributions in respect thereof) that secured (or, under the
written arrangements under which such Liens arose, could secure) the
obligations to which such Liens relate;
(n) Liens on Capital Stock of an Unrestricted Subsidiary that secure
Indebtedness or other obligations of such Unrestricted Subsidiary;
(o) any encumbrance or restriction (including, but not limited to, put
and call agreements) with respect to Capital Stock of any joint venture or
similar arrangement pursuant to any joint venture or similar agreement;
(p) Liens securing the Notes or the Exchange Debentures; and
(q) Liens securing Refinancing Indebtedness Incurred in respect of any
Indebtedness secured by, or securing any refinancing, refunding, extension,
renewal or replacement (in whole or in part) of any other obligation
secured by, any other Permitted Liens, provided that any such new Lien is
limited to all or part of the same property or assets (plus improvements,
accessions, proceeds or dividends or distributions in respect thereof) that
secured (or, under the written arrangements
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under which the original Lien arose, could secure) the obligations to
which such Liens relate.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any corporation
means Capital Stock of any class or classes (however designated) that is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Public Equity Offering" means an underwritten primary public offering
of common stock of the Company pursuant to an effective registration statement
under the Securities Act (whether alone or in conjunction with any secondary
public offering).
"Public Market" means any time after a Public Equity Offering has been
consummated and either (x) at least 10% of the total issued and outstanding
common stock (or equivalent equity interests) of the Company has been
distributed by means of an effective registration statement under the Securities
Act or (y) an established public trading market otherwise exists for any such
common stock or equivalent equity interests.
"Purchase Agreement" means the Agreement, dated March 13, 1998, among
the Company, the Initial Purchaser and the Guarantors signatory thereto,
providing for the purchase by the Initial Purchaser of $115.0 million aggregate
principal amount of the Company's 12 1/4% Senior Subordinated Notes due 2008 and
$35.0 million aggregate liquidation preference of the Company's 12 1/4% Senior
Exchangeable Preferred Stock due 2010.
"Quarterly Dividend Period" shall mean the quarterly period commencing
on each March 15, June 15, September 15 and December 15 and ending on the day
before the following Dividend Payment Date.
"Redemption Date" with respect to any shares of Exchangeable Preferred
Stock, means the date on which such shares of Exchangeable Preferred Stock are
redeemed by the Company.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or
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discharge mechanism) (collectively, "refinances," "refinanced" and "refinancing"
as used in the Indenture shall have a correlative meaning) any Indebtedness
existing on the date of the Indenture or Incurred in compliance with the
Indenture (including Indebtedness of the Company that refinances Indebtedness of
any Restricted Subsidiary (to the extent permitted in the Indenture) and
Indebtedness of any Restricted Subsidiary that refinances Indebtedness of
another Restricted Subsidiary) including Indebtedness that refinances
Refinancing Indebtedness; provided, however, that (i) the Refinancing
Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the
Indebtedness being refinanced, (ii) the Refinancing Indebtedness has an Average
Life at the time such Refinancing Indebtedness is Incurred that is equal to or
greater than the Average Life of the Indebtedness being refinanced and (iii)
such Refinancing Indebtedness is Incurred in an aggregate principal amount (or
if issued with original issue discount, an aggregate issue price) that is equal
to or less than the sum of (x) the aggregate principal amount (or if issued with
original issue discount, the aggregate accreted value) then outstanding of the
Indebtedness being refinanced, plus (y) fees, underwriting discounts, premiums
not in excess of the premiums called for in the documentation related to such
Indebtedness so refinanced and other costs and expenses incurred in connection
with such Refinancing Indebtedness; provided further, however, that Refinancing
Indebtedness shall not include (A) Indebtedness of a Restricted Subsidiary that
is not a Note Guarantor that refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
"Registration Default" shall have the meaning in paragraph (c)(viii)
hereof.
"Registration Rights Agreement" means the Registration Rights Agreement
dated March 18, 1998, by and among the Initial Purchaser, the Company and the
Note Guarantors signatory thereto, as such agreement may be amended, modified,
or supplemented from time to time in accordance with the terms thereof.
"Related Business" means those businesses in which the Company or any of
its Subsidiaries is engaged on the Issue Date, or that are reasonably related,
complementary or incidental thereto.
"Representative" means the trustee, agent or representative (if any) for
an issue of Senior Indebtedness.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
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"Revolving Credit Facility" means the revolving credit facility under
the Senior Secured Credit Facility (which may include any swing line or letter
of credit facility or subfacility thereunder).
"SGCP" means SG Capital Partners, LLC, a Delaware limited liability
company.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc. and its successors.
"Sale/Leaseback Transaction" means an arrangement relating to property
now owned or hereafter acquired by the Company or a Restricted Subsidiary
whereby the Company or such Restricted Subsidiary transfers such property to a
Person and the Company or such Restricted Subsidiary leases it from such Person,
other than leases (x) between the Company and a Restricted Subsidiary or between
or (y) required to be classified and accounted for as capitalized leases for
financial reporting purposes in accordance with GAAP.
"Secured Indebtedness" means any Indebtedness of the Company secured by
a Lien.
"Senior Credit Agreement" means the senior secured credit agreement
dated as of January 15, 1998, among the Company, the several lenders party
thereto from time to time, Societe Generale Securities Corporation, as arranger,
and Societe Generale, as administrative agent, as such agreement may be assumed
by any successor in interest, and as such agreement may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise).
"Senior Indebtedness" means the following obligations, whether
outstanding on the date of the Indenture or thereafter issued, without
duplication: (i) all obligations consisting of Bank Indebtedness; (ii) all
obligations relating to the 2005 Notes; and (iii) all obligations consisting of
the principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company regardless of whether post-filing
interest is allowed in such proceeding) on, and fees and other amounts owing in
respect of, all other Indebtedness of the Company, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that the obligations in respect of such Indebtedness are
not senior in right of payment to the Securities; provided, however, that Senior
Indebtedness shall not include
46
<PAGE> 47
(1) any obligation of the Company to any Subsidiary, (2) any liability for
Federal, state, foreign, local or other taxes owed or owing by the Company, (3)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company (or Guarantee
by the Company of any Indebtedness) that is expressly subordinate in right of
payment to any other Indebtedness of the Company (or Guarantee by the Company of
any Indebtedness) or (5) any Capital Stock. If any Designated Senior
Indebtedness is disallowed, avoided or subordinated pursuant to the provisions
of Section 548 of Title 11 of the United States Code or any applicable state
fraudulent conveyance law, such Designated Senior Indebtedness nevertheless will
constitute Senior Indebtedness.
"Senior Secured Credit Facility" means the collective reference to the
Senior Credit Agreement, any Loan Documents (as defined therein), any notes and
letters of credit issued pursuant thereto and any guarantee and collateral
agreement, patent and trademark security agreement, mortgages, letter of credit
applications and other security agreements and collateral documents, and other
instruments and documents, executed and delivered pursuant to or in connection
with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise). Without limiting the generality
of the foregoing, the term "Senior Secured Credit Facility" shall include any
agreement (i) changing the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (ii) adding Subsidiaries of the Company as additional
borrowers or guarantors thereunder, (iii) increasing the amount of Indebtedness
incurred thereunder or available to be borrowed thereunder or (iv) otherwise
altering the terms and conditions thereof.
"SGCP" means SG Capital Partners, LLC, a Delaware limited liability
company.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Company within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC, as in effect on the Issue Date.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
47
<PAGE> 48
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other equity interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such person
or (ii) one or more Subsidiaries of such Person.
"Successor Company" has the meaning assigned thereto in paragraph
(m)(i)(A).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the Issue Date.
"Term Loan Facility" means the term loan facility under the Senior
Secured Credit Facility.
"Trade Payables" means, with respect to any Person, any accounts payable
or any indebtedness or monetary obligation to trade creditors created, assumed
or Guaranteed by such Person arising in the ordinary course of business in
connection with the acquisition of goods or services.
"Transfer Agent" means The Bank of New York, and its successors serving
thereunder.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15(519) which
has become publicly available at least two Business Days prior to the Redemption
Date (or, if such Statistical Release is no longer published, any publicly
available source or similar market data)) most nearly equal to the period from
the Redemption Date to the Stated Maturity; provided, however, that if the
period from the Redemption Date to the Stated Maturity is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to the Stated Maturity
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
48
<PAGE> 49
"Trustee" means the party named as such in the Exchange Debenture
Indenture until a successor replaces it in accordance with the applicable
provisions of the Exchange Debenture Indenture and thereafter means the
successor serving thereunder.
"2005 Notes" means the Company's 11 1/8% Senior Subordinated Notes due
2005.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that
at the time of determination shall be designated an Unrestricted Subsidiary by
the Board of Directors in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary
of the Company (including any newly acquired or newly formed Subsidiary of the
Company) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness 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, however,
that either (A) the Subsidiary to be so designated has total consolidated assets
of $1,000 or less or (B) if such Subsidiary has consolidated assets greater than
$1,000, then such designation would be permitted under Section 4.4. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that immediately after giving effect to such
designation (x) the Company could incur at least $1.00 of additional
Indebtedness under Section 4.3(a) and (y) no 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 resolution of the
Company's Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions.
"Voting Stock" of an entity means all classes of Capital Stock of such
entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the Company
all the Capital Stock of which (other than directors' qualifying shares, or (in
the case of any Foreign Subsidiary) to the extent required by applicable law) is
owned by the Company or another Wholly Owned Subsidiary.
(o) Registration Rights.
Reference is made to the Registration Rights Agreement by and between
the Company, Day International, Inc. and Societe Generale Securities
Corporation, dated
49
<PAGE> 50
March 18, 1998, as such agreement may be amended, modified or supplemented from
time to time. So long as any shares of Exchangeable Preferred Stock constitute
"Transfer Restricted Securities" as defined in the Registration Rights
Agreement, each Holder shall be entitled to the rights granted by the Company
thereunder, and shall be bound by the restrictions contained therein, on the
certificates representing the Preferred Stock and in the Offering Memorandum.
50
<PAGE> 51
IN WITNESS WHEREOF, Day International Group, Inc. has caused this
Certificate of Designation to be signed by _____________________, its
______________________, on the date and year first above written.
DAY INTERNATIONAL GROUP,
INC.
By:____________________________
Name:
Title:
51
<PAGE> 1
Exhibit 4.5.2
[SEAL] INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE [SEAL]
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREIN ARE ISSUED AND SHALL BE
SUBJECT TO ALL OF THE PROVISIONS OF THE CERTIFICATE OF INCORPORATION (INCLUDING
THE CERTIFICATE OF ORGANIZATION FOR THE SHARES) AND THE BY-LAWS OF THE
CORPORATION (COPIES OF WHICH ARE ON FILE WITH THE TRANSFER AGENT), AS NOW OR
HEREAFTER AMENDED PURSUANT TO THEIR TERMS, TO ALL OF WHICH THE HOLDER HEREOF BY
ACCEPTANCE HEREOF ASSERTS. THIS CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED
AND REGISTERED BY THE TRANSFER AGENT AND REGISTRAR
DAY INTERNATIONAL GROUP, INC. SEE REVERSE SIDE FOR
CERTAIN DEFINITIONS
TOTAL AUTHORIZED ISSUE Registered and
105,000 SHARES PAR VALUE $.01 EACH Countersigned by THE
12 1/4% SENIOR EXCHANGEABLE BANK OF NEW YORK
PREFERRED STOCK DUE 2010
-------------------
This is to Certify that CEDE & CO. is the owner of THIRTY-FIVE THOUSAND fully
--------- --------------------
paid and non-assessable shares of the above Corporation transferable only on
the books of the Corporation by the holder hereof in person or by duly
authorized Attorney upon surrender of this Certificate, properly endorsed.
Witness, the seal of the Corporation and the signatures of its duly authorized
officers.
Dated:
- -------------------------------------- ---------------------------------
SECRETARY/TREASURER PRESIDENT
<PAGE> 1
Exhibit 4.6
EXCHANGE DEBENTURE INDENTURE
Between
DAY INTERNATIONAL GROUP, INC.
DAY INTERNATIONAL, INC.
AND
THE BANK OF NEW YORK
Dated as of March 18, 1998
<PAGE> 2
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) ................................................N.A.
(b)....................................................7.8; 7.10
(c)....................................................N.A.
311(a)....................................................7.11
(b)....................................................7.11
(c)....................................................N.A.
312(a)....................................................2.5
(b)....................................................12.3
(c)....................................................12.3
313(a)....................................................7.6
(b)(1).................................................N.A.
(b)(2).................................................7.6
(c)....................................................12.2
(d)....................................................7.6
314(a)....................................................4.2; 4.9; 12.2
(b)....................................................N.A.
(c)(1).................................................12.4
(c)(2).................................................12.4
(c)(3).................................................N.A.
(d)....................................................N.A.
(e)....................................................12.5
(f)....................................................4.9
315(a)(1).................................................7.1
315(a)(2).................................................7.1
(b)....................................................7.5; 12.2
(c)....................................................7.1
(d)....................................................7.1
(e)....................................................6.11
316(a)(last sentence).....................................12.6
(a)(1)(A)..............................................6.5
(a)(1)(B)..............................................6.4
(a)(2).................................................N.A.
(b)....................................................6.7
(c)....................................................6.10
11
<PAGE> 3
317(a)(1).................................................6.8
(a)(2).................................................6.9
(b)....................................................2.4
318(a)....................................................12.1
N.A. means Not Applicable.
- -----------
Note: This Cross-Reference Table shall not, for any purpose, be
deemed to be part of the Exchange Debenture Indenture.
12
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
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ARTICLE 1
Definitions and Incorporation by Reference........... 1
SECTION 1.1. Definitions................................................ 1
SECTION 1.2. Other Definitions.......................................... 23
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.......... 24
SECTION 1.4. Rules of Construction...................................... 24
ARTICLE 2
The Securities......................... 25
SECTION 2.1. Form, Dating............................................... 25
SECTION 2.2. Execution and Authentication............................... 28
SECTION 2.3. Registrar and Paying Agent................................. 29
SECTION 2.4. Paying Agent To Hold Money in Trust........................ 29
SECTION 2.5. Securityholder Lists....................................... 30
SECTION 2.6. Transfer and Exchange...................................... 30
SECTION 2.7. Mutilated, Destroyed, Lost or Stolen Securities............ 31
SECTION 2.8. Outstanding Securities..................................... 32
SECTION 2.9. Temporary Securities....................................... 32
SECTION 2.10. Cancellation.............................................. 33
SECTION 2.11. Payment of Interest; Defaulted Interest................... 33
SECTION 2.12. Computation of Interest................................... 34
SECTION 2.13. CUSIP Numbers............................................. 34
ARTICLE 3
Redemption........................... 34
SECTION 3.1. Notices to Trustee......................................... 34
SECTION 3.2. Selection of Securities To Be Redeemed..................... 35
SECTION 3.3. Notice of Redemption....................................... 35
SECTION 3.4. Effect of Notice of Redemption............................. 36
SECTION 3.5. Deposit of Redemption Price................................ 36
SECTION 3.6. Securities Redeemed in Part................................ 36
SECTION 3.7. Optional Redemption........................................ 36
ARTICLE 4
Covenants........................... 37
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SECTION 4.1. Payment of Securities...................................... 37
SECTION 4.2. SEC Reports................................................ 37
SECTION 4.3. Limitation on Indebtedness................................. 38
SECTION 4.4. Limitation on Restricted Payments.......................... 41
SECTION 4.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries........................................ 45
SECTION 4.6. Limitation on Sales of Assets.............................. 47
SECTION 4.7. Limitation on Transactions with Affiliates. .............. 49
SECTION 4.8. Change of Control.......................................... 50
SECTION 4.9. Compliance Certificate; Notice of Default.................. 51
SECTION 4.10. [Intentionally omitted.................................... 52
SECTION 4.11. Limitation on Liens....................................... 52
SECTION 4.12. Additional Exchange Debenture Guarantors.................. 52
SECTION 4.13. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries........................................ 53
ARTICLE 5
Successor Company....................... 53
SECTION 5.1. When Company May Merge or Transfer Assets.................. 53
ARTICLE 6
Defaults and Remedies..................... 54
SECTION 6.1. Events of Default.......................................... 54
SECTION 6.2. Acceleration............................................... 56
SECTION 6.3. Other Remedies............................................. 57
SECTION 6.4. Waiver of Past Defaults.................................... 57
SECTION 6.5. Control by Majority........................................ 57
SECTION 6.6. Limitation on Suits........................................ 57
SECTION 6.7. Rights of Holders to Receive Payment....................... 58
SECTION 6.8. Collection Suit by Trustee................................. 58
SECTION 6.9. Trustee May File Proofs of Claim........................... 58
SECTION 6.10. Priorities................................................ 58
SECTION 6.11. Undertaking for Costs..................................... 59
SECTION 6.12. Waiver of Stay or Extension Laws.......................... 59
ARTICLE 7
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Trustee............................ 59
SECTION 7.1. Duties of Trustee.......................................... 59
SECTION 7.2. Rights of Trustee.......................................... 61
SECTION 7.3. Individual Rights of Trustee............................... 62
SECTION 7.4. Trustee's Disclaimer....................................... 62
SECTION 7.5. Notice of Defaults......................................... 62
SECTION 7.6. Reports by Trustee to Holders.............................. 62
SECTION 7.7. Compensation and Indemnity................................. 63
SECTION 7.8. Replacement of Trustee..................................... 63
SECTION 7.9. Successor Trustee by Merger................................ 64
SECTION 7.10. Eligibility; Disqualification............................. 65
SECTION 7.11. Preferential Collection of Claims Against Company......... 65
SECTION 7.12. Not Responsible for Recitals or Issuance of Securities.... 65
ARTICLE 8
Discharge of Exchange Debenture Indenture; Defeasance..... 65
SECTION 8.1. Discharge of Liability on Securities; Defeasance........... 65
SECTION 8.2. Conditions to Defeasance................................... 66
SECTION 8.3. Application of Trust Money................................. 67
SECTION 8.4. Repayment to Company....................................... 67
SECTION 8.5. Indemnity for Government Obligations....................... 68
SECTION 8.6. Reinstatement.............................................. 68
ARTICLE 9
Amendments........................... 68
SECTION 9.1. Without Consent of Holders................................. 68
SECTION 9.2. With Consent of Holders.................................... 69
SECTION 9.3. Compliance with Trust Indenture Act........................ 70
SECTION 9.4. Effect of Amendment; Revocation and Effect of
Consents and Waivers........................................... 70
SECTION 9.5. Notation on or Exchange of Securities...................... 71
SECTION 9.6. Trustee To Sign Amendments................................. 71
SECTION 9.7. Payment for Consent........................................ 71
ARTICLE 10
Subordination......................... 72
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SECTION 10.1. Agreement To Subordinate.................................. 72
SECTION 10.2. Liquidation, Dissolution, Bankruptcy...................... 72
SECTION 10.3. Default on Exchange Debenture Senior Indebtedness......... 72
SECTION 10.4. Acceleration a Payment of Securities...................... 73
SECTION 10.5. When a Distribution Must Be Paid Over..................... 73
SECTION 10.6. Subrogation............................................... 74
SECTION 10.7. Relative Rights........................................... 74
SECTION 10.8. Subordination May Not Be Impaired by Company.............. 74
SECTION 10.9. Rights of Trustee and Paying Agent........................ 74
SECTION 10.10. Distribution or Notice to Representative................. 75
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate............................................ 75
SECTION 10.12. Trust Moneys Not Subordinated............................ 75
SECTION 10.13. Trustee Entitled To Rely................................. 75
SECTION 10.14. Trustee To Effectuate Subordination...................... 76
SECTION 10.15. Trustee Not Fiduciary for Holders of Exchange
Debenture Senior Indebtedness.................................. 76
SECTION 10.16. Reliance by Holders of Exchange Debenture Senior
Indebtedness on Subordination Provisions....................... 76
SECTION 10.17. Trustee's Compensation Not Prejudiced.................... 76
ARTICLE 11
Guarantee........................... 76
SECTION 11.1. Guarantee................................................. 76
SECTION 11.2. Limitation on Liability; Termination, Release and
Discharge...................................................... 78
SECTION 11.3. Subordination............................................. 79
ARTICLE 12
Miscellaneous......................... 79
SECTION 12.1. Trust Indenture Act Controls.............................. 79
SECTION 12.2. Notices................................................... 79
SECTION 12.3. Communication by Holders with Other Holders............... 80
SECTION 12.4. Certificate and Opinion as to Conditions Precedent........ 80
SECTION 12.5. Statements Required in Certificate or Opinion............. 81
SECTION 12.6. When Securities Disregarded............................... 81
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SECTION 12.7. Acts of Holders; Rules by Trustee, Paying Agent and
Registrar...................................................... 82
SECTION 12.8. Legal Holidays............................................ 82
SECTION 12.9. Governing Law............................................. 82
SECTION 12.10. No Recourse Against Others............................... 82
SECTION 12.11. Successors............................................... 82
SECTION 12.12. Multiple Originals....................................... 82
SECTION 12.13. Table of Contents; Headings.............................. 82
SECTION 12.14. Separability............................................. 83
SECTION 12.15. Benefits of Exchange Debenture Indenture................. 83
</TABLE>
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<PAGE> 9
INDENTURE dated as of March 18, 1998, between Day International
Group, Inc., a Delaware corporation (the "Company"), Day International, Inc., a
Delaware corporation ("Day") and The Bank of New York, a New York banking
corporation (the "Trustee").
For good and valuable consideration, the receipt of which is
hereby acknowledged, each party hereto agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the
Company's 12 1/4% Subordinated Exchange Debentures due 2010 (the "Securities").
ARTICLE I.
Definitions and Incorporation by Reference
SECTION A. Definitions.
The "Acquisition" means the acquisition by GSD and SG of
approximately 93.9% of the common stock of the Company (on a fully-diluted
basis) from American Industrial Partners Capital Fund, L.P., American Industrial
Partners Capital Fund II, L.P. (together, "AIP"), certain affiliates of AIP and
certain management stockholders of the Company on January 16, 1998.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or (iii) Capital Stock of
any Person that at such time is a Restricted Subsidiary, acquired from a third
party; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Related Business.
"Affiliate" of any specified Person means any other Person,
directly or indirectly, controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Applicable Premium" means, with respect to a Security at any
Redemption Date, the greater of (i) 1.0% of the then outstanding principal
amount of such
<PAGE> 10
Security and (ii) the excess of (A) the present value at such time of (1) the
redemption price of such Security at March 15, 2003 plus (2) all required
interest and principal payments (excluding accrued but unpaid interest) due on
such Security through March 15, 2003, computed using a discount rate equal to
the Treasury Rate plus 50 basis points, over (B) the then-outstanding principal
amount of such Security.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
directors' qualifying shares, or (in the case of a Foreign Subsidiary) to the
extent required by applicable law), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Company or by the Company or a Restricted
Subsidiary to a Restricted Subsidiary, (ii) a disposition of inventory,
equipment, obsolete assets or surplus personal property in the ordinary course
of business, (iii) the sale of Cash Equivalents in the ordinary course of
business, (iv) dispositions with a fair market value not exceeding $500,000 in
the aggregate in any fiscal year, (v) the sale or discount (with or without
recourse, and on commercially reasonable terms) of accounts receivable or notes
receivable arising in the ordinary course of business, or the conversion or
exchange of accounts receivable for notes receivable, (vi) the licensing of
intellectual property in the ordinary course of business, (vii) for purposes of
Section 4.6 only, a disposition subject to Section 4.4 or (viii) a disposition
of property or assets that is governed by Section 5.1.
"Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate assumed in making calculations in accordance with FAS 13) of the
total obligations of the lessee for rental payments during the remaining term of
the lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness or Preferred Stock, the quotient obtained by
dividing (i) the sum of the products of the numbers of years from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption or similar payment with respect to such
Preferred Stock multiplied by the amount of such payment by (ii) the sum of all
such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding
on the Issue Date or thereafter incurred, payable under or in respect of the
Senior Secured Credit Facility, including without limitation principal, premium
(if any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company or any
Restricted Subsidiary whether or not a
2
<PAGE> 11
claim for post-filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees, other monetary obligations of
any nature and all other amounts payable thereunder or in respect thereof.
"Board of Directors" means the Board of Directors of the Company
or any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions are authorized or required by law
to close in New York City.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligations" means an obligation that is
required to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the Stated Maturity thereof
shall be the date of the last payment of rent or any other amount due under such
lease.
"Cash Equivalents" means any of the following: (a) securities
issued or fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof, (b) time deposits, certificates of deposit or
bankers' acceptances of (i) any lender under the Senior Credit Agreement or (ii)
any commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), (c) commercial paper rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency) and (d)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of
1940, as amended.
"Change of Control" means the occurrence of any of the following
events:
(i) prior to the first public offering of Voting Stock of the
Company, either (x) Permitted Holders cease to be the "beneficial
owner" or "beneficial
3
<PAGE> 12
owners" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than 35% of the total voting power of
the Voting Stock of the Company, or (y) Permitted Holders cease to be
entitled by voting power, contract or otherwise to elect or cause the
election of directors of the Company having a majority of the total
voting power of the Board of Directors, in each case, whether as a
result of issuance of securities of the Company, any merger,
consolidation, liquidation or dissolution of the Company, any direct or
indirect transfer of securities by any Permitted Holder or otherwise
(for purposes of this clause (i) and clause (ii) below, Permitted
Holders shall be deemed to beneficially own any Voting Stock of an
entity (the "specified entity" held by any other entity (the "parent
entity") so long as the Permitted Holders beneficially own (as so
defined), directly or indirectly, a majority of the Voting Stock of the
parent entity);
(ii) following the first public offering of Voting Stock of
the Company, any "Person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in clause (i) above,
except that a Person shall be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire within one
year), directly or indirectly, of more than 35% of the Voting Stock of
the Company, provided that the Permitted Holders beneficially own (as
defined in clause (i) above), directly or indirectly, in the aggregate
a lesser percentage of the Voting Stock of the Company 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; or
(iii) during any period of two consecutive years, individuals
who at the beginning of such period constituted the Board of Directors
(together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of a majority of the directors of the
Company then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Day International Group, Inc., a Delaware
corporation and any successor thereto.
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The "Consent Solicitation" means the Company's solicitation of
consent of the registered holders of at least a majority in principal amount of
the Company's outstanding 2005 Notes to adopt the Proposed Amendments contained
in, and as defined in, the Company's Consent Solicitation Statement dated
February 20, 1998.
"Consolidated Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of EBITDA of the Company and its
Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the date of such determination for which
consolidated financial statements of the Company are available to (ii)
Consolidated Interest Expense for such four fiscal quarters (in each case,
determined, for each fiscal quarter (or portion thereof) of the four fiscal
quarters ending prior to the Issue Date, on a pro forma basis; provided,
however, that:
(1) if the Company or any Restricted Subsidiary (x) has Incurred
any Indebtedness since the beginning of such period that remains
outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been Incurred on
the first day of such period (except that in making such computation,
the amount of Indebtedness under any revolving credit facility
outstanding on the date of such calculation shall be computed based on
(A) the average daily balance of such Indebtedness during such four
fiscal quarters or such shorter period for which such facility was
outstanding or (B) if such facility was created after the end of such
four fiscal quarters, the average daily balance of such Indebtedness
during the period from the date of creation of such facility to the
date of such calculation) and the discharge of any other Indebtedness
repaid, repurchased, defeased or otherwise discharged with the proceeds
of such new Indebtedness as if such discharge had occurred on the first
day of such period, or (y) has repaid, repurchased, defeased or
otherwise discharged any Indebtedness since the beginning of the period
that is no longer outstanding on such date of determination, or if the
transaction giving rise to the need to calculate the Consolidated
Coverage Ratio involves a discharge of Indebtedness (in each case other
than Indebtedness Incurred under any revolving credit facility unless
such Indebtedness has been permanently repaid), EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving
effect on a pro forma basis to such discharge of such Indebtedness,
including with the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period,
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<PAGE> 14
(2) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition of any
company or any business or any group of assets constituting an
operating unit of a business, the EBITDA for such period shall be
reduced by an amount equal to the EBITDA (if positive) directly
attributable to the assets that are the subject of such Asset
Disposition for such period or increased by an amount equal to the
EBITDA (if negative) directly attributable thereto for such period and
Consolidated Interest Expense for such period shall be reduced by an
amount equal to the Consolidated Interest Expense directly attributable
to any Indebtedness of the Company or any Restricted Subsidiary repaid,
repurchased, defeased or otherwise discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with
such Asset Disposition for such period (and, if the Capital Stock of
any Restricted Subsidiary is sold, the Consolidated Interest Expense
for such period directly attributable to the Indebtedness of such
Restricted Subsidiary to the extent the Company and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale),
(3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Person that thereby becomes a Restricted Subsidiary,
or otherwise acquired any company or any business or any group of
assets constituting an operating unit of a business, including any such
acquisition of assets occurring in connection with a transaction
causing a calculation to be made hereunder, EBITDA and Consolidated
Interest Expense for such period shall be calculated after giving pro
forma effect thereto (including the Incurrence of any Indebtedness) as
if such Investment or acquisition occurred on the first day of such
period, and
(4) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged with or into
the Company or any Restricted Subsidiary since the beginning of such
period) shall have made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant
to clause (2) or (3) above if made by the Company or a Restricted
Subsidiary during such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment or acquisition of
assets occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to
be given to an Asset Disposition, Investment or acquisition of assets, or any
transaction governed by the provisions of Article 5, or the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or
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<PAGE> 15
repaid, repurchased, defeased or otherwise discharged in connection therewith,
the pro forma calculations in respect thereof shall be as determined in good
faith by a responsible financial or accounting Officer of the Company, based on
reasonable assumptions. If any Indebtedness bears a floating rate of interest
and is being given pro forma effect, the interest expense on such Indebtedness
shall be calculated as if the rate in effect on the date of determination had
been the applicable rate for the entire period (taking into account any Interest
Rate Agreement applicable to such Indebtedness if such Interest Rate Agreement
has a remaining term as at the date of determination in excess of 12 months). If
any Indebtedness bears, at the option of the Company or a Restricted Subsidiary,
a fixed or floating rate of interest and is being given pro forma effect, the
interest expense on such Indebtedness shall be computed by applying, at the
option of the Company or such Restricted Subsidiary, either a fixed or floating
rate. If any Indebtedness which is being given pro forma effect was Incurred
under a revolving credit facility, the interest expense on such Indebtedness
shall be computed based upon the average daily balance of such Indebtedness
during the applicable period.
"Consolidated Interest Expense" means, for any period, the total
consolidated interest expense of the Company and its Restricted Subsidiaries,
the Company and its consolidated Restricted Subsidiaries, determined in
accordance with GAAP, minus, to the extent included in such interest expense,
amortization or write-off of financing costs, and plus, to the extent incurred
by the Company and its Restricted Subsidiaries in such period but not included
in such interest expense, without duplication, (i) interest expense attributable
to Capitalized Lease Obligations and the interest component of rent expense
associated with Attributable Debt in respect of the relevant lease giving rise
thereto, determined as if such lease were a capitalized lease, in accordance
with GAAP, (ii) amortization of debt discount, (iii) interest in respect of
Indebtedness of any other Person that has been Guaranteed by the Company or any
Restricted Subsidiary, (iv) non-cash interest expense, (v) net costs associated
with Hedging Obligations, (vi) cash dividends in respect of all Preferred Stock
of the Company and its Restricted Subsidiaries and Disqualified Stock of the
Company, in each case held by Persons other than the Company or a Restricted
Subsidiary; and (vii) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such plan or
trust to pay interest to any Person (other than the Company or any Restricted
Subsidiary) on Indebtedness Incurred by such plan or trust; provided, however,
that there shall be excluded therefrom any such interest expense of any
Unrestricted Subsidiary to the extent the related Indebtedness is not Guaranteed
or paid by the Company or any Restricted Subsidiary. For purposes of the
foregoing, gross interest expense shall be determined after giving effect to any
net payments made or received by the Company and its Subsidiaries with respect
to Interest Rate Agreements.
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<PAGE> 16
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Company and its Restricted Subsidiaries, determined in
accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income
of any such Person for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company or a
Restricted Subsidiary as a dividend or other distribution (subject, in
the case of a dividend or other distribution to a Restricted
Subsidiary, to the limitations contained in clause (iii) below) and (B)
the Company's equity in the net loss of such Person shall be included
to the extent of the aggregate Investment of the Company or any of its
Restricted Subsidiaries in such Person,
(ii) any net income (loss) of any Person acquired by the Company
or a Restricted Subsidiary in a pooling of interests transaction for
any period prior to the date of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary that is
not an Exchange Debenture Guarantor if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Restricted Subsidiary,
directly or indirectly, to the Company, except that (A) subject to the
limitations contained in clause (iv) below, the Company's equity in the
net income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount of
cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a
dividend (subject, in the case of a dividend that could have been made
to another Restricted Subsidiary, to the limitation contained in this
clause) and (B) the net loss of such Restricted Subsidiary shall be
included to the extent of the aggregate Investment of the Company or
any of its other Restricted Subsidiaries in such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or other disposition
of any asset of the Company or its consolidated Restricted Subsidiaries
(including pursuant to any Sale/Leaseback Transaction) that is not sold
or otherwise disposed of in the ordinary course of business,
(v) any extraordinary gain or loss, and
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<PAGE> 17
(vi) the cumulative effect of a change in accounting principles.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangements (including derivative agreements or arrangements) as to which such
Person is a party or a beneficiary.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default as defined in Section 6.1.
"Definitive Securities" means Securities that are substantially in
the form of Exhibit A or Exhibit B attached hereto that do not include the
information called for by footnote 1 thereof.
"Depository" means, with respect to the Securities issuable or
issued in whole or in part in global form, the person specified in Section 2.3
as the Depository with respect to the Securities, until a successor shall have
been appointed and become such pursuant to the applicable provisions of this
Exchange Debenture Indenture, and thereafter, "Depository" shall mean or include
such successor.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock (other than Management Stock) that by its terms (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable at the option of the Holder) or upon the happening of any event (i)
matures or is mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (ii) is convertible or exchangeable for Indebtedness or Disqualified
Stock at the option of the Holder or (iii) is redeemable at the option of the
holder thereof, in whole or in part, in each case on or prior to the 91st day
after the Stated Maturity of the Securities. For avoidance of debt, the
Exchangeable Preferred Stock shall not be deemed Disqualified Stock.
"Domestic Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Subsidiary.
"EBITDA" means, for any period, the Consolidated Net Income for
such period, plus the following to the extent deducted in calculating such
Consolidated Net Income: (i) income tax expense, (ii) Consolidated Interest
Expense, (iii) depreciation expense and (iv) amortization of intangibles and
other non-cash charges or non-cash losses.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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<PAGE> 18
"Exchange Debentures" means the 12 1/4% Exchange Debentures of the
Company due March 15, 2010 and any Exchange Debentures issued as payment in kind
interest thereon.
"Exchange Debenture Designated Senior Indebtedness" means (i) the
Bank Indebtedness, (ii) the 2005 Notes and (iii) the Notes and (iv) any other
Exchange Debenture Senior Indebtedness which, at the date of determination, has
an aggregate principal amount to or under which, at the date of determination,
the holders thereof are committed to lend up to, at least $25.0 million and is
specifically designated by the Company in the instrument evidencing or governing
such Exchange Debenture Senior Indebtedness as "Exchange Debenture Designated
Senior Indebtedness" for purposes of the Exchange Debenture Indenture.
"Exchange Debenture Guarantee" means any guarantee that may from
time to time be executed and delivered by a Subsidiary of the Company pursuant
to the covenant described herein under Section 4.12.
"Exchange Debenture Guarantor" means any Subsidiary that has
issued an Exchange Debenture Guarantee.
"Exchange Debenture Guarantor Pari Passu Indebtedness" means, with
respect to an Exchange Debenture Guarantor, the obligations of such Exchange
Debenture Guarantor under the Exchange Debenture Guarantee and any other
Indebtedness of such Exchange Debenture Guarantor that specifically provides
that such Indebtedness is to rank pari passu in right of payment with the
obligations of such Exchange Debenture Guarantor under the Exchange Debenture
Guarantee.
"Exchange Debenture Guarantor Senior Indebtedness" means the
following obligations, whether outstanding on the date of the Exchange Debenture
Indenture or thereafter issued, without duplication: (i) any Guarantee of the
Bank Indebtedness by such Exchange Debenture Guarantor and all other Guarantees
by such Exchange Debenture Guarantor of Exchange Debenture Senior Indebtedness
(including, without limitation, guarantees in respect of the Notes) of the
Company or Exchange Debenture Guarantor Senior Indebtedness for any other
Exchange Debenture Guarantor; and (ii) all obligations consisting of the
principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Exchange Debenture Guarantor regardless of
whether postfiling interest is allowed in such proceeding) on, and fees and
other amounts owing in respect of, all other Indebtedness of the Exchange
Debenture Guarantor, unless, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is expressly provided that the
obligations in respect of such
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<PAGE> 19
Indebtedness are not senior in right of payment to the obligations of such
Exchange Debenture Guarantor under the Exchange Debenture Guarantee; provided,
however, that Exchange Debenture Guarantor Senior Indebtedness shall not include
(1) any obligations of such Exchange Debenture Guarantor to the Exchange
Debenture Guarantor or any other Subsidiary of the Exchange Debenture Guarantor,
(2) any liability for Federal, state, local, foreign or other taxes owed or
owing by such Exchange Debenture Guarantor, (3) any accounts payable or other
liability to trade creditors arising in the ordinary course of business
(including Guarantees thereof or instruments evidencing such liabilities), (4)
any Indebtedness of such Exchange Debenture Guarantor that is expressly
subordinate in right of payment to any of the Indebtedness of such Exchange
Debenture Guarantor (excluding guarantees in respect of the Notes), including
any Exchange Debenture Guarantor Pari Passu Indebtedness and Exchange Debenture
Guarantor Subordinated Indebtedness of such Exchange Debenture Guarantor or (5)
any Capital Stock.
"Exchange Debenture Guarantor Subordinated Indebtedness" means,
with respect to an Exchange Debenture Guarantor, any Indebtedness of such
Exchange Debenture Guarantor (whether outstanding on the Issue Date or
thereafter Incurred) which is expressly subordinate in right of payment to the
obligations of such Exchange Debenture Guarantor under the Exchange Debenture
Guarantee pursuant to a written agreement.
"Exchange Debenture Holder" means the Person in whose name an
Exchange Debenture is registered.
"Exchange Debenture Indenture" means this Indenture as amended or
supplemented from time to time.
"Exchange Debenture Pari Passu Indebtedness" means the Exchange
Debentures and any other Indebtedness of the Company that (i) specifically
provides that such Indebtedness is to rank pari passu with the Exchange
Debentures or is otherwise entitled "Senior Subordinated" Indebtedness and (ii)
is not expressly subordinated by its terms in right of payment to any
Indebtedness of the Company that is not Exchange Debenture Senior Indebtedness.
"Exchange Debenture Senior Indebtedness" means the following
obligations, whether outstanding on the date of the Exchange Debenture Indenture
or thereafter issued, without duplication: (i) all obligations consisting of
Bank Indebtedness; (ii) all obligations relating to the 2005 Notes; (iii) all
obligations relating to the Notes and (iv) all obligations consisting of the
principal of and premium, if any, and accrued and unpaid interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to the Company regardless of whether
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<PAGE> 20
post-filing interest is allowed in such proceeding) on, and fees and other
amounts owing in respect of, all other Indebtedness of the Company, unless, in
the instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is expressly provided that the obligations in respect of such
Indebtedness are not senior in right of payment to the Exchange Debentures;
provided, however, that Exchange Debenture Senior Indebtedness shall not include
(1) any obligation of the Company to any Subsidiary, (2) any liability for
Federal, state, foreign, local or other taxes owed or owing by the Company, (3)
any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of the Company (or Guarantee
by the Company of any Indebtedness) that is expressly subordinate in right of
payment to any other Indebtedness of the Company (or Guarantee by the Company of
any Indebtedness) (other than the Notes) or (5) any Capital Stock. If any
Exchange Debenture Designated Senior Indebtedness is disallowed, avoided or
subordinated pursuant to the provisions of Section 548 of Title 11 of the United
States Code or any applicable state fraudulent conveyance law, such Exchange
Debenture Designated Senior Indebtedness nevertheless will constitute Exchange
Debenture Senior Indebtedness.
"Exchange Debenture Subordinated Indebtedness" means any
Indebtedness of the Company (whether outstanding on the date of the Exchange
Debenture Indenture or thereafter Incurred) which is expressly subordinate in
right of payment to the Exchange Debentures pursuant to a written agreement.
"Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Exchangeable Preferred Stock" means the 12 1/4% Senior
Exchangeable Preferred Stock of the Company due March 15, 2010 and any
Exchangeable Preferred Stock issued as payment of dividends thereon.
"Exchangeable Preferred Stock Holder" means the Person in whose
name a share of Exchangeable Preferred Stock is registered.
"Foreign Subsidiary" means (a) any Restricted Subsidiary of the
Company that is not organized under the laws of the United States of America or
any state thereof or the District of Columbia and (b) any Restricted Subsidiary
of the Company that has no material assets other than securities of one or more
Foreign Subsidiaries, and other assets relating to an ownership interest in any
such securities or Subsidiaries.
"G-IV" means Greenwich IV, LLC, a Delaware limited liability
company, and any successor in interest thereto.
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"GAAP" means generally accepted accounting principles in the
United States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated Interest
Expense," "Consolidated Net Income" and "EBITDA," all defined terms in the
Exchange Debenture Indenture to the extent used in or relating to any of the
foregoing definitions, and all ratios and computations based on any of the
foregoing definitions) and as in effect from time to time (for all other
purposes of the Exchange Debenture Indenture), including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession
all ratios and computations based on GAAP contained in the Exchange Debenture
Indenture shall be computed in conformity with GAAP.
"Global Security" means a Security that is substantially in the
form of Exhibit A hereto.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GSCP" means Greenwich Street Capital Partners, Inc., a Delaware
corporation, and any successor thereto.
"GSD" means GSD Acquisition Corp., a Delaware corporation.
"GSD Credit Facility" means a $140.0 million credit facility
provided to GSD by Societe Generale.
"GSD Liquidation" means the liquidation of GSD.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other
nonfinancial obligation of any other Person, including any such obligation,
direct or indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or such other obligation of such other Person (whether arising by
virtue of partnership arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for purposes of assuring
in any other manner the obligee of such Indebtedness or other obligation of
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided,
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<PAGE> 22
however, that the term "Guarantee" shall not include endorsements for collection
or deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered in the Register.
"Incur" means issue, assume, enter into any Guarantee of, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Any
Indebtedness issued at a discount (including Indebtedness on which interest is
payable through the issuance of additional Indebtedness) shall be deemed
incurred at the time of original issuance of the Indebtedness at the initial
accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed
money,
(ii) the principal of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person (including
reimbursement obligations) in respect of letters of credit or other
similar instruments (the amount of such obligations being equal at any
time to the aggregate then undrawn and unexpired amount of such letters
of credit or other instruments plus the aggregate amount of drawings
thereunder that have not then been reimbursed),
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except Trade Payables), which
purchase price is due more than one year after the date of placing such
property in final service or taking final delivery and title thereto or
the completion of such services,
(v) all Capitalized Lease Obligations and Attributable Debt of
such Person,
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(vi) Disqualified Stock of the Company and Preferred Stock of a
Subsidiary (to the extent held by a Person other than the Company or a
Restricted Subsidiary), but excluding, in each case, any accrued
dividends (the amount of such obligation to be equal at any time to the
maximum fixed involuntary redemption, repayment or repurchase price for
such Capital Stock, or if such Capital Stock has no such fixed price,
to the involuntary redemption, repayment or repurchase price therefor
calculated in accordance with the terms thereof as if then redeemed,
repaid or repurchased, and if such price is based upon or measured by
the fair market value of such Capital Stock, such fair market value
shall be as determined in good faith by the Board of Directors or the
board of directors of the issuer of such Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by
such Person; provided, however, that the amount of Indebtedness of such
Person shall be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness
of such other Persons,
(viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person, and
(ix) to the extent not otherwise included in this definition, net
Hedging Obligations of such Person (the amount of any such obligation
to be equal at any time to the termination value of such agreement or
arrangement giving rise to such Hedging Obligation that would be
payable by such Person at such time).
The amount of Indebtedness of any Person at any date shall be
determined as set forth above or otherwise provided in this Exchange Debenture
Indenture, or otherwise in accordance with GAAP.
"Initial Purchaser" means Societe Generale Securities Corporation.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement (including derivative agreements or
arrangements) as to which such Person is party or a beneficiary.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers,
directors, officers or employees of any Person in the ordinary course of
business) or capital
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<PAGE> 24
contribution (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) to, or
any purchase or acquisition of Capital Stock, Indebtedness or other similar
instruments issued by, such Person. For purposes of the definition of
"Unrestricted Subsidiary" and Section 4.4, (i) "Investment" shall include the
portion (proportionate to the Company's equity interest in such Subsidiary) of
the fair market value of the net assets of any Subsidiary of the Company at the
time that such Subsidiary is designated an Unrestricted Subsidiary; provided,
however, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time of such redesignation; and (ii) any property transferred
to or from an Unrestricted Subsidiary shall be valued at its fair market value
at the time of such transfer, in each case as determined in good faith by the
Board of Directors.
"Issue Date" means the date on which the Securities are originally
issued.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Agreements" means, collectively, the Consulting
Agreement, the Fee Agreement and the Indemnification Agreement, each between the
Company, GSCP and SGCP (and their permitted successors and assigns thereunder),
as each may be amended, supplemented, waived or otherwise modified from time to
time in accordance with the terms thereof and of the Exchange Debenture
Indenture.
"Management Investors" means the officers, directors, employees
and other members of the management of the Company or any of its Subsidiaries,
or family members or relatives thereof, or trusts for the benefit of any of the
foregoing, or any of their heirs, executors, successors and legal
representatives, who at any date beneficially own or have the right to acquire,
directly or indirectly, Capital Stock of the Company.
"Management Stock" means Capital Stock of the Company, or options,
warrants or other rights in respect thereof, held by any of the Management
Investors.
"Moody's" means Moody's Investors Service, Inc., and its
successors.
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"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition, (ii) all payments made, and all installment payments required to be
made, on any Indebtedness that is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any Lien upon such assets, or that
must by its terms, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law, be repaid out of the proceeds from such Asset
Disposition, (iii) all distributions and other payments required to be made to
minority interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, or to any other Person (other than the Company or a
Restricted Subsidiary) owning a beneficial interest in the assets disposed of in
such Asset Disposition and (iv) appropriate amounts to be provided as a reserve,
in accordance with GAAP, against any liabilities associated with the assets
disposed of in such Asset Disposition and retained by the Company or any
Restricted Subsidiary after such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, means the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance, sale or
contribution and net of taxes paid or payable as a result thereof.
The "Note Indenture" means the indenture dated as of March 18,
1998 between the Company, Day International, Inc. and the Trustee relating to
the Company's 9 1/2% Senior Subordinated Notes Due 2008.
"Notes" means the 9 1/2% Senior Subordinated Notes Due March 15,
2008.
The "Offering" means the Company's offering of the Notes and the
Exchangeable Preferred Stock pursuant to the Purchase Agreement.
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<PAGE> 26
"Officer" means the President, Chief Financial Officer, any Vice
President, Controller or Treasurer of the Company.
"Officer's Certificate" means a certificate signed by one Officer.
"Opinion of Counsel" means a written opinion from legal counsel
who is reasonably acceptable to the Trustee. The counsel may be an employee of
or counsel to the Company or the Trustee.
"Permitted Holder" means any of the following: (i) GSCP, SGCP, and
their respective Affiliates provided that "Permitted Holders" in any event shall
include Greenwich Street Capital Partners, L.P., Greenwich Street Capital
Offshore Fund, Ltd., The Travelers Insurance Company, The Travelers Life and
Annuity Company, TRV Employees Fund, Inc., Smith Barney Company Inc. and their
respective Affiliates; any other investment fund or vehicle managed, sponsored
or advised by GSCP, the Travelers Insurance Company, the Travelers Life and
Annuity Company, Smith Barney Company, Inc. or any of their respective
Affiliates; and (ii) any Person acting in the capacity of an underwriter in
connection with a public or private offering of the Company's capital stock.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in, or consisting of, any of the following:
(i) a Restricted Subsidiary, the Company or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary;
(ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys
all or substantially all its assets to, the Company or a Restricted
Subsidiary;
(iii) Cash Equivalents;
(iv) receivables owing to the Company or any Restricted
Subsidiary, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary
trade terms as the Company or any such Restricted Subsidiary deems
reasonable under the circumstances;
(v) any Investment resulting from the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and
in compliance with the covenant described herein in Section 4.6 as if
such covenant is in effect on the
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<PAGE> 27
date of such Investment (without consideration of whether the Exchange
Debenture Indenture is in effect);
(vi) securities or other Investments received in settlement of
debts created in the ordinary course of business and owing to the
Company or any Restricted Subsidiary, or as a result of foreclosure,
perfection or enforcement of any Lien, or in satisfaction of judgments,
including in connection with any bankruptcy proceeding or other
reorganization of another Person;
(vii) Investments in existence or made pursuant to legally binding
written commitments in existence on the Issue Date;
(viii) Currency Agreements, Interest Rate Agreements and related
Hedging Obligations, which obligations are Incurred in compliance with
Section 4.3;
(ix) pledges or deposits (x) with respect to leases or utilities
provided to third parties in the ordinary course of business or (y)
otherwise described in the definition of "Permitted Liens"; and
(x) other Investments in an aggregate amount outstanding at any
time not to exceed $12.5 million.
"Permitted Liens" means:
(a) Liens for taxes, assessments or other governmental charges not
yet delinquent or the nonpayment of which in the aggregate would not
reasonably be expected to have a material adverse effect on the Company
and its Restricted Subsidiaries, or that are being contested in good
faith and by appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of the Company or a Subsidiary
thereof, as the case may be, in accordance with GAAP;
(b) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations that are not overdue for a
period of more than 60 days, or that are bonded or that are being
contested in good faith and by appropriate proceedings;
(c) pledges, deposits or Liens in connection with workers'
compensation, unemployment insurance and other social security and
other similar legislation or other insurance related obligations
(including, without limitation, pledges or
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<PAGE> 28
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements);
(d) pledges, deposits or Liens to secure the performance of bids,
tenders, trade, government or other contracts (other than for borrowed
money), obligations for utilities, leases, licenses, statutory
obligations, surety, judgment and appeal bonds, performance bonds and
other obligations of a like nature incurred in the ordinary course of
business;
(e) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not in the aggregate materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries,
taken as a whole;
(f) Liens existing on, or provided for under written arrangements
existing on, the Issue Date, or (in the case of any such Liens securing
Indebtedness of the Company or any of its Subsidiaries existing or
arising under written arrangements existing on the Issue Date) securing
any Refinancing Indebtedness in respect of such Indebtedness so long as
the Lien securing such Refinancing Indebtedness is limited to all or
part of the same property or assets (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof) that secured
(or under such written arrangements could secure) the original
Indebtedness;
(g) (i) mortgages, liens, security interests, restrictions,
encumbrances or any other matters of record that have been placed by
any developer, landlord or other third party on property over which the
Company or any Restricted Subsidiary of the Company has easement rights
or on any leased property and subordination or similar agreements
relating thereto and (ii) any condemnation or eminent domain
proceedings affecting any real property;
(h) Liens securing Hedging Obligations Incurred in compliance with
Section 4.3;
(i) Liens arising out of judgments, decrees, orders or awards in
respect of which the Company shall in good faith be prosecuting an
appeal or proceedings for review, which appeal or proceedings shall not
have been finally terminated, or if the period within which such appeal
or proceedings may be initiated shall not have expired;
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(j) leases, subleases, licenses or sublicenses to third parties;
(k) Liens securing (x) Indebtedness Incurred in compliance with
clause (b)(i), (b)(ii), (b)(v) or (b)(vii) of Section 4.3, or clause
(b)(iv) thereof (other than Refinancing Indebtedness Incurred in
respect of Indebtedness described in paragraph (a) thereof) or (y) Bank
Indebtedness;
(l) Liens on properties or assets (1) of the Company or any
Exchange Debenture Guarantor securing Exchange Debenture Senior
Indebtedness or Exchange Debenture Guarantor Senior Indebtedness, (2)
of any Wholly Owned Subsidiary that is not an Exchange Debenture
Guarantor securing Indebtedness of any Wholly Owned Subsidiary that is
not an Exchange Debenture Guarantor or (3) of any Restricted Subsidiary
that is not an Exchange Debenture Guarantor securing its Indebtedness;
(m) Liens existing on property or assets of a Person at the time
such Person becomes a Subsidiary of the Company (or at the time the
Company or a Restricted Subsidiary acquires such property or assets);
provided, however, that such Liens are not created in connection with,
or in contemplation of, such other Person becoming such a Subsidiary
(or such acquisition of such property or assets), and that such Liens
are limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under
which such Liens arose, could secure) the obligations to which such
Liens relate;
(n) Liens on Capital Stock of an Unrestricted Subsidiary that
secure Indebtedness or other obligations of such Unrestricted
Subsidiary;
(o) any encumbrance or restriction (including, but not limited to,
put and call agreements) with respect to Capital Stock of any joint
venture or similar arrangement pursuant to any joint venture or similar
agreement;
(p) Liens securing the Notes and the Securities; and
(q) Liens securing Refinancing Indebtedness Incurred in respect of
any Indebtedness secured by, or securing any refinancing, refunding,
extension, renewal or replacement (in whole or in part) of any other
obligation secured by, any other Permitted Liens, provided that any
such new Lien is limited to all or part of the same property or assets
(plus improvements, accessions, proceeds or dividends or distributions
in respect thereof) that secured (or, under the written
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arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any
corporation means Capital Stock of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security that is due or overdue or is to
become due at the relevant time.
"Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act (whether alone or in conjunction with any
secondary public offering).
"Public Market" means any time after a Public Equity Offering has
been consummated and either (x) at least 10% of the total issued and outstanding
common stock (or equivalent equity interests) of the Company has been
distributed by means of an effective registration statement under the Securities
Act or (y) an established public trading market otherwise exists for any such
common stock or equivalent equity interests.
"Purchase Agreement" means the Agreement, dated March 13, 1998,
among the Company, the Initial Purchaser and Day, providing for the purchase by
the Initial Purchaser of $115.0 million aggregate principal amount of the
Company's 9 1/2% Senior Subordinated Notes due 2008 and $35.0 million aggregate
liquidation preference of the Company's 12 1/4% Senior Exchangeable Preferred
Stock due 2010.
"Redemption Date" means the date on which the Securities are
optionally redeemed pursuant to Section 3.7.
"Refinancing Indebtedness" means Indebtedness that is Incurred to
refund, refinance, replace, renew, repay or extend (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," "refinanced" and
"refinancing" as used in the Exchange Debenture Indenture shall have a
correlative meaning) any Indebtedness
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existing on the date of the Exchange Debenture Indenture or Incurred in
compliance with the Exchange Debenture Indenture (including Indebtedness of the
Company that refinances Indebtedness of any Restricted Subsidiary (to the extent
permitted in the Exchange Debenture Indenture) and Indebtedness of any
Restricted Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing Indebtedness;
provided, however, that (i) the Refinancing Indebtedness has a Stated Maturity
no earlier than the Stated Maturity of the Indebtedness being refinanced, (ii)
the Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the Average Life of
the Indebtedness being refinanced and (iii) such Refinancing Indebtedness is
Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the sum of (x)
the aggregate principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding of the Indebtedness being refinanced,
plus (y) fees, underwriting discounts, premiums not in excess of the premiums
called for in the documentation related to such Indebtedness so refinanced and
other costs and expenses incurred in connection with such Refinancing
Indebtedness; provided further, however, that Refinancing Indebtedness shall not
include (A) Indebtedness of a Restricted Subsidiary that is not an Exchange
Debenture Guarantor that refinances Indebtedness of the Company or (B)
Indebtedness of the Company or a Restricted Subsidiary that refinances
Indebtedness of an Unrestricted Subsidiary.
"Registration Rights Agreement" means the Registration Rights
Agreement dated March 18, 1998, by and among the Initial Purchaser, the Company
and Day, as such agreement may be amended, modified, or supplemented from time
to time in accordance with the terms thereof.
"Related Business" means those businesses in which the Company or
any of its Subsidiaries is engaged on the date of the Exchange Debenture
Indenture, or that are reasonably related, complementary or incidental thereto.
"Representative" means the trustee, agent or representative (if
any) for an issue of Exchange Debenture Senior Indebtedness.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Notes are offered to
persons other than distributors (as defined in Regulation S under the Securities
Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend
set forth in clause (A) of Section 2.1(c) or the Regulation S Legend set forth
in clause (B) of Section 2.1(c), as applicable.
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"Restricted Subsidiary" means any Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Revolving Credit Facility" means the revolving credit facility
under the Senior Secured Credit Facility (which may include any swing line or
letter of credit facility or subfacility thereunder).
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired by the Company or a Restricted
Subsidiary whereby the Company or such Restricted Subsidiary transfers such
property to a Person and the Company or such Restricted Subsidiary leases it
from such Person, other than leases (x) between the Company and a Restricted
Subsidiary or between or (y) required to be classified and accounted for as
capitalized leases for financial reporting purposes in accordance with GAAP.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company
secured by a Lien.
"Securities Custodian" means the custodian with respect to the
Global Security (as appointed by the Depository), or any successor entity
thereto and shall initially be the Trustee.
"Senior Credit Agreement" means the senior secured credit
agreement dated as of January 15, 1998, among the Company, the several lenders
party thereto from time to time, Societe Generale Securities Corporation, as
arranger, and Societe Generale, as administrative agent, as such agreement may
be assumed by any successor in interest, and as such agreement may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise).
"Senior Secured Credit Facility" means the collective reference to
the Senior Credit Agreement, any Loan Documents (as defined therein), any notes
and letters of credit issued pursuant thereto and any guarantee and collateral
agreement, patent and trademark security agreement, mortgages, letter of credit
applications and other security agreements and collateral documents, and other
instruments and documents, executed and delivered pursuant to or in connection
with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or
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<PAGE> 33
refunded, refinanced, restructured, replaced, renewed, repaid, increased or
extended from time to time (whether in whole or in part, whether with the
original agent and lenders or other agents and lenders or otherwise, and whether
provided under the original Senior Credit Agreement or otherwise). Without
limiting the generality of the foregoing, the term "Senior Secured Credit
Facility" shall include any agreement (i) changing the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder,
(iii) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder or (iv) otherwise altering the terms and conditions
thereof.
"SGCP" means SG Capital Partners, LLC, a Delaware limited
liability company.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC, as in effect on the Issue
Date.
"S&P" means Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of principal
of such security is due and payable, including pursuant to any mandatory
redemption provision (but excluding any provision providing for the repurchase
of such security at the option of the holder thereof upon the happening of any
contingency beyond the control of the issuer unless such contingency has
occurred).
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other equity interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such person
or (ii) one or more Subsidiaries of such Person.
"Term Loan Facility" means the term loan facilities provided under
the Senior Secured Credit Facility.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Exchange Debenture
Indenture, except as provided in Section 9.3.
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"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or Guaranteed by such Person arising in the ordinary course of
business in connection with the acquisition of goods or services.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15(519) which has become publicly available at least two Business Days prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the Redemption Date to the Stated Maturity; provided, however, that
if the period from the Redemption Date to the Stated Maturity is not equal to
the constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the Redemption Date to the Stated Maturity
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in the Exchange Debenture
Indenture until a successor replaces it and, thereafter, means the successor.
"Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer its corporate trust matters.
"2005 Notes" means the Company's 11 1/8% Senior Subordinated Notes
due 2005.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect from time to time in any relevant jurisdiction.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided below and (ii) any Subsidiary
of an Unrestricted Subsidiary. The Board of Directors may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness 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, however, that either (A) the Subsidiary to be so
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<PAGE> 35
designated has total consolidated assets of $1,000 or less or (B) if such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 4.4. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation (x) the Company could incur
at least $1.00 of additional Indebtedness under Section 4.3(a) and (y) no
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 resolution of the Company's Board of Directors giving
effect to such designation and an Officer's Certificate certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable or redeemable at the issuer's option.
"Voting Stock" of an entity means all classes of Capital Stock of
such entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
"Wholly Owned Subsidiary" means a Restricted Subsidiary of the
Company all the Capital Stock of which (other than directors' qualifying shares,
or (in the case of any Foreign Subsidiary) to the extent required by applicable
law) is owned by the Company or another Wholly Owned Subsidiary.
SECTION B. Other Definitions.
Defined in
Term Section
"Affiliate Transaction" .......................................... 4.7
"Bankruptcy Law" ................................................. 6.1
"Blockage Notice" ................................................ 10.3
"Company Order" .................................................. 2.2
"covenant defeasance option" ..................................... 8.1(b)
"Custodian" ...................................................... 6.1
"Event of Default" ............................................... 6.1
"Excess Proceeds" ................................................ 4.6
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"Exchange Securities" ............................................ Recitals
"Fairness Opinion" ............................................... 4.7
"legal defeasance option" ........................................ 8.1(b)
"Legal Holiday" .................................................. 11.8
"Offer" .......................................................... 4.6
"Offer Period" ................................................... 4.6
"pay the Securities" ............................................. 10.3
"Paying Agent" ................................................... 2.3
"Payment Blockage Period" ........................................ 10.3
"Register"........................................................ 2.3
"Registrar"....................................................... 2.3
"Restricted Payment" ............................................. 4.4
"Securities" ..................................................... Recitals
"Securities Act" ................................................. 2.1
"Successor Company" .............................................. 5.1
SECTION C. Incorporation by Reference of Trust Indenture Act. This
Exchange Debenture Indenture is subject to the mandatory provisions of the TIA,
which are incorporated by reference in and made a part of this Exchange
Debenture Indenture. The following TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Exchange Debenture
Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.
All other TIA terms used in this Exchange Debenture Indenture that
are defined by the TIA, defined by TIA reference to another statute or defined
by SEC rule have the meanings assigned to them by such definitions.
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SECTION D. Rules of Construction. 1. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) as used herein, accounting terms relating to the Company and
its Subsidiaries not defined in Section 1.1, and accounting terms
partly defined in Section 1.1 to the extent not defined, shall have the
respective meanings given to them under GAAP. All computations
determining compliance with financial covenants or terms, including
definitions used therein, shall be prepared in accordance with
generally accepted accounting principles in effect at the Issue Date,
as and to the extent provided in the definition of the term "GAAP." If
at any time the computations for determining compliance with such
financial covenants or provisions relating thereto utilize generally
accepted accounting principles different than those in effect at the
Issue Date, the financial statements within which such computations are
delivered shall be accompanied by a reconciliation statement with
respect to such computations;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in the
plural include the singular.
2. Unsecured Indebtedness is not deemed to be subordinate or
junior to Secured Indebtedness merely because it is unsecured, and Indebtedness
that is not guaranteed by a particular Person is not deemed to be subordinate or
junior to Indebtedness that is so guaranteed merely because it is not so
guaranteed.
ARTICLE II.
The Securities
SECTION A. 1. Form, Dating and Terms. The Securities are being
offered to Exchangeable Preferred Stock Holders by the Company in exchange for
their Exchangeable Preferred Stock pursuant to and in accordance with a
certificate of designations dated March 18, 1998 (the "Certificate of
Designations"). The Securities are sometimes herein referred to as the "Global
Securities."
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The principal of (and premium, if any) and interest on the
Securities shall be payable at the office or agency of the Company maintained
for such purpose in The City of New York, or at such other office or agency of
the Company as may be maintained for such purpose pursuant to Section 2.3;
provided, however, that, at the option of the Company, each installment of
interest may be paid by (i) check mailed to addresses of the Persons entitled
thereto as such addresses shall appear on the Security Register or (ii) wire
transfer or other electronic funds transfer to an account located in the United
States maintained by the payee, provided that the payee has given the Trustee
appropriate wire instructions at least 15 days before the relevant payment date.
The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, in addition to those set forth on
Exhibit A. The Company and the Trustee shall approve the forms of the Securities
and any notation, endorsement or legend on them. Each Security shall be dated
the date of its authentication. The terms of the Securities set forth in Exhibit
A are part of the terms of this Exchange Debenture Indenture and, to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Exchange Debenture Indenture, expressly agree to be bound by such terms.
2. Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof to the extent possible, and shall also be issued in
principal amounts less than $1,000 so that each Exchangeable Preferred Stock
Holder shall receive certificates representing the entire amount of Securities
to which his shares of Exchangeable Preferred Stock entitle him, provided that
the Company may, at its option, pay cash in lieu of issuing a Security in a
principal amount less than $1,000.
3. Restrictive Legends. The Global Securities shall bear the
following legend on the face thereof:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW
YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR 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
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<PAGE> 39
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE
HEREOF."
4. Book-Entry Provisions. (i) This Section 2.1(d) shall apply
only to Global Securities deposited with the Trustee, as custodian for the
Depository.
(ii) Each Global Security initially shall (x) be registered in the
name of the Depository for such Global Security or the nominee of such
Depository, (y) be delivered to the Trustee as custodian for such Depository and
(z) bear the legend as set forth in Section 2.1(c).
(iii) Members of, or participants in, the Depository ("Agent
Members") shall have no rights under this Exchange Debenture Indenture with
respect to any Global Security held on their behalf by the Depository or by the
Trustee as the custodian of the Depository or under such Global Security, 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 such Global Security for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of the Depository governing the exercise of the
rights of a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the
beneficial interest in a Global Security pursuant to subsection (e) of this
Section to beneficial owners who are required to hold Definitive Securities (as
defined below), the Security Trustee shall reflect on its books and records the
date and a decrease in the principal amount of such Global Security in an amount
equal to the principal amount of the beneficial interest in the Global Security
to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Definitive Securities of like tenor and
amount.
(v) In connection with the transfer of an entire Global Security
to beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be
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<PAGE> 40
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
such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
5. Definitive Securities. Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
certificated Securities ("Definitive Securities"). If required to do so pursuant
to any applicable law or regulation, beneficial owners may obtain Definitive
Securities in exchange for their beneficial interests in a Global Security upon
written request in accordance with the Depository's and the Registrar's
procedures. In addition, Definitive Securities shall be transferred to all
beneficial owners in exchange for their beneficial interests in a Global
Security if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for such Global Security or the Depository
ceases to be a clearing agency registered under the Exchange Act, at a time when
the Depository is required to be so registered in order to act as Depository,
and in each case a successor depositary is not appointed by the Company within
90 days of such notice or, (ii) the Company executes and delivers to the Trustee
and Registrar an Officers' Certificate stating that such Global Security shall
be so exchangeable or (iii) an Event of Default has occurred and is continuing
and the Registrar has received a request from the Depository.
6. Any Definitive Security delivered in exchange for an interest
in a Global Security pursuant to Section 2.1(d)(iv) and (v) shall, except as
otherwise provided by paragraph (c) of Section 2.6, bear the legend regarding
the Definitive Security set forth in Section 2.1(c).
7. The registered holder of a Global Security may grant proxies
and otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Exchange Debenture Indenture or the Securities.
SECTION B. Execution and Authentication. An Officer shall sign the
Securities for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Exchange Debenture Indenture.
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<PAGE> 41
At any time and from time to time on or after the exchange of
Exchangeable Preferred Stock for Securities pursuant to the terms of and in
accordance with the Certificate of Designations, the Trustee shall authenticate
and make available for delivery Securities for original issue in an aggregate
principal amount of $35.0 million or greater, with such principal amount in
excess of $35.0 million equal to the aggregate liquidation preference of the
shares of Exchangeable Preferred Stock issued as dividends pursuant to the
Certificate of Designations. A written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company (the "Company Order") shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $35.0 million except as provided in this
paragraph or in accordance with Section 2.7. Notwithstanding anything in this
Exchange Debenture Indenture to the contrary or the execution and delivery of
this Exchange Debenture Indenture on the date hereof, the terms and provisions
of this Exchange Debenture Indenture shall not be effective until the
consummation of an exchange pursuant to and in accordance with the provisions of
the Certificate of Designations.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Exchange Debenture Indenture to authentication by the Trustee includes
authentication by such agent.
In case the Company or any Note Guarantor (if any), pursuant to
Article 5, shall be consolidated or merged with or into any other Person or
shall convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Note Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article 5, any of the Securities authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Securities executed in the name of the successor Person with such changes
in phraseology and form as may be appropriate, but otherwise in substance of
like tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Order of the successor Person, shall
authenticate and deliver Securities as specified in such order for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section 2.2 in exchange
or substitution for or upon registration of transfer of any Securities, such
successor
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Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all Securities at the time outstanding for Securities
authenticated and delivered in such new name.
SECTION C. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Register").
The Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.
The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Exchange
Debenture Indenture, which shall incorporate the terms of the TIA. The agreement
shall implement the provisions of this Exchange Debenture Indenture that relate
to such agent. The Company shall notify the Trustee of the name and address of
each such agent. If the Company fails to maintain a Registrar or Paying Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.7. The Company or any of its domestically
incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar,
co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
The Company initially appoints The Depository Trust Company to act
as Depository with respect to the Global Securities.
SECTION D. Paying Agent To Hold Money in Trust. By at least 10:00
a.m (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money held by it as Paying Agent and hold
it as a separate trust fund. The Company at any time may require a Paying Agent
(other than the Trustee) to pay all money held by it to the Trustee and to
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<PAGE> 43
account for any funds disbursed by such Paying Agent. Upon complying with this
Section, the Paying Agent (if other than the Company or a Subsidiary) shall have
no further liability for the money delivered to the Trustee. Upon any
bankruptcy, reorganization or similar proceeding with respect to the Company,
the Trustee shall serve as Paying Agent for the Securities.
SECTION E. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.
SECTION F. Transfer and Exchange.
1. Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall, subject to the other terms and conditions of this
Article II (including without limitation Section 2.1(e)), execute and
the Trustee shall authenticate Definitive Securities and Global
Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax, assessments, or
similar governmental charge payable in connection therewith (other than
any such transfer taxes or similar governmental charges payable upon
exchange or transfer).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period
beginning (1) 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities and ending at the close of
business on the day of such mailing or (2) 15 Business Days before an
interest payment date and ending on such interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar
or any co-registrar may deem and treat the person in whose name a
Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such
Security and for all other purposes whatsoever, whether or not such
Security is overdue, and none of the Company, the Trustee,
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<PAGE> 44
the Paying Agent, the Registrar or any co-registrar shall be affected
by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant
to the terms of this Exchange Debenture Indenture shall evidence the
same debt and shall be entitled to the same benefits under this
Exchange Debenture Indenture as the Securities surrendered upon such
transfer or exchange.
2. No Obligation of the Trustee. The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, the Depository or other Person with respect to
the accuracy of the records of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice or
the payment of any amount or delivery of any Securities (or other security or
property) under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made to Holders
in respect of the Securities shall be given or made only to or upon the order of
the registered Holders (which shall be the Depository or its nominee in the case
of a Global Security). The rights of beneficial owners in any Global Security
shall be exercised only through the Depository subject to the applicable rules
and procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with respect
to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Exchange Debenture Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers between or
among Depository participants, members or beneficial owners in any Global
Security) other than to require delivery of such certificates and other
documentation or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of this Exchange Debenture Indenture, and to
examine the same to determine substantial compliance as to form with the express
requirements hereof.
SECTION G. Mutilated, Destroyed, Lost or Stolen Securities. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform Commercial Code are
met and the Holder satisfies any other reasonable requirements of the Trustee.
If required by the Trustee or the Company, such Holder shall furnish an
indemnity bond sufficient in the judgment of the Company and
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<PAGE> 45
the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar
and any co-registrar from any loss that any of them may suffer if a Security is
replaced, then, in the absence of notice to the Company, any Note Guarantor or
the Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and upon Company Order the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay all amounts due and payable on such
Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Note Guarantor and any
other obligor upon the Securities, whether or not the mutilated, destroyed, lost
or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Exchange Debenture Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION H. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding in the
event the Company or an Affiliate of the Company holds the Security.
If a Security is replaced or paid pursuant to Section 2.7, it
ceases to be outstanding unless the Trustee and the Company receive proof
satisfactory to them that such Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance
with this Exchange Debenture Indenture, on a maturity date money sufficient to
pay all principal
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<PAGE> 46
and interest payable on that date with respect to the Securities maturing and
the Paying Agent is not prohibited from paying such money to the Securityholders
on that date pursuant to the terms of this Exchange Debenture Indenture, then on
and after that date such Securities will cease to be outstanding and interest on
them will cease to accrue.
SECTION I. Temporary Securities. Until Definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Exchange
Debenture Indenture as a holder of Definitive Securities.
SECTION J. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation. The Company may not issue new Securities to replace Securities it
has paid or delivered to the Trustee for cancellation.
SECTION K. Payment of Interest; Defaulted Interest. Interest on
any Security which is payable, and is punctually paid or duly provided for, on
any interest payment date shall be paid to the Person in whose name such
Security (or one or more predecessor Securities) is registered at the close of
business on the regular record date for such interest at the office or agency of
the Company maintained for such purpose pursuant to Section 2.3.
Any interest on any Security which is payable, but is not paid
when the same becomes due and payable and such nonpayment continues for a period
of 30 days shall forthwith cease to be payable to the Holder on the regular
record date by virtue of having been such Holder, and such defaulted interest
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities (such defaulted interest and
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interest thereon herein collectively called "Defaulted Interest") shall be paid
by the Company, at its election in each case, as provided in clause (a) or (b)
below:
1. The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date (not less
than 30 days after such notice) of the proposed payment (the "Special
Interest Payment Date"), and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the Special Interest Payment Date and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date, and in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date and Special Interest Payment Date therefor
to be given in the manner provided for in Section 10.2, not less than
10 days prior to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date and
Special Interest Payment Date therefor having been so given, such
Defaulted Interest shall be paid on the Special Interest Payment Date
to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (b).
2. The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Exchange Debenture Indenture upon registration of transfer
of or in exchange
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<PAGE> 48
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION L. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months and the
actual number of days elapsed.
SECTION M. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III.
Redemption
SECTION A. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the paragraph of the Securities pursuant to which the redemption
will occur.
The Company shall give each notice to the Trustee provided for in
this Section at least 45 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officer's
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. Any such notice may be canceled at any time prior to
notice of such redemption being mailed to any Holder and shall thereby be void
and of no effect.
SECTION B. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed on a pro rata basis, by lot or by a method that complies with
applicable legal and securities exchange requirements, if any, and that the
Trustee considers, in its sole discretion, fair and appropriate and in
accordance with methods generally used at the time of selection by fiduciaries
in similar circumstances. The Trustee shall make the selection
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<PAGE> 49
from outstanding Securities not previously called for redemption. The Trustee
may select for redemption portions of the principal of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in amounts of $1,000 or a whole multiple of $1,000. Provisions
of this Exchange Debenture Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly in writing of the Securities or
portions of Securities to be redeemed.
SECTION C. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers and principal amounts of the
particular Securities to be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Exchange Debenture Indenture, interest on
Securities (or portion thereof) called for redemption ceases to accrue
on and after the redemption date;
(7) the paragraph of the Securities pursuant to which the
Securities called for redemption are being redeemed;
(8) the CUSIP number, if any, printed on the Securities being
redeemed; and
(9) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Securities.
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At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION D. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest, if any, to the redemption
date; provided that if the redemption date is after a regular record date and on
or prior to the interest payment date, the accrued interest shall be payable to
the Securityholder of the redeemed Securities registered on the relevant record
date. Failure to give notice or any defect in the notice to any Holder shall not
affect the validity of the notice to any other Holder.
SECTION E. Deposit of Redemption Price. On or prior to 10:00 a.m.
on the redemption date, the Company shall deposit with the Paying Agent (or, if
the Company or a Subsidiary is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the redemption price of and accrued interest on
all Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation, and from and after such date (unless the Company
defaults in making such redemption payment) interest on such Securities shall
cease to accrue.
SECTION F. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION G. Optional Redemption. 1. Except as set forth in this
Section 3.7, the Securities may not be redeemed pursuant to this Section 3.7(a)
at the option of the Company prior to March 15, 2003. On and after that date,
the Company may redeem the Securities in whole at any time or in part from time
to time at the following redemption prices (expressed in percentages of
principal amount), plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date) if redeemed during
the 12-month period beginning on March 15 of the years set forth below:
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<PAGE> 51
Redemption
Period Price
2003 ........................................................... 106.125%
2004 ........................................................... 104.083%
2005 ........................................................... 102.042%
2006 and thereafter ........................................... 100.000%
2. Notwithstanding the foregoing, at any time and from time to
time prior to March 15, 2001, the Company may redeem the Securities in whole or
in part with the Net Cash Proceeds of one or more Public Equity Offerings by the
Company following which there is a Public Market, at a redemption price
(expressed as a percentage of principal amount) of 112.250% plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of Holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that such redemption shall occur
within 180 days of the date of the closing of such Public Equity Offering(s).
3. At any time on or prior to March 15, 2003, the Securities may
be redeemed as a whole at the option of the Company upon the occurrence of a
Change of Control, upon not less than 30 nor more than 60 days' prior notice
(but in no event more than 180 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
ARTICLE IV.
Covenants
SECTION A. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Exchange Debenture Indenture. Principal
and interest shall be considered paid on the date due if on such date the
Trustee or the Paying Agent holds in accordance with this Exchange Debenture
Indenture money sufficient to pay all principal and interest then due and the
Trustee or the Paying Agent, as the case may be, is not prohibited from paying
such money to the Securityholders on that date pursuant to the terms of this
Exchange Debenture Indenture.
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The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION B. SEC Reports. Notwithstanding that the Company may not
be required to be or remain subject to the reporting requirements of Section 13
or 15(d) of the Exchange Act, the Company will file (if then permitted to do so)
with the SEC and provide (whether or not so filed with the SEC) the Trustee and
Securityholders and prospective Securityholders (upon request) with the annual
reports and the information, documents and other reports, which are specified in
Sections 13 and 15(d) of the Exchange Act. The Company also will comply with the
other provisions of TIA Section 314(a). Delivery of such reports, information
and documents to the Trustee is for informational purposes only and the
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Company's compliance with any of
its covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers' Certificates).
SECTION C. Limitation on Indebtedness. 1. The Company will not,
and will not permit any Restricted Subsidiary to, Incur any Indebtedness;
provided, however, that the Company and the Exchange Debenture Guarantors may
Incur Indebtedness if on the date of the Incurrence of such Indebtedness the
Consolidated Coverage Ratio would be greater than 2.00:1.00.
2. Notwithstanding Section 4.3(a), the Company and, where
indicated, its Restricted Subsidiaries may Incur the following Indebtedness:
(a) Indebtedness of the Company Incurred pursuant to the Senior
Secured Credit Facility in a maximum principal amount not to exceed at
any time (A) an aggregate principal amount of $40.0 million under the
Term Loan Facility less the aggregate amount of all scheduled
repayments of principal, or mandatory prepayments of principal with Net
Available Cash from Asset Dispositions, applied to permanently reduce
the Indebtedness outstanding under the Term Loan Facility, plus (in the
case of any refinancing thereof) the aggregate amount of fees,
underwriting discounts, premiums and other costs and expenses incurred
in connection with such refinancing, and (B) an aggregate principal
amount outstanding at any time under the Revolving Credit Facility not
to exceed $20.0 million less the amount of all mandatory prepayments of
principal with Net Available Cash from Asset Dispositions, applied to
permanently reduce the commitments under the Revolving Credit Facility,
plus (in the case of any refinancing thereof) the aggregate amount of
fees, underwriting discounts,
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premiums and other costs and expenses incurred in connection with such
refinancing;
(b) Indebtedness of Foreign Subsidiaries for working capital
purposes and any Guarantees in respect thereof, the aggregate principal
amount of which Indebtedness outstanding at any time does not exceed,
as to all such Foreign Subsidiaries, $15.0 million;
(c) Indebtedness (A) of the Company to any Restricted Subsidiary
and (B) of any Wholly Owned Subsidiary to the Company or any Restricted
Subsidiary; provided, however, (x) in the case of clause (A), any such
Indebtedness is subordinated to the Securities and (y) any subsequent
issuance or transfer of any Capital Stock or any other event that
results in any such Wholly Owned Subsidiary ceasing to be a Wholly
Owned Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Company or a Wholly Owned Subsidiary) will
be deemed, in each case, an Incurrence of Indebtedness by the Company
or such Restricted Subsidiary, as the case may be;
(d) any Indebtedness (other than the Indebtedness described in
clause 4.3(b)(i), (ii) or (iii) above) outstanding on the date of the
Exchange Debenture Indenture and any Refinancing Indebtedness Incurred
in respect of any Indebtedness described in this clause 4.3(b)(iv) or
Section 4.3(a);
(e) Indebtedness of the Company or any Restricted Subsidiary (A)
to finance or refinance the deferred purchase price of newly acquired
property of the Company and its Subsidiaries used in the ordinary
course of business of the Company and its Subsidiaries (provided such
purchase money financing is entered into within six months of the
acquisition of such property), and any Refinancing Indebtedness with
respect thereto, and (B) in the form of Capitalized Lease Obligations
or Attributable Debt, and any Refinancing Indebtedness with respect
thereto, in an aggregate amount (based on, in the case of clause (A),
the remaining balance of the obligations therefor on the books of the
Company and its Restricted Subsidiaries) not in excess, at any one time
outstanding, of $10,0 million:
(f) Indebtedness of the Company or any Restricted Subsidiary
(which may comprise Bank Indebtedness) in an aggregate principal amount
at any one time outstanding not in excess of $10.0 million;
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(g) Indebtedness represented by the Exchange Debenture Guarantees
and Guarantees of Indebtedness Incurred pursuant to clause 4.3(b)(i) or
(iii) above;
(h) Guarantees (A) by any Exchange Debenture Guarantor of Exchange
Debenture Senior Indebtedness, (B) by the Company or any Exchange
Debenture Guarantor of Guarantor Senior Indebtedness or (C) by any
Wholly Owned Subsidiary that is not an Exchange Debenture Guarantor of
Indebtedness of any Wholly Owned Subsidiary that is not an Exchange
Debenture Guarantor;
(i) Indebtedness (A) arising by reason of any Lien created or
permitted to exist by Section 4.11, including any Indebtedness of any
Exchange Debenture Guarantor arising by reason of any Lien granted by
such Person to secure Exchange Debenture Senior Indebtedness, or of the
Company or any Exchange Debenture Guarantor arising by reason of any
Lien granted by such Person to secure Exchange Debenture Guarantor
Senior Indebtedness, or (B) of any Restricted Subsidiary that is not an
Exchange Debenture Guarantor arising by reason of any Lien granted by
such Person to secure Indebtedness of any Restricted Subsidiary that is
not an Exchange Debenture Guarantor;
(j) Indebtedness of the Company or any Restricted Subsidiary
arising from the honoring of a check, draft or similar instrument of
such Person drawn against insufficient funds, provided that such
Indebtedness is extinguished within five Business Days of its
incurrence;
(k) Indebtedness of the Company or any Restricted Subsidiary
consisting of guarantees, indemnities, or obligations in respect of
purchase price adjustments, in connection with the acquisition or
disposition of assets, other than guarantees of Indebtedness incurred
by any Person acquiring such assets for the purpose of financing such
acquisition; provided, however, that (A) such Indebtedness is not
reflected on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to
financial statements and not otherwise reflected on the balance sheet
will not be deemed to be reflected on such balance sheet for purposes
of this clause (A)) and (B) the maximum Indebtedness Incurred in
connection with such disposition shall at no time exceed the gross
proceeds being measured at the time received by the Company and its
Restricted Subsidiaries in connection with such disposition (which
proceeds would include assumed Indebtedness of the Company or any
Restricted Subsidiary and, with respect to any other non-cash proceeds
of any such disposition, the fair market value at the time of receipt
of such proceeds and without giving effect to any subsequent changes in
value);
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(l) Indebtedness in respect of (A) commercial letters of credit,
or other letters of credit or other similar instruments or obligations,
issued in connection with liabilities incurred in the ordinary course
of business (including those issued to governmental entities in
connection with self-insurance under applicable workers' compensation
statutes), or (B) surety, judgment, appeal, performance and other
similar bonds, instruments or obligations provided in the ordinary
course of business;
(m) Indebtedness of the Company or any Exchange Debenture
Guarantor under Hedging Obligations; provided, however, that such
Hedging Obligations are entered into for bona fide hedging purposes and
are in the ordinary course of business;
(n) Indebtedness (A) of the Company consisting of Guarantees of up
to an aggregate principal amount of $500,000 of borrowings by
Management Investors in connection with the purchase of Capital Stock
of the Company by such Management Investors or (B) of the Company or
any Restricted Subsidiary consisting of guarantees in respect of loans
or advances made to officers or employees of the Company or any
Restricted Subsidiary, or guarantees otherwise made on their behalf,
(1) in respect of travel, entertainment and moving-related expenses
incurred in the ordinary course of business, or (2) in the ordinary
course of business not exceeding $500,000 in the aggregate outstanding
at any time;
(o) Indebtedness of any Restricted Subsidiary that is Indebtedness
of another Person assumed by such Restricted Subsidiary in connection
with its acquisition of assets from such Person (other than
Indebtedness Incurred in connection with, or in contemplation of, such
acquisition) and any Refinancing Indebtedness with respect thereto;
provided, however, that at the time of such acquisition of assets the
Company shall have been able to Incur at least an additional $1.00 of
Indebtedness under Section 4.3(a) above after giving effect to such
acquisition;
(p) Indebtedness of a Restricted Subsidiary issued and outstanding
on or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred (A) as
consideration in, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was acquired by the Company or (B)
otherwise in connection with, or in contemplation of, such acquisition)
and any Refinancing Indebtedness with respect thereto; provided,
however, that on the date of any such acquisition the Company shall
have been able to Incur at least
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$1.00 of Indebtedness under Section 4.3(a) above after giving effect to
such acquisition;
(xvii) Indebtedness of the Company in respect of Exchange
Debentures issued upon the exchange of the Exchangeable Preferred Stock
or issued thereafter on the Exchange Debentures, to the extent such
interest payments are made pursuant to the terms of the Exchange
Debenture Indenture; and
3. Notwithstanding the foregoing, the Company will not Incur any
Indebtedness pursuant to any provision of the foregoing paragraph (b) that
permits Refinancing Indebtedness in respect of Indebtedness constituting
Exchange Debenture Subordinated Indebtedness, if the proceeds of such
Refinancing Indebtedness are used, directly or indirectly, to refinance such
Exchange Debenture Subordinated Indebtedness, unless such Refinancing
Indebtedness will be subordinated to the Securities to at least the same extent
as such Exchange Debenture Subordinated Indebtedness.
4. For purposes of determining compliance with, and the
outstanding principal amount of any particular Indebtedness Incurred pursuant to
and in compliance with, this covenant, (i) any other obligation of the obligor
on such Indebtedness arising under any Guarantee, Lien or letter of credit
supporting such Indebtedness shall be disregarded to the extent that such
Guarantee, Lien or letter of credit secures the principal amount of such
Indebtedness; (ii) in the event that Indebtedness meets the criteria of more
than one of the types of Indebtedness described in any clause of Section 4.3(b)
above, the Company, in its sole discretion, shall classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of such clauses; and (iii) the amount of Indebtedness issued
at a price that is less than the principal amount thereof shall be equal to the
amount of the liability in respect thereof determined in accordance with GAAP.
5. For purposes of determining compliance with any
Dollar-denominated restriction on the Incurrence of Indebtedness denominated in
a foreign currency, the Dollar-equivalent principal amount of such Indebtedness
Incurred pursuant thereto shall be calculated based on the relevant currency
exchange rate in effect on the date of such calculation.
SECTION D. Limitation on Restricted Payments. 1. The Company shall
not, and shall not permit any Restricted Subsidiary, directly or indirectly, to
(i) declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving the Company) except (x) dividends or distributions
payable solely in its Capital Stock (other than
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Disqualified Stock) and (y) dividends or distributions payable to the Company or
any Restricted Subsidiary (and, if the Restricted Subsidiary making such
dividend or distribution is not a Wholly Owned Subsidiary, to its other
shareholders on no more than a pro rata basis, measured by value), (ii)
purchase, redeem, retire or otherwise acquire for value any Capital Stock of the
Company held by Persons other than the Company or another Restricted Subsidiary,
(iii) purchase, repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Exchange Debenture Subordinated Indebtedness (other than the
purchase, repurchase, redemption or other acquisition of Exchange Debenture
Subordinated Indebtedness in anticipation of satisfying a sinking fund
obligation, principal installment or final maturity, in each case due within one
year of the date of acquisition) or (iv) make any Investment (other than a
Permitted Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to as a "Restricted Payment") if at the time the Company
or such Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom);
(2) the Company could not incur at least an additional $1.00 of
Indebtedness under Section 4.3(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to
be determined in good faith by the Company's Board of Directors whose
determination shall be conclusive and evidenced by a resolution of the
Company's Board of Directors) declared or made subsequent to the date
of the Exchange Debenture Indenture would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the end of the most
recent fiscal quarter ending prior to the Issue Date to the end of
the most recent fiscal quarter ending prior to the date of such
Restricted Payment for which consolidated financial statements of
the Company are available (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit);
(B) the aggregate Net Cash Proceeds received by the Company
either (x) as capital contributions to the Company after the Issue
Date or (y) from the issuance or sale of its Capital Stock (other
than Disqualified
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Stock) subsequent to the Issue Date (other than an issuance or
sale to a Restricted Subsidiary of the Company);
(C) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion or
exchange (other than by a Restricted Subsidiary of the Company)
subsequent to the Issue Date, of any Indebtedness of the Company
or its Restricted Subsidiaries convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of the Company (less
the amount of any cash, or other property (other than Capital
Stock), distributed by the Company upon such conversion or
exchange), plus the amount of any cash or other property received
by the Company or any Restricted Subsidiary upon such conversion
or exchange;
(D) the amount equal to the net reduction in Investments in
Unrestricted Subsidiaries resulting from (i) repayments of the
principal of loans or advances or other transfers of assets to the
Company or any Restricted Subsidiary from any Unrestricted
Subsidiary or (ii) the redesignation of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each case as provided in the
definition of "Investment"), not to exceed in the case of any such
Unrestricted Subsidiary the aggregate amount of Investments (other
than Permitted Investments) made by the Company or any Restricted
Subsidiary in such Unrestricted Subsidiary after the Issue Date;
and
(E) in the case of disposition or repayment of any Investment
constituting a Restricted Payment (without duplication of any
amount deducted in calculating the amount of Investments at any
time outstanding included in the amount of Restricted Payments),
an amount equal to the lesser of the return of capital or
repayment with respect to such Investment and the initial amount
of such Investment, in either case, less the cost of the
disposition of such Investment.
2. The provisions of Section 4.4(a) will not prohibit:
(a) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Capital Stock of the Company or
Exchange Debenture Subordinated Indebtedness made by exchange
(including any such exchange pursuant to the exercise of a conversion
right or privilege in connection with which cash is paid in lieu of the
issuance of fractional shares) for, or out of the proceeds of the
substantially concurrent sale of, Capital Stock of the Company
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(other than Disqualified Stock and other than Capital Stock issued or
sold to a Subsidiary or an employee stock ownership plan or other trust
established by the Company or any of its Subsidiaries) or a
substantially concurrent capital contribution to the Company; provided,
however, that (A) such purchase, redemption, repurchase, defeasance,
retirement or other acquisition shall be excluded in subsequent
calculations of the amount of Restricted Payments and (B) the Net Cash
Proceeds from such sale or capital contribution shall be excluded in
subsequent calculations under clause (B) of Section 4.4(a);
(b) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Exchange Debenture Subordinated
Indebtedness made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Exchange Debenture Subordinated
Indebtedness of the Company that is permitted to be Incurred pursuant
to Section 4.3; provided, however, that such purchase, redemption,
repurchase, defeasance, retirement or other acquisition shall be
excluded in subsequent calculations of the amount of Restricted
Payments;
(c) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Exchange Debenture Subordinated
Indebtedness from Net Available Cash to the extent permitted by Section
4.6; provided, however, that such purchase, redemption, repurchase,
defeasance, retirement or other acquisition shall be excluded in
subsequent calculations of the amount of Restricted Payments;
(d) any purchase, redemption, repurchase, defeasance,
retirement or other acquisition of Exchange Debenture Subordinated
Indebtedness upon a Change of Control to the extent required by the
agreement governing such Exchange Debenture Subordinated Indebtedness
but only if the Company shall have complied with Section 4.8 and
purchased all Securities tendered pursuant to the offer to repurchase
all the Securities required thereby, prior to purchasing or repaying
such Exchange Debenture Subordinated Indebtedness; provided, however,
that (A) the purchase price (stated as a percentage of principal amount
or issue price plus accrued original issue discount, if less) of such
Exchange Debenture Subordinated Indebtedness shall not be greater than
the price (stated as a percentage of principal amount) of the
Securities pursuant to any such offer to repurchase the Securities in
the event of a Change of Control, and (B) any such purchase,
redemption, repurchase, defeasance, retirement or other acquisition
shall be included in subsequent calculations of the amount of
Restricted Payments;
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(e) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such dividend would
have complied with Section 4.4(a); provided, however, that such
dividends shall be included in subsequent calculations of the amount of
Restricted Payments;
(f) a Restricted Payment to pay for the repurchase or other
acquisition or retirement of Capital Stock or options, warrants or
other rights in respect thereof, or payments by the Company to
repurchase or otherwise acquire Capital Stock or options, warrants or
other rights in respect thereof, in each case from Management
Investors, such payments not to exceed an amount equal to $500,000 in
any fiscal year and $2.5 million in the aggregate (plus the Net Cash
Proceeds received by the Company since the Issue Date as a capital
contribution from the sale to Management Investors of Capital Stock or
options, warrants or other rights in respect thereof); provided,
however, that such payments will be included in subsequent calculations
of the amount of Restricted Payments;
(g) payments by the Company or any Restricted Subsidiary (x)
pursuant to the Management Agreements and (y) to G-IV, GSCP and SGCP
and their respective Affiliates, not to exceed an amount necessary to
permit each such Person, as the case may be, to (A) pay its costs
(including all professional fees and expenses) incurred to comply with
its reporting obligations under federal or state laws or under this
Exchange Debenture Indenture or the Certificate of Designations or the
Note Indenture, including any reports filed with respect to the
Securities Act, Exchange Act or the respective rules and regulations
promulgated thereunder, to the extent such costs relate to the Company
and its Subsidiaries, (B) make payments in respect of its
indemnification obligations of such Persons owing to directors,
officers, employees or other Persons under their charters or by-laws or
pursuant to written agreements with any such Person, to the extent such
payments relate to the Company and its Subsidiaries, (C) pay all
reasonable out-of-pocket expenses incurred in connection with the
Acquisition, the Consent Solicitation, the Offerings and related
transactions, and (D) indemnify or reimburse, or pay on behalf of, such
Persons any taxes, charges or assessments arising by reason of their
ownership of Capital Stock of the Company and the GSD Liquidation;
provided, however, that such payments will be excluded in subsequent
calculations of the amount of Restricted Payments;
(viii) the payment by the Company of dividends on the common stock
of the Company following an initial public offering of such common
stock, in an amount not to exceed in any fiscal year 6% of the net
proceeds received by the Company from such public offering; provided,
however, that such dividends will be included in subsequent
calculations of the amount of Restricted Payments;
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provided, that in the case of clauses (vi) and (viii) no Default or
Event of Default shall have occurred or be continuing at the time of
such payment after giving effect thereto; provided, further, that the
ongoing annual fees of up to $950,000 payable pursuant to the
Management Agreements shall not be made if a Default or an Event of
Default has occurred or is continuing at the time of such payment.
SECTION E. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause to exist or become effective
any consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except:
(i) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the date of the Exchange Debenture
Indenture (including, without limitation, the Notes, the Senior Secured
Credit Facility and the 2005 Notes);
(ii) any encumbrance or restriction with respect to a Restricted
Subsidiary (x) pursuant to an agreement relating to any Indebtedness
Incurred by a Restricted Subsidiary prior to the date on which such
Restricted Subsidiary was acquired by the Company, or of another Person
that is assumed by the Company or a Restricted Subsidiary in connection
with the acquisition of assets from, or merger or consolidation with,
such Person (other than Indebtedness Incurred as consideration in, or
to provide all or any portion of the funds or credit support utilized
to consummate, the transaction or series of related transactions
pursuant to which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company, or such acquisition of
assets, merger or consolidation) and outstanding on the date of such
acquisition, merger or consolidation or (y) pursuant to any agreement
(not relating to any Indebtedness) in existence when a Person becomes a
Subsidiary of the Company or when such agreement is acquired by the
Company or any Subsidiary thereof, that is not created in contemplation
of such Person becoming such a Subsidiary or such acquisition (for
purposes of this clause (2), if another Person is the Successor
Company, any Subsidiary or agreement thereof shall be deemed acquired
or assumed, as the case may be, by the Company when such Person becomes
the Successor Company);
(iii) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement (a "Refinancing Agreement")
effecting a refinancing of Indebtedness Incurred pursuant to, or that
otherwise extends, renews, refinances or replaces, an agreement
referred to in clause (1) or (2) of this
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Section 4.5 or this clause (3) (an "Initial Agreement") or contained in
any amendment to an Initial Agreement; provided, however, that the
encumbrances and restrictions contained in any such Refinancing
Agreement or amendment are no less favorable to the Holders of the
Securities taken as a whole than encumbrances and restrictions
contained in the Initial Agreement or Initial Agreements to which such
Refinancing Agreement or amendment relates (as conclusively determined
in good faith by the Board of Directors);
(iv) any encumbrance or restriction (A) that restricts in a
customary manner the subletting, assignment or transfer of any property
or asset that is subject to a lease, license or similar contract, or
the assignment or transfer of any lease, license or other contract, (B)
by virtue of any transfer of, agreement to transfer, option or right
with respect to, or Lien on, any property or assets of the Company or
any Restricted Subsidiary not otherwise prohibited by the Exchange
Debenture Indenture, (C) contained in mortgages, pledges or other
security agreements securing Indebtedness of a Restricted Subsidiary to
the extent such encumbrance or restrictions restrict the transfer of
the property subject to such mortgages, pledges or other security
agreements or (D) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal
easement agreements of the Company or any Restricted Subsidiary;
provided, however, that, in each case, such encumbrance or restriction
relates to, and restricts dealings with, only the property or asset
that is the subject of such encumbrance or restriction;
(v) any restriction with respect to a Restricted Subsidiary (or
any of its property or assets) imposed pursuant to an agreement entered
into for the direct or indirect sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted
Subsidiary (or the property or assets that are subject to such
restriction) pending the closing of such sale or disposition;
(vi) any encumbrance or restriction on the transfer of property or
assets required by any regulatory authority having jurisdiction over
the Company or any Restricted Subsidiary or any of their businesses;
and
(vii) any encumbrance or restriction pursuant to an agreement
relating to any foreign Indebtedness Incurred, or any sale of
receivables, by a Foreign Subsidiary, provided that the Indebtedness
pursuant to which such restriction applies does not exceed $10.0
million in any one case.
SECTION F. Limitation on Sales of Assets. 1. The Company will not, and
will not permit any Restricted Subsidiary to, make any Asset Disposition unless
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(a) the Company or such Restricted Subsidiary receives
consideration (including by way of relief from, or by any other Person
assuming responsibility for, any liabilities, contingent or otherwise)
at the time of such Asset Disposition at least equal to the fair market
value of the shares and assets subject to such Asset Disposition, as
such fair market value may be determined (and shall be determined, to
the extent such Asset Disposition or any series of related Asset
Dispositions involves aggregate consideration in excess of $1.0
million) in good faith by the Board of Directors, whose determination
shall be conclusive (including as to the value of all noncash
consideration),
(b) at least 75% of the consideration therefor (excluding, in the
case of an Asset Disposition of assets, any consideration by way of
relief from, or by any other Person assuming responsibility for, any
liabilities, contingent or otherwise, which are not Indebtedness)
received by the Company or such Restricted Subsidiary is in the form of
cash, and
(c) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) as follows:
(A) first, either (x) to the extent the Company elects (or is
required by the terms of any Exchange Debenture Senior Indebtedness
or Indebtedness (other than Exchangeable Preferred Stock) of a
Restricted Subsidiary), to prepay, repay or purchase Exchange
Debenture Senior Indebtedness or such Indebtedness of a Restricted
Subsidiary (in each case other than Indebtedness owed to the Company
or a Restricted Subsidiary) within 365 days after the date of such
Asset Disposition or (y) to the extent the Company or such
Restricted Subsidiary elects, to reinvest in Additional Assets
(including by means of an Investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the
Company or another Restricted Subsidiary) within 365 days from the
date of such Asset Disposition, or, if such reinvestment in
Additional Assets is a project authorized by the Board of Directors
that will take longer than such 365 days to complete, so long as
such project is completed within two years of the receipt of the Net
Available Cash from such Asset Sale;
(B) second, to the extent of the balance of such Net
Available Cash after application in accordance with clause (A) (such
balance, the "Excess Proceeds"), to make an offer to purchase
Securities and (to the extent required by the terms thereof) any
other Exchange Debenture Pari Passu Indebtedness, pursuant and
subject to the conditions of the
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Exchange Debenture Indenture and the agreements governing such other
Indebtedness, at a purchase price of 100% of the principal amount
thereof (or accreted value, as applicable) plus accrued and unpaid
interest to the purchase date; and
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B) above,
to fund (to the extent consistent with any other applicable
provision of the Exchange Debenture Indenture) any general corporate
purpose (including the repayment of any Exchange Debenture
Subordinated Indebtedness);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A)(x) or (B) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions of this covenant, the Company and the Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this covenant
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions that is not applied in accordance with this covenant exceeds $5.0
million. If the aggregate principal amount (or accreted value, as applicable) of
Securities and Exchange Debenture Pari Passu Indebtedness validly tendered and
not withdrawn in connection with an offer pursuant to clause (B) above exceeds
the Excess Proceeds, the Excess Proceeds will be apportioned between the
Securities and such Exchange Debenture Pari Passu Indebtedness, with the portion
of the Excess Proceeds payable in respect of the Securities to equal the lesser
of (x) the Excess Proceeds amount multiplied by a fraction, the numerator of
which is the outstanding principal amount of the Securities and the denominator
of which is the sum of the outstanding principal amount of the Securities and
the outstanding principal amount (or accreted value, as applicable) of the
relevant Exchange Debenture Pari Passu Indebtedness, and (y) the aggregate
principal amount of Securities validly tendered and not withdrawn.
For the purposes of this covenant, the following are deemed to be
cash: (w) Cash Equivalents, (x) the assumption of Indebtedness of the Company
(other than Disqualified Stock of the Company) or any Restricted Subsidiary and
the release of the Company or such Restricted Subsidiary from all liability on
such Indebtedness in connection with such Asset Disposition, (y) Indebtedness of
any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result
of such Asset Disposition, to the extent that the Company and each other
Restricted Subsidiary is released from any Guarantee of such Indebtedness in
connection with such Asset Disposition and (z)
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securities received by the Company or any Restricted Subsidiary from the
transferee that are promptly converted by the Company or such Restricted
Subsidiary into cash.
2. In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause 4.6(a)(iii)(B) above, the Company will be
required to purchase Securities tendered pursuant to an offer by the Company for
the Securities (the "Offer") at a purchase price of 100% of their principal
amount plus accrued and unpaid interest to the Purchase Date in accordance with
the procedures (including prorating in the event of oversubscription) set forth
in the Exchange Debenture Indenture. If the aggregate purchase price of the
Securities tendered pursuant to the Offer is less than the Net Available Cash
allotted to the purchase of the Securities, the remaining Net Available Cash
will be available to the Company for use in accordance with clause
4.6(a)(iii)(B) above (to repay Exchange Debenture Pari Passu Indebtedness) or
clause 4.6(a)(iii)(C) above. The Company shall not be required to make an Offer
for Securities pursuant to this covenant if the Net Available Cash available
therefor (after application of the proceeds as provided in clauses
4.6(a)(iii)(A) above) is less than $5.0 million for any particular Asset
Disposition (which lesser amounts shall be carried forward for purposes of
determining whether an Offer is required with respect to the Net Available Cash
from any subsequent Asset Disposition).
3. The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.6. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 4.6 by virtue
thereof.
SECTION G. Limitation on Transactions with Affiliates. The Company
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of transactions
(including the purchase, sale, lease or exchange of any property or the
rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") on terms (i) that taken as a whole are less favorable to the
Company or such Restricted Subsidiary, as the case may be, than those that could
be obtained at the time of such transaction in arm's-length dealings with a
Person who is not such an Affiliate and (ii) that, in the event such Affiliate
Transaction involves an aggregate amount in excess of $1.0 million, are not in
writing and have not been approved by a majority of the members of the Board of
Directors having no material personal financial interest in such Affiliate
Transaction, or in the event there are no such members, as to which the Company
has not obtained a Fairness Opinion (as hereinafter defined). In addition, any
transaction involving aggregate payments or other transfers by
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the Company and its Restricted Subsidiaries in excess of $5.0 million will also
require an opinion (a "Fairness Opinion") from an independent investment banking
firm or appraiser, as appropriate, of national prominence, to the effect that
the terms of such transaction taken as a whole are either (i) no less favorable
to the Company or such Restricted Subsidiary, as the case may be, than those
that could be obtained at the time of such transaction in arm's-length dealings
with a Person who is not an Affiliate or (ii) fair to the Company or such
Restricted Subsidiary, as the case may be, from a financial point of view.
2. The provisions of Section 4.7(a) shall not prohibit (i) any
Restricted Payment permitted by Section 4.4, any Permitted Investment, or any
other transaction specifically excluded from the definition of the term
"Restricted Payment," (ii) the performance of the Company's or Restricted
Subsidiary's obligations under any employment contract, collective bargaining
agreement, employee benefit plan, related trust agreement or any other similar
arrangement heretofore or hereafter entered into in the ordinary course of
business, (iii) payment of compensation, performance of indemnification or
contribution obligations, or any issuance, grant or award of stock, options or
other securities, to employees, officers or directors in the ordinary course of
business, (iv) maintenance in the ordinary course of business of benefit
programs or arrangements for employees, officers or directors, including
vacation plans, health and the insurance plans, deferred compensation plans, and
retirement or savings plans and similar plans, (v) any transaction between the
Company and a Restricted Subsidiary or between Restricted Subsidiaries, (vi)
loans or advances made to directors, officers or employees of the Company or any
Restricted Subsidiary, or guarantees in respect thereof or otherwise made on
their behalf (including any payments under such guarantees), (A) in respect of
travel, entertainment or moving-related expenses incurred in the ordinary course
of business, or (B) in the ordinary course of business not exceeding $500,000 in
the aggregate outstanding at any time, (vii) guarantees of borrowings by
Management Investors in connection with the purchase of Capital Stock of the
Company by such Management Investors, which guarantees are permitted
by Section 4.3, and payments thereunder, (viii) the assumption of GSD's
obligations under the GSD Credit Facility, and the incurrence and payment of all
fees and expenses payable in connection with the Acquisition, the Offerings and
related transactions, (ix) any other transaction arising out of agreements in
existence on the Issue Date, (x) execution, delivery and performance of the
Management Agreements, including the ongoing payment of fees to GSCP and SGCP of
up to $950,000 per year plus reasonable out of pocket expenses, (xi) any
commercial or other business transaction in the ordinary course of business with
any Permitted Holder or any Affiliate thereof, on terms that taken as a whole
are no less favorable to the Company and its Restricted Subsidiaries than those
that could be obtained at the time in arm's-length dealings with a Person who is
not an Affiliate of the Company, and (xii) any transaction between the Company
or any Restricted Subsidiary and any Affiliate of the
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Company controlled by the Company that is a joint venture or similar entity
primarily engaged in a Related Business so long as such transaction is in the
ordinary course of business and is on terms that are not materially less
favorable to the Company or the relevant Restricted Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person.
SECTION H. Change of Control. Upon the occurrence of a Change of
Control, each Securityholder shall have the right to require the Company to
repurchase all or any part of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date), provided, however, that notwithstanding the occurrence
of a Change of Control, the Company shall not be obligated to purchase the
Securities pursuant to this Section 4.8 in the event that it has exercised its
right to redeem all the Securities under Section 3.7 hereof.
In the event that at the time of such Change of Control the terms
of the Bank Indebtedness or the Note Indenture restrict or prohibit the
repurchase of Securities pursuant to this Section, then prior to the mailing of
the notice to Holders provided for in Section 4.8(b) below but in any event
within 30 days following any Change of Control (unless the Company has exercised
its right to redeem all the Securities under Section 3.7 hereof), the Company
shall (i) repay in full all Bank Indebtedness and obligations in respect of the
Notes or offer to repay in full all Bank Indebtedness and obligations in respect
of the Notes and repay the Bank Indebtedness of each lender and each Holder of
Notes who has accepted such offer or (ii) obtain the requisite consent under the
agreements governing the Bank Indebtedness and under the Note Indenture to
permit the repurchase of the Securities as provided for in Section 4.8(b) below.
2. Unless the Company has exercised its right to redeem all the
Securities under Section 3.7 hereof, within 30 days following any Change of
Control (or at the Company's option, prior to such Change of Control but after
the public announcement thereof) (except as provided in the proviso to the first
sentence of Section 4.8(a)), the Company shall mail a notice to each Holder with
a copy to the Trustee stating: (1) that a Change of Control has occurred or will
occur and that such Holder has (or upon such occurrence will have) the right to
require the Company to purchase such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on a record date to receive interest on the relevant interest payment
date); (2) the circumstances and relevant facts and financial information
regarding such Change of Control; (3) the repurchase date (which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed); (4) the instructions determined by the
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Company, consistent with this Section, that a Holder must follow in order to
have its Securities purchased and (5) that if such offer is made prior to such
Change of Control, payment is conditioned on the occurrence of such Change of
Control.
3. Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date a facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased.
4. On the purchase date, all Securities purchased by the Company
under this Section shall be delivered to the Trustee for cancellation, and the
Company shall pay the purchase price plus accrued and unpaid interest, if any,
to the Holders entitled thereto.
5. The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 4.8. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 4.8, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section 4.8 by virtue
thereof.
SECTION I. Compliance Certificate; Notice of Default. The Company
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company an Officer's Certificate signed by the principal executive,
principal financial or principal accounting officer of the Company complying
with Section 314(a)(4) of the TIA and stating that a review of its activities
and the activities of its Subsidiaries during the preceding fiscal year has been
made under the supervision of the signing Officer with a view to determining
whether the Company has kept, observed, performed and fulfilled its obligations
under this Exchange Debenture Indenture (without regard to notice requirements
or periods of grace) and further stating, as to each Officer signing such
certificate, whether or not the signer knows of any failure by the Company or
any Subsidiary of the Company to comply with any conditions or covenants in this
Exchange Debenture Indenture, and, if such signer does know of such a failure to
comply, the certificate shall describe such failure with particularity and
describe what actions, if any, the Company proposes to take with respect to such
failure. The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default, their
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status and what action the Company is taking or proposes to take in respect
thereof, within 30 days after the occurrence thereof.
SECTION J. [Intentionally omitted.]
SECTION K. Limitation on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, create or
permit to exist any Lien (other than Permitted Liens) on any of its property or
assets (including Capital Stock of any other Person), whether owned on the date
of the Exchange Debenture Indenture or thereafter acquired, securing any
Indebtedness that is not Exchange Debenture Senior Indebtedness or Exchange
Debenture Guarantor Senior Indebtedness (the "Initial Lien"), unless
contemporaneously therewith effective provision is made to secure the
Indebtedness due under the Exchange Debenture Indenture and the Securities or,
in respect of Liens on any Restricted Subsidiary's property or assets, any
Exchange Debenture Guarantee of such Restricted Subsidiary, equally and ratably
with such obligation for so long as such obligation is so secured by such
Initial Lien. Any such Lien thereby created in favor of the Securities or any
such Exchange Debenture Guarantee will be automatically and unconditionally
released and discharged upon (i) the release and discharge of the Initial Lien
to which it relates, or (ii) any sale, exchange or transfer to any Person not an
Affiliate of the Company of the property or assets secured by such Initial Lien,
or of all of the Capital Stock held by the Company or any Restricted Subsidiary
in, or all or substantially all the assets of, any Restricted Subsidiary
creating such Lien.
SECTION L. Additional Exchange Debenture Guarantors. 1. If the
Company or any of its Domestic Subsidiaries shall acquire or create another
Domestic Subsidiary that is a Significant Subsidiary, then the Company, the
Trustee and such newly acquired or created Domestic Subsidiary shall execute and
deliver a supplemental indenture evidencing such Note Guarantee and deliver an
Opinion of Counsel, in accordance with the terms of this Exchange Debenture
Indenture. The Company will also have the right to cause any Restricted
Subsidiary so to become an Exchange Debenture Guarantor. Each Exchange Debenture
Guarantee will be limited to an amount not to exceed the maximum amount that can
be Guaranteed by that Subsidiary without rendering the Exchange Debenture
Guarantee, as it relates to such Subsidiary, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer or similar laws
affecting the rights of creditors generally. Such Exchange Debenture Guarantee
may be substantially in the form of Exhibit B hereto or in such other form as
may be reasonably satisfactory to the Trustee and the Company.
2. Except as provided in the applicable Exchange Debenture
Guarantee, no Exchange Debenture Guarantor may consolidate or merge with into
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(whether or not such Exchange Debenture Guarantor is the surviving Person)
another Person unless (i) the Person formed by or surviving any such
consolidation or merger (if other than an Exchange Debenture Guarantor or the
Company) assumes all the obligations of such Exchange Debenture Guarantor under
the Exchange Debenture Guarantee and the Exchange Debenture Indenture pursuant
to a supplemental indenture, in form reasonably satisfactory to the Trustee, and
(ii) if such merger or consolidation is with a Person other than the Company or
a Restricted Subsidiary, (x) immediately after such transaction, no Default or
Event of Default exists and (y) the Company will, at the time of such
transaction after giving pro forma effect thereto, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to Section 4.3(a).
SECTION M. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries . The Company (i) will not, and will not permit any
Restricted Subsidiary of the Company to transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Restricted Subsidiary to any
Person (other than the Company or a Wholly Owned Subsidiary) and (ii) will not
permit any Restricted Subsidiary to issue any of its Capital Stock (other than
to management of such Restricted Subsidiary and, if necessary, shares of its
Capital Stock constituting directors' qualifying shares) to any Person other
than to the Company or a Wholly Owned Subsidiary, unless (a) after any such
transfer, conveyance, sale, lease, disposition or issuance, such Restricted
Subsidiary continues to be a Restricted Subsidiary and (b) the net cash proceeds
from such transfer, conveyance, sale, lease, disposition or issuance, are
applied in accordance with Section 4.6; provided, however, that this provision
shall not prohibit (x) the transfer, conveyance, sale, lease or other
disposition of all of the Capital Stock of any Restricted Subsidiary or the
retention of Preferred Stock which is not Disqualified Stock in connection with
any such transfer, conveyance, sale, lease or other disposition, (y) the
transfer, conveyance, sale, lease or other disposition of Preferred Stock of a
Subsidiary in compliance with Section 4.6 and (z) the issuance or sale of any
Preferred Stock of a Restricted Subsidiary if such issuance or sale would be in
compliance with Section 4.3.
ARTICLE V.
Successor Company
SECTION A. When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into, or convey, transfer or lease
all or substantially all its assets to, any Person, unless:
(a) the resulting, surviving or transferee Person (the "Successor
Company") will be a Person organized and existing under the laws of the
United
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States of America, any State thereof or the District of Columbia and
the Successor Company (if not the Company) will expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form reasonably satisfactory to the Trustee, all the obligations of
the Company under the Securities and the Exchange Debenture Indenture;
(ii) immediately after giving effect to such transaction (and treating
any Indebtedness which becomes an obligation of the Successor Company
or any Restricted Subsidiary as a result of such transaction as having
been Incurred by the Successor Company or such Restricted Subsidiary at
the time of such transaction), no Default will have occurred and be
continuing; (iii) immediately after giving pro forma effect to such
transaction, the Successor Company would be able to Incur an additional
$1.00 of Indebtedness under Section 4.3(a); (iv) each Exchange
Debenture Guarantor (other than any party to any such merger) shall
have delivered a written instrument in form and substance reasonably
satisfactory to the Trustee confirming its Exchange Debenture
Guarantee; and (v) the Company will have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each to the effect
that such consolidation, merger or transfer and such supplemental
indenture (if any) comply with the Exchange Debenture Indenture,
provided that (x) in giving such opinion such counsel may rely on such
officer's certificate as to any matters of fact (including without
limitation as to compliance with the foregoing clauses (ii) and (iii)),
and (y) no Opinion of Counsel will be required for a consolidation,
merger or transfer described in the last paragraph of this Section 5.1.
Any Indebtedness that becomes an obligation of the Company or any
Restricted Subsidiary (or that is deemed to be Incurred by any
Restricted Subsidiary that becomes a Restricted Subsidiary) as a result
of such transaction undertaken in compliance with this covenant, and
any Refinancing Indebtedness with respect thereto, shall be deemed to
have been Incurred in compliance with Section 4.3.
The Successor Company will succeed to, and be substituted for,
and may exercise every right and power of, the Company under the
Exchange Debenture Indenture, and thereafter the predecessor Company
shall be relieved of all obligations and covenants under this
Agreement, except that, in the case of a conveyance, transfer or lease
of all or substantially all its assets, the predecessor Company will
not be released from the obligation to pay the principal of and
interest on the Securities.
Notwithstanding Section 5.1(ii) and (iii), (1) any Restricted
Subsidiary may consolidate with, merge into or transfer all or part of its
properties and assets to the Company and (2) the Company may merge with an
Affiliate incorporated or organized for the purpose of reincorporating or
reorganizing the Company in another jurisdiction to realize tax or other
benefits.
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ARTICLE VI.
Defaults and Remedies
SECTION A. Events of Default. An "Event of Default" occurs if:
(i) the Company defaults in any payment of interest on any
Security when the same becomes due and such default continues for a
period of 30 days;
(ii) the Company defaults in the payment of the principal of any
Security when the same becomes due at its Stated Maturity, upon
optional redemption, upon required repurchase, upon declaration or
otherwise, whether or not such payment shall be prohibited by Article
10;
(iii) the Company fails to comply with Section 5.1;
(iv) the Company fails to comply with Section 4.2, 4.3, 4.4, 4.5,
4.6, 4.7, 4.8, 4.11, 4.12, 4.13 or 4.14 (other than a failure to
purchase Securities when required under Section 4.6 or 4.8) and such
failure continues for 30 days after the notice specified below;
(v) the Company fails to comply with any of its agreements in the
Securities or this Exchange Debenture Indenture (other than those
referred to in (1), (2), (3) or (4) above) and such failure continues
for 60 days after the notice specified below;
(vi) any Exchange Debenture Guarantor fails to comply with its
obligations under any Exchange Debenture Guarantee to which such
Exchange Debenture Guarantor is a party, after any applicable grace
period;
(vii) Indebtedness of the Company or any Significant Subsidiary is
not paid within any applicable grace period after final maturity or the
acceleration by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million
or its foreign currency equivalent at the time;
(viii) the Company or any Significant Subsidiary pursuant to or
within the meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
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(B) consents to the entry of an order for relief against
it in an involuntary case;
(C) consents to the appointment of a Custodian of it or
for any substantial part of its property;
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(ix) any judgment or decree for the payment of money (net of any
insurance or indemnity payments actually received in respect thereof
prior to or within 60 days from the entry thereof, or to be received in
respect thereof in the event any appeal thereof shall be unsuccessful)
in excess of $5.0 million or its foreign currency equivalent at the
time is entered against the Company or any Significant Subsidiary that
is not discharged, or bonded or insured by a third Person and either
(A) an enforcement proceeding has been commenced upon such judgment or
decree or (B) there is a period of 60 days following the entry of such
judgment or decree during which such judgment or decree is not
discharged, waived or the execution thereof stayed; or
(x) any Exchange Debenture Guarantee by an Exchange Debenture
Guarantor which is a Significant Subsidiary shall cease to be in full
force and effect (except as contemplated by the terms thereof or of
this Exchange Debenture Indenture) or any such Exchange Debenture
Guarantor shall deny or disaffirm its obligations in writing under this
Exchange Debenture Indenture or any Exchange Debenture Guarantee and
such Default continues for 10 days after the notice specified below.
The foregoing shall constitute Events of Default whatever the
reason for any such Event of Default and whether it is voluntary or involuntary
or is effected by operation of law or pursuant to any judgment, decree or order
of any court or any order, rule or regulation of any administrative or
governmental body.
The term "Bankruptcy Law" means Title 11, United States Code, or
any similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (4) or (5) above is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
outstanding Securities
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notify the Company of the Default and the Company does not cure such Default
within the time specified after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any Event of Default under clause (6) above and any event which with the giving
of notice or the lapse of time would become an Event of Default under clause
(4), (5) or (9) above, its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION B. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(8) with respect to the Company) occurs
and is continuing, the Trustee by notice to the Company, or the Holders of at
least a majority in principal amount of the outstanding Securities by notice to
the Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon such a declaration,
such principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.1(8) with respect to the Company occurs and is
continuing, the principal of and interest on all the Securities shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Securityholders. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default have
been cured or waived except nonpayment of principal or interest that has become
due solely because of acceleration. No such rescission shall affect any
subsequent Default or impair any right consequent thereto.
SECTION C. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Exchange Debenture Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION D. Waiver of Past Defaults. The Holders of a majority in
principal amount of the outstanding Securities by notice to the Trustee may
waive an
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existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security or (ii) a Default in respect of a
provision that under Section 9.2 cannot be amended without the consent of each
Securityholder affected. When a Default is waived, it is deemed cured, but no
such waiver shall extend to any subsequent or other Default or impair any
consequent right.
SECTION E. Control by Majority. The Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Exchange
Debenture Indenture or, subject to Section 7.1, that the Trustee determines is
unduly prejudicial to the rights of other Securityholders or would involve the
Trustee in personal liability; provided, however, that the Trustee may take any
other action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION F. Limitation on Suits. A Securityholder may not pursue
any remedy with respect to this Exchange Debenture Indenture or the Securities
unless:
(i) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(ii) the Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(iii) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of security or indemnity;
and
(v) the Holders of a majority in principal amount of the
outstanding Securities do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Exchange Debenture Indenture to
prejudice the rights of another Securityholder or to obtain a preference or
priority over another Securityholder.
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SECTION G. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Exchange Debenture Indenture, the right of any
Holder to receive payment of principal of and premium (if any) and interest on
the Securities held by such Holder, on or after the respective due dates
expressed in the Securities, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION H. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION I. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents and take such other actions,
including participating as a member, voting or otherwise, of any committee of
creditors appointed in the matter, as may be necessary or advisable in order to
have the claims of the Trustee and the Securityholders allowed in any judicial
proceedings relative to the Company, any Subsidiary or Exchange Debenture
Guarantor, their creditors or their property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements
and-advances of the Trustee, its agents and its counsel, and any other amounts
due the Trustee under Section 7.7.
SECTION J. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to holders of Exchange Debenture Senior Indebtedness to
the extent required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
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FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Trustee shall mail to each Securityholder and the Company a notice
that states the record date, the payment date and amount to be paid.
SECTION K. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Exchange Debenture Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a court in
its discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Company, a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7 or a suit by Holders of more than 10% in principal
amount of the Securities.
SECTION L. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Exchange Debenture Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE VII.
Trustee
SECTION A. Duties of Trustee. 1. If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Exchange Debenture Indenture and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use under
the circumstances in the conduct of such Person's own affairs.
2. Except during the continuance of an Event of Default:
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(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Exchange Debenture
Indenture and no implied covenants or obligations shall be read into
this Exchange Debenture Indenture against the Trustee; and
(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 Exchange Debenture Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform to
the requirements of this Exchange Debenture Indenture.
3. The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.1;
(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; and
(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 6.5.
4. Every provision of this Exchange Debenture Indenture that in
any way relates to the Trustee is subject to paragraphs (a), (b) and (c) of this
Section 7.1.
5. The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
6. Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
7. No provision of this Exchange Debenture Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur financial
liability in the performance of any of its duties hereunder or in the exercise
of any of its rights or
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powers, if it shall have reasonable grounds to believe that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
8. Every provision of this Exchange Debenture Indenture relating
to the conduct or affecting the liability of or affording protection to the
Trustee shall be subject to the provisions of this Section and to the provisions
of the TIA.
SECTION B. Rights of Trustee. Subject to Section 7.1: 1. The
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. The Trustee need not investigate any
fact or matter stated in the document.
2. Before the Trustee acts or refrains from acting, it may require
an Officer's Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on the
Officer's Certificate or Opinion of Counsel.
3. The Trustee may act through its attorneys or agents and shall
not be responsible for the misconduct or negligence of any attorney or agent
appointed with due care.
4. The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute wilful misconduct or negligence.
5. The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Exchange Debenture Indenture and the Securities shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
6. The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other paper or document unless requested in writing to do so
by the Holders of not less than a majority in principal amount of the Securities
at the time outstanding, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney, during reasonable business
hours and subject to executing a confidentiality undertaking in customary form
with respect to
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confidential and/or proprietary information of the Company; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Exchange Debenture
Indenture, the Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding.
7. The Trustee shall not be deemed to have knowledge of any
default or fact the occurrence of which requires the Trustee to take any action
(other than a payment default hereunder) unless a Trust Officer actually knows
of such default or fact.
8. The Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Exchange Debenture Indenture; and
9. The Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such an Event of Default
is received by the Trustee at the Corporate Trust Office of the Trustee, and
such notice references the Securities and this Exchange Debenture Indenture.
10. Upon request of the Trustee, the Company shall make reasonable
efforts to execute and deliver such further instruments and do such further acts
as may be reasonably necessary to carry out more effectively the purpose of this
Exchange Debenture Indenture. The parties hereto agree that the purpose of this
provision shall be for administrative purposes only.
SECTION C. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION D. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Exchange Debenture Indenture or the Securities, it shall not be accountable
for the Company's use of the proceeds from the Securities, and it shall not be
responsible for any statement of the Company in this Exchange Debenture
Indenture or in any document issued in connection with the sale of the
Securities or in the Securities other than the Trustee's certificate of
authentication.
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SECTION E. Notice of Defaults. If a Default occurs and is
continuing and if it is known to a Trust Officer of the Trustee, the Trustee
shall mail to each Securityholder notice of the Default within 90 days after it
occurs. Except in the case of a Default in payment of principal of or premium
(if any) or interest on any Security (including payments pursuant to the
mandatory redemption provisions of such Security, if any), the Trustee may
withhold the notice if and so long as a committee of its Trust Officers in good
faith determines that withholding the notice is in the interests of
Securityholders.
SECTION F. Reports by Trustee to Holders. As promptly as
practicable after each March 15 beginning with the March 15 following the date
of this Exchange Debenture Indenture (and in any event prior to May 15 in each
year), but only upon the occurrence within the previous 12 months of any events
specified in TIA Section 313(a), the Trustee shall mail to each Securityholder a
brief report dated as of March 15 that complies with TIA Section 313(a). The
Trustee shall also comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange (if any) on
which the Securities are listed. The Company agrees to notify promptly the
Trustee whenever the Securities become listed on any stock exchange and of any
delisting thereof.
SECTION G. Compensation and Indemnity. The Company shall pay to
the Trustee, Paying Agent and Registrar from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for its services.
The Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee, Paying Agent, Registrar, and
each of their officers, directors, agents and employees (each in their
respective capacities), for and hold each of them harmless against any and all
loss, demand, claim, liability or expense (including reasonable attorneys' fees
and expenses) incurred by them without negligence or bad faith on their part in
connection with the acceptance or administration of this trust and the
performance of their duties hereunder. The Trustee, Paying Agent and Registrar
shall notify the Company of any claim for which they may seek indemnity promptly
upon obtaining actual knowledge thereof; provided that any failure so to notify
the Company shall not relieve the Company of its indemnity obligations hereunder
except to the extent the Company shall have been adversely affected thereby. The
Company shall defend the claim and the indemnified party shall provide
reasonable cooperation at the Company's expense in the defense.
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Such indemnified parties may have separate counsel and the Company shall pay the
fees and expenses of such counsel; provided that the Company shall not be
required to pay such fees and expenses if it assumes such indemnified parties'
defense and, in such indemnified parties' reasonable judgment, there is no
conflict of interest between the Company and such parties in connection with
such defense. The Company need not pay for any settlement made without its
written consent. The Company need not reimburse any expense or indemnify against
any loss, liability or expense incurred by an indemnified party through any
indemnified party's own wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.
The Company's payment obligations pursuant to this Section shall
survive the discharge of this Exchange Debenture Indenture or the resignation or
removal of the Trustee. When the Trustee, Paying Agent or Registrar incurs
expenses after the occurrence of a Default specified in Section 6.1(7) or (8)
with respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION H. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company in writing. The Holders of a majority in
principal amount of the outstanding Securities may remove the Trustee by so
notifying the Company and the Trustee and may appoint a successor Trustee with
the consent of the Company, which shall not be unreasonably withheld. The
Company shall 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
(iv) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the
Holders of a majority in principal amount of the outstanding Securities and such
Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy
exists in the office of
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Trustee for any reason (the Trustee in such event being referred to herein as
the retiring Trustee), the Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Exchange Debenture Indenture. The successor Trustee shall mail a
notice of its succession to Securityholders. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee, subject to
the lien provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee or the Holders
of 10% in principal amount of the outstanding Securities may petition any court
of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section 7.8, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION I. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Exchange Debenture Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Securities so authenticated; and in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor to the Trustee; and in all such cases such certificates shall
have the full force which it is anywhere in the Securities or in this Exchange
Debenture Indenture provided that the certificate of the Trustee shall have.
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SECTION J. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION K. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
SECTION L. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee or any Authenticating Agent assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Exchange Debenture Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
ARTICLE VII
Discharge of Exchange Debenture Indenture; Defeasance
SECTION A. Discharge of Liability on Securities; Defeasance.
1. When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.7) for cancellation or
(ii) all outstanding Securities have become due and payable, whether at maturity
or as a result of the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee funds or U.S.
Government Obligations on which payment of principal and interest when due will
be sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.7), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Exchange
Debenture Indenture shall, subject to Section 8.1(c), cease to be of further
effect. The Trustee shall acknowledge satisfaction and discharge of this
Exchange Debenture Indenture on demand of the Company accompanied by an
Officer's Certificate and an Opinion of Counsel and at the cost and expense of
the Company.
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2. Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Exchange
Debenture Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.2 (subject to any requirement of the TIA), 4.3, 4.4, 4.5, 4.6, 4.7,
4.8, 4.11, 4.12, 4.13, 5.1 (iii) and the operation of Sections 6.1(4), 6.1(6),
6.1(7) (with respect to Subsidiaries of the Company only), 6.1(8) (with respect
to Subsidiaries of the Company only) and 6.1(9) ("covenant defeasance option").
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option.
If the Company exercises its legal defeasance option, payment of
the Securities may not be accelerated because of an Event of Default. If the
Company exercises its covenant defeasance option, payment of the Securities may
not be accelerated because of an Event of Default specified in Section 6.1(4),
6.1(6), 6.1(7), 6.1(8) (but only with respect to certain bankruptcy events of a
Significant Subsidiary), 6.1(9) or 6.1(10) or because of the failure of the
Company to comply with (iii) of Section 5.1. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Exchange Debenture
Guarantor will be automatically and unconditionally released and discharged from
all of its obligations under its Exchange Debenture Guarantee.
Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.
3. Notwithstanding clauses (a) and (b) above, Sections 2.3, 2.4,
2.5, 2.6, 7.7, 7.8, 8.4, 8.5 and 8.6 shall survive until the Securities have
been paid in full. Thereafter, Sections 7.7, 8.4 and 8.5 shall survive.
SECTION B. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(i) the Company irrevocably deposits in trust with the Trustee
money or U.S. Government Obligations for the payment of principal,
premium (if any) and interest on the Securities to maturity or
redemption, as the case may be;
(ii) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and
without reinvestment on the deposited U.S. Government Obligations plus
any deposited money without investment will provide cash at such times
and in such amounts as will be
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sufficient to pay principal and interest when due on all the Securities
to maturity or redemption, as the case may be;
(iii) 90 days pass after the deposit is made and during the 90-day
period no Default specified in Section 6.1(7) or (8) with respect to
the Company occurs which is continuing at the end of the period;
(iv) the deposit does not constitute a material default under any
other material agreement binding on the Company and is not prohibited
by Article 10;
(v) the Company delivers to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940;
(vi) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i)
the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (ii) since the date of this
Exchange Debenture Indenture there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Securityholders
will not recognize income, gain or loss for federal income tax purposes
as a result of such defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as
would have been the case if such defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Securityholders will not recognize income, gain or loss for
federal income tax purposes as a result of such covenant defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(viii) the Company delivers to the Trustee an Officer's
Certificate and an Opinion of Counsel, each to the effect that all
conditions precedent under this Section 8.2 to the defeasance and
discharge of the Securities as contemplated by this Article 8 have been
complied with; provided that in giving such opinion such counsel may
rely on such Officer's Certificate as to any matters of fact (including
without limitation as to compliance with the foregoing clauses (1),
(2), (3) and (4)).
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Either defeasance option may be exercised to any redemption date
or to the maturity date for the Securities. Before or after a deposit, the
Company may make arrangements reasonably satisfactory to the Trustee for the
redemption of Securities at a future date in accordance with Article 3.
SECTION C. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Exchange
Debenture Indenture to the payment of principal of and interest on the
Securities. Money and securities so held in trust are not subject to Article 10.
SECTION D. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general unsecured creditors and all liability of the
Trustee or the Paying Agent with respect to such trust money shall thereupon
cease.
SECTION E. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited U.S. Government Obligations or the principal
and interest received on such U.S. Government Obligations other than any tax,
fee or other charge that by law is for the account of the Securityholders.
SECTION F. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Exchange Debenture Indenture and the Securities shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with this Article 8; provided, however,
that, if the Company has made any payment of interest on or principal of any
Securities because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money or U.S. Government Obligations held by the Trustee or
Paying Agent.
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ARTICLE IX
Amendments
SECTION A. Without Consent of Holders. The Company and the Trustee
may amend this Exchange Debenture Indenture or the Securities without notice to
or consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency;
(ii) to comply with Article 5, or otherwise to provide for the
assumption by a successor of the obligations of the Company under the
Exchange Debenture Indenture;
(iii) to provide for uncertificated Securities in addition to or
in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(iv) to provide that any Indebtedness that becomes or will become
an obligation of the Successor Company pursuant to a transaction
governed by the provisions of Article 5 (and that is not Exchange
Debenture Subordinated Indebtedness) is Exchange Debenture Pari Passu
Indebtedness for the purposes of this Exchange Debenture Indenture;
(v) to add Exchange Debenture Guarantees with respect to the
Securities;
(vi) to secure the Securities;
(vii) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(viii) to comply with any requirements of the SEC in connection
with qualifying this Exchange Debenture Indenture under the TIA; or
(9) to make any change that does not adversely affect the rights
of any Securityholder.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Exchange
Debenture Senior
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Indebtedness then outstanding unless the holders of such Exchange Debenture
Senior Indebtedness (or any group or representative thereof authorized to give a
consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION B. With Consent of Holders. The Company and the Trustee
may amend this Exchange Debenture Indenture or the Securities without notice to
any Securityholder but with the consent of, and compliance with any provision of
this Exchange Debenture Indenture or the Securities may be waived by, the
Holders of at least a majority in principal amount of the outstanding
Securities. However, without the consent of each Securityholder affected, an
amendment may not:
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment;
(ii) reduce the rate of or extend the time for payment of interest
on any Security;
(iii) reduce the principal of or extend the Stated Maturity of any
Security;
(iv) reduce the premium payable upon the redemption of any
Security or change the time at which any Security may be redeemed in
accordance with Article 3;
(v) make any Security payable in money other than that stated in
the Security;
(vi) make any change in Article 10 that adversely affects the
rights of any Securityholder;
(vii) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities;
(viii) release any Exchange Debenture Guarantor from any of its
obligations under its Exchange Debenture Guarantee or the Exchange
Debenture
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Indenture (other than in accordance with the terms of the Exchange
Debenture Guarantee or the Exchange Debenture Indenture), or amend the
provisions of the Exchange Debenture Indenture relating to the release
of Exchange Debenture Guarantors (other than any releases pursuant to
the terms of the Exchange Debenture Guarantee of the Exchange Debenture
Indenture); or
(ix) make any change to this Section.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Exchange
Debenture Senior Indebtedness then outstanding unless the holders of such
Exchange Debenture Senior Indebtedness (or any group or representative thereof
authorized to give a consent) consent to such change.
After an amendment under this Section becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section.
SECTION C. Compliance with Trust Indenture Act. Every amendment to
this Exchange Debenture Indenture or the Securities shall comply with the TIA as
then in effect.
SECTION D. Effect of Amendment; Revocation and Effect of Consents
and Waivers. Upon the execution of any amendment under this Article 9, this
Exchange Debenture Indenture shall be modified in accordance therewith, and such
amendment shall form a part of this Exchange Debenture Indenture for all
purposes. A consent to an amendment or a waiver by a Holder of a Security shall
bind the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same debt as the consenting Holder's Security, even
if notation of the consent or waiver is not made on the Security. However, any
such Holder or subsequent Holder may revoke the consent or waiver as to such
Holder's Security or portion of the Security if the Trustee receives the notice
of revocation before the date the instrument providing for the amendment or
waiver is signed by the parties thereto. After an amendment or waiver becomes
effective, it shall bind every Securityholder. An amendment or waiver becomes
effective once the requisite number of consents are received by the Company or
the Trustee.
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The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Exchange Debenture Indenture. If a record date is fixed,
then notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders after such record date. No such consent shall be valid or
effective for more than 180 days after such record date.
SECTION E. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company so determines, the Company in exchange for
the Security shall issue and the Trustee shall authenticate a new Security that
reflects the changed terms. Failure to make the appropriate notation or to issue
a new Security shall not affect the validity of any amendment or waiver.
SECTION F. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.1) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel each to the effect that
such amendment is authorized or permitted by this Exchange Debenture Indenture
and complies with the provisions hereof (including Section 9.3); provided that
in giving such opinion such counsel may rely on such Officer's Certificate as to
any matters of fact.
SECTION G. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Exchange Debenture Indenture or the Securities unless such
consideration is offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame, and subject to the terms and conditions, set
forth in solicitation documents relating to such consent, waiver or agreement.
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ARTICLE X.
Subordination
SECTION A. Agreement To Subordinate. The Company agrees, and each
Securityholder by accepting a Security agrees, that the Indebtedness evidenced
by the Securities is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment in full (when due) of
all existing and future Exchange Debenture Senior Indebtedness and that the
subordination is for the benefit of and enforceable by the holders of Exchange
Debenture Senior Indebtedness. The Securities shall in all respects rank pari
passu with all existing and future Exchange Debenture Pari Passu Indebtedness of
the Company and will be senior in right of payment to all existing and future
Exchange Debenture Subordinated Indebtedness of the Company. The Securities
shall also be subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full (when due) of all
existing and future Secured Indebtedness to the extent of the value of the
assets securing such Indebtedness. For purposes of these subordination
provisions, the Indebtedness evidenced by the Securities is deemed to include
the liquidated damages payable pursuant to the provisions set forth in the
Securities and the Registration Rights Agreement. All provisions of this Article
10 shall be subject to Section 10.12.
SECTION B. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of the Company upon a total or partial liquidation
or a total or partial dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property:
(i) holders of Exchange Debenture Senior Indebtedness shall be
entitled to receive payment in full of the Exchange Debenture Senior
Indebtedness before Securityholders shall be entitled to receive any
payment of principal of or interest on the Securities; and
(ii) until the Exchange Debenture Senior Indebtedness is paid in
full, any payment or distribution to which Securityholders would be
entitled but for this Article 10 shall be made to holders of Exchange
Debenture Senior Indebtedness as their interests may appear.
SECTION C. Default on Exchange Debenture Senior Indebtedness. The
Company may not pay the principal of, or premium (if any) or interest on the
Securities or make any deposit pursuant to Section 8.1 and may not purchase,
redeem or otherwise retire any Securities (collectively, "pay the Securities")
if (i) any Exchange Debenture Senior Indebtedness is not paid when due in cash
or Cash Equivalents or (ii) any other
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default on Exchange Debenture Senior Indebtedness occurs and the maturity of
such Exchange Debenture Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, (x) the default has been cured or waived and
any such acceleration has been rescinded in writing or (y) such Exchange
Debenture Senior Indebtedness has been paid in full in cash or Cash Equivalents;
provided, however, that the Company may pay the Securities without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of the Exchange Debenture Designated Senior
Indebtedness with respect to which either of the events in clause (i) or (ii) of
this sentence has occurred and is continuing. In addition, during the
continuance of any default (other than a default described in clause (i) or (ii)
of the preceding sentence) with respect to any Exchange Debenture Designated
Senior Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representative of
such Exchange Debenture Designated Senior Indebtedness specifying an election to
effect a Payment Blockage Period and ending 179 days thereafter (or earlier if
such Payment Blockage Period is terminated (i) by written notice to the Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because such Exchange Debenture Designated Senior Indebtedness has been
discharged or repaid in full or (iii) because the default giving rise to such
Blockage Notice is no longer continuing). Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
contained in the first sentence of this Section), unless the holders of such
Exchange Debenture Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Exchange Debenture
Designated Senior Indebtedness, the Company may resume payments on the
Securities after the end of such Payment Blockage Period. Not more than one
Blockage Notice may be given in any consecutive 360-day period, irrespective of
the number of defaults with respect to Exchange Debenture Designated Senior
Indebtedness during such period; provided, however, that if any Blockage Notice
within such 360-day period is given by or on behalf of any holders of Exchange
Debenture Designated Senior Indebtedness (other than Bank Indebtedness), the
Representative of Bank Indebtedness may give another Blockage Notice within such
period; provided further, however, that in no event may the total number of days
during which any Payment Blockage Period or Periods is in effect exceed 179 days
in the aggregate during any 360 consecutive day period.
SECTION D. Acceleration a Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Exchange Debenture Designated
Senior Indebtedness
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(or their Representative) of the acceleration. If any Exchange Debenture
Designated Senior Indebtedness is outstanding, the Company may not pay the
Securities until five Business Days after such holders or the Representative of
the Exchange Debenture Designated Senior Indebtedness receive notice of such
acceleration and, thereafter, may pay the Securities only if this Article 10
otherwise permits payment at that time.
SECTION E. When a Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of the provisions of
Article 10 should not have been made to them, the Securityholders who receive
the distribution shall hold it in trust for holders of Exchange Debenture Senior
Indebtedness and pay it over to them as their interests may appear.
SECTION F. Subrogation. After all Exchange Debenture Senior
Indebtedness is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of Exchange
Debenture Senior Indebtedness to receive distributions applicable to Exchange
Debenture Senior Indebtedness. A distribution made under this Article 10 to
holders of Exchange Debenture Senior Indebtedness which otherwise would have
been made to Securityholders is not, as between the Company and Securityholders,
a payment by the Company on Exchange Debenture Senior Indebtedness.
SECTION G. Relative Rights. This Article 10 defines the relative
rights of Securityholders and holders of Exchange Debenture Senior Indebtedness
prior to the Subordination Termination Date. Nothing in this Exchange Debenture
Indenture shall:
(i) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(ii) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Exchange Debenture Senior Indebtedness to receive distributions
otherwise payable to Securityholders.
SECTION H. Subordination May Not Be Impaired by Company. No right
of any holder of Exchange Debenture Senior Indebtedness to enforce the
subordination of the Indebtedness evidenced by the Securities shall be impaired
by any act or failure to act by the Company or by its failure to comply with
this Exchange Debenture Indenture.
SECTION I. Rights of Trustee and Paying Agent. The Company shall
give prompt written notice to the Trustee of any fact known to the Company which
would
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prohibit the making of any payment to or by the Trustee in respect of the
Securities. Failure to give such notice shall not affect the subordination of
the Securities to Exchange Debenture Senior Indebtedness. Notwithstanding
Section 10.3, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Exchange Debenture Senior Indebtedness may give
the notice; provided, however, that, if an issue of Exchange Debenture Senior
Indebtedness has a Representative, only the Representative may give the notice.
The Trustee shall be entitled to rely on the delivery to it of a written notice
by a Person representing himself or itself to be a holder of any Exchange
Debenture Senior Indebtedness (or a Representative of such holder) to establish
that such notice has been given by a holder of such Exchange Debenture Senior
Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold
Exchange Debenture Senior Indebtedness with the same rights it would have if it
were not Trustee. The Registrar and co-registrar and the Paying Agent may do the
same with like rights. The Trustee shall be entitled to all the rights set forth
in this Article 10 with respect to any Exchange Debenture Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
Exchange Debenture Senior Indebtedness; and nothing in Article 7 shall deprive
the Trustee of any of its rights as such holder. Nothing in this Article 10
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.7.
SECTION J. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Exchange Debenture
Senior Indebtedness, the distribution may be made and the notice given to their
Representative (if any).
SECTION K. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.
SECTION L. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of U.S.
Government Obligations held in trust under Article 8 by the Trustee for the
payment of principal of and interest on the Securities shall not be subordinated
to the prior payment
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of any Exchange Debenture Senior Indebtedness or subject to the restrictions set
forth in this Article 10, and none of the Securityholders shall be obligated to
pay over any such amount to the Company or any holder of Exchange Debenture
Senior Indebtedness of the Company or any other creditor of the Company.
SECTION M. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.2
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Exchange
Debenture Senior Indebtedness for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Exchange Debenture Senior Indebtedness and other Indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10. In the
event that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Exchange Debenture Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Exchange Debenture
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.1 and 7.2 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION N. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Exchange Debenture Senior Indebtedness as provided in this Article 10 and
appoints the Trustee as attorney-in-fact for any and all such purposes.
SECTION O. Trustee Not Fiduciary for Holders of Exchange Debenture
Senior Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Exchange Debenture Senior Indebtedness and shall not be liable
to any such holders if it shall mistakenly pay over or distribute to
Securityholders or the Company or any other Person, money or assets to which any
holders of Exchange Debenture Senior Indebtedness shall be entitled by virtue of
this Article 10 or otherwise. With respect to
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the holders of Exchange Debenture Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants or obligations as are
specifically set forth in this Article 10 and no implied covenants or
obligations with respect to holders of Exchange Debenture Senior Indebtedness
shall be read into this Exchange Debenture Indenture against the Trustee.
SECTION P. Reliance by Holders of Exchange Debenture Senior
Indebtedness on Subordination Provisions. Each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Exchange Debenture Senior Indebtedness, whether such Exchange Debenture
Senior Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such
Exchange Debenture Senior Indebtedness and such holder of Exchange Debenture
Senior Indebtedness shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Exchange Debenture Senior Indebtedness.
SECTION Q. Trustee's Compensation Not Prejudiced. Nothing in this
Article shall apply to amounts due to the Trustee pursuant to other sections of
this Exchange Debenture Indenture.
ARTICLE XI.
Guarantee
SECTION A. Guarantee. Day hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Exchange Debenture Guarantor, to each Holder of the
Securities (a) the full and punctual payment when due, whether at Stated
Maturity, by acceleration, by redemption or otherwise, of principal of and
interest on the Securities and all other monetary obligations of the Company
under this Exchange Debenture Indenture and the Securities and (b) the full and
punctual performance within applicable grace periods of all other obligations of
the Company under this Exchange Debenture Indenture and the Securities (all the
foregoing being hereinafter collectively called the "Obligations"). Day further
agrees (to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this Article 11 notwithstanding any extension or
renewal of any Obligation.
To the extent permitted by applicable law, (i) Day waives
presentation to, demand of payment from and protest to the Company of any of the
Obligations and also
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waives notice of protest for nonpayment, (ii) Day waives notice of any default
under the Securities or the Obligations and (iii) the obligations of Day
hereunder shall not be affected by (a) the failure of any Holder to assert any
claim or demand or to enforce any right or remedy against the Company or any
other person under this Exchange Debenture Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Exchange Debenture Indenture, the Securities or any other
agreement; or (d) the failure of any Holder to exercise any right or remedy
against any other Guarantor of the Obligations.
Day further agrees that its Guarantee herein constitutes a
guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and, to the extent permitted by applicable law, waives any right
to require that any resort be had by any Holder to any security held for payment
of the Obligations.
Except as otherwise provided herein or under applicable law, the
obligations of Day hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than payment of the Obligations
in full), including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, to the extent permitted by applicable law, the
obligations of Day herein shall not be discharged or impaired or otherwise
affected by the failure of any Holder to assert any claim or demand or to
enforce any remedy under the Exchange Debenture Indenture, the Securities or any
other agreement, by any waiver or modification of any thereof, by any default,
failure or delay, willful or otherwise, in the performance of the Obligations,
or by any other act or thing or omission or delay to do any other act or thing
which may or might in any manner or to any extent vary the risk of Day or would
otherwise operate as a discharge of Day as a matter of law or equity.
Day further agrees that, subject to Section 11.2(b) hereof, its
Guarantee herein shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of principal of or interest
on any Obligation is rescinded or must otherwise be restored by any Holder upon
the bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against Day by virtue hereof,
upon the failure of the Company to pay the principal of or interest on any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, by redemption or otherwise, or to
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perform or comply with any other Obligation, Day hereby promises to and will,
upon receipt of written demand by the Trustee or the Holders of a majority in
principal amount of the then outstanding Securities (the "Majority
Securityholders"), forthwith pay, or cause to be paid, in cash, to the Holders
an amount equal to the sum of (i) the unpaid principal amount of such
Obligations then due and owing, (ii) accrued and unpaid interest on such
Obligations then due and owing (but only to the extent not prohibited by law)
and (iii) all other monetary Obligations of the Company to the Holders then due
and owing.
Day agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Obligations guarantied
hereby until payment in full of all Obligations. Day further agrees (to the
extent permitted by applicable law) that, as between Day, on the one hand, and
the Holders, on the other hand, (x) the maturity of the Obligations guarantied
hereby may be accelerated for the purposes of Day's Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guarantied hereby, and (y) in the
event of any declaration of acceleration of such Obligations, such Obligations
(whether or not due and payable) shall forthwith become due and payable by Day
for the purposes of this Section.
Day also agrees to pay any and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or the Holders in
enforcing any rights under this Section.
SECTION B. Limitation on Liability; Termination, Release and
Discharge. 1. Any term or provision of this Guarantee to the contrary
notwithstanding, the maximum aggregate amount of the Obligations guarantied
hereunder by Day shall not exceed the maximum amount that can be hereby
guarantied without rendering this Guarantee, as it relates to Day, voidable
under applicable law, including without limitation applicable law relating to
fraudulent conveyance or fraudulent transfer or affecting the rights or remedies
of creditors generally.
2. This Guarantee shall terminate and be of no further force or
effect, and Day shall automatically and unconditionally be released and
discharged from all liabilities and obligations in respect hereof, upon (w)
payment in full of the principal amount of all outstanding Securities (whether
by payment at maturity, purchase, redemption, defeasance, retirement or other
acquisition) and all other monetary Obligations then due and owing, (x) the
merger or consolidation of Day with and into the Company or another Exchange
Debenture Guarantor that is the surviving Person in such merger or
consolidation, or (y) the exercise by the Company of its legal defeasance option
or its covenant defeasance option, or (z) the sale or other transfer (i) by Day
of all
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or substantially all of its assets or (ii) by the Company or a Restricted
Subsidiary of all of the capital stock or other equity interests in Day held by
the Company or such Restricted Subsidiary, to a Person that is not an Affiliate
of the Company; provided, however, that, in the case of this clause (z), (1) any
such sale or transfer is made in accordance with the terms of this Exchange
Debenture Indenture (including Section 4.6 hereof), and (2) all obligations of
Day under, and all of its guarantees of, and all of its pledges of assets or
other security interests which secure, any Bank Indebtedness of the Company
shall also terminate upon such release, sale or transfer (other than with
respect to any such Indebtedness that is assumed by any Person that is not an
Affiliate of the Company). Upon notice to the Trustee that any such payment,
merger, consolidation, exercise, sale or transfer has occurred or is occurring,
the Trustee shall execute all agreements and instruments confirming and
acknowledging such termination, release and discharge as may be reasonably
requested by Day.
SECTION C. Subordination. Day agrees, and each Securityholder by
accepting a Security agrees, that (a) the obligations of Day under this
Guarantee are subordinated in right of payment to the prior payment in full
(when due) of all existing and future Exchange Debenture Guarantor Senior
Indebtedness of Day, including without limitation any Guarantee by Day of the
Bank Indebtedness or of any Exchange Debenture Senior Indebtedness of the
Company or of any Exchange Debenture Guarantor Senior Indebtedness of any other
Exchange Debenture Guarantor, to the extent and in the matter provided in
Article 10 hereof (as if Day were the Company for purposes of such Article 10
and all defined terms used therein, and the Exchange Debenture Guarantor Senior
Indebtedness of the Exchange Debenture Guarantor were Exchange Debenture Senior
Indebtedness), and Day is made subject to such provisions, and (b) such
subordination is for the benefit of and enforceable by the holders of Exchange
Debenture Guarantor Senior Indebtedness of Day.
ARTICLE XII.
Miscellaneous
SECTION A. Trust Indenture Act Controls. If any provision of this
Exchange Debenture Indenture limits, qualifies or conflicts with another
provision which is required to be included in this Exchange Debenture Indenture
by the TIA, the required provision shall control.
SECTION B. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
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if to the Company:
Day International Group, Inc.
130 West 2nd Street, Suite 1700
Dayton, Ohio 45402
Attention of: David B. Freimuth
with a copy to:
Greenwich Street Capital Partners
388 Greenwich St., 36th Floor
New York, New York 10013
Attention of: Alfred C. Eckert III
and:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention of: Andrew L. Sommer, Esq.
if to the Trustee:
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention of: Corporate Trust Trustee Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
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All notices and communications shall be deemed to be duly given:
at the time delivered, if personally delivered, or five Business Days after
being deposited into the mail, if mailed. All notices may be waived by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice for all purposes of this
Exchange Debenture Indenture. Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with respect
to other Securityholders. If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the addressee receives it.
SECTION C. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Exchange Debenture
Indenture or the Securities. The Company, the Trustee, the Registrar and their
agents shall have the protection of TIA Section 312(c).
SECTION D. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Exchange Debenture Indenture, the Company
shall furnish to the Trustee:
(i) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Exchange Debenture Indenture relating to the proposed action have been
complied with; and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee to the effect that, in the opinion of such
counsel, all such conditions precedent have been complied with,
provided that in giving such opinion such counsel may rely on any
Officer's Certificate or certificate of a public official as to any
matters of fact; and
provided, further, that, in the case of any such application or request as to
which the furnishing of any Officer's Certificate or Opinion of Counsel is
specifically required by any provision of this Exchange Debenture Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
SECTION E. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Exchange Debenture Indenture shall include:
94
<PAGE> 103
(i) a statement to the effect that the individual or counsel
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 to the effect that, in the opinion of such
individual or counsel, such individual or counsel has made such
examination or investigation as is necessary to enable such individual
or counsel 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 such
individual or counsel, such covenant or condition has been complied
with;
provided that an Opinion of Counsel can rely as to matters of fact on an
Officer's Certificate or certificates of public officials.
SECTION F. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which a Trust Officer of the Trustee actually knows are so owned
shall be so disregarded. Also, subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION G. Acts of Holders; Rules by Trustee, Paying Agent and
Registrar. Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Exchange Debenture Indenture to be given
or taken by a specified percentage in principal amount of the Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such specified percentage of Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. The
Trustee may make reasonable rules for action by or a meeting of Securityholders
not inconsistent with the foregoing. The Registrar and the Paying Agent may make
reasonable rules for their functions.
95
<PAGE> 104
SECTION H. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which commercial banking institutions (including, without
limitation, the Federal Reserve System) are authorized or required by law to
close in New York City. If a payment date is a Legal Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday, and no interest
shall accrue for the intervening period. If a regular record date is a Legal
Holiday, the record date shall not be affected.
SECTION I. Governing Law. This Exchange Debenture Indenture and
the Securities shall be governed by, and construed in accordance with, the laws
of the State of New York, without giving effect to applicable principles of
conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
SECTION J. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company or a Note Guarantor shall not
have any liability for any obligations of the Company or any Note Guarantor
under the Securities, this Exchange Debenture Indenture or any Note Guarantee or
for any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder waives and releases all
such liability. The waiver and release shall be part of the consideration for
the issue of the Securities.
SECTION K. Successors. All agreements of the Company in this
Exchange Debenture Indenture and the Securities shall bind its successors. All
agreements of the Trustee in this Exchange Debenture Indenture shall bind its
successors.
SECTION L. Multiple Originals. The parties may sign any number of
copies of this Exchange Debenture Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement. One signed copy
is enough to prove this Exchange Debenture Indenture.
SECTION M. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this Exchange
Debenture Indenture have been inserted for convenience of reference only, are
not intended to be considered a part hereof and shall not modify or restrict any
of the terms or provisions hereof.
SECTION N. Separability. In case any provision of this Exchange
Debenture Indenture, the Securities or the Note Guarantees shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
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<PAGE> 105
SECTION O. Benefits of Exchange Debenture Indenture. Nothing in
this Exchange Debenture Indenture, the Securities or any Note Guarantee,
expressed or implied, shall give to any Person, other than the parties hereto
and their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Exchange Debenture Indenture.
IN WITNESS WHEREOF, the parties have caused this Exchange
Debenture Indenture to be duly executed as of the date first written above.
DAY INTERNATIONAL GROUP, INC.
By:
____________________
Name:
Title:
DAY INTERNATIONAL, INC.
By:
____________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
____________________
Name:
Title:
97
<PAGE> 106
EXHIBIT A
[FORM OF FACE OF SECURITY]
[Depository Legend, if applicable]
DAY INTERNATIONAL GROUP, INC.
12 1/4% SENIOR SUBORDINATED NOTE DUE 2010
No. CUSIP No.________
$[ ]
DAY INTERNATIONAL GROUP, INC., a Delaware corporation,
promises to pay to [ ], or registered assigns, the principal sum of $[ ] on ,
2010.
Interest Payment Dates: and .
Record Dates: and .
<PAGE> 107
Additional provisions of this Security are set forth on the
other side of this Security.
DAY INTERNATIONAL GROUP, INC.
by
------------------------------------------------
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
THE BANK OF NEW YORK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Exchange Debenture Indenture
by
-------------------------------------
Authorized Signatory
2
<PAGE> 108
[FORM OF REVERSE SIDE OF SECURITY]
12 1/4% Senior Subordinated Note due 2010
1. Interest
Day International Group, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Exchange Debenture
Indenture hereinafter referred to, being herein called the "Company"), promises
to pay interest on the principal amount of this Security at the rate per annum
shown above. The Company will pay interest semiannually on and of each
year. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from , 1998.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay interest on overdue principal at the rate borne by
the Securities, and it shall pay interest on overdue installments of interest at
the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered holders of Securities at
the close of business on the or next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may, at its option, pay principal
and interest (i) by check payable in such money or (ii) by wire transfer of
immediately available funds to such account as may be designated by the Holder
at least 15 days prior to the relevant payment date and as specified in the
books of the Registrar. It may mail an interest check to a Holder's registered
address.
3. Paying Agent and Registrar
Initially, The Bank of New York, a New York banking
corporation ("Trustee"), will act as Paying Agent and Registrar. The Company may
appoint and change any Paying Agent, Registrar or co-registrar without notice.
The Company or any of its domestically incorporated Wholly Owned Subsidiaries
may act as Paying Agent, Registrar or co-registrar.
4. Exchange Debenture Indenture
The Company issued the Securities under an Indenture dated as
of March , 1998 (as amended or supplemented from time to time, "Exchange
Debenture Indenture"), between the Company and the Trustee. The terms of the
Securities include those stated in the Exchange
1
<PAGE> 109
Debenture Indenture and those made part of the Exchange Debenture Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of the Exchange Debenture Indenture (the
"TIA"). Terms defined in the Exchange Debenture Indenture and not defined herein
have the meanings ascribed thereto in the Exchange Debenture Indenture. The
Securities are subject to all such terms, and Securityholders are referred to
the Exchange Debenture Indenture and the TIA for a statement of those terms.
The Securities are general unsecured obligations of the
Company of $35.0 million or greater aggregate principal amount (with such
principal amount in excess of $35.0 million equal to the aggregate liquidation
preference of Exchangeable Preferred Stock issued as dividends to Exchangeable
Preferred Stock Holders pursuant to the Certificate of Designations) at any one
time outstanding (subject to Section 2.7 of the Exchange Debenture Indenture).
The Exchange Debenture Indenture imposes certain limitations on the issuance of
debt by the Company, the payment of dividends and other distributions and
acquisitions or retirements of the Company's Capital Stock and Exchange
Debenture Subordinated Indebtedness, the incurrence by the Company and its
Restricted Subsidiaries of Liens on its property and assets which do not equally
and ratably secure the Securities, the sale or transfer of assets and Subsidiary
Stock, investments by the Company, consolidations, mergers and transfers of all
or substantially all of the Company's assets and transactions with Affiliates.
In addition, the Exchange Debenture Indenture limits the ability of the Company
and its Restricted Subsidiaries to restrict distributions and dividends from
Restricted Subsidiaries.
5. Optional Redemption
Except as set forth in the next two paragraphs, the Securities
may not be redeemed pursuant to this paragraph 5 at the option of the Company
prior to March 15, 2003. On and after that date, the Company may redeem the
Securities in whole at any time or in part from time to time at the following
redemption prices (expressed in percentages of principal amount), plus accrued
interest, if any, to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date), if redeemed during the 12-month period beginning on
March 15 of the years set forth below:
Redemption
Period Price
2003................................................................ 106.125%
2004................................................................ 104.083%
2005................................................................ 102.042%
2006 and thereafter................................................. 100.000%
2
<PAGE> 110
Notwithstanding the foregoing, at any time and from time to
time prior to March 15, 2001, the Company may redeem in whole or in part the
original aggregate principal amount of the Securities with the Net Cash Proceeds
of one or more Public Equity Offerings by the Company following which there is a
Public Market, at a redemption price (expressed as a percentage of principal
amount) of 112.250% plus accrued interest, if any, to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date); provided, however,
that such redemption shall occur within 180 days of the date of the closing of
such Public Equity Offering(s).
At any time on or prior to March 15, 2003, the Securities may
also be redeemed as a whole at the option of the Company upon the occurrence of
a Change of Control, upon not less than 30 nor more than 60 days prior notice
(but in no event more than 180 days after the occurrence of such Change of
Control) mailed by first-class mail to each Holder's registered address, at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium as of, and accrued but unpaid interest, if any, to, the
Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
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 Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part but only in whole multiples of $1,000. If money
sufficient to pay the redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date is deposited with
the Paying Agent on or before the redemption date and certain other conditions
are satisfied, on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have
the right, subject to certain conditions specified in the Exchange Debenture
Indenture, to cause the Company to repurchase all or any part of the Securities
of such Holder at a purchase price in cash equal to 101% of the principal amount
of the Securities to be repurchased plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Exchange Debenture
Indenture; provided, however, that notwithstanding the occurrence of a Change of
Control, the Company shall not be obligated to purchase the Securities pursuant
to this paragraph 7 in the event that it has exercised its option to redeem all
of the Securities under paragraph 5.
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<PAGE> 111
8. Subordination
The Securities are subordinated to Exchange Debenture Senior
Indebtedness, as defined in the Exchange Debenture Indenture. To the extent
provided in the Exchange Debenture Indenture, Exchange Debenture Senior
Indebtedness must be paid before the Securities may be paid. The Company agrees,
and each Securityholder by accepting a Security agrees, to the subordination
provisions contained in the Exchange Debenture Indenture and authorizes the
Trustee to give effect to such provisions and appoints the Trustee as
attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of $1,000 and whole multiples of $1,000. A Holder may transfer or
exchange Securities in accordance with the Exchange Debenture Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law
or permitted by the Exchange Debenture Indenture. The Registrar need not
register the transfer of or exchange any Securities selected for redemption
(except, in the case of a Security to be redeemed in part, the portion of the
Security not to be redeemed) or any Securities for a period of 15 days before a
selection of Securities to be redeemed or 15 days before an interest payment
date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the
owner of it for all purposes, subject to the provisions for record dates with
respect to payment of interest.
11. Unclaimed Money
If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent shall pay the money back to
the Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may
terminate some or all of its obligations under the Securities and the Exchange
Debenture Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal of and interest on the
Securities to redemption or maturity, as the case may be.
4
<PAGE> 112
13. Amendment, Waiver
Subject to certain exceptions set forth in the Exchange
Debenture Indenture, (i) the Exchange Debenture Indenture or the Securities may
be amended with the consent of the Holders of at least a majority in principal
amount outstanding of the Securities and (ii) any default or noncompliance with
any provision may be waived with the consent of the Holders of a majority in
principal amount outstanding of the Securities. Subject to certain exceptions
set forth in the Exchange Debenture Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Exchange Debenture
Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency, or to comply with Article 5 of the Exchange Debenture Indenture,
or to provide for uncertificated Securities in addition to or in place of
certificated Securities, or to add Guarantees with respect to the Securities, or
to secure the Securities, or to add additional covenants or surrender rights and
powers conferred on the Company, or to provide that any Indebtedness that
becomes or will become an obligation of the Successor Company pursuant to
Article 5 of the Exchange Debenture Indenture (and that is not a Subordinated
Obligation) is Senior Subordinated Indebtedness for the purposes of the Exchange
Debenture Indenture or to comply with any request of the SEC in connection with
qualifying the Exchange Debenture Indenture under the Act; provided, however, no
amendment under this Section may make any change that adversely affects the
rights under Article 10 of the Exchange Debenture Indenture of any holder of
Exchange Debenture Senior Indebtedness then outstanding unless the holders of
such Exchange Debenture Senior Indebtedness (or any group or representative
thereof authorized to give a consent) consent to such change.
14. Defaults and Remedies
Under the Exchange Debenture Indenture, Events of Default
include (i) a default in any payment of interest on any Security when due,
continued for 30 days, (ii) a default in the payment of principal of any
Security when due at its Stated Maturity, upon optional redemption, upon
required repurchase, upon declaration or otherwise, whether or not such payment
is prohibited by Article 10 of the Exchange Debenture Indenture, (iii) the
failure by the Company to comply with its obligations under Section 5.1 of the
Exchange Debenture Indenture, (iv) the failure by the Company to comply for 30
days after notice with certain of its obligations under Article 4 of the
Exchange Debenture Indenture (in each case, other than a failure to purchase
Securities), (v) the failure by the Company to comply for 60 days after notice
with its other agreements contained in the Securities or the Exchange Debenture
Indenture, (vi) the failure by any Exchange Debenture Guarantor to comply with
its obligations under any Exchange Debenture Guarantee to which such Exchange
Debenture Guarantor is a party, after any applicable grace period, (vii) the
failure by the Company or any Significant Subsidiary to pay any Indebtedness
within any applicable grace period after final maturity or the acceleration of
any such Indebtedness by the holders thereof because of a default if the total
amount of such Indebtedness unpaid or accelerated exceeds $5.0 million or its
foreign currency equivalent (the
5
<PAGE> 113
"cross acceleration provision"), (viii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary (the "bankruptcy
provisions"), (ix) the rendering of any judgment or decree for the payment of
money in an amount (net of any insurance or indemnity payments actually received
in respect thereof prior to or within 60 days from the entry thereof, or to be
received in respect thereof in the event any appeal thereof shall be
unsuccessful) in excess of $5.0 million or its foreign currency equivalent
against the Company or a Significant Subsidiary that is not discharged, or
bonded or insured by a third Person, if (A) an enforcement proceeding thereon is
commenced or (B) such judgment or decree remains outstanding for a period of 60
days following such judgment or decree and is not discharged, waived or stayed
(the "judgment default provision") or (x) the failure of any Exchange Debenture
Guarantee by an Exchange Debenture Guarantor which is a Significant Subsidiary
to be in full force and effect (except as contemplated by the terms thereof or
of the Exchange Debenture Indenture) or the denial or disaffirmation in writing
by any such Exchange Debenture Guarantor of its obligations under the Exchange
Debenture Indenture or any Exchange Debenture Guarantee if such Default
continues for 10 days. If an Event of Default (other than a Default relating to
certain events of bankruptcy, insolvency or reorganization of the Company)
occurs and is continuing, the Trustee or the Holders of at least a majority in
principal amount of the outstanding Securities may declare the principal of and
accrued but unpaid interest on all the Securities to be due and payable
immediately. Certain events of bankruptcy, insolvency, or reorganization are
Events of Default which will result in the Securities being due and payable
immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Exchange Debenture
Indenture or the Securities except as provided in the Exchange Debenture
Indenture. The Trustee may refuse to enforce the Exchange Debenture Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Securityholders notice of any continuing
Default (except a Default in payment of principal or interest) if and so long as
a committee of its Trust Officers in good faith determines that withholding
notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, the Trustee
under the Exchange Debenture Indenture, in its individual or any other capacity,
may become the owner or pledgee of the Securities and may otherwise deal with
and collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee.
16. No Recourse Against Others
6
<PAGE> 114
A director, officer, employee or stockholder, as such, of the
Company or a Note Guarantor shall not have any liability for any obligations of
the Company or any Note Guarantor under the Securities, the Exchange Debenture
Indenture or any Note Guarantee or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Securityholder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized signatory
of the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with rights of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
19. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
20. Governing Law.
This Security shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN
REQUEST AND WITHOUT CHARGE TO THE SECURITYHOLDER A COPY OF THE EXCHANGE
DEBENTURE INDENTURE WHICH HAS IN IT THE TEXT OF THIS SECURITY IN LARGER TYPE.
REQUESTS MAY BE MADE TO:
DAY INTERNATIONAL GROUP, INC.
130 WEST 2ND STREET, SUITE 1700
7
<PAGE> 115
DAYTON, OHIO 45402
8
<PAGE> 116
ASSIGNMENT FORM
To assign this Security, fill in the form
below:
I or we assign and transfer this Security to
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint___________agent to transfer this Security on
the books of the Company. The agent may substitute another to act for him.
Date: _______________ Your Signature ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.
9
<PAGE> 117
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
EXCHANGE DEBENTURE GUARANTEE
Day International, Inc. hereby fully, unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, jointly and
severally with each other Note Guarantor, to each Holder of the Securities (a)
the full and punctual payment when due, whether at Stated Maturity, by
acceleration, by redemption or otherwise, of principal of and interest on the
Securities and all other monetary obligations of the Company under this Exchange
Debenture Indenture and the Securities and (b) the full and punctual performance
within applicable grace periods of all other obligations of the Company under
the Exchange Debenture Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"), all in accordance with
Article 11 of the Exchange Debenture Indenture and this Security.
Day agrees, and each Securityholder by accepting a Security
agrees, that (a) the obligations of Day under this Guarantee are subordinated in
right of payment to the prior payment in full (when due) of all existing and
future Exchange Debenture Guarantor Senior Indebtedness of Day, including
without limitation any Guarantee by Day of the Bank Indebtedness or of any
Exchange Debenture Senior Indebtedness of the Company or of any Exchange
Debenture Guarantor Senior Indebtedness of any other Exchange Debenture
Guarantor, to the extent and in the matter provided in Article 10 of the
Exchange Debenture Indenture (as if Day were the Company for purposes of such
Article 10 and all defined terms used therein, and the Exchange Debenture
Guarantor Senior Indebtedness of the Guarantor were Exchange Debenture Senior
Indebtedness), and Day is made subject to such provisions, and (b) such
subordination is for the benefit of and enforceable by the holders of Exchange
Debenture Guarantor Senior Indebtedness of Day.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which the
Guarantee is noted shall have been executed by the Trustee under the Exchange
Debenture Indenture by the manual signature of one of its authorized officers.
10
<PAGE> 118
This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of law to the extent that the application of
the law of another jurisdiction would be required thereby.
DAY INTERNATIONAL, INC.
By: ________________________________________
11
<PAGE> 119
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security
have been made:
<TABLE>
<S> <C> <C> <C> <C>
Amount of decrease in Amount of increase in Principal Amount of this Signature of authorized
Date of Principal Amount of this Principal Amount of this Global Security following such signatory of Trustee or
Exchange Global Security Global Security decrease or increase Securities Custodian
</TABLE>
12
<PAGE> 120
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to
Section 4.6 or 4.8 of the Exchange Debenture Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the Company
pursuant to Section 4.6 or 4.8 of the Exchange Debenture Indenture, state the
amount: $
Date: Your Signature:
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:
(Signature must be guaranteed by a
participant in a recognized signature
guarantee medallion program)
13
<PAGE> 121
EXHIBIT B
FORM OF SUPPLEMENTAL EXCHANGE DEBENTURE INDENTURE
This Supplemental Exchange Debenture Indenture, dated as of
[__________] (this "Supplemental Exchange Debenture Indenture" or "Exchange
Debenture Guarantee"), among [name of Exchange Debenture Guarantor] (the
"Exchange Debenture Guarantor"), [Company] (together with its successors and
assigns, the "Company"), [each other then existing Note Guarantor under the
Exchange Debenture Indenture referred to below,] and the Bank of New York, a New
York banking corporation, as Trustee (the "Trustee") under the Exchange
Debenture Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed
and delivered an Indenture, dated as of March 18, 1998 (as amended,
supplemented, waived or otherwise modified, the "Exchange Debenture Indenture"),
providing for the issuance of an aggregate principal amount of $35.0 million of
12 1/4% Subordinated Exchange Debentures due 2010 of the Company (the
"Securities");
WHEREAS, Section 4.12 of the Exchange Debenture Indenture
provides that under certain circumstances the Company is required to cause the
Exchange Debenture Guarantor to execute and deliver to the Trustee a
supplemental indenture pursuant to which the Exchange Debenture Guarantor shall
unconditionally guarantee all of the Company's obligations under the Securities
pursuant to an Exchange Debenture Guarantee on the terms and conditions set
forth herein; and
WHEREAS, pursuant to Section 9.1 of the Exchange Debenture
Indenture, the Trustee and the Company are authorized to execute and deliver
this Supplemental Exchange Debenture Indenture to amend the Exchange Debenture
Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Exchange Debenture Guarantor, the Company[, the other Exchange
Debenture Guarantors] and the Trustee mutually covenant and agree for the equal
and ratable benefit of the holders of the Securities as follows:
ARTICLE I
1
<PAGE> 122
Definitions
SECTION 1.1 Defined Terms. As used in this Exchange Debenture
Guarantee, terms defined in the Exchange Debenture Indenture or in the preamble
or recital hereto are used herein as therein defined, except that the term
"Holders" in this Exchange Debenture Guarantee shall refer to the term "Holders"
as defined in the Exchange Debenture Indenture and the Trustee acting on behalf
or for the benefit of such holders. The words "herein," "hereof" and "hereby"
and other words of similar import used in this Supplemental Exchange Debenture
Indenture refer to this Supplemental Exchange Debenture Indenture as a whole and
not to any particular section hereof.
ARTICLE II
Exchange Debenture Guarantee
SECTION 2.1 Exchange Debenture Guarantee. The Exchange
Debenture Guarantor hereby fully, unconditionally and irrevocably guarantees, as
primary obligor and not merely as surety, jointly and severally with each other
Exchange Debenture Guarantor, to each Holder of the Securities (a) the full and
punctual payment when due, whether at Stated Maturity, by acceleration, by
redemption or otherwise, of principal of and interest on the Securities and all
other monetary obligations of the Company under the Exchange Debenture Indenture
and the Securities and (b) the full and punctual performance within applicable
grace periods of all other obligations of the Company under the Exchange
Debenture Indenture and the Securities (all the foregoing being hereinafter
collectively called the "Obligations"). The Exchange Debenture Guarantor further
agrees (to the extent permitted by law) that the Obligations may be extended or
renewed, in whole or in part, without notice or further assent from it, and that
it will remain bound under this Article II notwithstanding any extension or
renewal of any Obligation.
To the extent permitted by applicable law, (i) the Exchange
Debenture Guarantor waives presentation to, demand of payment from and protest
to the Company of any of the Obligations and also waives notice of protest for
nonpayment (ii), the Exchange Debenture Guarantor waives notice of any default
under the Securities or the Obligations and (iii) the obligations of the
Exchange Debenture Guarantor hereunder shall not be affected by (a) the failure
of any Holder to assert any claim or demand or to enforce any right or remedy
against the Company or any other person under the Exchange Debenture Indenture,
the Securities or any other agreement or otherwise; (b) any extension or renewal
of any thereof; (c) any rescission, waiver, amendment or modification of any of
the terms or provisions of the Exchange Debenture Indenture, the Securities or
any other agreement; or (d) the failure of any Holder to exercise any right or
remedy against any other Exchange Debenture Guarantor of the Obligations.
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<PAGE> 123
The Exchange Debenture Guarantor further agrees that its
Exchange Debenture Guarantee herein constitutes a guarantee of payment,
performance and compliance when due (and not a guarantee of collection) and, to
the extent permitted by applicable law, waives any right to require that any
resort be had by any Holder to any security held for payment of the Obligations.
Except as otherwise provided herein or under applicable law,
the obligations of the Exchange Debenture Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, to the extent
permitted by applicable law, the obligations of the Exchange Debenture Guarantor
herein shall not be discharged or impaired or otherwise affected by the failure
of any Holder to assert any claim or demand or to enforce any remedy under the
Exchange Debenture Indenture, the Securities or any other agreement, by any
waiver or modification of any thereof, by any default, failure or delay, willful
or otherwise, in the performance of the Obligations, or by any other act or
thing or omission or delay to do any other act or thing which may or might in
any manner or to any extent vary the risk of the Exchange Debenture Guarantor or
would otherwise operate as a discharge of the Exchange Debenture Guarantor as a
matter of law or equity.
The Exchange Debenture Guarantor further agrees that, subject
to Section 2.2(b) hereof, its Exchange Debenture Guarantee herein shall continue
to be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be restored by any Holder upon the bankruptcy or reorganization
of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any
other right which any Holder has at law or in equity against the Exchange
Debenture Guarantor by virtue hereof, upon the failure of the Company to pay the
principal of or interest on any Obligation when and as the same shall become
due, whether at maturity, by acceleration, by redemption or otherwise, or to
perform or comply with any other Obligation, the Exchange Debenture Guarantor
hereby promises to and will, upon receipt of written demand by the Trustee or
the Holders of a majority in principal amount of the then outstanding Securities
(the "Majority Securityholders"), forthwith pay, or cause to be paid, in cash,
to the Holders an amount equal to the sum of (i) the unpaid principal amount of
such Obligations then due and owing, (ii) accrued and unpaid interest on
3
<PAGE> 124
such Obligations then due and owing (but only to the extent not prohibited by
law) and (iii) all other monetary Obligations of the Company to the Holders then
due and owing.
The Exchange Debenture Guarantor agrees that it shall not be
entitled to any right of subrogation in relation to the Holders in respect of
any Obligations guarantied hereby until payment in full of all Obligations. The
Exchange Debenture Guarantor further agrees (to the extent permitted by
applicable law) that, as between such Exchange Debenture Guarantor, on the one
hand, and the Holders, on the other hand, (x) the maturity of the Obligations
guarantied hereby may be accelerated for the purposes of such Exchange Debenture
Guarantor's Exchange Debenture Guarantee herein, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guarantied hereby, and (y) in the event of any declaration of
acceleration of such Obligations, such Obligations (whether or not due and
payable) shall forthwith become due and payable by such Exchange Debenture
Guarantor for the purposes of this Section.
The Exchange Debenture Guarantor also agrees to pay any and
all reasonable costs and expenses (including reasonable attorneys' fees)
incurred by the Trustee or the Holders in enforcing any rights under this
Section.
SECTION 2.2 Limitation on Liability; Termination, Release and
Discharge. (a) Any term or provision of this Exchange Debenture Guarantee to the
contrary notwithstanding, the maximum aggregate amount of the Obligations
guarantied hereunder by the Exchange Debenture Guarantor shall not exceed the
maximum amount that can be hereby guarantied without rendering this Exchange
Debenture Guarantee, as it relates to such Exchange Debenture Guarantor,
voidable under applicable law, including without limitation applicable law
relating to fraudulent conveyance or fraudulent transfer or affecting the rights
or remedies of creditors generally.
(b) This Exchange Debenture Guarantee shall terminate and be
of no further force or effect, and the Exchange Debenture Guarantor shall
automatically and unconditionally be released and discharged from all
liabilities and obligations in respect hereof, upon (w) payment in full of the
principal amount of all outstanding Securities (whether by payment at maturity,
purchase, redemption, defeasance, retirement or other acquisition) and all other
monetary Obligations then due and owing, (x) the merger or consolidation of the
Exchange Debenture Guarantor with and into the Company or another Exchange
Debenture Guarantor that is the surviving Person in such merger or
consolidation, or (y) the exercise by the Company of its legal defeasance option
or its covenant defeasance option, or (z) the sale or other transfer (i) by
4
<PAGE> 125
the Exchange Debenture Guarantor of all or substantially all of its assets or
(ii) by the Company or a Restricted Subsidiary of all of the capital stock or
other equity interests in the Exchange Debenture Guarantor held by the Company
or such Restricted Subsidiary, to a Person that is not an Affiliate of the
Company; provided, however, that, in the case of this clause (z), (1) any such
sale or transfer is made in accordance with the terms of the Exchange Debenture
Indenture (including Section 4.6 thereof), and (2) all obligations of the
Exchange Debenture Guarantor under, and all of its guarantees of, and all of its
pledges of assets or other security interests which secure, any Bank
Indebtedness of the Company shall also terminate upon such release, sale or
transfer (other than with respect to any such Indebtedness that is assumed by
any Person that is not an Affiliate of the Company). Upon notice to the Trustee
that any such payment, merger, consolidation, exercise, sale or transfer has
occurred or is occurring, the Trustee shall execute all agreements and
instruments confirming and acknowledging such termination, release and discharge
as may be reasonably requested by the Exchange Debenture Guarantor, and the
Trustee shall return the original Exchange Debenture Guarantee to the Exchange
Debenture Guarantor.
ARTICLE III
Subordination
SECTION 3.1 Subordination. The Exchange Debenture Guarantor
agrees, and each Securityholder by accepting a Security agrees, that (a) the
obligations of the Exchange Debenture Guarantor under this Exchange Debenture
Guarantee are subordinated in right of payment to the prior payment in full
(when due) of all existing and future Exchange Debenture Guarantor Senior
Indebtedness of the Exchange Debenture Guarantor, including without limitation
any Exchange Debenture Guarantee by the Exchange Debenture Guarantor of the Bank
Indebtedness or of any Exchange Debenture Senior Indebtedness of the Company or
of any Exchange Debenture Guarantor Senior Indebtedness of any other Exchange
Debenture Guarantor, to the extent and in the matter provided in Article 10 of
the Exchange Debenture Indenture (as if the Exchange Debenture Guarantor were
the Company for purposes of such Article 10 and all defined terms used therein,
and the Exchange Debenture Guarantor Senior Indebtedness of the Exchange
Debenture Guarantor were Exchange Debenture Senior Indebtedness), and this
Exchange Debenture Guarantor is made subject to such provisions (which are
hereby incorporated herein by reference), and (b) such subordination is for the
benefit of and enforceable by the holders of Exchange Debenture Guarantor Senior
Indebtedness of the Exchange Debenture Guarantor.
ARTICLE IV
5
<PAGE> 126
Miscellaneous
SECTION 4.1 Notices. All notices and other communications
pertaining to this Exchange Debenture Guarantee or any Security shall be in
writing and shall be deemed to have been duly given upon the receipt thereof.
Such notices shall be delivered by hand, or mailed, certified or registered mail
with postage prepaid (a) if to the Exchange Debenture Guarantor, at its address
set forth below, with a copy to the Company as provided in the Exchange
Debenture Indenture for notices to the Company, and (b) if to the Holders or the
Trustee, as provided in the Exchange Debenture Indenture. The Exchange Debenture
Guarantor by notice to the Trustee may designate additional or different
addresses for subsequent notices to or communications with the Exchange
Debenture Guarantor.
SECTION 4.2 Parties. Nothing expressed or mentioned in this
Exchange Debenture Guarantee is intended or shall be construed to give any
Person, firm or corporation, other than the Holders and the Trustee and the
holders of any Exchange Debenture Guarantor Senior Indebtedness, any legal or
equitable right, remedy or claim under or in respect of this Exchange Debenture
Guarantee or any provision herein contained.
SECTION 4.3 Governing Law. This Agreement shall be governed by
the laws of the State of New York, without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
SECTION 4.4 Severability Clause. In case any provision in this
Exchange Debenture Guarantee shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and such provision shall be ineffective
only to the extent of such invalidity, illegality or unenforceability.
SECTION 4.5 Waivers and Remedies. Neither a failure nor a
delay on the part of the Holders or the Trustee in exercising any right, power
or privilege under this Exchange Debenture Guarantee shall operate as a waiver
thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise of any right, power or privilege. The rights, remedies and
benefits of the Holders and the Trustee herein expressly specified are
cumulative and not exclusive of any other rights, remedies or benefits which
either may have under this Exchange Debenture Guarantee or at law, in equity, by
statute or otherwise.
6
<PAGE> 127
SECTION 4.6 Successors and Assigns. Subject to Section 2.2(b)
hereof, (a) this Exchange Debenture Guarantee shall be binding upon and inure to
the benefit of the Exchange Debenture Guarantor, the Trustee, any other parties
hereto, the Holders and their respective successors and assigns and (b) in the
event of any transfer or assignment of rights by any Holder, the rights and
privileges conferred upon that party in this Exchange Debenture Guarantee and in
the Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Exchange Debenture
Guarantee and the Exchange Debenture Indenture.
SECTION 4.7 Modification, etc. Subject to the provisions of,
and except as otherwise provided in, Article 9 of the Exchange Debenture
Indenture (including without limitation Section 9.1 thereof), no modification,
amendment or waiver of any provision of this Exchange Debenture Guarantee, nor
the consent to any departure by the Exchange Debenture Guarantor therefrom,
shall in any event be effective unless the same shall be in writing and
consented to by the Majority Securityholders, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given. No notice to or demand on the Exchange Debenture Guarantor in any
case shall entitle such Exchange Debenture Guarantor or any other guarantor to
any other or further notice or demand in the same, similar or other
circumstances.
SECTION 4.8 Entire Agreement. This Exchange Debenture
Guarantee is intended by the parties to be a final expression of their agreement
in respect of the subject matter contained herein and, together with the
Exchange Debenture Indenture, supersedes all prior agreements and understandings
between the parties with respect to such subject matter.
SECTION 4.9 Ratification of Exchange Debenture Indenture;
Supplemental Exchange Debenture Indentures Part of Exchange Debenture Indenture.
Except as expressly amended hereby, the Exchange Debenture Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Exchange
Debenture Indenture shall form a part of the Exchange Debenture Indenture for
all purposes, and every holder of Securities heretofore or hereafter
authenticated and delivered shall be bound hereby. The Trustee makes no
representation or warranty as to the validity or sufficiency of this
Supplemental Exchange Debenture Indenture.
SECTION 4.10 Counterparts. The parties hereto may sign one or
more copies of this Supplemental Exchange Debenture Indenture in counterparts,
all of which together shall constitute one and the same agreement.
7
<PAGE> 128
SECTION 4.11 Headings. The headings of the Articles and the
sections in this Exchange Debenture Guarantee are for convenience of reference
only and shall not be deemed to alter or affect the meaning or interpretation of
any provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Exchange Debenture Indenture to be duly executed as of the date
first above written.
[NAME OF EXCHANGE DEBENTURE
GUARANTOR],
By:
------------------------------
Name:
Title:
Address:
[COMPANY]
By:
------------------------------
Name:
Title:
[Add signature block for any other existing
Exchange Debenture Guarantor]
THE BANK OF NEW YORK, as Trustee
By:
------------------------------
Name:
8
<PAGE> 129
Title:
9
<PAGE> 1
Exhibit 4.8
CONFORMED COPY
================================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by and among
DAY INTERNATIONAL GROUP, INC.,
as Borrower,
Certain Subsidiaries of the Borrower
and
SOCIETE GENERALE,
as Administrative Agent
Dated as of January 15, 1998
================================================================================
<PAGE> 2
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINED TERMS.................................................. 1
1.1 Definitions...................................................... 1
1.2 Other Definitional Provisions.................................... 7
SECTION 2. GUARANTEE...................................................... 7
2.1 Guarantee........................................................ 7
2.2 Right of Contribution............................................ 8
2.3 No Subrogation................................................... 8
2.4 Amendments, etc. with respect to the Borrower Obligations........ 8
2.5 Guarantee Absolute and Unconditional............................. 9
2.6 Reinstatement.................................................... 10
2.7 Payments......................................................... 10
SECTION 3. GRANT OF SECURITY INTEREST..................................... 10
SECTION 4. REPRESENTATIONS AND WARRANTIES................................. 12
4.1 Representations and Warranties of Each Guarantor................. 12
4.2 Representations and Warranties of Each Grantor................... 12
4.2.1 Title; No Other Liens.......................................... 12
4.2.2 Perfected First Priority Liens................................. 12
4.2.3 Chief Executive Office......................................... 14
4.2.4 Inventory and Equipment........................................ 14
4.2.5 Farm Products.................................................. 14
4.2.6 Accounts....................................................... 14
4.2.7 Intellectual Property.......................................... 14
4.3 Representations and Warranties of Each Pledgor................... 14
SECTION 5. COVENANTS...................................................... 15
5.1 Covenants of Each Guarantor...................................... 15
5.2 Covenants of Each Grantor........................................ 15
5.2.1 Delivery of Instruments and Chattel Paper...................... 15
5.2.2 Maintenance of Insurance....................................... 15
5.2.3 Payment of Obligations......................................... 16
5.2.4 Maintenance of Perfected Security Interest; Further
Documentation................................................... 16
5.2.5 Changes in Locations, Name, etc................................ 17
5.2.6 Notices........................................................ 17
5.2.7 Pledged Securities............................................. 17
5.2.8 Accounts....................................................... 17
5.2.9 Maintenance of Records......................................... 18
5.2.10 Acquisition of Intellectual Property.......................... 18
5.2.11 Protection of Trade Secrets................................... 18
5.3 Covenants of Each Pledgor........................................ 18
SECTION 6. REMEDIAL PROVISIONS............................................ 20
<PAGE> 3
Page
----
6.1 Certain Matters Relating to Accounts............................. 20
6.2 Communications with Obligors; Grantors Remain Liable............. 21
6.3 Pledged Stock.................................................... 22
6.4 Proceeds to be Turned Over To Administrative Agent............... 23
6.5 Application of Proceeds.......................................... 23
6.6 Code and Other Remedies.......................................... 24
6.7 Registration Rights.............................................. 24
6.8 Waiver; Deficiency............................................... 25
SECTION 7. THE ADMINISTRATIVE AGENT....................................... 26
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc...... 26
7.2 Duty of Administrative Agent..................................... 27
7.3 Execution of Financing Statements................................ 28
7.4 Authority of Administrative Agent................................ 28
7.5 Right Of Inspection.............................................. 28
SECTION 8. MISCELLANEOUS.................................................. 29
8.1 Amendments in Writing............................................ 29
8.2 Notices.......................................................... 29
8.3 No Waiver by Course of Conduct; Cumulative Remedies.............. 29
8.4 Enforcement Expenses; Indemnification............................ 29
8.5 Successors and Assigns........................................... 30
8.6 Set-Off.......................................................... 30
8.7 Counterparts..................................................... 30
8.8 Severability..................................................... 30
8.9 Section Headings................................................. 31
8.10 Integration..................................................... 31
8.11 GOVERNING LAW................................................... 31
8.12 Submission To Jurisdiction; Waivers............................. 31
8.13 Acknowledgements................................................ 32
8.14 WAIVER OF JURY TRIAL............................................ 32
8.15 Additional Granting Parties..................................... 32
8.16 Releases........................................................ 32
ii
<PAGE> 4
SCHEDULES
1 Notice Addresses of Guarantors
2 Description of Pledged Securities
3 Location of Jurisdiction of Organization and Chief Executive Office or
Sole Place of Business
4 Location of Inventory and Equipment
5 Patents and Patent Licenses; Trademarks and Trademark Licenses
6 Existing Prior Liens
7 Accounts
8 Contracts
ANNEXES
1 Assumption Agreement
iii
<PAGE> 5
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of January 15, 1998,
made by DAY INTERNATIONAL GROUP, INC., a Delaware corporation (the "Borrower")
and DAY INTERNATIONAL, INC., a Delaware corporation ("Day") (the Borrower and
Day, together with any other Subsidiary of the Borrower that becomes a party
hereto from time to time after the date hereof, the "Granting Parties"), in
favor of SOCIETE GENERALE, as administrative agent (in such capacity, the
"Administrative Agent") for the banks and other financial institutions
(collectively, the "Lenders"; individually, a "Lender") from time to time
parties to the Credit Agreement, dated as of January 15, 1998 (as amended,
waived, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among DAY INTERNATIONAL GROUP, INC., a Delaware corporation (the
"Borrower"), the Lenders, and SOCIETE GENERALE SECURITIES CORPORATION, as
advisor and arranger (in such capacity, the "Arranger").
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective extensions of credit to the Borrower under the
Credit Agreement that the Granting Parties that are parties hereto on the date
hereof shall have executed and delivered this Agreement (as defined below) to
the Administrative Agent for the ratable benefit of the Secured Parties (as
defined below);
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Granting Party hereby agrees with the Administrative Agent, for
the ratable benefit of the Secured Parties (as defined below), as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Code (as defined below) are used herein as so defined: Accounts, Chattel Paper,
Documents, Equipment, Farm Products, Fixtures, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"Agreement": this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.
<PAGE> 6
"Borrower Obligations": the collective reference to the unpaid
principal of and interest on the Loans and Reimbursement Obligations
and all other obligations and liabilities of the Borrower (including,
without limitation, interest accruing at the then applicable rate
provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable
rate provided in the Credit Agreement after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to
the Administrative Agent or any Lender (or, in the case of any
Permitted Hedging Arrangement or Hedge Agreement referred to below, any
Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents and any
Letter of Credit or any Hedge Agreement entered into by the Borrower
with any Lender (or, in the case of any Permitted Hedging Arrangement
or Hedge Agreement, any Affiliate of any Lender) or any other document
made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of any of the foregoing agreements).
"Code": the Uniform Commercial Code as in effect from time to time
in the State of New York.
"Collateral": as defined in Section 3.
"Collateral Account Bank": Societe Generale or, if Societe
Generale is no longer a Lender, another bank which at all times is a
Lender as selected by the Borrower and notified to the Administrative
Agent in writing promptly following such selection.
"Collateral Proceeds Account": the cash collateral account
established by the relevant Grantor at an office of the Collateral
Account Bank in the name of the Administrative Agent.
"Commitments": the collective reference to the Revolving Credit
Commitments, the Swing Line Commitments, the Term Loan Commitments and
the L/C Commitment; individually, a "Commitment".
"Contracts" with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and portions
thereof (except for the contracts listed on Schedule 8), to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of
such Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of such Grantor to damages
arising thereunder and (iii) all rights of such Grantor to perform and
to exercise all remedies thereunder.
"Copyright Licenses": with respect to any Grantor, all United
States written license agreements of such Grantor providing for the
grant by or to such Grantor of any right to use any Copyright of such
Grantor, other than intercompany agreements, subject,
<PAGE> 7
in each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.
"Copyrights": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States copyrights,
whether or not the underlying works of authorship have been published
or registered, United States copyright registrations and copyright
applications, and (a) all renewals thereof, (b) all income, royalties,
damages and payments now and hereafter due and/or payable with respect
thereto, including, without limitation, payments under all licenses
entered into in connection therewith, and damages and payments for past
or future infringement thereof and (c) the right to sue or otherwise
recover for past, present and future infringement and misappropriation
thereof.
"Default": a "Default" as defined in the Credit Agreement.
"Event of Default": an "Event of Default" as defined in the Credit
Agreement.
"General Fund Account": the general fund account of the relevant
Grantor established at the same office of the Collateral Account Bank
as the Collateral Proceeds Account.
"General Intangibles": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in
the State of New York on the date hereof.
"Granting Parties": as defined in the recitals hereto.
"Grantor": the Borrower, Day and each other Subsidiary of the
Borrower that from time to time becomes a party hereto.
"Guarantor Obligations": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or
in connection with this Agreement or any other Loan Document to which
such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and
disbursements of counsel to the Administrative Agent or to the Lenders
that are required to be paid by such Guarantor pursuant to the terms of
this Agreement or any other Loan Document).
"Guarantors": the collective reference to each Granting Party
other than the Borrower.
"Hedge Agreements": as to any Person, all interest rate swaps,
caps or collar agreements or similar arrangements entered into by such
Person providing for protection against fluctuations in interest rates
or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies,
including, without limitation, all Interest Rate Protection Agreements
and Permitted Hedging Arrangements.
"Holdings": GSD Acquisition Corp., a Delaware corporation.
<PAGE> 8
"Holdings Guarantee and Pledge": the Guarantee and Pledge
Agreement (Holdings) among Holdings, GSD Acquisition II Corp. and
Societe Generale, as Administrative Agent, dated as of the Date hereof.
"Intellectual Property": with respect to any Grantor, the
collective reference to such Grantor's Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trade Secrets, Trademarks and Trademark
Licenses.
"Intercompany Note": with respect to any Granting Party, any
promissory note evidencing loans made by such Granting Party to the
Borrower or any of its Subsidiaries.
"Issuers": the collective reference to (i) the Persons identified
on Schedule 2 as the issuers of the Pledged Stock and (ii) any
"Issuers" as defined under the Holdings Guarantee and Pledge.
"Loan Documents": the collective reference to the "Loan Documents"
as defined in the Credit Agreement.
"Maker": with respect to any Pledged Note, the maker thereof.
"Obligations": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"Patent Licenses": with respect to any Grantor, all United States
written license agreements of such Grantor with any Person who is not
an Affiliate or a Subsidiary in connection with any of the Patents of
such Grantor or such other Person's patents, whether such Grantor is a
licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on Schedule 5, subject, in
each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.
"Patents": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States patents, patent
applications and patentable inventions and all reissues and extensions
thereof, including, without limitation, all patents and patent
applications identified in Schedule 5, and including, without
limitation, (a) all inventions and improvements described and claimed
therein, and patentable inventions, (b) the right to sue or otherwise
recover for any and all past, present and future infringement and
misappropriation thereof, (c) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past or
future infringements thereof), and (d) all other rights corresponding
thereto in the United States and all reissues, divisions,
continuations, continuations-in-part, substitutes, renewals, and
extensions thereof, all improvements thereon, and all other rights of
any kind whatsoever of such Grantor accruing thereunder or pertaining
thereto.
"Pledged Collateral": as defined in Section 3.
"Pledged Notes": with respect to any Pledgor, all Intercompany
Notes at any time issued to such Pledgor and all other promissory notes
issued to or held by such Pledgor
<PAGE> 9
(other than promissory notes issued in connection with extensions of
trade credit by any Pledgor in the ordinary course of business).
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": with respect to any Pledgor, the shares of
Capital Stock listed on Schedule 2 as held by such Pledgor, together
with any other shares, stock certificates, options or rights of any
nature whatsoever in respect of the Capital Stock of any Issuer that
may be issued or granted to, or held by, such Pledgor while this
Agreement is in effect (provided that in no event shall there be
pledged, nor shall any Pledgor be required to pledge pursuant to this
Agreement, directly or indirectly, shares of any series of the
outstanding Capital Stock of any Foreign Subsidiary that would result
in more than 65% of the aggregate voting power of all such Capital
Stock being pledged hereunder).
"Pledgor": the Borrower (with respect to Pledged Stock of the
corporations listed on Schedule 2 hereto under the name of the Borrower
and any other Subsidiary of the Borrower and any other Pledged
Securities held by the Borrower) and any other Granting Party (with
respect to Pledged Securities held by such Granting Party).
"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, Proceeds of Pledged
Securities shall include, without limitation, all dividends or other
income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Revolving Credit Commitments": the collective reference to the
"Revolving Credit Commitments" as defined in the Credit Agreement.
"Secured Parties": the collective reference to the Administrative
Agent, the Lenders (including, without limitation the Issuing Lender)
and any Affiliate of any Lender which has entered into any Hedge
Agreement with the Borrower or any of its Subsidiaries, and their
respective successors and assigns.
"Securities Act": the Securities Act of 1933, as amended from time
to time.
"Security Collateral": as defined in Section 3.
"Trade Secrets": with respect to any Grantor, all of such
Grantor's right, title and interest in and to all United States trade
secrets, including, without limitation, know-how, processes, formulae,
compositions, designs, and confidential business and technical
information, and all rights of any kind whatsoever accruing thereunder
or pertaining thereto, including, without limitation, (a) all income,
royalties, damages and payments now and hereafter due and/or payable
with respect thereto, including, without limitation, payments under all
licenses, non-disclosure agreements and memoranda of understanding
entered into in connection therewith, and damages and payments for past
or future misappropriation thereof, and (b) the right to sue or
otherwise recover for past, present or future misappropriation thereof.
"Trademark Licenses": with respect to any Grantor, all United
States written license agreements of such Grantor with any Person who
is not an Affiliate or a
<PAGE> 10
Subsidiary in connection with any of the Trademarks of such Grantor or
such other Person's names or trademarks, whether such Grantor is a
licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on Schedule 5, subject, in
each case, to the terms of such license agreements, and the right to
prepare for sale, sell and advertise for sale, all Inventory now or
hereafter covered by such licenses.
"Trademarks": with respect to any Grantor, all of such Grantor's
right, title and interest in and to all United States trademarks,
service marks, trade names, trade dress or other indicia of trade
origin or business identifiers, trademark and service mark
registrations, and applications for trademark or service mark
registrations (except for "intent to use" applications for trademark or
service mark registrations filed pursuant to Section 1(b) of the Lanham
Act, 15 U.S.C. Section 1051, unless and until an Amendment to Allege
Use or a Statement of Use under Sections 1(c) and 1(d) of said Act has
been filed), and any renewals thereof, including, without limitation,
each registration and application identified in Schedule 5, and
including, without limitation, (a) the right to sue or otherwise
recover for any and all past, present and future infringements and
misappropriation thereof, (b) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered
into in connection therewith, and damages and payments for past or
future infringements thereof), and (c) all other rights corresponding
thereto in the United States and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto,
together in each case with the goodwill of the business connected with
the use of, and symbolized by, each such trademark, service mark, trade
name, trade dress or other indicia of trade origin or business
identifiers.
"Vehicles": all cars, trucks, trailers, construction and earth
moving equipment and other vehicles covered by a certificate of title
law of any state and all tires and other appurtenances to any of the
foregoing.
1.2 Other Definitional Provisions. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Annex references are to this Agreement
unless otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral,
Pledged Collateral or Security Collateral, or any part thereof, when used in
relation to a Granting Party shall refer to such Granting Party's Collateral,
Pledged Collateral or Security Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Secured Parties and their respective
successors, indorsees, transferees and assigns, the prompt and complete payment
and performance by the Borrower when due and payable (whether at the stated
maturity, by acceleration or otherwise) of the Borrower Obligations.
<PAGE> 11
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable law, including applicable federal and state
laws relating to the insolvency of debtors.
(c) Each Guarantor agrees that the Borrower Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any other
Secured Party hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until the earlier to occur of (i) the first date on which all
the Loans, any Reimbursement Obligations, all other Borrower Obligations then
due and owing, and the obligations of each Guarantor under the guarantee
contained in this Section 2 then due and owing shall have been satisfied by
payment in full, no Letter of Credit shall be outstanding and the Commitments
shall be terminated, notwithstanding that from time to time during the term of
the Credit Agreement the Borrower may be free from any Borrower Obligations or
(ii) as to any Guarantor, the sale or other disposition of all of the Capital
Stock of such Guarantor permitted under the Credit Agreement.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the earlier to occur of (i) the
first date on which the Loans, any Reimbursement Obligations, and all other
Borrower Obligations then due and owing, are paid in full, no Letter of Credit
shall be outstanding and the Commitments are terminated or (ii) the sale or
other disposition of all of the Capital Stock of such Guarantor permitted under
the Credit Agreement.
2.2 Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any other Secured Party, no Guarantor shall be entitled
to be subrogated to any of the rights of the Administrative Agent or any other
Secured Party against the Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by the Administrative
<PAGE> 12
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the other Secured Parties by the Borrower on account of the Borrower
Obligations are paid in full, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all of the Borrower
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the Administrative Agent in the exact form
received by such Guarantor (duly indorsed by such Guarantor to the
Administrative Agent, if required), to be applied against the Borrower
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations. To the
maximum extent permitted by law, each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for payment
of any of the Borrower Obligations made by the Administrative Agent or any other
Secured Party may be rescinded by the Administrative Agent or such other Secured
Party and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any other Secured Party, and the Credit Agreement
and the other Loan Documents and any other documents executed and delivered in
connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent (or the Required Lenders, as the
case may be) may deem advisable from time to time, and any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
other Secured Party for the payment of the Borrower Obligations may be sold,
exchanged, waived, surrendered or released. Neither the Administrative Agent nor
any other Secured Party shall have any obligation to protect, secure, perfect or
insure any Lien at any time held by it as security for the Borrower Obligations
or for the guarantee contained in this Section 2 or any property subject
thereto, except to the extent required by applicable law.
2.5 Guarantee Absolute and Unconditional. Each Guarantor waives, to the
maximum extent permitted by applicable law, any and all notice of the creation,
renewal, extension or accrual of any of the Borrower Obligations and notice of
or proof of reliance by the Administrative Agent or any other Secured Party upon
the guarantee contained in this Section 2 or acceptance of the guarantee
contained in this Section 2; the Borrower Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in this
Section 2; and all dealings between the Borrower and any of the Guarantors, on
the one hand, and the Administrative Agent and the other Secured Parties, on the
other hand, likewise shall be conclusively presumed to have been had or
consummated in reliance upon the guarantee contained in this Section 2. Each
Guarantor waives, to the maximum extent permitted by applicable law, diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrower or any of the other Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees, to the extent permitted by
law, that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment. Each Guarantor
hereby waives, to the maximum extent
<PAGE> 13
permitted by applicable law, any and all defenses that it may have arising out
of or in connection with any and all of the following: (a) the validity or
enforceability of the Credit Agreement or any other Loan Document, any of the
Borrower Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Borrower against the Administrative
Agent or any other Secured Party, (c) any change in the time, place, manner or
place of payment, amendment, or waiver or increase in the Obligations, (d) any
exchange, taking, or release of Collateral, (e) any change in the corporate
structure or existence of the Borrower, (f) any application of Collateral to
Obligations or (g) any other circumstance whatsoever (with or without notice to
or knowledge of the Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Borrower Obligations, or of such Guarantor under the guarantee contained in this
Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any other Secured Party may, but shall be
under no obligation to, make a similar demand on or otherwise pursue such rights
and remedies as it may have against the Borrower, any other Guarantor or any
other Person or against any collateral security or guarantee for the Borrower
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any other Secured Party to make any such demand, to
pursue such other rights or remedies or to collect any payments from the
Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any
release of the Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve any
Guarantor of any obligation or liability hereunder, and shall not impair or
affect the rights and remedies, whether express, implied or available as a
matter of law, of the Administrative Agent or any other Secured Party against
any Guarantor. For the purposes hereof "demand" shall include the commencement
and continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that payments hereunder
will be paid to the Administrative Agent without set-off or counterclaim in
Dollars at the office of the Administrative Agent located at 1221 Avenue of the
Americas, New York, New York 10020.
SECTION 3. GRANT OF SECURITY INTEREST
Each Granting Party (1) that is a Grantor hereby grants, subject to
existing ownership rights of joint owners of Patents, Trademarks, Copyrights and
Trade Secrets and existing licenses granted by such Grantor in the ordinary
course of business with respect to Patents, Trademarks, Copyrights and Trade
Secrets, to the Administrative Agent, for the ratable benefit of the Secured
Parties, a security interest in all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in
<PAGE> 14
the future may acquire any right, title or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Obligations of such Grantor:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment (other than Vehicles);
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all books and records pertaining to any of the foregoing;
(k) the Collateral Proceeds Account; and
(l) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
and (2) that is a Pledgor hereby grants to the Administrative Agent, for the
ratable benefit of the Secured Parties, a security interest in all of the
Pledged Securities now owned or at any time hereafter acquired by such Pledgor,
and any Proceeds thereof (the "Pledged Collateral"), as collateral security for
the prompt and complete performance when due (whether at the stated maturity by
acceleration or otherwise) of the Obligations of such Pledgor; (the Collateral
(if any) and the Pledged Collateral (if any) of any Granting Party being
collectively referred to herein as such Granting Party's "Security Collateral");
provided however, that (w) Collateral shall not include any Pledged Collateral,
or any property or assets specifically excluded from Pledged Collateral
(including any Capital Stock of any Foreign Subsidiary having in excess of 65%
of the aggregate voting power of all such Capital Stock); (x) in the case of any
Instruments, Contracts, Chattel Paper, General Intangibles, Copyright Licenses,
Patent Licenses, Trademark Licenses or other contracts or agreements with or
issued by Persons (other than a Subsidiary of the Borrower) that would otherwise
be included in the Security Collateral, no security interest in the right, title
and interest of any Grantor thereunder or therein will be granted pursuant to
this Section 2 (and such Instruments, Contracts, Chattel Paper, General
Intangibles, Copyright Licenses, Patent Licenses, Trademark Licenses or other
contracts or agreements shall not be deemed to constitute a part of the Security
Collateral) for so long as, and to the extent that, the granting of a security
interest in the right, title and interest of such Grantor thereunder or therein
pursuant to the terms hereof would result in a breach, default or
<PAGE> 15
termination of such Instruments, Contracts, Chattel Paper, General Intangibles,
Copyright Licenses, Patent Licenses, Trademark Licenses or other contracts or
agreements; (y) in the case of any Patents, Trademarks, Copyrights and Trade
Secrets owned jointly with Persons (other than a Subsidiary of the Borrower)
that would otherwise be included in the Security Collateral, no security
interest in the right, title and interest of any Grantor thereunder or therein
will be granted pursuant to this Section 3 (and such Patents, Trademarks,
Copyrights and Trade Secrets shall not be deemed to constitute a part of the
Security Collateral) for so long as, and to the extent that, the granting of a
security interest in the right, title and interest of such Grantor thereunder or
therein pursuant to the terms hereof is prohibited by the terms of the written
agreement or document or instrument creating or evidencing such joint ownership
or gives the other party the right to terminate the rights of such Grantor with
respect to such Patents, Trademarks, Copyrights or Trade Secrets in the event of
the grant of a security interest with respect thereto and (z) in the case of the
Equipment that would otherwise be included in the foregoing Collateral, the
foregoing will not be deemed to grant a security interest therein under this
Agreement (and such Equipment shall not be deemed to constitute a part of the
Collateral) if such Equipment is subject to a Lien permitted by Section 7.3(g)
of the Credit Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Each Guarantor. To induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Guarantor hereby represents and warrants to the Administrative
Agent and each other Secured Party that the representations and warranties set
forth in Section 4 of the Credit Agreement as they relate to such Guarantor or
to the Loan Documents to which such Guarantor is a party or to the Transaction
Documents to which such Guarantor is a party, each of which representations and
warranties is hereby incorporated herein by reference, are true and correct in
all material respects, and the Administrative Agent and each other Secured Party
shall be entitled to rely on each of such representations and warranties as if
fully set forth herein; provided that each reference in each such representation
and warranty to the Borrower's knowledge shall, for the purposes of this Section
4.1, be deemed to be a reference to such Guarantor's knowledge.
4.2 Representations and Warranties of Each Grantor. To induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby represents and warrants to the Administrative
Agent and each other Secured Party that:
4.2.1 Title; No Other Liens. Except for the security interest granted
to the Administrative Agent, for the ratable benefit of the Secured Parties,
pursuant to this Agreement and the other Liens permitted to exist on such
Grantor's Collateral by the Credit Agreement (including without limitation
Section 7.3 thereof), such Grantor owns each item of such Grantor's Collateral
free and clear of any and all Liens. Except as set forth on Schedule 6, no
financing statement or other similar public notice with respect to all or any
part of such Grantor's Collateral is on file or of record in any public office,
except such as have been filed in favor of the Administrative Agent, for the
ratable benefit of the Secured Parties, pursuant to this Agreement or as are
permitted by the Credit Agreement (including without limitation Section 7.3
thereof) or any other Loan Document or for which termination statements will be
delivered on the Closing Date.
<PAGE> 16
4.2.2 Perfected First Priority Liens. (i) This Agreement is effective
to create, as collateral security for the Obligations of such Grantor, valid and
enforceable Liens on such Grantor's Collateral in favor of the Administrative
Agent, for the benefit of the Secured Parties, except as enforceability may be
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditor's rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(ii) Except with respect to (A) Liens on Equipment constituting
Fixtures, (B) any rights reserved in favor of the United States government as
required under law, (C) Liens upon Patents, Patent Licenses, Trademarks and
Trademark Licenses to the extent that (x) such Liens cannot be perfected by the
filing of financing statements under the Uniform Commercial Code or by the
filing and acceptance thereof in the United States Patent and Trademark Office
or (y) such Patents, Patent Licenses, Trademarks and Trademark Licenses are not,
individually or in the aggregate, material to the business of the Borrower and
its Subsidiaries taken as a whole, (D) Liens on Collateral the perfection of
which requires filings in or other actions under the laws of jurisdictions
outside of the United States of America, any State, territory or dependency
thereof or the District of Columbia (except to the extent that such filings or
other actions have been made or taken), (E) Liens on Proceeds of receivables and
Inventory, until transferred to or deposited in the Collateral Proceeds Account
(if any), and (F) claims of creditors of Persons receiving goods included as
Collateral for "sale or return" within the meaning of Section 2-326 of the
Uniform Commercial Code of the applicable jurisdiction, and (G) Liens on
contracts or receivables on which the United States of America or any
department, agency, or instrumentality thereof is the obligor, upon filing of
the financing statements delivered to the Administrative Agent by such Grantor
on the Effective Date in the jurisdictions listed on Schedule 4.19(a) to the
Credit Agreement (which financing statements are in proper form for filing in
such jurisdictions) and the recording of the Mortgages (and the recording of any
Patent and Trademark Security Agreement, as set forth therein, and the making of
filings after the Effective Date in any other jurisdiction as may be necessary
under any Requirement of Law), the delivery to, and continuing possession by,
the Administrative Agent of all Instruments, Chattel Paper and Documents a
security interest in which is perfected by possession and the completion of all
necessary notifications and other actions with respect to Liens on
uncertificated securities, the Liens created pursuant to this Agreement will
constitute valid Liens on and, to the extent provided herein, perfected security
interests in such Grantor's Collateral (but as to the Copyrights and Copyright
Licenses and accounts arising therefrom, only to the extent the Uniform
Commercial Code of the relevant jurisdiction, from time to time in effect, is
applicable) in favor of the Administrative Agent for the benefit of the Secured
Parties, which Liens will be prior to all other Liens of all other Persons,
except for Liens permitted pursuant to the Loan Documents (including, without
limitation, those permitted to exist pursuant to Section 7.3 of the Credit
Agreement), and which Liens are enforceable as such as against all other Persons
(except (i) as set forth on Schedule 5 and (ii) to the extent that the recording
of an assignment or other transfer of title to the Administrative Agent in the
United States Patent and Trademark Office or the United States Copyright Office
may be necessary for enforceability, and except, with respect to goods only,
buyers in the ordinary course of business to the extent provided in Section
9-307(1) of the Code), except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law) or by an
implied covenant of good faith and fair dealing.
<PAGE> 17
4.2.3 Chief Executive Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 3.
4.2.4 Inventory and Equipment. On the date hereof, such Grantor's
Inventory and Equipment (other than mobile goods and Vehicles) are kept at the
locations listed on Schedule 4.
4.2.5 Farm Products. None of such Grantor's Collateral constitutes, or
is the Proceeds of, Farm Products.
4.2.6 Accounts. The amount represented by such Grantor to the
Administrative Agent or the other Secured Parties from time to time as owing by
each account debtor or by all account debtors in respect of such Grantor's
Accounts will at such time be the correct amount, in all material respects,
actually owing by such account debtor or debtors thereunder, except to the
extent that appropriate reserves therefor have been established on the books of
such Grantor in accordance with GAAP. The places where such Grantor keeps its
records concerning such Grantor's Accounts are listed on Schedule 7 or such
other location or locations of which such Grantor shall have provided prior
written notice to the Administrative Agent pursuant to Section 5.2.5 hereof.
Unless otherwise indicated in writing to the Administrative Agent, each Account
of such Grantor arises out of a bona fide sale and delivery of goods or
rendition of services by such Grantor. Such Grantor has not given any account
debtor any deduction in respect of the amount due under any such Account, except
as such Grantor may otherwise advise the Administrative Agent in writing.
4.2.7 Intellectual Property. Schedule 5 lists all material Trademarks
and material Patents (including, without limitation, Trademarks and Patents
registered in the United States Patent and Trademark Office) owned by such
Grantor in its own name as of the date hereof and all material Trademark
Licenses and all material Patent Licenses (including, without limitation,
material Trademark Licenses for registered Trademarks and material Patent
Licenses for registered Patents) owned by such Grantor in its own name as of the
date hereof.
4.3 Representations and Warranties of Each Pledgor. To induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Pledgor hereby represents and warrants to the Administrative
Agent and each other Secured party that:
4.3.1 The shares of Pledged Stock pledged by such Pledgor hereunder
constitute (i) in the case of each Domestic Subsidiary, all the issued and
outstanding shares of all classes of the Capital Stock of each such Domestic
Subsidiary owned by such Pledgor and (ii) in the case of each Foreign Subsidiary
such percentage (not more than 65% in aggregate voting power) as is specified on
Schedule 2 of all the issued and outstanding shares of all classes of the
Capital Stock of each such Foreign Subsidiary.
4.3.2 All the shares of the Pledged Stock pledged by such Pledgor
hereunder have been duly and validly issued and are fully paid and
nonassessable.
4.3.3 Such Pledgor is the record and beneficial owner of, and has good
and valid title to, the Pledged Securities pledged by it hereunder, free of any
and all Liens or options in favor of, or claims of, any other Person, except the
security interest created by this Agreement and Liens imposed by operation of
law.
<PAGE> 18
4.3.4 Upon delivery to the Administrative Agent of the certificates
evidencing the Pledged Securities held by such Pledgor, the security interest
created by this Agreement in such Pledged Collateral, assuming the continuing
possession of such Pledged Securities by the Administrative Agent, will
constitute a valid, perfected first priority security interest in such Pledged
Collateral to the extent provided in the Code, enforceable in accordance with
its terms against all creditors of such Pledgor and any persons purporting to
purchase such Pledged Collateral from such Pledgor, except as enforceability may
be affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 5. COVENANTS
5.1 Covenants of Each Guarantor. Each Guarantor covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the Loans, any Reimbursement Obligations, and
all other Obligations then due and owing, shall have been paid in full, no
Letter of Credit shall be outstanding and the Commitments shall have terminated,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 Covenants of Each Grantor. Each Grantor covenants and agrees with
the Administrative Agent and the other Secured Parties that, from and after the
date of this Agreement until the Loans, any Reimbursement Obligations, and all
other Obligations then due and owing, shall have been paid in full, no Letter of
Credit shall be outstanding and the Commitments shall have terminated:
5.2.1 Delivery of Instruments and Chattel Paper. If any amount payable
under or in connection with any of such Grantor's Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be promptly delivered to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, to be held as Collateral
pursuant to this Agreement.
5.2.2 Maintenance of Insurance. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring such
Grantor's Inventory and Equipment against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) insuring such Grantor, the Administrative Agent and the other
Secured Parties against liability for personal injury and property damage
relating to such Inventory and Equipment, such policies to be in such form and
amounts and having such coverage as may be reasonably satisfactory to the
Administrative Agent.
(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (ii) name the Administrative Agent as an additional insured
party or loss payee, (iii) include deductibles consistent with past practice or
otherwise reasonably satisfactory to the Administrative Agent and (iv) be
reasonably satisfactory in all other respects to the Administrative Agent.
<PAGE> 19
(c) Such Grantor (if the Borrower) shall deliver to the
Administrative Agent and the other Secured Parties reports of one or more
reputable insurance brokers of the individual insurance companies with respect
to such insurance as the Administrative Agent may from time to time reasonably
request.
5.2.3 Payment of Obligations. Such Grantor will pay and discharge
or otherwise satisfy at or before maturity or before they become delinquent, as
the case may be, all taxes, assessments and governmental charges or levies
imposed upon such Grantor's Collateral or in respect of income or profits
therefrom, as well as all claims of any kind (including, without limitation,
claims for labor, materials and supplies) against or with respect to such
Grantor's Collateral, except that no such tax, assessment, charge or levy need
be paid or satisfied if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings would not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.2.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Grantor shall maintain the security interest created by
this Agreement in such Grantor's Collateral as a perfected security interest
having at least the priority described in Section 4.2.2 and shall defend such
security interest against the claims and demands of all Persons whomsoever,
except where such defense would not be required of such Grantor under the terms
of any Patent and Trademark Security Agreement made by such Grantor in
connection herewith.
(b) Such Grantor will furnish to the Administrative Agent from
time to time statements and schedules further identifying and describing such
Grantor's Collateral and such other reports in connection with such Grantor's
Collateral as the Administrative Agent may reasonably request in writing, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of
the Administrative Agent, and at the sole expense of such Grantor, such Grantor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Administrative Agent may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted by such Grantor,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.2.5 Changes in Locations, Name, etc. Such Grantor will not,
except upon not less than 30 days' prior written notice to the Administrative
Agent and delivery to the Administrative Agent, if applicable, of a written
supplement to Schedule 4 showing any additional location at which such Grantor's
Inventory or Equipment shall be kept:
(i) permit any of such Grantor's Inventory or Equipment to be kept
at a location other than the location(s) applicable to such Grantor
listed on Schedule 4 (other than Inventory or Equipment being conveyed,
sold, leased, assigned, transferred or otherwise disposed of as
permitted by the Credit Agreement);
(ii) change the location of its chief executive office or sole
place of business from that referred to in Section 4.2.3; or
<PAGE> 20
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent
in connection with this Agreement would become misleading;
provided that, prior to taking any such action, or promptly after receiving a
written request therefor from the Administrative Agent, such Grantor shall
deliver to the Administrative Agent all additional executed financing statements
and other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein.
5.2.6 Notices. Such Grantor will advise the Administrative Agent
promptly, in reasonable detail, of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of such Grantor's Collateral
which would adversely affect the ability of the Administrative Agent to exercise
any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of such
Grantor's Collateral or on the security interests created hereby.
5.2.7 Pledged Securities. In the case of each Grantor which is an
Issuer, such Issuer agrees that (i) it will be bound by the terms of this
Agreement or, if applicable, the Holdings Guarantee and Pledge relating to the
Pledged Stock issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.3.1 hereof
or, if applicable, of Section 5.3.1 of the Holdings Guarantee and Pledge with
respect to the Pledged Stock issued by it and (iii) the terms of Sections 6.3(c)
and 6.7 hereof or, if applicable, of Sections 6.3(c) and 6.7 of the Holdings
Guarantee and Pledge shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Stock issued by it.
5.2.8 Accounts. (a) Other than in the ordinary course of business,
such Grantor will not (i) grant any extension of the time of payment of any of
such Grantor's Accounts, (ii) compromise or settle any such Account for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Account, (iv) allow any credit or discount
whatsoever on any such Account or (v) amend, supplement or modify any Account in
any manner that could adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy
of each material demand, notice or document received by it that questions or
calls into doubt the validity or enforceability of more than 10% of the
aggregate amount of the then outstanding Accounts.
5.2.9 Maintenance of Records. Such Grantor will keep and maintain
at its own cost and expense reasonably satisfactory and complete records of its
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to such Collateral, and shall mark such records
to evidence this Agreement and the Liens and the security interests created
hereby. For the Administrative Agent's and the other Secured Parties' further
security, the Administrative Agent, for the benefit of the Secured Parties shall
have a security interest in all of such Grantor's books and records pertaining
to such Grantor's Collateral.
<PAGE> 21
5.2.10 Acquisition of Intellectual Property. Within 45 days after
the end of each calendar quarter, such Grantor will notify the Administrative
Agent of any acquisition by such Grantor of (i) any material registration of
Copyright, Patent or Trademark or (ii) any exclusive rights under a material
Copyright License, Patent License or Trademark License, and shall take such
actions as may be reasonably requested by the Administrative Agent (but only to
the extent such actions are within such Grantor's control) to perfect the
security interest granted to the Administrative Agent and the other Secured
Parties therein (including, without limitation, (x) the execution and delivery
of a Patent and Trademark Security Agreement (or amendments to any such
agreement previously executed or delivered by such Grantor) or other comparable
agreements with respect to Copyrights or Copyright Licenses and (y) the making
of appropriate filings (I) of financing statements under the Uniform Commercial
Code of any applicable jurisdiction and/or (II) in the United States Patent and
Trademark Office, or with respect to Copyrights and Copyright Licenses, other
applicable office).
5.2.11 Protection of Trade Secrets. Such Grantor shall take all
steps which it deems commercially reasonable to preserve and protect the secrecy
of all material Trade Secrets of such Grantor.
5.3 Covenants of Each Pledgor. Each Pledgor covenants and agrees
with the Administrative Agent and the other Secured Parties that, from and after
the date of this Agreement until the Loans, any Reimbursement Obligations, and
all other Obligations then due and owing shall have been paid in full, no Letter
of Credit shall be outstanding and the Commitments shall have terminated:
5.3.1 If such Pledgor shall become entitled to receive or shall
receive any stock certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the Capital
Stock of any Issuer, whether in addition to, in substitution of, as a conversion
of, or in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Pledgor shall accept the same as the agent of the Administrative
Agent and the other Secured Parties, hold the same in trust for the
Administrative Agent and deliver the same forthwith to the Administrative Agent
in the exact form received, duly indorsed by such Pledgor to the Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by such Pledgor and with, if the
Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations (provided that in no event shall there be pledged,
nor shall any Pledgor be required to pledge, Capital Stock having more than 65%
of the aggregate voting power of all series of the outstanding Capital Stock of
any Foreign Subsidiary pursuant to this Agreement). Any sums paid upon or in
respect of the Pledged Securities upon the liquidation or dissolution of any
Issuer or Maker (except any liquidation or dissolution of any Subsidiary of the
Borrower in accordance with the Credit Agreement) shall be paid over to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Stock or any property shall be distributed
upon or with respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Administrative Agent, be delivered
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Pledgor, such Pledgor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property
<PAGE> 22
in trust for the Secured Parties, segregated from other funds of such Pledgor,
as additional collateral security for the Obligations.
5.3.2 Without the prior written consent of the Administrative
Agent, such Pledgor will not (except pursuant to a transaction permitted by the
Credit Agreement) (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof or (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or Liens arising by operation of law.
5.3.3 Such Pledgor shall maintain the security interest created by
this Agreement in such Pledgor's Pledged Collateral as a perfected security
interest having at least the priority described in Section 4.3.4 and shall
defend such security interest against the claims and demands of all Persons
whomsoever. At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Pledgor, such Pledgor will
promptly and duly execute and deliver such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted by such Pledgor.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Accounts. (a) At any time and from
time to time after the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and the relevant Grantor shall furnish all such
assistance and information as the Administrative Agent may require in connection
with such test verifications. At any time and from time to time after the
occurrence and during the continuance of an Event of Default, upon the
Administrative Agent's reasonable request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants or others
reasonably satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts.
(b) The Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Accounts and the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any Proceeds constituting collections of such Accounts, when collected by such
Grantor, (i) shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Administrative Agent if required, in the Collateral Proceeds
Account established by such Grantor maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the Administrative
Agent for the account of the Secured Parties only as provided in Section 6.5,
and (ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Grantor. Each such deposit of Proceeds of Accounts shall be accompanied
by a report identifying in reasonable detail the nature and source
<PAGE> 23
of the payments included in the deposit. All Proceeds constituting collections
of Accounts while held by the Collateral Account Bank (or by any Guarantor in
trust for the benefit of the Administrative Agent and the other Secured Parties)
shall continue to be collateral security for all of the Obligations and shall
not constitute payment thereof until applied as hereinafter provided. At any
time when an Event of Default has occurred and is continuing, at the
Administrative Agent's election, the Administrative Agent may apply all or any
part of the funds on deposit in the Collateral Proceeds Account established by
the relevant Grantor to the payment of the Obligations of such Grantor then due
and owing, such application to be made as set forth in Section 6.5 hereof. So
long as no Event of Default has occurred and is continuing, the funds on deposit
in the Collateral Proceeds Account shall be remitted as provided in Section 6.9
hereof. At any time when an Event of Default has occurred and is continuing, at
the Administrative Agent's request, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to such Grantor's Accounts,
including, without limitation, all statements relating to such Grantor's
Accounts.
(c) At any time and from time to time after the occurrence and
during the continuance of an Event of Default, at the Administrative Agent's
request, each Grantor shall deliver to the Administrative Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to such Grantor's Accounts, including, without limitation, all
original orders, invoices and shipping receipts.
(d) General Fund Account. So long as no Event of Default has
occurred and is continuing, the Administrative Agent shall instruct the
Collateral Account Bank to promptly remit any funds on deposit in each Grantor's
Collateral Proceeds Account to such Grantor's General Fund Account. In the event
that an Event of Default has occurred and is continuing, the Administrative
Agent and the Grantors agree that the Administrative Agent, at its option, may
require that each Collateral Proceeds Account be established at Societe
Generale. Each Grantor shall have the right, at any time and from time to time,
to withdraw such of its own funds from its own General Fund Account, and to
maintain such balances in its General Fund Account, as it shall deem to be
necessary or desirable.
(e) Restructuring of Deposit Accounts. If (a) any Collateral
Proceeds Account is maintained at a Collateral Account Bank located in a state
within the United States in which Article 9 of the Uniform Commercial Code in
effect in such state has been expressly made applicable to (and only for so long
as it is applicable to) demand deposit accounts and all filings have been made
in such state which are necessary to perfect the Secured Parties' security
interest in such Collateral Proceeds Account or (b) after the Effective Date the
relevant Grantor demonstrates to the Administrative Agent, and the
Administrative Agent in its sole discretion agrees, that the costs associated
with maintaining both a Collateral Proceeds Account and a General Fund Account
outweigh any benefits to the Secured Parties in terms of any additional
protection to their rights in such Grantor's Collateral that could not be
achieved with the use of a single account, then upon the request of such
Grantor, the Administrative Agent may amend this Agreement to delete the
requirement that a separate General Fund Account be maintained and provide that
such Grantor be entitled to withdraw funds on deposit in such Collateral
Proceeds Account at any time so long as no Event of Default has occurred and is
continuing.
6.2 Communications with Obligors; Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
and from time to time after the occurrence and during the continuance of an
Event of Default communicate with obligors under the Accounts and parties to the
Contracts (in each case, to the extent constituting
<PAGE> 24
Collateral) to verify with them to the Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify obligors on such Grantor's Accounts and parties to such Grantor's
Contracts (in each case, to the extent constituting Collateral) that such
Accounts and such Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of such Grantor's Accounts to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Account (or any agreement giving rise thereto)
by reason of or arising out of this Agreement or the receipt by the
Administrative Agent or any other Secured Party of any payment relating thereto,
nor shall the Administrative Agent or any other Secured Party be obligated in
any manner to perform any of the obligations of any Grantor under or pursuant to
any Account (or any agreement giving rise thereto) to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
6.3 Pledged Stock. (a) Unless an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have given notice
to the relevant Pledgor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Pledgor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, to the extent permitted in the
Credit Agreement, and to exercise all voting and corporate rights with respect
to the Pledged Stock; provided, however, that no vote shall be cast or corporate
right exercised or such other action taken (other than in connection with a
transaction expressly permitted by the Credit Agreement) which, in the
Administrative Agent's reasonable judgment, would materially impair the Pledged
Collateral or the related rights or remedies of the Secured Parties or which
would be inconsistent with or result in any violation of any provision of the
Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Pledgor or Pledgors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Stock and make application thereof to the Obligations in
such order as the Administrative Agent may determine, and (ii) any or all of the
Pledged Stock shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may thereafter exercise (x)
all voting, corporate and other rights pertaining to such Pledged Stock at any
meeting of shareholders of the relevant Issuer or Issuers or otherwise and (y)
any and all rights of conversion, exchange, subscription and any other rights,
privileges or options pertaining to such Pledged Stock as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Stock upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by the relevant Pledgor or the
Administrative Agent of any right, privilege or option pertaining to such
Pledged
<PAGE> 25
Stock, and in connection therewith, the right to deposit and deliver any and all
of the Pledged Stock with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as the Administrative
Agent may reasonably determine), all without liability (other than for its gross
negligence or willful misconduct) except to account for property actually
received by it, but the Administrative Agent shall have no duty to any Pledgor
to exercise any such right, privilege or option and shall not be responsible for
any failure to do so or delay in so doing, provided that the Administrative
Agent shall not exercise any voting or other consensual rights pertaining to the
Pledged Stock in any way that would constitute an exercise of the remedies
described in Section 7 other than in accordance with Section 7.
(c) Each Pledgor hereby authorizes and instructs each Issuer or
Maker of any Pledged Securities pledged by such Pledgor hereunder to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (x) states that an Event of Default has occurred and (y) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Pledgor, and each Pledgor agrees that each Issuer or
Maker shall be fully protected in so complying, and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with respect to
the Pledged Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative Agent. In
addition to the rights of the Administrative Agent and the other Secured Parties
specified in Section 6.1 with respect to payments of Accounts, if an Event of
Default shall occur and be continuing, and the Administrative Agent shall have
instructed any Grantor to do so, all Proceeds received by such Grantor
consisting of cash, checks and other Cash Equivalent items shall be held by such
Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly indorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in the relevant Collateral Proceeds
Account maintained under its sole dominion and control. All Proceeds while held
by the Administrative Agent in such Collateral Proceeds Account (or by such
Grantor in trust for the Administrative Agent and the other Secured Parties)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 6.5.
6.5 Application of Proceeds. It is agreed that if an Event of
Default shall occur and be continuing, any and all Proceeds of the relevant
Granting Party's Security Collateral received by the Administrative Agent
(whether from the relevant Granting Party or otherwise) shall be held by the
Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations of the relevant Granting Party (whether matured or
unmatured), and/or then or at any time thereafter may, in the sole discretion of
the Administrative Agent, be applied by the Administrative Agent against the
Obligations of the relevant Granting Party then due and owing in the following
order of priority:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Administrative Agent in connection with this Agreement,
the Credit Agreement, any other Loan Document or any of the Obligations
of the relevant Granting Party, including, without limitation, all
court costs and the reasonable fees and expenses of its agents and
legal counsel, and any other reasonable costs or expenses incurred in
connection with the exercise by the Administrative Agent of any right
or remedy under this Agreement, the Credit Agreement, or any other Loan
Document;
<PAGE> 26
SECOND, to the ratable satisfaction of all other Obligations of
the relevant Granting Party; and
THIRD, to the relevant Granting Party or its successors or
assigns, or to whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall occur
and be continuing, the Administrative Agent on behalf of the Secured Parties may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the Code or any other applicable law. Without limiting the generality of the
foregoing, to the extent permitted by applicable law, the Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below) to or upon any Granting Party or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Security Collateral, or any part thereof, and/or may forthwith sell, lease,
assign, give option or options to purchase, or otherwise dispose of and deliver
the Security Collateral or any part thereof (or contract to do any of the
foregoing), in one or more parcels at public or private sale or sales, at any
exchange, broker's board or office of the Administrative Agent or any other
Secured Party or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any other Secured Party shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Security Collateral so sold, free of
any right or equity of redemption in any Granting Party, which right or equity
is hereby waived or released. Each Granting Party further agrees, at the
Administrative Agent's request, to assemble the Security Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Granting Party's premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Security Collateral or in any way relating to the
Security Collateral or the rights of the Administrative Agent and the other
Secured Parties hereunder, including, without limitation, reasonable attorneys'
fees and disbursements, to the payment in whole or in part of the Obligations of
the relevant Granting Party, in the order of priority specified in Section 6.5
above, and only after such application and after the payment by the
Administrative Agent of any other amount required by any provision of law,
including, without limitation, Section 9-504(1)(c) of the Code, need the
Administrative Agent account for the surplus, if any, to any Granting Party. To
the extent permitted by applicable law, each Granting Party waives all claims,
damages and demands it may acquire against the Administrative Agent or any other
Secured Party arising out of the exercise by them of any rights hereunder,
except to the extent arising as a result of the gross negligence or willful
misconduct of the Administrative Agent or such other Secured Party. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the reasonable opinion of the Administrative Agent it
is necessary or reasonably advisable to have the Pledged Stock, or that portion
thereof to be sold, registered under the provisions of the Securities Act, the
relevant Pledgor will use its reasonable best efforts to cause the Issuer
thereof
<PAGE> 27
to (i) execute and deliver, and use its best efforts to cause the directors and
officers of such Issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Administrative Agent, necessary or advisable to register such
Pledged Stock, or that portion thereof to be sold, under the provisions of the
Securities Act, (ii) use its best efforts to cause the registration statement
relating thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of such Pledged Stock, or that
portion thereof to be sold, and (iii) make all amendments thereto and/or to the
related prospectus which, in the reasonable opinion of the Administrative Agent,
are necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto. Such Pledgor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws of any and all
jurisdictions which the Administrative Agent shall reasonably designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Such Pledgor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all such Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Such
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the Issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
(c) Such Pledgor agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of such Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Such Pledgor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Pledgor, and to the extent permitted by applicable law, such
Pledgor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Granting Party (other than the
Borrower) waives and agrees not to assert any rights or privileges which it may
acquire under Section 9-112 of the Code, to the extent permitted by applicable
law. Each Granting Party shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Security Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any other Secured Party to collect such deficiency.
<PAGE> 28
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc.
(a) Each Granting Party hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Granting Party and in the
name of such Granting Party or in its own name, for the purpose of carrying out
the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be reasonably necessary
or desirable to accomplish the purposes of this Agreement to the extent
permitted by applicable law. Without limiting the generality of the foregoing,
at any time when an Event of Default has occurred and is continuing (in each
case to the extent permitted by applicable law), (x) each Pledgor hereby gives
the Administrative Agent the power and right, on behalf of such Pledgor, without
notice or assent by such Pledgor, to execute, in connection with any sale
provided for in Section 6.6 or 6.7, any indorsements, assessments or other
instruments of conveyance or transfer with respect to such Pledgor's Pledged
Collateral, and (y) each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Account of such Grantor or with respect to any other Collateral of
such Grantor and file any claim or take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such
moneys due under any Account of such Grantor or with respect to any
other Collateral of such Grantor whenever payable;
(ii) in the case of any Copyright, Patent or Trademark
constituting Collateral of such Grantor, execute and deliver any and
all agreements, instruments, documents and papers as the Administrative
Agent may reasonably request to evidence the Administrative Agent's and
the Lenders' security interest in such Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral of such Grantor, effect any repairs
or any insurance called for by the terms of this Agreement and pay all
or any part of the premiums therefor and the costs thereof; and
(iv) (i) direct any party liable for any payment under any of the
Collateral of such Grantor to make payment of any and all moneys due or
to become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (ii) ask or demand for, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral of such Grantor; (iii) sign and indorse any
invoices, freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments, verifications,
notices and other documents in connection with any of the Collateral of
such Grantor; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral of such Grantor or any portion thereof and to
enforce any other right in respect of any Collateral of such Grantor;
(v) defend any suit, action or proceeding brought against such Grantor
with respect to any Collateral of such Grantor; (vi) subject to any
existing rights of joint
<PAGE> 29
owners of Patents, Trademarks, Copyrights and Trade Secrets, settle,
compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (vii) subject to any
existing reserved rights or licenses, assign any Copyright, Patent or
Trademark constituting Collateral of such Grantor (along with the
goodwill of the business to which any such Copyright, Patent or
Trademark pertains), for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole discretion
determine; and (viii) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral
of such Grantor as fully and completely as though the Administrative
Agent were the absolute owner of all of such Grantor's rights therein
for all purposes, and do, at the Administrative Agent's option and such
Grantor's expense, at any time, or from time to time, all acts and
things which the Administrative Agent deems necessary to protect,
preserve or realize upon the Collateral of such Grantor and the
Administrative Agent's and the other Secured Parties' security
interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
(b) If any Granting Party fails to perform or comply with any of
its agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent incurred
in connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Base Rate Loans which are Term Loans
under the Credit Agreement, from the date of payment by the Administrative Agent
to the date reimbursed by the relevant Granting Party, shall be payable by such
Granting Party to the Administrative Agent on demand.
(d) Each Granting Party hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable as to the relevant Granting Party until this
Agreement is terminated as to such Granting Party, and the security interests in
the Security Collateral of such Granting Party created hereby are released.
7.2 Duty of Administrative Agent. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Security Collateral in its possession, under Section 9-207 of the Code or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Security Collateral or for any delay in doing
so or shall be under any obligation to sell or otherwise dispose of any Security
Collateral upon the request of any Granting Party or any other Person or to take
any other action whatsoever with regard to the Security Collateral or any part
thereof. The powers conferred on the Administrative Agent and the other Secured
Parties hereunder are solely to protect the Administrative Agent's and the other
Secured Parties' interests in the Security Collateral and shall not impose any
duty upon the Administrative Agent or any other Secured Party to exercise any
such powers. The Administrative Agent and the other
<PAGE> 30
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Granting
Party for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
7.3 Execution of Financing Statements. Pursuant to Section 9-402
of the Code and any other applicable law, each Granting Party authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to such Granting Party's
Security Collateral without the signature of such Granting Party in such form
and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Granting Party
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement or any amendment, supplement or other
modification of this Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the Administrative Agent and the Granting Party the Administrative
Agent shall be conclusively presumed to be acting as agent for the Secured
Parties with full and valid authority so to act or refrain from acting, and no
Granting Party shall be under any obligation, or entitlement, to make any
inquiry respecting such authority.
7.5 Right Of Inspection. Upon reasonable written advance notice to
any Grantor and at reasonable intervals, or at any time and from time to time
after the occurrence and during the continuation of an Event of Default, the
Administrative Agent shall have reasonable access during normal business hours
to all the books, correspondence and records of such Grantor, and the
Administrative Agent and its representatives may examine the same, and to the
extent reasonable take extracts therefrom and make photocopies thereof, and such
Grantor agrees to render to the Administrative Agent, at such Grantor's
reasonable cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Administrative Agent and its
representatives shall also have the right, upon reasonable advance written
notice to such Grantor, to enter during normal business hours into and upon any
premises owned, leased or operated by such Grantor where any of such Grantor's
Inventory or Equipment is located for the purpose of inspecting the same,
observing its use or otherwise protecting its interests therein.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by each affected Granting Party and the
Administrative Agent, provided that any provision of this Agreement imposing
obligations on any Granting Party may be waived by the Administrative Agent in a
written instrument executed by the Administrative Agent.
8.2 Notices. All notices, requests and demands to or upon the
Administrative Agent or any Granting Party hereunder shall be effected in the
manner provided for in Section
<PAGE> 31
10.2 of the Credit Agreement; provided that any such notice, request or demand
to or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on Schedule 1, unless and until such Guarantor shall change
such address by notice to the Administrative Agent given in accordance with
Section 10.2 of the Credit Agreement.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither
the Administrative Agent nor any other Secured Party shall by any act (except by
a written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any other
Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy which the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Guarantor
agrees to pay or reimburse each Secured Party and the Administrative Agent for
all their respective reasonable costs and expenses incurred in collecting
against such Guarantor under the guarantee contained in Section 2 or otherwise
enforcing or preserving any rights under this Agreement against such Guarantor
and the other Loan Documents to which such Guarantor is a party, including,
without limitation, the reasonable fees and disbursements of one firm of counsel
to the Secured Parties and the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative
Agent and the Secured Parties harmless from, (x) any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other similar taxes which may be payable or determined to be payable
with respect to any of the Security Collateral or in connection with any of the
transactions contemplated by this Agreement and (y) any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement (collectively, the "indemnified liabilities"), in each case to the
extent the Borrower would be required to do so pursuant to Section 10.5 of the
Credit Agreement, and in any event excluding any taxes or other indemnified
liabilities arising from gross negligence or willful misconduct of the
Administrative Agent or any Secured Party.
(c) The agreements in this Section 8.4 shall survive repayment of
the Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be binding upon
and shall inure to the benefit of the Granting Party, the Administrative Agent
and the Secured Parties and their respective successors and assigns; provided
that no Granting Party may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 Set-Off. Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party at any time and from time to
time without notice to such Guarantor, any other Guarantor or the Borrower, any
such notice being expressly waived by each
<PAGE> 32
Guarantor and by the Borrower, to the extent permitted by applicable law, upon
the occurrence and during the continuance of an Event of Default under Section
8(a) of the Credit Agreement and any amount remaining unpaid after it becomes
due and payable by such Guarantor hereunder, to set-off and appropriate and
apply against any such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such other Secured Party to or for the
credit or the account of such Guarantor, or any part thereof in such amounts as
the Administrative Agent or such other Secured Party may elect. The
Administrative Agent and each other Secured Party shall notify such Guarantor
promptly of any such set-off and the application made by the Administrative
Agent or such other Secured Party of the proceeds thereof; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each other Secured Party
under this Section 8.6 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Administrative Agent or
such other Secured Party may have.
8.7 Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in this Agreement
are for convenience of reference only and are not to affect the construction
hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Granting Party, the Administrative Agent
and the other Secured Parties with respect to the subject matter hereof, and
there are no promises, undertakings, representations or warranties by the
Granting Party, the Administrative Agent or any other Secured Party relative to
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each party hereto hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate courts
from any thereof;
<PAGE> 33
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such party at its address referred to in Section 8.2 or at
such other address of which the Administrative Agent (in the case of
any other party hereto) or the Borrower (in the case of the
Administrative Agent) shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right
it may have to claim or recover in any legal action or proceeding
referred to in this Section any punitive damages.
8.13 Acknowledgements. Each Guarantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents to which it
is a party;
(b) neither the Administrative Agent nor any other Secured Party
has any fiduciary relationship with or duty to any Guarantor arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Guarantors, on the one
hand, and the Administrative Agent and the Secured Parties, on the
other hand, in connection herewith or therewith is solely that of
debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Guarantors
and the Secured Parties.
8.14 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
8.15 Additional Granting Parties. Each new Domestic Subsidiary of
the Borrower that is required to become a party to this Agreement pursuant to
Section 6.9 of the Credit Agreement shall become a Granting Party for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations then due and owing shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, all Security Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than
<PAGE> 34
those expressly stated to survive such termination) of the Administrative Agent
and each Granting Party hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Security Collateral shall revert to the Granting Parties. At the request and
sole expense of any Granting Party following any such termination, the
Administrative Agent shall deliver to such Granting Party any Security
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Granting Party such documents (including without limitation UCC
termination statements) as such Granting Party shall reasonably request to
evidence such termination and shall have prepared and submitted to the
Administrative Agent for its execution.
(b) In connection with the sale or other disposition of all of the
Capital Stock of any Guarantor or the sale or other disposition of Security
Collateral permitted under the Credit Agreement and the release of such
Guarantor from its Guarantee or the release of the Security Collateral subject
to such sale or other disposition, the Borrower shall deliver to the
Administrative Agent, a written request for release identifying such Guarantor
or the relevant Security Collateral and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents. The Administrative Agent shall execute and deliver to the
relevant Granting Party (at the sole cost and expense of such Granting Party)
all releases or other documents (including without limitation UCC termination
statements) necessary or reasonably desirable for the release of the Liens
created hereby on such Security Collateral as such Granting Party may reasonably
request and shall have prepared and submitted to the Administrative Agent for
its execution.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
<PAGE> 35
DAY INTERNATIONAL GROUP, INC.
By: ____________________________
Name:
Title:
<PAGE> 36
DAY INTERNATIONAL, INC.
By: ____________________________
Name:
Title:
<PAGE> 37
DAY HOLDINGS I, INC.
By: ____________________________
Name:
Title:
<PAGE> 38
DAY HOLDINGS II, INC.
By: ____________________________
Name:
Title:
<PAGE> 39
Acknowledged and Agreed to as
of the date hereof by:
SOCIETE GENERALE, NEW YORK BRANCH, as
Administrative Agent
By: ____________________________
Name:
Title:
<PAGE> 40
Schedule 1
NOTICE ADDRESSES OF GUARANTORS
GSD ACQUISITION CORP.
DAY INTERNATIONAL GROUP, INC.
<PAGE> 41
Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
<TABLE>
<CAPTION>
Stock Certificate
Issuer Class of Stock No. No. of Shares
- ------------------ ------------------ -------------------- ---------------
<S> <C> <C> <C>
</TABLE>
<PAGE> 42
Schedule 3
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
OR SOLE PLACE OF BUSINESS
<TABLE>
<CAPTION>
Grantor Location
------- --------
<S> <C>
GSD ACQUISITION CORP. Jurisdiction of Organization:
Delaware
DAY INTERNATIONAL GROUP, INC. Jurisdiction of Organization:
Delaware
</TABLE>
<PAGE> 43
Schedule 4
LOCATION OF INVENTORY AND EQUIPMENT
Grantor Locations
------- ---------
<PAGE> 44
Schedule 5
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 45
Schedule 6
EXISTING PRIOR LIENS
I. Real Property Liens
II. UCC Liens
See attached chart.
<PAGE> 46
Schedule 7
ACCOUNTS
<PAGE> 47
Schedule 8
CONTRACTS
<PAGE> 48
Annex 1 to
Guarantee and Collateral Agreement
ASSUMPTION AGREEMENT, dated as of _________ __, ___, made by
______________________________, a ______________ corporation (the "Additional
Grantor"), in favor of SOCIETE GENERALE, as administrative agent (in such
capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Credit Agreement
referred to below and the other Secured Parties (as defined below). All
capitalized terms not defined herein shall have the meaning ascribed to them in
such Guarantee and Collateral Agreement referred to below, or if not defined
therein, in the Credit Agreement.
WITNESSETH:
WHEREAS, DAY INTERNATIONAL GROUP, INC., a Delaware corporation
(the "Borrower"), the Lenders, Societe Generale Securities Corporation, as
arranger (in such capacity, the "Arranger"), and the Administrative Agent are
parties to a Credit Agreement, dated as of January __, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower,
GSD Acquisition Corp. ("Holdings") and certain Subsidiaries of the Borrower are,
or are to become, parties to the Guarantee and Collateral Agreement, dated as of
January __, 1998 (as amended, supplemented or otherwise modified from time to
time, the "Guarantee and Collateral Agreement") in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties (as defined in the
Guarantee and Collateral Agreement);
WHEREAS, the Additional Grantor is a member of an affiliated group
of companies that includes the Borrower and the other Grantors; the proceeds of
the extensions of credit under the Credit Agreement will be used in part to
enable the Borrower to make valuable transfers to one or more of the other
Grantors (including the Additional Grantor) in connection with the operation of
their respective businesses; and the Borrower and the other Grantors (including
the Additional Grantor) are engaged in related businesses, and each such Grantor
(including the Additional Grantor) will derive substantial direct and indirect
benefit from the making of the extensions of credit under the Credit Agreement;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver
this Assumption Agreement in order to become a party to the Guarantee and
Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.15
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as
<PAGE> 49
2
a Grantor thereunder with the same force and effect as if originally named
therein as a Guarantor [, Grantor and Pledgor] [and Grantor] [and Pledgor]1 and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Guarantor [, Grantor and Pledgor] [and Grantor]
[and Pledgor]2 thereunder. The information set forth in Annex 1-A hereto is
hereby added to the information set forth in Schedules ____________ to the
Guarantee and Collateral Agreement, and such Schedules are hereby amended and
modified to include such information. The Additional Grantor hereby represents
and warrants that each of the representations and warranties of such Additional
Grantor, in its capacities as a Guarantor [, Grantor and Pledgor] [and Grantor]
[and Pledgor],3 contained in Section 4 of the Guarantee and Collateral Agreement
is true and correct in all material respects on and as the date hereof (after
giving effect to this Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: _______________________________
Name:
Title:
___________________
1. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
2. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
3. Indicate the capacities in which the Additional Grantor is becoming a
Granting Party.
<PAGE> 50
3
DAY INTERNATIONAL GROUP, INC.
By: /s/ Dennis R. Wolters
----------------------------
Name: Dennis R. Wolters
Title: Director
<PAGE> 51
DAY INTERNATIONAL, INC.
By: /s/ Dennis R. Wolters
----------------------------
Name: Dennis R. Wolters
Title: Director
<PAGE> 52
Annex 1-A to
Assumption Agreement
<PAGE> 1
Exhibit 4.9
CONFORMATION COPY
PATENT AND TRADEMARK SECURITY AGREEMENT
PATENT AND TRADEMARK SECURITY AGREEMENT, dated as of
January 15, 1998, made by Day International, Inc., a Delaware corporation (the
"Grantor"), in favor of Societe Generale ("SocGen"), as administrative agent (in
such capacity, the "Administrative Agent") for the banks and other financial
institutions (the "Lenders") from time to time parties to the Credit Agreement,
dated as of January 15, 1998 (as amended, waived, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among Day International
Group, Inc., a Delaware corporation, the Lenders, the Administrative Agent and
Societe Generale Securities Corporation, as advisor and arranger, (in such
capacity, the "Arranger").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower (as defined
therein) upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition to the obligation of the Lenders to
make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantor shall execute and deliver this Agreement to the
Administrative Agent for the ratable benefit of the Secured Parties (as defined
below);
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent, the Arranger and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, the Grantor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
1. Defined Terms. (a) Unless otherwise defined herein, capitalized terms which
are defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"Agreement": this Patent and Trademark Security Agreement, as
the same may be amended, supplemented, waived or otherwise modified
from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2 of this Agreement.
<PAGE> 2
"Default": a "Default" as defined in the Credit Agreement.
"Event of Default": an "Event of Default" as defined in the
Credit Agreement.
"General Intangibles": as defined in Section 9-106 of the
Code, including, without limitation, all Patents and Trademarks now or
hereafter owned by the Grantor to the extent such Patents and
Trademarks would be included in General Intangibles under the Code.
"Loan Documents": the collective reference to the "Loan
Documents" as defined in the Credit Agreement.
"Loans": the collective reference to the "Loans" as defined in
the Credit Agreement.
"Obligations": the Obligations (as defined in the Guarantee
and Collateral Agreement) of the Grantor.
"Patent Licenses": all United States written license
agreements of the Grantor with any Person who is not an Affiliate or
Subsidiary of the Grantor in connection with any of the Patents or such
other Person's patents, whether the Grantor is a licensor or a licensee
under any such agreement, including, without limitation, the license
agreements listed on Schedule II hereto, subject, in each case, to the
terms of such license agreements, and the right to prepare for sale,
sell and advertise for sale, all Inventory (as defined in the Guarantee
and Collateral Agreement) now or hereafter covered by such licenses.
"Patents": all of the Grantor's right, title and interest in
and to all United States patents, patent applications and patentable
inventions and all reissues and extensions thereof, including, without
limitation, all patents and patent applications identified in Schedule
II hereto, and including, without limitation, (a) all inventions and
improvements described and claimed therein, and patentable inventions,
(b) the right to sue or otherwise recover for any and all past, present
and future infringements and misappropriations thereof, (c) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages
and payments for past or future infringements thereof), and (d) all
other rights corresponding thereto in the United States and all
reissues, divisions, continuations, continuations-in-part, substitutes,
renewals, and extensions thereof, all improvements thereon, and all
other rights of any kind whatsoever of the Grantor accruing thereunder
or pertaining thereto (Patents and Patent Licenses being, collectively,
the "Patent Collateral").
"Proceeds": as defined in Section 9-306(1) of the Code.
"Revolving Credit Commitments": the collective reference to
the "Revolving Credit Commitments" as defined in the Credit Agreement.
"Secured Parties": the collective reference to the
Administrative Agent, the Lenders (including, without limitation, the
Issuing Lender and the Swing Line Lender), any Affiliate of any Lender
which has entered into any Hedge Agreement (as defined in
<PAGE> 3
the Guarantee and Collateral Agreement) or Permitted Hedging
Arrangement with the Borrower or any of its Subsidiaries, and their
respective successors and assigns.
"Trademark Licenses": all United States written license
agreements of the Grantor with any Person who is not an Affiliate or
Subsidiary of the Grantor in connection with any of the Trademarks or
such other Person's names or trademarks, whether the Grantor is a
licensor or a licensee under any such agreement, including, without
limitation, the license agreements listed on Schedule I hereto,
subject, in each case, to the terms of such license agreements, and the
right to prepare for sale, sell and advertise for sale, all Inventory
(as defined in the Guarantee and Collateral Agreement) now or hereafter
covered by such licenses.
"Trademarks": all of the Grantor's right, title and interest
in and to all United States trademarks, service marks, trade names,
trade dress or other indicia of trade origin or business identifiers,
trademark and service mark registrations, and applications for
trademark or service mark registrations (except for "intent to use"
applications for trademark or service mark registrations filed pursuant
to Section 1(b) of the Lanham Act, 15 U.S.C. Section 1051, unless and
until an Amendment to Allege Use or a Statement of Use under Sections
1(c) and 1(d) of said Act has been filed), and any renewals thereof,
including, without limitation, each registration and application
identified in Schedule I hereto, and including, without limitation, (a)
the right to sue or otherwise recover for any and all past, present and
future infringements and misappropriations thereof, (b) all income,
royalties, damages and other payments now and hereafter due and/or
payable with respect thereto (including, without limitation, payments
under all licenses entered into in connection therewith, and damages
and payments for past or future infringements thereof), and (c) all
other rights corresponding thereto in the United States and all other
rights of any kind whatsoever of the Grantor accruing thereunder or
pertaining thereto, together in each case with the goodwill of the
business connected with the use of, and symbolized by, each such
trademark, service mark, trade name, trade dress or other indicia of
trade origin or business identifiers (Trademarks and Trademark Licenses
being, collectively, the "Trademark Collateral").
(b) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section and
paragraph references are to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(d) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to the Grantor, shall
refer to the Grantor's Collateral or the relevant part thereof.
2. Grant of Security Interest. The Grantor hereby grants,
subject to existing ownership rights of joint owners and existing licenses
granted by the Grantor in the ordinary course of business with respect to the
Collateral (as hereinafter defined), to the Administrative Agent for the ratable
benefit of the Secured Parties a security interest in all of the following
property now owned or at any time hereafter acquired by the Grantor or in which
the Grantor now has or at any time in the future may acquire any right, title or
interest (collectively, the "Collateral"), as collateral security for the prompt
and complete payment and performance when
<PAGE> 4
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations of the Grantor:
(i) all Patents;
(ii) all Patent Licenses;
(iii) all Trademarks;
(iv) all Trademark Licenses;
(v) all General Intangibles connected with the use of or
symbolized by the Trademarks and Patents; and
(vi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing;
provided, that the foregoing grant of a security interest with respect to
General Intangibles, Patent Licenses and Trademark Licenses shall not include a
security interest in, and the Collateral shall not include, any Patent License
or Trademark License with or issued by Persons other than a Subsidiary of the
Grantor that would otherwise be included in the Collateral to the extent that
the grant by such Grantor of such security interest is prohibited by the terms
and provisions of the written agreement or document or instrument creating or
evidencing such license or permit or Patent License or Trademark License, or
gives the other party thereto the right to terminate such Patent License or
Trademark License in the event of the grant of a security interest with respect
thereto and, provided further, that the foregoing grant of a security interest
with respect to Patents and Trademarks shall not include a security interest in,
and the Collateral shall not include, any Patent or Trademark owned jointly with
or issued to Persons other than a Subsidiary of the Grantor that would otherwise
be included in the Collateral to the extent that the grant by such Grantor of
such security interest is prohibited by the terms and provisions of the written
agreement or document or instrument creating or evidencing such joint ownership
or gives the other party the right to terminate the rights of the Grantor with
respect to such Patent or Trademark in the event of the grant of a security
interest with respect thereto. All references in this Agreement to any of the
property described in clauses (i) through (vi) of the preceding sentence, or to
any Proceeds thereof, shall be deemed to be references to such property or
Proceeds to the extent such property or Proceeds constitutes Collateral.
3. Representations and Warranties. The Grantor hereby
represents and warrants to the Administrative Agent on behalf of the Secured
Parties that:
(a) Power and Authority. As of the date hereof, the Grantor
has the corporate power and authority, and the legal right, to make,
deliver and perform its obligations under, and to grant the security
interest in the Trademark Collateral and the Patent Collateral to the
extent provided in, and pursuant to, this Agreement and has taken all
necessary corporate action to authorize the execution, delivery and
performance of, and grant of the security interest in the Trademark
Collateral and the Patent Collateral to the extent provided in, and
pursuant to, this Agreement.
(b) Title; No Other Liens. As of the date hereof, except for
the Liens granted to the Administrative Agent, for the benefit of the
Secured Parties, pursuant to this
<PAGE> 5
Agreement and the other Liens permitted to exist on the Collateral
pursuant to the Loan Documents (including, without limitation, any
Liens permitted to exist on the Collateral pursuant to Section 7.3 of
the Credit Agreement), and except as set forth on Schedule I or II
hereto, the Grantor is (or, in the case of after-acquired Collateral,
will be) the sole, legal and beneficial owner of the entire right,
title and interest in and to the material Trademarks set forth on
Schedule I hereto and the material Patents set forth in Schedule II
hereto free and clear of any and all Liens. As of the date hereof,
except as set forth on Schedule III hereto, no security agreement,
financing statement or other public notice similar in effect with
respect to all or any part of the Collateral is on file or of record in
any public office (including, without limitation, the United States
Patent and Trademark Office), except such as may have been filed in
favor of the Administrative Agent, for the benefit of the Secured
Parties, pursuant to this Agreement or in respect of such Liens as may
be permitted pursuant to the Loan Documents (including, without
limitation, any Liens permitted to exist on the Collateral pursuant to
Section 7.3 of the Credit Agreement).
(c) Perfected Liens. (i) As of the date hereof, this Agreement
is effective to create, as collateral security for the Obligations,
valid and enforceable Liens on the Collateral in favor of the
Administrative Agent, for the benefit of the Secured Parties, except as
enforceability may be affected by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating
to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing.
(ii) As of the date hereof, except with respect to Liens upon
Patents and Trademarks and Patent Licenses and Trademark Licenses,
which Liens, to the extent not otherwise perfected by the filing of
financing statements under the Code in accordance herewith, would in
the case of Patents and Trademarks listed in Schedules I and II hereto,
or in the case of Patent Licenses and Trademark Licenses listed in
Schedules I and II hereto, may be perfected upon the filing, acceptance
and recordation thereof in the United States Patent and Trademark
Office, upon filing of the financing statements delivered to the
Administrative Agent by the Grantor on the Closing Date in the
jurisdictions listed on Schedule 4.19(a) to the Credit Agreement (which
financing statements are in proper form for filing in such
jurisdictions) (and the recording of this Agreement in the United
States Patent and Trademark Office, and the making of filings after the
Closing Date in any other jurisdiction in the United States as may be
necessary under any Requirement of Law) the Liens created pursuant to
this Agreement will constitute valid and perfected Liens on the
Collateral in the United States in favor of the Administrative Agent
for the benefit of the Secured Parties, which Liens will be prior to
all other Liens of all other Persons with respect to the Collateral,
except for Liens permitted pursuant to the Loan Documents (including,
without limitation, those permitted to exist pursuant to Section 7.3 of
the Credit Agreement) and except as set forth on Schedule I or II
hereto, and which Liens are enforceable as such against all creditors
of and purchasers (except to the extent that the recording of an
assignment or other transfer of title to the Administrative Agent in
the United States Patent and Trademark Office may be necessary for such
enforceability) from the Grantor, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) or by an implied covenant of good
faith and fair dealing.
<PAGE> 6
(d) Consents. No consent of any party (other than the Grantor)
to any material Patent License or material Trademark License
constituting Collateral is required, or purports to be required, to be
obtained by or on behalf of the Grantor in connection with the
execution, delivery and performance of this Agreement that has not been
obtained. Each Patent License and Trademark License constituting
Collateral is in full force and effect and constitutes a valid and
legally enforceable obligation of the Grantor and (to the knowledge of
the Grantor) each other party thereto except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditor's rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) or by an implied covenant of good
faith and fair dealing and except to the extent the failure of any such
Patent License or Trademark License constituting Collateral to be in
full force and effect or valid or legally enforceable would not be
reasonably expected, in the aggregate, to have a material adverse
effect on the value of the Collateral (as such term is defined in the
Credit Agreement). No consent or authorization of, filing with or other
act by or in respect of any Governmental Authority is required in
connection with the execution, delivery, performance, validity or
enforceability of any of the Patent Licenses or Trademark Licenses
constituting Collateral by any party thereto other than those which
have been duly obtained, made or performed and are in full force and
effect and those the failure of which to make or obtain would not be
reasonably expected, in the aggregate, to have a material adverse
effect on the value of the Collateral (as such term is defined in the
Credit Agreement). Neither such Grantor nor (to the knowledge of such
Grantor) any other party to any Patent License or Trademark License
constituting Collateral is in default in the performance or observance
of any of the terms thereof, except for such defaults as would not
reasonably be expected, in the aggregate, to have a material adverse
effect on the value of the Collateral (as such term is defined in the
Credit Agreement). Except for rights reserved in favor of the United
States government, as required under law, the right, title and interest
of the Grantor in, to and under each Patent License and Trademark
License constituting Collateral are not subject to any defense, offset,
counterclaim or claim which would be reasonably expected, either
individually or in the aggregate, to have a material adverse effect on
the value of the Collateral (as such term is defined in the Credit
Agreement).
(e) Schedules I and II are Complete; All Filings Have Been
Made. Set forth in Schedules I and II is a complete and accurate list
of all material Trademarks and material Patents owned by the Grantor as
of the date hereof. As of the date hereof, the Grantor will have made
all necessary filings to protect and maintain its interest in the
Trademarks and Patents set forth in Schedules I and II, including,
without limitation, all necessary filings and payments of all
maintenance fees, in the United States Patent and Trademark Office to
the extent such Trademarks and Patents are material to the Grantor's
business. Set forth in Schedules I and II is a complete and accurate
list of all of the material Trademark Licenses and material Patent
Licenses owned by the Grantor as of the date hereof.
(f) The Trademarks and Trademark Licenses are Subsisting and
Not Adjudged Invalid. As of the date hereof, each trademark
registration and trademark application of the Grantor set forth in
Schedule I is subsisting as of the date hereof, and has not been
adjudged invalid, unregisterable or unenforceable, in whole or in part,
and, to the best of such Grantor's knowledge, is valid, registrable and
enforceable. As of the date hereof, each of the Trademark Licenses set
forth in Schedule I is validly subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, and, to the best of such
<PAGE> 7
Grantor's knowledge, is valid and enforceable. As of the date hereof,
each Grantor has notified the Administrative Agent in writing of all
uses of any item of Trademark Collateral material to such Grantor's
business of which such Grantor is aware which could reasonably be
expected to lead to such item becoming invalid or unenforceable,
including unauthorized uses by third parties and uses which were not
supported by the goodwill of the business connected with such
Collateral.
(g) The Patents and Patent Licenses are Subsisting and Not
Adjudged Invalid. As of the date hereof, each Patent and patent
application of the Grantor set forth in Schedule II is subsisting and
has not been adjudged invalid, unpatentable or unenforceable, in whole
or in part, and, to the best of such Grantor's knowledge, is valid,
patentable and enforceable. As of the date hereof, each of the Patent
Licenses set forth in Schedule II is validly subsisting and has not
been adjudged invalid or unenforceable, in whole or in part, and, to
the best of such Grantor's knowledge, is valid and enforceable. As of
the date hereof, the Grantor has notified the Administrative Agent in
writing of all uses of any item of Patent Collateral material to such
Grantor's business of which such Grantor is aware which could
reasonably be expected to lead to such item becoming invalid or
unenforceable.
(h) No Previous Assignments or Releases. Except as set forth
on Schedule I or II hereto, as of the date hereof, the Grantor has not
made an agreement constituting a present or future assignment, sale,
transfer or encumbrance of any of the Collateral (except for any such
assignment, sale, transfer or encumbrance permitted under the Loan
Documents). Except as permitted by the Loan Documents or as required by
law, the Grantor has not granted any license, shop right, release,
covenant not to sue, or non-assertion assurance to any Person with
respect to any material part of the Collateral which would have a
Material Adverse Effect.
(i) Proper Statutory Notice. The Grantor has marked its
products with the trademark registration symbol (R), the numbers of all
appropriate patents, the common law trademark symbol (TM), or the
designation "patent pending," as the case may be, to the extent that it
is reasonably and commercially practicable.
(j) No Knowledge of Claims Likely to Arise. Except for the
Trademark Licenses and Patent Licenses listed in Schedules I and II
hereto, the Grantor has no knowledge of the existence of any right or
any claim (other than as permitted by this Agreement or the Loan
Documents) that is likely to be made under or against any item of
Collateral contained on Schedules I and II which would have a Material
Adverse Effect.
(k) No Knowledge of Existing or Threatened Claims. No claim
has been made and is continuing or, to the Grantor's knowledge,
threatened that the use by such Grantor of any item of Collateral is
invalid or unenforceable or that the use by such Grantor of any
Collateral does or may violate the rights of any Person, which would
have a Material Adverse Effect. To the Grantor's knowledge, there is
currently no infringement or unauthorized use of any item of Collateral
contained on Schedules I and II hereto which would have a Material
Adverse Effect.
The Grantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Grantor on and as of each
date on which an extension of credit is made by the Lenders to the Borrower
under the Credit Agreement, in each case as though
<PAGE> 8
made on and as of each such date (or, if any such representation or warranty is
expressly stated to have been made as of a specific date, as of such specific
date).
4. Covenants. The Grantor covenants and agrees with the
Administrative Agent and the other Secured Parties that, from and after the date
of this Agreement until the payment in full of the Loans, the Reimbursement
Obligations and to the extent then due and owing, all other Obligations, the
termination of the Revolving Credit Commitments and the expiration, termination
or return to the Issuing Lender of any Letters of Credit:
(a) Further Documentation; Pledge of Instruments and Chattel
Paper. At any time and from time to time, upon the written request of
the Administrative Agent or the Grantor, as the case may be, and at the
sole expense of such Grantor, such Grantor or the Administrative Agent,
as the case may be, will promptly and duly execute and deliver such
further instruments and documents and take such further action as the
Administrative Agent or the Grantor, as the case may be, may reasonably
request for the purpose of obtaining or preserving the full benefits of
this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code in effect in any
jurisdiction with respect to the Liens created hereby. The Grantor also
hereby authorizes the Administrative Agent to file any such financing
or continuation statement without the signature of the Grantor to the
extent permitted by applicable law. A carbon, photographic or other
reproduction of this Agreement shall be sufficient as a financing
statement for filing in any jurisdiction. The Administrative Agent
agrees to notify the Grantor and the Grantor agrees to notify the
Administrative Agent of any financing or continuation statement filed
by it pursuant to this Section 4(a), provided that any failure to give
any the notice shall not affect the validity or effectiveness of any
such filing.
(b) Indemnification and Expenses. The Grantor agrees to pay,
and to save the Administrative Agent, the other Secured Parties and
their respective agents, officers, directors and successors harmless
from, any and all liabilities and reasonable costs and expenses
(including, without limitation, reasonable legal fees and expenses) (i)
with respect to, or resulting from, any delay by the Grantor in
complying with any material Requirement of Law applicable to any of the
Collateral, or (ii) in connection with any of the transactions
contemplated by this Agreement, provided that such indemnity shall not,
as to the Administrative Agent, any of the other Secured Parties or any
of their respective agents, officers, directors and successors, be
available to the extent that such liabilities, costs and expenses
resulted from the gross negligence or willful misconduct of any of the
same. In any suit, proceeding or action brought by the Administrative
Agent or any other Secured Party under any of the Collateral for any
sum owing thereunder, or to enforce any of the Collateral, the Grantor
will save, indemnify and keep the Administrative Agent, such Secured
Party and their respective agents, officers, directors and successors
harmless from and against all expense, loss or damage suffered by
reason of any defense or counterclaim raised in any such suit,
proceeding or action, except to the extent such expense, loss or damage
resulted from the gross negligence or willful misconduct of any of the
same.
(c) Maintenance of Records. The Grantor will keep and maintain
at its own cost and expense reasonably satisfactory and complete
records of the Collateral, and shall mark such records to evidence this
Agreement and the Liens and the security interests created hereby. For
the Administrative Agent's and the other Secured Parties' further
<PAGE> 9
security, the Administrative Agent, for the benefit of the Secured
Parties, shall have a security interest in all of the Grantor's books
and records pertaining to the Collateral.
(d) Right of Inspection. Upon reasonable written advance
notice to the Grantor and at reasonable intervals, or at any time and
from time to time after the occurrence and during the continuation of
an Event of Default, the Administrative Agent shall have reasonable
access during normal business hours to all the books, correspondence
and records of the Grantor, and the Administrative Agent and its
representatives may examine the same, and to the extent reasonable take
extracts therefrom and make photocopies thereof, and the Grantor agrees
to render to the Administrative Agent, at the Grantor's reasonable cost
and expense, such clerical and other assistance as may be reasonably
requested with regard thereto.
(e) Compliance with Laws, etc. The Grantor will comply in all
material respects with all material Requirements of Law applicable to
the Collateral or any part thereof, except to the extent that the
failure to so comply would not be reasonably expected to materially
adversely affect in the aggregate the Administrative Agent's or the
other Secured Parties' rights hereunder, the priority of their Liens on
the Collateral or the value of the Collateral.
(f) Further Identification of Collateral. The Grantor will
furnish to the Administrative Agent from time to time such statements
and schedules further identifying and describing the Collateral, and
such other reports in connection with the Collateral, as the
Administrative Agent may reasonably request, all in reasonable detail.
(g) Security Interest in Any Newly Acquired Collateral. The
Grantor agrees that, should it obtain an ownership interest in any
material Trademark, Patent, Trademark License or Patent License, which
is not now a part of the Collateral, (i) the provisions of Section 2
shall automatically apply thereto, (ii) any such Trademark, Patent,
Trademark License and Patent License shall automatically become part of
the Collateral, and (iii) with respect to any ownership interest in any
such Trademark, Patent, Trademark License or Patent License that such
Grantor should obtain, it shall give notice thereof to the
Administrative Agent in writing, in reasonable detail, at its address
set forth in the Credit Agreement within 45 days after the end of the
calendar quarter in which it obtains such ownership interest. The
Grantor authorizes the Administrative Agent to modify this Agreement by
amending Schedules I and II (and will cooperate reasonably with the
Administrative Agent in effecting any such amendment) to include on
Schedule I any Trademark and Trademark License and on Schedule II any
Patent or Patent License of which it receives notice under this
Section, or to prepare and file with the United States Patent and
Trademark Office a supplement to this Agreement to include any Patent
or Trademark of which it receives notice to under this Section.
(h) Maintenance of the Trademark Collateral. Except as
permitted in the Loan Documents and to the extent permitted by law, the
Grantor agrees to take all reasonably necessary steps, including,
without limitation, in the United States Patent and Trademark Office or
in any court, to (i) maintain each trademark registration and each
Trademark License identified on Schedule I hereto, and (ii) pursue each
trademark application now or hereafter identified in Schedule I hereto,
including, without limitation, the filing of responses to office
actions issued by the United States Patent and Trademark Office, the
filing of applications for renewal, the filing of affidavits under
Sections 8 and 15 of the United States Trademark Act, and the
participation in opposition, cancellation,
<PAGE> 10
infringement and misappropriation proceedings, except, in each case in
which such Grantor has reasonably determined that any of the foregoing
is not of material economic value to it. The Grantor agrees to take
corresponding steps with respect to each new or acquired trademark or
service mark registration, or application for trademark or service mark
registration, or any rights obtained under any Trademark License, in
each case, which it is now or later becomes entitled, except in each
case in which the Grantor has reasonably determined that any of the
foregoing is not of material economic value to it. Any expenses
incurred in connection with such activities shall be borne by such
Grantor.
(i) Maintenance of the Patent Collateral. Except as permitted
in the Loan Documents and to the extent permitted by law, the Grantor
agrees to take all reasonably necessary steps, including, without
limitation, in the United States Patent and Trademark Office or in any
court, to (i) maintain each patent and each Patent License identified
on Schedule II hereto, and (ii) pursue each patent application, now or
hereafter identified in Schedule II hereto, including, without
limitation, the filing of divisional, continuation,
continuation-in-part and substitute applications, the filing of
applications for reissue, renewal or extensions, the payment of
maintenance fees, and the participation in interference, reexamination,
opposition, infringement and misappropriation proceedings, except, in
each case in which the Grantor has reasonably determined that any of
the foregoing is not of material economic value to it. The Grantor
agrees to take corresponding steps with respect to each new or acquired
patent, patent application, or any rights obtained under any Patent
License, in each case, which it is now or later becomes entitled,
except in each case in which the Grantor has reasonably determined that
any of the foregoing is not of material economic value to it. Any
expenses incurred in connection with such activities shall be borne by
the Grantor.
(j) Preservation and Protection of the Trademark Collateral
and Patent Collateral. Except as provided in Section 4(k) hereof, the
Grantor shall take all steps permitted by law which it or the
Administrative Agent deems reasonably appropriate under the
circumstances to preserve and protect its material Trademark Collateral
and Patent Collateral.
(k) Grantor Shall Not Abandon any Collateral. The Grantor
shall not abandon any trademark registration, patent or any pending
trademark or patent application, in each case listed on Schedule I or
Schedule II, without the written consent of the Administrative Agent,
unless such Grantor shall have previously determined that such use or
the pursuit or maintenance of such trademark registration, patent or
pending trademark or patent application is not of material economic
value to it, in which case, such Grantor will, at least annually, give
notice of any such abandonment to the Administrative Agent in writing,
in reasonable detail, at its address set forth in the Credit Agreement.
(l) Infringement of Any Collateral. In the event that any
Grantor becomes aware that any item of the Collateral which such
Grantor has reasonably determined to be material to its business is
infringed or misappropriated by a third party, which infringement or
misappropriation would reasonably be expected to have a Material
Adverse Effect, the Grantor shall notify the Administrative Agent
promptly and in writing, in reasonable detail, at its address set forth
in the Credit Agreement, and shall take such actions permitted by law
as the Grantor or the Administrative Agent deems reasonably appropriate
under the circumstances to protect such Collateral, including, without
limitation, suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation. Any expense
incurred in connection with
<PAGE> 11
such activities shall be borne by such Grantor. The Grantor will advise
the Administrative Agent promptly and in writing, in reasonable detail,
at its address set forth in the Credit Agreement, of any adverse
determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the United States
Patent and Trademark Office or any court) regarding any item of the
Collateral which has a Material Adverse Effect.
(m) Use of Statutory Notice. The Grantor shall mark its
products with the trademark registration symbol (R), the numbers of all
appropriate patents, the common law trademark symbol (TM), or the
designation "patent pending," as the case may be, to the extent that it
is reasonably and commercially practicable.
(n) Limitation on Liens on Collateral. The Grantor will not
create, incur or permit to exist, will defend the Collateral against,
and will take such other action as is reasonably necessary to remove,
any material Lien or material adverse claim on or to any of the
Collateral, other than Liens created hereby and other than as permitted
pursuant to the Loan Documents (including, without limitation, any
Liens permitted to exist on the Collateral pursuant to Section 7.3 of
the Credit Agreement), and will defend the right, title and interest of
the Administrative Agent and the other Secured Parties in and to any of
the Collateral against the claims and demands of all Persons
whomsoever, except where failure to defend would not have a Material
Adverse Effect and except where such claim or demand arises from a Lien
permitted pursuant to the Loan Documents including, without limitation,
any Liens permitted to exist on the Collateral pursuant to Section 7.3
of the Credit Agreement).
(o) Limitations on Dispositions of Collateral. Without the
prior written consent of the Administrative Agent, the Grantor will not
sell, assign, transfer, exchange or otherwise dispose of, or grant any
option with respect to, the Collateral, or attempt, offer or contract
to do so, except with respect to licenses in the ordinary course of
business or as permitted by this Agreement or the Loan Documents.
(p) Notices. The Grantor will advise the Administrative Agent
promptly and in writing, in reasonable detail, at its address set forth
in the Credit Agreement, (i) of any Lien (other than Liens created
hereby or permitted under the Loan Documents, including, without
limitation, any Liens permitted to exist on the Collateral pursuant to
Section 7.3 of the Credit Agreement) on any Patents or Trademarks and
(ii) of the occurrence of any other event which would reasonably be
expected in the aggregate to have a material adverse effect on the
aggregate value of the Collateral taken as a whole or the Liens created
hereunder.
5. Administrative Agent's Appointment as Attorney-in-Fact.
(a) Powers. The Grantor hereby irrevocably constitutes and
appoints the Administrative Agent and any officer or agent of the Administrative
Agent, with full power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Grantor
and in the name of the Grantor or in its own name, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be reasonably necessary
or desirable to accomplish the purposes of this Agreement to the extent
permitted by law, and, without limiting the generality of the foregoing, to the
extent permitted by law, the Grantor hereby gives the Administrative Agent the
power and right, on behalf of the Grantor, without notice to or
<PAGE> 12
assent by the Grantor, to do, at any time when an Event of Default has occurred
and is continuing, the following:
(i) to execute and deliver any and all agreements,
instruments, documents, and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's and the other
Secured Parties' security interest in any of the Collateral and the
goodwill of the Grantor relating thereto or represented thereby;
(ii) in the name of the Grantor or its own name, or otherwise,
to take possession of and indorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due
under any General Intangible (to the extent that the foregoing
constitute Collateral) or with respect to any other Collateral and to
file any claim or to take any other action or institute any proceeding
in any court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such
moneys due under such General Intangible or with respect to any other
Collateral whenever payable;
(iii) to pay or discharge Liens placed on the Collateral,
other than Liens permitted under this Agreement or the other Loan
Documents, including, without limitation, any Liens permitted to exist
on the Collateral pursuant to Section 7.3 of the Credit Agreement; and
(iv) (A) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to ask for, or demand, collect,
receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising
out of any Collateral; (C) to sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (D) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any
thereof and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action or proceeding brought against the
Grantor with respect to any of the Collateral; (F) subject to any
preexisting rights of joint owners, to settle, compromise or adjust any
suit, action or proceeding described in clause (E) above and, in
connection therewith, to give such discharges or releases as the
Administrative Agent may deem appropriate; (G) subject to any
pre-existing reserved rights or licenses, to assign any Patent or
Trademark constituting Collateral (along with the goodwill of the
business to which any such Patent or Trademark pertains), for such term
or terms, on such conditions, and in such manner, as the Administrative
Agent shall in its sole discretion determine; and (H) generally, to
sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner of all such
Grantor's rights therein for all purposes, and to do, at the
Administrative Agent's option and the Grantor's expense, at any time,
or from time to time, all acts and things which the Administrative
Agent deems reasonably necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent's and the other Secured
Parties' Liens thereon and to effect the intent of this Agreement, all
as fully and effectively as the Grantor might do.
<PAGE> 13
The Grantor hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. This power of attorney is a power coupled with an
interest and shall be irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and the other Obligations then due and owing, the
termination of the Revolving Credit Commitments and the expiration, termination
or return to the Issuing Lender of any Letters of Credit.
(b) Other Powers. The Grantor also authorizes the
Administrative Agent, from time to time if an Event of Default shall have
occurred and be continuing, to execute, in connection with any sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
(c) No Duty on the Part of Administrative Agent or Secured
Parties. The powers conferred on the Administrative Agent and the other Secured
Parties hereunder are solely to protect the Administrative Agent's and the other
Secured Parties' interests in the Collateral and shall not impose any duty upon
the Administrative Agent or any other Secured Party to exercise any such powers.
The Administrative Agent and the other Secured Parties shall be accountable only
for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees,
affiliates, agents or successors shall be responsible to the Grantor for any act
or failure to act hereunder, except for gross negligence or willful misconduct
of any of the same.
6. Performance by Administrative Agent of Grantor's
Obligations. If the Grantor fails to perform or comply with any of its
agreements contained herein and the Administrative Agent, as provided for by the
terms of this Agreement, shall perform or comply, or otherwise cause performance
or compliance, with such agreements, the reasonable expenses of the
Administrative Agent incurred in connection with such performance or compliance,
together with interest thereon at a rate per annum equal to 2.0% above the rate
applicable to Base Rate Loans that are Term Loans, shall be payable by the
Grantor to the Administrative Agent on demand, and the Grantor's obligations to
make such payments shall constitute Obligations secured hereby.
7. Proceeds. It is agreed that if an Event of Default shall
occur and be continuing, (a) all Proceeds of any Collateral received by the
Grantor consisting of cash, checks and other near-cash items shall be held by
the Grantor in trust for the Administrative Agent and the other Secured Parties,
segregated from other funds of the Grantor, and shall, forthwith upon receipt by
the Grantor, be turned over to the Administrative Agent in the exact form
received by the Grantor (duly indorsed by the Grantor to the Administrative
Agent, if required), and (b) any and all such Proceeds received by the
Administrative Agent (whether from the Grantor or otherwise) shall be held by
the Administrative Agent for the benefit of the Secured Parties as collateral
security for the Obligations (whether matured or unmatured), and/or then or at
any time thereafter may, in the sole discretion of the Administrative Agent, be
applied by the Administrative Agent against the Obligations then due and owing
in the following order of priority:
FIRST, to the payment of all reasonable costs and expenses
incurred by the Administrative Agent (including, without limitation, in
its capacity as Credit Agreement Administrative Agent) in connection
with this Agreement, the Guarantee and Collateral Agreement, the Credit
Agreement, any other Loan Document or any of the Obligations,
including, without limitation, all court costs and the reasonable fees
and expenses of its agents and legal counsel, and any other reasonable
costs or expenses incurred in connection with the exercise by the
Administrative Agent (including, without limitation,
<PAGE> 14
in its capacity as Credit Agreement Administrative Agent) of any right
or remedy under this Agreement, the Credit Agreement, or any other Loan
Document;
SECOND, to the ratable satisfaction of all other Obligations;
and
THIRD, to the Grantor or its successors or assigns, or to
whomsoever may be lawfully entitled to receive the same.
8. Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise all rights and remedies of a secured party under the Code, and, to the
extent permitted by law, all other rights and remedies granted to the
Administrative Agent or any Secured Party in this Agreement and the other Loan
Documents and in any other instrument or agreement securing, evidencing or
relating to the Obligations. Without limiting the generality of the foregoing,
the Administrative Agent, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon the Grantor or any other Person
(all and each of which demands, defenses, advertisements and notices are hereby
waived), may in such circumstances, to the extent permitted by law, forthwith
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of the
Administrative Agent or any other Secured Party or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit risk.
The Administrative Agent or any other Secured Party shall have the right, to the
extent permitted by law, upon any such sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
the Grantor, which right or equity is hereby waived and released. The Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at the Grantor's premises
or elsewhere. In the event of any sale, assignment, or other disposition of any
of the Collateral, the goodwill of the business connected with and symbolized by
any Trademark Collateral subject to such disposition shall be included, and the
Grantor shall supply to the Administrative Agent or its designee the Grantor's
know-how and expertise relating to the Collateral subject to such disposition,
and the Grantor's notebooks, studies, reports, records, documents and things
embodying the same or relating to the inventions, processes or ideas covered by,
and to the manufacture of any products under or in connection with, the
Collateral subject to such disposition, and the Grantor's customer's lists,
studies and surveys and other records and documents relating to the
distribution, marketing, advertising and sale of products relating to the
Collateral subject to such disposition. The Administrative Agent shall apply the
net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the other Secured Parties hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment and
performance in whole or in part of the Obligations then due and owing, in the
order of priority specified in Section 7 hereof, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of law, including, without limitation, Section 9-504(1)(c) of
the Code, need the Administrative Agent account for the surplus, if any, to the
Grantor. To the extent permitted by applicable law, (a) the Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the
<PAGE> 15
repossession, retention or sale of the Collateral, other than any such claims,
damages and demands that may arise from the gross negligence or willful
misconduct of any of them, and (b) any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least 10 days before such sale or other
disposition. The Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay in
full the Loans, the Reimbursement Obligations, and, to the extent then due and
owing, all other Obligations, including, without limitation, the reasonable fees
and disbursements of any attorneys employed by the Administrative Agent or any
other Secured Party to collect such deficiency, as provided in the Credit
Agreement.
9. Limitation on Duties Regarding Preservation of Collateral.
The Administrative Agent's sole duty with respect to the custody, safekeeping
and physical preservation of the Collateral in its possession, under Section
9-207 of the Code or otherwise, shall be to deal with it in the same manner as
the Administrative Agent deals with similar property for its own account.
Neither the Administrative Agent, any other Secured Party, nor any of their
respective directors, officers, employees, affiliates or agents shall be liable
for failure to demand, collect or realize upon all or any part of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Grantor or any other
Person.
10. Powers Coupled with an Interest. All authorizations and
agencies herein contained with respect to the Collateral are powers coupled with
an interest and are irrevocable until the payment in full of the Loans, the
Reimbursement Obligations and, to the extent then due and owing, all other
Obligations, the termination of the Revolving Credit Commitments and the
expiration, termination or return to the Issuing Lender of any Letters of
Credit.
11. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
13. No Waiver; Cumulative Remedies. Neither the Administrative
Agent nor any other Secured Party nor the Grantor shall by any act (except by a
written instrument pursuant to Section 14 hereof), delay, indulgence, omission
or otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent, any other Secured Party or
the Grantor, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent,
any other Secured Party or the Grantor of any right or remedy hereunder on any
one occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent, such other Secured Party or the Grantor would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
rights or remedies provided by law.
<PAGE> 16
14. Waivers and Amendments; Successors and Assigns. None of
the terms or provisions of this Agreement may be amended, supplemented, waived
or otherwise modified except by a written instrument executed by the Grantor and
the Administrative Agent, provided that, if requested by the Grantor, any
provision of this Agreement for the benefit of the Administrative Agent and/or
the other Secured Parties may be waived by the Administrative Agent in a written
letter or agreement executed by the Administrative Agent or by telex or
facsimile transmission from the Administrative Agent. This Agreement shall be
binding upon and shall inure to the benefit of the Grantor and its successors
and assigns, and the Administrative Agent and the other Secured Parties and
their respective successors, indorsees, transferees and assigns, except that
(other than in accordance with Section 7.5 of the Credit Agreement) the Grantor
shall not assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.
15. Notices. All notices, requests and demands to or upon the
respective parties hereto shall be made in accordance with Section 10.2 of the
Credit Agreement. The Administrative Agent, the Secured Parties and the Grantor
may change their respective addresses and transmission numbers for notices by
notice in the manner provided in this Section 15.
16. Authority of Administrative Agent. The Grantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantor, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and the Grantor shall not be under any obligation to make any inquiry
respecting such authority.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF.
18. Release of Collateral and Termination. (a) This Agreement
shall remain in full force and effect and be binding in accordance with and to
the extent of its terms and the security interest created by this Agreement
shall not be released until the payment in full of the Loans, the Reimbursement
Obligations and the other Obligations then due and owing shall have occurred,
the Revolving Credit Commitments shall have been terminated and any Letters of
Credit shall have expired or been terminated or returned to the Issuing Lender,
at which time the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and the Grantor hereunder
shall terminate, all without delivery of any instrument or performance of any
act by any party, and all rights to the Collateral shall revert to the Grantor,
provided that if any payment, or any part thereof, of any of the Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Grantor or any other Loan Party, or upon or
as a result of the appointment of a receiver, intervenor or conservator of, or a
trustee or similar officer for, the Grantor or any other Loan Party or any
substantial part of its property, or otherwise, this Agreement, all rights
hereunder and the Liens created hereby shall continue to be effective, or be
reinstated, as though such payments had not been made. Upon request of the
<PAGE> 17
Grantor following any such termination, the Administrative Agent shall reassign
(at the sole cost and expense of the Grantor) to the Grantor any Collateral held
by the Administrative Agent hereunder, and execute and deliver (at the sole cost
and expense of the Grantor) to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination and reassignment and shall have
prepared and submitted to the Administrative Agent for its execution.
(b) If any of the Collateral shall be sold, transferred or
otherwise disposed of by the Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent shall execute and deliver to the
Grantor (at the sole cost and expense of the Grantor) all releases or other
documents reasonably necessary or desirable for the release of the Liens created
hereby on such Collateral as such Grantor may reasonably request that shall have
been prepared by the Grantor and submitted to the Administrative Agent for its
signature.
19. Incorporation of Provisions of Guarantee and Collateral
Agreement. The Grantor hereby acknowledges and affirms that the rights and
remedies of the Administrative Agent with respect to the security interest in
the Collateral made and granted hereby are more fully set forth in the Guarantee
and Collateral Agreement, the terms, conditions and other provisions of which,
in so far as they relate to the Collateral, such security interest and such
rights and remedies, are incorporated by reference herein as if fully set forth
herein. Nothing in this Agreement shall defer or impair the attachment or
perfection of any security interest in any collateral described in the Guarantee
and Collateral Agreement which would attach or be perfected pursuant to the
terms of the Guarantee and Collateral Agreement without action by the Grantor or
any other Person.
20. Interpretation. In the event of a conflict between any
term of this Agreement and the terms of the Credit Agreement, the terms of the
Credit Agreement shall control.
21. Integration. This Agreement and the other Loan Documents
represent the entire agreement of the Grantor and the Administrative Agent with
respect to the subject matter hereof and there are no promises or
representations by the Grantor, the Administrative Agent or any other Secured
Party relative to the subject matter hereof not reflected or referred to herein
or therein.
22. Submission To Jurisdiction; Waivers. Each party hereto
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any
judgement in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United States
of America for the Southern District of New York, and appellate courts
from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or
that such action or proceeding was brought in an inconvenient forum and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially
<PAGE> 18
similar form of mail), postage prepaid, to the Grantor or the
applicable Secured Party, as the case may be, at the address referred
to in Section 15 or at such other address of which the Administrative
Agent and the Grantor shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section 22 any punitive damages.
23. WAIVER OF JURY TRIAL. THE GRANTOR AND THE ADMINISTRATIVE
AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM
THEREIN.
24. Counterparts. This Agreement may be executed and
acknowledged by one or more of the parties to this Agreement on any number of
separate counterparts, and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
<PAGE> 19
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.
<PAGE> 20
DAY INTERNATIONAL, INC.
By:
-----------------------------------
Name: Christine Vanden Beukel
Title: Vice President and Secretary
<PAGE> 21
ACKNOWLEDGED AND AGREED AS OF
THE DATE HEREOF BY:
SOCIETE GENERALE, NEW YORK BRANCH, as Administrative Agent
By:
--------------------
Title: Director
<PAGE> 22
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of January, 1998, before me personally came
__________________ to me known, who, being by me duly sworn, did depose and say
he resides at ____________________________________________________________ and
that he is the ____________________________ of DAY INTERNATIONAL, INC., the
corporation described in and which executed the above instrument; that he has
been authorized to execute said instrument on behalf of said corporation; and
that he has signed said instrument on behalf of said corporation pursuant to
said authority.
-------------
Notary Public
[Notarial Seal]
<PAGE> 23
Schedule I
TRADEMARKS AND TRADEMARK LICENSES
<PAGE> 24
Schedule II
PATENTS AND PATENT LICENSES
<PAGE> 25
Schedule III
EXISTING SECURITY INTERESTS
<PAGE> 1
Exhibit 4.10
[Florida]
MORTGAGE
from
DAY INTERNATIONAL, INC., Mortgagor
to
SOCIETE GENERALE, as Administrative Agent, Mortgagee
DATED AS OF JANUARY 16, 1998
After recording, please return to:
SIMPSON THACHER & BARTLETT
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Dennis D. Kiely, Esq.
THE INSTRUMENTS EVIDENCING THE INDEBTEDNESSES SECURED BY THIS MORTGAGE
WERE MADE IN ANOTHER STATE AND ARE SECURED BY MORTGAGES ON PROPERTY
LOCATED BOTH IN THE STATE OF FLORIDA AND OUT-OF-STATE. THE VALUE OF ALL
FLORIDA PROPERTY IS $2,325,000.00 AND THE VALUE OF THE PROPERTY IN ALL
OTHER STATES IS $6,890,000.00. THE PERCENTAGE OF THE FLORIDA PROPERTY
TO ALL OF THE PROPERTY IS 25.23%.
AS THIS MORTGAGE LIMITS RECOVERY TO $2,325,000.00 PURSUANT TO RULE
12B4.053(32)(C) OF THE FLORIDA ADMINISTRATIVE CODE, DOCUMENTARY STAMPS
ARE DUE ON $2,325,000.00, THE AMOUNT TO WHICH RECOVERY IS LIMITED.
AS THIS MORTGAGE LIMITS RECOVERY TO $2,325,000.00 PURSUANT TO RULE
12C-2.004(2)(B)1 OF THE FLORIDA ADMINISTRATIVE CODE, THE NON-RECURRING
INTANGIBLE TAX IS DUE ON $2,325,000.00, THE AMOUNT TO WHICH RECOVERY IS
LIMITED.
<PAGE> 2
[Florida]
This MORTGAGE, dated as of January 16, 1998 is made by DAY
INTERNATIONAL, INC., a Delaware corporation ("Mortgagor"), whose address is 333
West First Street, Dayton, Ohio 45401, to SOCIETE GENERALE, whose address is
1221 Avenue of the Americas, New York, New York 10020, as Administrative Agent
(in such capacity, "Mortgagee") for the several banks and other financial
institutions (the "Lenders") from time to time parties to the Senior Secured
Credit Agreement dated as January 16, 1998, (as the same may be amended,
supplemented, waived or otherwise modified from time to time the "Credit
Agreement") among Societe Generale Securities Corporation, as Arranger,
Mortgagee, the Lenders, and Day International Group, Inc. (the "Borrower").
References to this Mortgage shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Credit Agreement.
Background
A. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "Improvements"), being collectively referred to as the
"Real Estate").
B. Pursuant to the terms of the Credit Agreement, the Lenders
have agreed, among other things, to make the Loans and the Issuing Lender has
agreed to issue, and the L/C Participants have agreed to acquire, undivided
participating interests in the Letters of Credit for the account of the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement,
which conditions include the grant by Mortgagor to Mortgagee of all estate,
right, title and interest of Mortgagor in and to the Real Estate pursuant to the
terms hereof.
C. It is a condition precedent to the agreement of each Lender
to make Loans and issue Letters of Credit under the Credit Agreement that
Mortgagor executes and delivers this Mortgage. Mortgagor, a subsidiary of
Borrower, will receive substantial direct and indirect benefit from the
extension of credit made to Borrower pursuant to the Credit Agreement.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
<PAGE> 3
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans (as they may be evidenced by the Notes from
time to time) and all other obligations (including the Reimbursement
Obligations) and liabilities of Mortgagor to Mortgagee, the Issuing
Lender and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, the Letters of Credit, the Security Documents,
any Guarantee Obligation of Mortgagor as to which any Lender is a
beneficiary, any Permitted Hedging Arrangement with any Lender or any
banking affiliate of any Lender (whether entered into directly, or
guaranteed by Mortgagor), the Guarantee and Collateral Agreement dated
as of the date hereof between Mortgagor, Holdings and Mortgagee (the
"Guarantee") or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent, the Issuing
Lender or any Lender that are required to be paid by any Loan Party
pursuant to the Credit Agreement) (the items set forth above being
referred to collectively as the "Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Mortgagor (the "Obligations") under or pursuant to
the provisions of the Credit Agreement, the Loans, this Mortgage, the
Guarantee, any other document securing payment of the Indebtedness (the
"Security Documents") and any amendments, supplements, extensions,
renewals, restatements, replacements or modifications of any of the
foregoing (the Credit Agreement, the Loans, the Letters of Credit, this
Mortgage, the Guarantee and all other documents and instruments from
time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same
may be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "Loan
Documents");
MORTGAGOR HEREBY CONVEYS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN,
AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water
<PAGE> 4
courses, water and riparian rights, development rights, air rights,
mineral rights and all estates, rights, titles, interests, privileges,
licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land
lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all right, title and interest of Mortgagor in and to all
of the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus
and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind
and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials to be used by Mortgagor whether stored at the Real
Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits,
<PAGE> 5
revenue, income and other benefits arising from the use and enjoyment
of the Mortgaged Property (as defined below) (collectively, the
"Rents");
(G) all books and records relating to or used in connection
with the operation of the Real Estate or the Equipment or any part
thereof;
(H) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all unearned premiums under insurance
policies now or subsequently obtained by Mortgagor relating to the Real
Estate or Equipment, (ii) any such insurance policies, (iii) all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth
below, and (iv) all awards and other compensation, including the
interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or
Equipment for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Real Estate or any easement or other right
therein, subject to the provisions relating to condemnation awards
generally set forth below;
(I) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "Contracts"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "Permits") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage ;
(K) all accounts and revenues arising from the operation of
the Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
<PAGE> 6
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby granted unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed or as otherwise expressly provided in the Section of
this Mortgage entitled "Reconveyance of Mortgage".
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters that are set forth in Schedule B
of the title insurance policy or policies being issued to Mortgagee to insure
this Mortgage and any Liens expressly permitted under the Credit Agreement
(collectively, the "PERMITTED EXCEPTIONS") and Mortgagor shall warrant, defend
and preserve such title and the rights granted by this Mortgage thereon against
all claims of all persons and entities. Mortgagor further warrants that it has
the right to grant this Mortgage.
2. Payment of Indebtedness. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified in the Credit
Agreement and shall perform all the Obligations.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property, except to the extent
that failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements of every Governmental Authority applicable to Mortgagor or to any
of the Mortgaged Property and all covenants, restrictions, and conditions which
now or later may be applicable to any of the Mortgaged Property are collectively
referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, except as
expressly permitted under the Credit Agreement or herein, Mortgagor shall not by
act or omission permit, other than Permitted Exceptions, any building or other
improvement on any premises not subject to
<PAGE> 7
this Mortgage to rely on the Premises or any part thereof or any interest
therein to fulfill any Legal Requirement, and Mortgagor hereby assigns to
Mortgagee any and all rights to give consent for all or any portion of the
Premises or any interest therein to be so used. Mortgagor shall not by act or
omission impair the integrity of any of the Real Estate as a single zoning lot
separate and apart from all other premises. Mortgagor represents that each
parcel of the Real Estate constitutes a legally subdivided lot, in compliance
with all subdivision laws and similar Legal Requirements, except to the extent
that failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Any act or omission by Mortgagor
which would result in a violation of any of the provisions of this subsection
shall be void.
4. Payment of Taxes and Other Impositions. (a) Except as
expressly permitted under the Credit Agreement, Mortgagor, prior to
delinquency, shall pay and discharge all taxes of every kind and nature
(including, without limitation, all real and personal property, income,
franchise, withholding, transfer, gains, profits and gross receipts taxes),
all charges for any easement or agreement maintained for the benefit of any of
the Mortgaged Property, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents and charges and all
other public charges even if unforeseen or extraordinary, imposed upon or
assessed against or which may become a lien on any of the Mortgaged Property,
or arising in respect of the occupancy, use or possession thereof, together
with any penalties or interest on any of the foregoing (all of the foregoing
are collectively referred to as the "Impositions"). Mortgagor shall within
30 days after the request of Mortgagee deliver to Mortgagee (i) original or
copies of receipted bills and cancelled checks or other evidence of payment
of such Imposition if it is a real estate tax or other public charge and
(ii) evidence acceptable to Mortgagee in its reasonable discretion showing
the payment of any other such Imposition. If by law any Imposition, at
Mortgagor's option, may be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Mortgagor may elect to pay
such Imposition in such installments and shall be responsible for the payment
of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become delinquent, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the rate of interest described in
subsection 2.15(c) of the Credit Agreement (the "Default Rate"). Any sums paid
by Mortgagee in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate as
set forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged Property
or any part thereof, and shall not claim any deduction from the taxable value of
the Mortgaged Property by reason of this Mortgage.
<PAGE> 8
(d) Mortgagor shall have the right pursuant to subsection 7.3
of the Credit Agreement to contest in good faith to the amount or validity of
any Imposition by appropriate proceedings diligently conducted with reserves in
conformity with GAAP, provided that Mortgagor shall demonstrate to Mortgagee's
reasonable satisfaction that such proceedings shall operate conclusively to
prevent the sale of the Mortgaged Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings.
(e) Upon written notice to Mortgagor, Mortgagee during the
continuance of an Event of Default (as defined below) shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss (provided, however, that the maintenance of insurance
against earthquake, windstorm, flood and freeze risks shall be subject
to availability of such insurance coverage on commercially reasonable
terms). The policy shall include building ordinance law endorsements
and the policy limits shall be automatically reinstated after each loss
(other than with respect to flood and earthquake coverage which shall
be reinstated on a commercially reasonable basis);
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury or
death, or property damage relating to any one occurrence plus such
excess limits as Mortgagee shall reasonably request from time to time;
(iii) when and to the extent reasonably required by Mortgagee,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality
or localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy shall include
coverage for independent contractors and completed operations. The
completed operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on an
<PAGE> 9
occurrence basis against claims for personal injury, including, without
limitation, bodily injury, and death, and property damage resulting
from Mortgagor's negligence or other behavior for which Mortgagor may
be adjudged tortiously liable, subject to standard policy terms,
conditions and exclusions, occurring on, in or about the Premises and
the adjoining streets, sidewalks and passageways, such insurance to
afford immediate minimum protection to a limit of not less than that
reasonably required by Mortgagee with respect to personal injury,
bodily injury or death to any one or more persons or damage to
property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts no less than the limits
established by law, or in the case of employer's liability insurance,
no less than $500,000, provided that Mortgagor may self-insure any or
all workers' compensation liabilities;
(vi) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value property insurance form against "all risks of physical loss"
(subject to standard policy exclusions), including collapse, water
damage, flood and earthquake and transit coverage, during construction
or repairs of the Improvements, with deductible approved by Mortgagee
in its reasonable discretion, in reporting form, covering the total
replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the
case of construction); provided, however, that the maintenance of
insurance against earthquake and flood risks shall be subject to
availability of such insurance coverage on commercially reasonable
terms;
(vii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
in such amounts as are reasonably satisfactory to Mortgagee but not
less than the lesser of $1,000,000 or 10% of the value of the
Improvements;
(viii) if any portion of the Premises are located in an area
identified in the Federal Register as having special flood hazards by
the Secretary of Housing and Urban Development or other applicable
agency, flood insurance covering any parcel of the Mortgaged Property
which contains improvements in an amount satisfactory to Mortgagee in
its reasonable discretion, but in no event less than the maximum
limit of coverage available with respect to the particular type of
property under the National Flood Insurance Act of 1968, as amended
and with a term ending not later than the maturity of the Indebtedness
and Mortgagee shall receive confirmation that Mortgagor has received
the notice required pursuant to Section 208.8(e)(3) of Regulation H
of the Board of Governors of The Federal Reserve System; and
(ix) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
<PAGE> 10
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or, in the case of
property and boiler and machinery insurance, materially amended without 30-days'
prior written notice to Mortgagee, (ii) with respect to all property insurance,
subject to availability on commercially reasonable terms, provide for
deductibles not to exceed $250,000, other than with respect to (a) flood,
freeze, windstorm and earthquake perils for which deductibles shall not exceed
the greater of $500,000 or 5% of values at risk per location involved in loss
and (b) boiler and machinery coverage for which deductibles shall not exceed the
greater of $500,000 or five times 100% of the daily time element value, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee in its reasonable discretion), with loss payable
solely to Mortgagee (modified, if necessary and to the extent available under
such policy, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee in its reasonable discretion and be written by insurance
companies having an A.M. Best Company, Inc. rating of A- or higher and a
financial size category of not less than VII, or otherwise as approved by
Mortgagee in its reasonable discretion and (iii) contain a "manuscript"
endorsement providing that Mortgagor may not unilaterally cancel such policy
without Mortgagee's prior written consent. Liability insurance policies shall
name Mortgagee as an additional insured and contain a waiver of subrogation
against Mortgagee; all such policies shall indemnify and hold Mortgagee harmless
from all liability claims occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, subject to standard policy terms,
conditions and exclusions. The amounts of each insurance policy and the form of
each such policy shall at all times be satisfactory to Mortgagee in its
reasonable discretion. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, Mortgagor shall immediately obtain new or additional insurance
satisfactory to Mortgagee in its reasonable discretion. Mortgagor shall not take
out any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise satisfactory to Mortgagee in
all respects in its reasonable discretion.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee in its reasonable discretion, together with a copy of
the declaration page for each such policy. Mortgagor shall (i) pay as they
become due all premiums for such insurance, (ii) not later than seven days prior
to the expiration of each policy to be furnished pursuant to the provisions of
this Section, deliver a renewed policy or policies, or certificates of insurance
acceptable to Mortgagee, in its reasonable discretion, or duplicate original or
originals thereof. Upon the reasonable request of Mortgagee, Mortgagor shall
cause its insurance underwriter or broker to certify to Mortgagee in writing
that all the requirements of this Mortgage governing insurance have been
satisfied.
<PAGE> 11
(c) If Mortgagor is in default of its obligations to insure or
deliver any such policy or policies, or certificates of insurance acceptable to
Mortgagee, in its reasonable discretion, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate and the same shall be deemed to be secured by this Mortgage
and shall be collectible in the same manner as the Indebtedness secured by this
Mortgage.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the Morgan & Swift Building Cost Index to determine whether
there shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall in all material respects comply
with and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Mortgagor or to any of the
Mortgaged Property or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Mortgaged Property.
Mortgagor shall not use or permit the use of the Mortgaged Property in any
manner which would permit any insurer to cancel any insurance policy or void
coverage required to be maintained by this Mortgage.
(f) (i) If the Mortgaged Property, or any part thereof, shall
be destroyed or damaged by fire or any other casualty, whether insured
or uninsured, or in the event any claim is made against Mortgagor for
any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall promptly give notice thereof to
Mortgagee.
(ii) If the Mortgaged Property is damaged by fire or other
casualty and the cost to repair such damage is less than $1,000,000,
then provided that no Event of Default shall have occurred and be
continuing, Mortgagor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss may be paid over to Mortgagor;
provided that Mortgagor shall, promptly after any such damage, repair
such damage to the extent required by subsection 6.5 of the Credit
Agreement regardless of whether any insurance proceeds have been
received or whether such proceeds, if received, are sufficient to pay
for the costs of repair.
(iii) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the limit in
Section 5(f)(ii) above, or if an Event of Default shall have occurred
and be continuing, then Mortgagor authorizes and empowers Mortgagee, at
Mortgagee's option and in Mortgagee's reasonable discretion, as
attorney-in-fact for Mortgagor, to make proof of loss, to adjust and
compromise any claim under any insurance policy, to appear in and
prosecute any action arising from
<PAGE> 12
any policy, to collect and receive insurance proceeds and to deduct
therefrom Mortgagee's reasonable expenses incurred in the collection
process. Each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to Mortgagee. Mortgagee
shall have the right to require Mortgagor to repair or restore the
Mortgaged Property to the extent required by subsection 6.5 of the
Credit Agreement, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to such repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee may be applied by Mortgagee toward reimbursement of all
reasonable costs and expenses of Mortgagee in collecting such proceeds,
and the balance, at Mortgagee's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of
maturity, if payable in installments) and interest due or to become due
under the Notes, the Credit Agreement or the other Loan Documents, to
fulfill any other Obligation of Mortgagor, to the restoration or repair
of the property damaged, or released to Mortgagor. Application by
Mortgagee of any insurance proceeds toward the last maturing
installments of principal and interest due or to become due on the
Loans shall not excuse Mortgagor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce
the amount of such payments. In the event Mortgagee elects to release
such proceeds to Mortgagor, Mortgagor shall be obligated to use such
proceeds to restore or repair the Mortgaged Property to the extent
required by subsection 6.5 of the Credit Agreement.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force, to the extent assignable or transferable, shall pass to
the purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee, during the
continuance of an Event of Default, shall be entitled to require Mortgagor to
pay monthly in advance to Mortgagee the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Mortgagee may commingle such funds with
its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
(i) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits and aggregates in such blanket policy applicable to the Premises
and the other Mortgaged Property, (B) each such blanket policy shall include an
endorsement providing that, in the event of a loss resulting from an insured
peril, insurance proceeds shall be allocated to the Mortgaged Property in an
amount equal to the coverages required to be maintained by Mortgagor as provided
above (subject to applicable sublimits and aggregates) and (C) the protection
afforded under any such blanket policy shall be no less than that which
<PAGE> 13
would have been afforded under a separate policy or policies relating only to
the Mortgaged Property (subject to applicable sublimits and aggregates).
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions and except as otherwise permitted
pursuant to the terms of the Credit Agreement, Mortgagor shall not further
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to this Mortgage and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may
be otherwise expressly permitted under the Credit Agreement, Mortgagor shall not
sell, transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. To the extent required under subsection 6.5 of the Credit
Agreement, Mortgagor shall repair, restore, replace or rebuild promptly any part
of the Premises which may be damaged or destroyed by any casualty whatsoever to
a condition substantially equivalent to its condition prior to the damage or
destruction. Except as permitted by the Credit Agreement, the Improvements shall
not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee, provided that Mortgagor may make
alterations or additions without the consent of Mortgagee that do not materially
reduce the value of the Mortgaged Property.
(b) Mortgagee and any persons authorized by Mortgagee shall,
upon reasonable notice and at any reasonable time, have the right to enter and
inspect the Premises and the right to inspect all work done, labor performed and
materials furnished in and about the Improvements and the right to inspect and
make copies, to the extent reasonable, of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Except as permitted under subsection 6.3 of the Credit
Agreement, Mortgagor shall pay or cause to be paid prior to delinquency, all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Promptly upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's
option and in Mortgagee's reasonable discretion, as attorney-in-fact for
Mortgagor, to commence, appear in and prosecute, in Mortgagee's or Mortgagor's
name, any action or proceeding relating to any condemnation of the Mortgaged
Property, or any portion thereof, and to settle or compromise any claim in
connection with such condemnation upon the occurrence and during the continuance
of an Event of Default. If Mortgagee elects not to participate in such
condemnation proceeding,
<PAGE> 14
then Mortgagor shall, at its expense, diligently prosecute any such proceeding
and shall consult with Mortgagee, its attorneys and experts and cooperate with
them in any defense of any such proceedings. All awards and proceeds of
condemnation shall be applied in the same manner as insurance proceeds, and to
the extent such awards and proceeds exceed $1,000,000 and no Event of Default
shall have occurred and be continuing, such awards and proceeds shall be
assigned to Mortgagee to be applied in the same manner as insurance proceeds, as
provided above in subsection 5(f)(iii) above, and Mortgagor agrees to execute
any such assignments of all such awards as Mortgagee may request.
10. Restoration. If Mortgagee elects or is required hereunder
to release funds to Mortgagor for restoration of any of the Mortgaged Property,
then such restoration shall be performed in accordance with such conditions as
Mortgagee shall impose in its reasonable discretion, and as are customarily
imposed by construction lenders.
11. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld or delayed, execute
or permit to exist any Lease of any of the Mortgaged Property, except for
Permitted Exceptions and except as may be otherwise expressly permitted under
the Credit Agreement.
(b) As to any Lease consented to by Mortgagee under subsection
11(a) above, Mortgagor shall:
(i) promptly perform in all material respects all of the
provisions of the Lease on the part of the lessor thereunder to be
performed;
(ii) promptly enforce all of the material provisions of the
Lease on the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 business days after a reasonable
request by Mortgagee, any right to request from the lessee a
certificate with respect to the status thereof;
(v) promptly deliver to Mortgagee copies of any notices of
default which Mortgagor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Mortgagee a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's
reasonable request, if permitted under such Lease, an assignment of the
Mortgagor's interest under such Lease.
<PAGE> 15
(c) Mortgagor shall deliver to Mortgagee, within 10 business
days after a reasonable request by Mortgagee, a written statement, certified by
Mortgagor as being true, correct and complete, containing the names of all
lessees and other occupants of the Mortgaged Property, the terms of all Leases
and the spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the default;
such statement shall be accompanied by such other information as Mortgagee may
reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage the lessee under each Lease shall, if requested by Mortgagee
or any other person succeeding to the interest of Mortgagee as a result of such
enforcement, and if provided, at such lessee's request, with a nondisturbance
agreement from Mortgagee or such person, attorn to Mortgagee or to such person
and shall recognize Mortgagee or such successor in interest as lessor under the
Lease without change in the provisions thereof; provided however, that Mortgagee
or such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the Premises or any portion
thereof; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Mortgagee or such successor in interest.
Each lessee or other occupant, upon request by Mortgagee or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Mortgagor agrees that each Lease entered into after the
date of this Mortgage shall include language to the effect of subsections (d)
and (e) of this Mortgage Section and language to the effect that if any act or
omission of Mortgagor would give any lessee under such Lease the right,
immediately or after lapse of a period of time, to cancel or terminate such
Lease, or to abate or offset against the payment of rent or to claim a partial
or total eviction, such lessee shall not exercise such right until it has given
written notice of such act or omission to Mortgagee and until a reasonable
period for remedying such act or omission shall have elapsed following the
giving of such notice without a remedy being effected; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of
<PAGE> 16
each Lease in recordable form) as may be reasonably required by Mortgagee to
confirm the rights or benefits conferred on Mortgagee by this Mortgage.
13. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee and the same shall be
secured by this Mortgage and shall be an encumbrance on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the date of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
14. Events of Default. The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, the Indebtedness
and all other amounts payable with respect to the Loans, the Letters of Credit,
the Credit Agreement, this Mortgage and the other Security Documents shall
become due and payable as provided in the Credit Agreement. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law,
(A) institute and maintain an action of judicial foreclosure against
all or any part of the Mortgaged Property (as described below), (B)
institute and maintain an action on the Notes, the Credit Agreement or
the other Security Documents, (C) sell all or part of the Mortgaged
Property (Mortgagor expressly granting to Mortgagee the power of sale),
or (D) take such other action at law or in equity for the enforcement
of this Mortgage or any of the Loan Documents as the law may allow.
Mortgagee may proceed in any such action to final judgment and
execution thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including, without
limitation, reasonable attorneys' fees and disbursements. Interest at
the Default Rate shall be due on any judgment obtained by Mortgagee
from the date of judgment until actual payment is made of the full
amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other
<PAGE> 17
collateral as security for the Indebtedness and Obligations enter into
and upon the Mortgaged Property and each and every part thereof and
exclude Mortgagor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Mortgagor hereby agreeing
to surrender possession of the Mortgaged Property to Mortgagee upon
demand at any such time) and use, operate, manage, maintain and control
the Mortgaged Property and every part thereof. Following such entry and
taking of possession, Mortgagee shall be entitled, without limitation,
(x) to lease all or any part or parts of the Mortgaged Property for
such periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and
(z) generally to execute, do and perform any other act, deed, matter or
thing concerning the Mortgaged Property as Mortgagee shall deem
appropriate as fully as Mortgagor might do.
Mortgagor acknowledges that it has been advised that Mortgagee
recognizes the value of the security covered hereby is inextricably intertwined
with the effectiveness of the management, maintenance and general operation of
the Mortgaged Property, and that Mortgagee would not extend the Indebtedness
secured hereby unless it could be assured that such Mortgagee would have the
right to take possession of the Mortgaged Property in order to manage or to
control management thereof, and to enjoy the income, rents and profits
therefrom, immediately upon default by Mortgagor hereunder, notwithstanding that
foreclosure proceedings may not have been instituted, or are pending, or the
redemption period may not have expired. Accordingly, Mortgagor hereby knowingly,
intelligently and voluntarily waives all right to possession of the Mortgaged
Property from and after the occurrence of an Event of Default hereunder, upon
demand for possession by Mortgagee, and Mortgagor agrees not to assert any
objection or defense to Mortgagee's request or petition to a court for
possession. The rights hereby conferred upon Mortgagee have been agreed upon
prior to any default by Mortgagor hereunder and the exercise by Mortgagee of any
such rights shall not be deemed to put Mortgagee in the status of a "mortgagee
in possession". Mortgagor acknowledges that this provision is material to this
transaction and that Mortgagee would not extend the Indebtedness secured hereby
but for this paragraph.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a foreclosure
sale, the Real Estate may be sold, at Mortgagee's election, in one parcel or in
more than one parcel and if in more than one parcel the same may be divided as
Mortgagee may elect and Mortgagee is specifically empowered, (without being
required to do so, and in its sole and absolute discretion) to cause successive
sales of portions of the Mortgaged Property to be held. At the election of
Mortgagee, the Mortgaged Property may be offered first in parcels and then as a
whole, the offer producing the highest price for the entire property offered to
prevail. Mortgagor hereby waives any right to require any such sale to be made
in parcels or any right to select such parcels.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and notwithstanding
to the contrary any exculpatory or non-recourse language which may be contained
herein, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition
<PAGE> 18
and Mortgagee shall have the right to invoke any equitable right or remedy as
though other such rights and remedies were provided for in this Mortgage.
(d) In the event of a default because of the existence of any
lien upon the Mortgaged Property, Mortgagee shall have the right (without being
obligated to do so or to continue to do so), without notice to Mortgagor, to
advance on and for the account of Mortgagor such sums as Mortgagee in its sole
discretion deems necessary to cure such default or to induce the holder of any
such lien to forbear from exercising its rights thereunder. Notwithstanding
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
16. Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Notes and other
instruments evidencing the Indebtedness and any and all documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property,
without requiring the posting of a surety bond and without reference to the
adequacy or inadequacy of the value of the Mortgaged Property or the solvency or
insolvency of Mortgagor or any other party obligated for payment of all or any
part of the Indebtedness, and whether or not waste has occurred with respect to
the Mortgaged Property. Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and duties
of Mortgagee in case of entry as provided in this Mortgage, including, without
limitation and to the extent permitted by law, the right to enter into leases of
all or any part of the Mortgaged Property, and shall continue as such and
exercise all such powers until the date of confirmation of sale of the Mortgaged
Property unless such receivership is sooner terminated.
18. Extension, Release, etc. (a) Without affecting the charge
of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the
<PAGE> 19
maturity or alter any of the terms of the Indebtedness or any guaranty thereof,
(iii) grant other indulgences, (iv) release or reconvey, or cause to be released
or reconveyed at any time at Mortgagee's option any parcel, portion or all of
the Mortgaged Property, (v) take or release any other or additional security for
any obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the encumbrance of this Mortgage until the encumbrance amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the encumbrance of this or any liens, rights,
powers or remedies of Mortgagee hereunder, and such liens, rights, powers and
remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid charge on the Mortgaged
Property for the amount secured hereby.
19. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State in which the Mortgaged Property is located. If an Event of
Default shall occur under this Mortgage, then in addition to having any other
right or remedy available at law or in equity, Mortgagee shall have the option
of either (i) proceeding under the Code and exercising such rights and remedies
as may be provided to a secured party by the Code with respect to all or any
portion of the Mortgaged Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii) treating
such property as real property and proceeding with respect to both the real and
personal property constituting the Mortgaged Property; or in accordance with
Mortgagee's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Mortgagee
shall elect to proceed under the Code, then five days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Mortgagee shall include, but not be limited to, reasonable attorneys' fees and
legal expenses. At Mortgagee's request, during the continuance of an Event of
Default, Mortgagor shall assemble the personal property and make it available to
Mortgagee at a place designated by Mortgagee which is reasonably convenient to
both parties.
<PAGE> 20
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; (iv) the mailing addresses of Mortgagor and Mortgagee
are as set forth on the first page of this Mortgage; (v) Mortgagor's federal tax
identification number is 34-1658458 and (vi) Mortgagee's federal tax
identification number is 52-1128875. In addition, for purposes of Article 9 of
the Uniform Commercial Code, (i) Mortgagor is the "debtor", (ii) Mortgagee is
the "secured party" and (iii) information concerning the security interest
created hereby may be obtained from Mortgagee at its address on the first page
of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee in its reasonable
discretion, covering all or any part of the Mortgaged Property and will further
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Mortgagee may request in order to perfect,
preserve, maintain, continue or extend the security interest under and the
priority of this Mortgage and such security instrument. Mortgagor further agrees
to pay to Mortgagee on demand all reasonable costs and expenses incurred by
Mortgagee in connection with the preparation, execution, recording, filing and
re-filing of any such document and all reasonable costs and expenses of any
record searches for financing statements Mortgagee shall reasonably require. If
Mortgagor shall fail to furnish any financing or continuation statement within
10 days after request by Mortgagee, then pursuant to the provisions of the Code,
Mortgagor hereby authorizes Mortgagee, without the signature of Mortgagor, to
execute and file any such financing and continuation statements. The filing of
any financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this Mortgage
as real property, as set forth above.
20. Assignment of Rents. Mortgagor hereby absolutely and
unconditionally assigns, transfers, conveys and sets over to Mortgagee, the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for the purpose of collecting the same and to let the
Mortgaged Property or any part thereof and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents, letting the Mortgaged Property or any part thereof or
applying the Rents and Mortgagor shall be entitled to collect, receive, use and
retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to
<PAGE> 21
collect the Rents, any lease security deposits, and shall pay monthly in advance
to Mortgagee, or to any such receiver, the fair and reasonable rental value as
determined by Mortgagee for the use and occupancy of the Mortgaged Property or
of such part thereof as may be in the possession of Mortgagor or any affiliate
of Mortgagor, and upon default in any such payment Mortgagor and any such
affiliate will vacate and surrender the possession of the Mortgaged Property to
Mortgagee or to such receiver, and in default thereof may be evicted by summary
proceedings or otherwise. Mortgagor shall not accept prepayments of installments
of Rent to become due for a period of more than one month in advance (except for
security deposits and estimated payments of percentage rent, if any).
21. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other funds
of Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall furnish
Mortgagee satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Mortgagee under which such security deposits
are held, which statement shall be certified by Mortgagor.
22. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Mortgaged Property shall have no right to
terminate any Lease whether or not such Lease is subordinate to this Mortgage
nor shall any holder of any subordinate lien or subordinate mortgage join any
tenant under any Lease in any action to foreclose the lien or modify, interfere
with, disturb or terminate the rights of any tenant under any Lease. By
recordation of this Mortgage all subordinate lienholders under subordinate
mortgages are subject to and notified of this provision, and any action taken by
any such lienholder or mortgagee contrary to this provision shall be null and
void. Upon the occurrence of any Event of Default, Mortgagee may, in its sole
discretion and without regard to the adequacy of its security under this
Mortgage, apply all or any part of any amounts on deposit with Mortgagee under
this Mortgage against all or any part of the Indebtedness. Any such application
shall not be construed to cure or waive any Default or Event of Default or
invalidate any act taken by Mortgagee on account of such Default or Event of
Default.
23. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien or mortgage
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Mortgage shall have the right to declare the Indebtedness due on a date
to be specified by not less than 30 days' written notice to be given to
Mortgagor unless within such 30-day period Mortgagor shall assume as an
Obligation hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
24. Notices. Mortgagor and Mortgagee hereby request that a
copy of any notice of default and a copy of any notice of sale hereunder shall
be mailed to each of them at the addresses set forth herein.
<PAGE> 22
25. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate mortgage, lien or encumbrance.
Mortgagor's execution of any written agreement between Mortgagor and Mortgagee
shall not be required for the effectiveness thereof as between Mortgagor and
Mortgagee.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
27. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
28. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by deed of trust, mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, shall prejudice or in any manner affect
Mortgagee's right to realize upon or enforce any other security now or hereafter
held by Mortgagee, it being agreed that Mortgagee shall be entitled to enforce
this Mortgage and any other security now or hereafter held by Mortgagee in such
order and manner as Mortgagee may determine in its absolute discretion. No
remedy herein conferred upon or reserved to Mortgagee is intended
<PAGE> 23
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which
either may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee. In no event shall Mortgagee, in the exercise of the remedies provided
in this Mortgage (including, without limitation, in connection with the
assignment of Rents, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession," and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.
29. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold or be the mortgagee of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Mortgagor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Indebtedness (including the Mortgaged
Property), which action may be brought or consolidated in the courts of any
county in which any of such collateral is located. Mortgagor acknowledges that
the right to maintain a consolidated foreclosure action is a specific inducement
to Mortgagee to extend the Indebtedness, and Mortgagor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now or hereafter have.
Mortgagor further agrees that if Mortgagee shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Mortgaged Property or
against any collateral other than the Mortgaged Property, which collateral
directly or indirectly secures the Indebtedness, or if Mortgagee shall have
obtained a judgment of foreclosure or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue any foreclosure proceedings and exercise its other
remedies granted in this Mortgage against all or any part of the Mortgaged
Property and Mortgagor waives any objections to the commencement or continuation
of a foreclosure of this Mortgage or exercise of any other remedies hereunder
based on such other proceedings or judgments, and waives any right to seek to
dismiss, stay, remove, transfer or consolidate either any action under this
Mortgage or such other proceedings on such basis. Neither the commencement nor
continuation of proceedings to foreclose this Mortgage nor the exercise of any
other rights hereunder nor the recovery of any judgment by Mortgagee in any such
proceedings shall prejudice, limit or preclude Mortgagee's right to commence or
continue one or more foreclosure or other proceedings or obtain a judgment
against any other collateral (either in or outside the State in which the Real
Estate is located) which directly or indirectly secures the Indebtedness, and
Mortgagor expressly waives any objections to the commencement of, continuation
of, or entry of a judgment in such other proceedings or
<PAGE> 24
exercise of any remedies in such proceedings based upon any action or judgment
connected to this Mortgage, and Mortgagor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other proceedings or
any sale or action under this Mortgage on such basis. It is expressly understood
and agreed that to the fullest extent permitted by law, Mortgagee may, at its
election, cause the sale of all collateral which is the subject of a single
foreclosure action at either a single sale or at multiple sales conducted
simultaneously and take such other measures as are appropriate in order to
effect the agreement of the parties to dispose of and administer all collateral
securing the Indebtedness (directly or indirectly) in the most economical and
least time-consuming manner.
30. Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its respective successors and assigns, and no other person or
entity shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants, any or
all of which may be freely waived in whole or in part by Mortgagee at any time
if in its sole discretion such waiver is deemed advisable. All such covenants of
Mortgagor shall run with the land and bind Mortgagor, the successors and assigns
of Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee,
and its respective successors and assigns. The word "Mortgagor" shall be
construed as if it read "Mortgagors" whenever the sense of this Mortgage
so requires and if there shall be more than one Mortgagor, the obligations of
the Mortgagors shall be joint and several.
31. No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the mortgagee of any subordinate mortgage or the
holder of any subordinate lien on the Mortgaged Property, any part of the
security held for the obligations secured by this Mortgage without, as to the
remainder of the security, in anywise impairing or affecting the lien of this
Mortgage or the priority of such lien over any subordinate lien or mortgage.
32. Governing Law, etc. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by its terms the
Credit Agreement shall be governed and construed in accordance with the laws of
the State of New York, without regard to principles of conflict of law, and for
purposes of consistency, Mortgagor agrees that in any in personam proceeding
related to this Mortgage the rights of the parties to this Mortgage shall also
be governed by and construed in accordance with the laws of the State of New
York governing contracts made and to be performed in that State, without regard
to principles of conflict of law.
33. Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action,
claim, suit or proceeding relating to this Mortgage and for any counterclaim
brought therein.
<PAGE> 25
34. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Mortgage shall be used interchangeably in singular or plural form and
the word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein," the
word "Mortgagee" shall mean "Mortgagee or any successor Administrative Agent,"
the word "Notes" shall mean "the notes that may from time to time be given
pursuant to the terms of the Credit Agreement or any other evidence of
indebtedness secured by this Mortgage" the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa. The captions
in this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
35. Reconveyance of Mortgage. Upon payment in full of the
Indebtedness, the termination of all Commitments under the Credit Agreement
secured hereby and the compliance with the Obligations then required to be
complied with, Mortgagee shall execute and deliver the encumbrance of this
Mortgage. If any of the Mortgaged Property shall be sold, transferred or
otherwise disposed of by Mortgagor in a transaction expressly permitted by the
Credit Agreement, then Mortgagee shall execute and deliver to Mortgagor (at the
sole cost and expense of Mortgagor) all releases, reconveyances or other
documents reasonably necessary or desirable for the release of such Mortgaged
Property from the encumbrance of this Mortgage.
36. Conflict with Credit Agreement. In the event of any
conflict or inconsistency between the terms and provisions of this Mortgage and
the terms and provisions of the Credit Agreement, the terms and provisions of
the Credit Agreement shall govern, other than with respect to the Section of
this Mortgage captioned "Governing Law, etc.". By their execution of the Credit
Agreement, each Lender hereby agrees that it shall not have the right to
institute any suit for enforcement of Notes or any other Indebtedness secured by
this Mortgage or any other Security Document, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver or loss of the Lien
of this Mortgage or any other Security Document or impede or delay the
enforcement of the Lien of this Mortgage or any other Security Document.
37. Revolving Credit Loans. A portion of the Indebtedness
secured by this Mortgage is a revolving line of credit under which advances,
payments and readvances may be made from time to time.
38. Future Advances; Maximum Secured Amount. In addition to
all other Indebtedness secured by this Mortgage, this Mortgage shall secure also
and constitute a first lien on the Mortgaged Property for all future advances
made by Mortgagee to Borrowers pursuant to the Credit Agreement within twenty
(20) years from the date of this Mortgage to the same extent as if such advances
were made on the date of the execution of this Mortgage.
<PAGE> 26
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, THE MAXIMUM AMOUNT OF
PRINCIPAL INDEBTEDNESS SECURED BY THIS MORTGAGE AT THE TIME OF EXECUTION OR
WHICH UNDER ANY CONTINGENCY MAY HEREAFTER BECOME SECURED HEREBY AT ANY TIME IS
TWO MILLION THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($2,325,000.00); PROVIDED
THAT SUCH LIMITATION SHALL NOT LIMIT THE SECURITY OF THIS MORTGAGE WITH RESPECT
TO (I) INTEREST ON THE AFORESAID MAXIMUM AMOUNT OF PRINCIPAL INDEBTEDNESS AT THE
RATES PROVIDED IN THE CREDIT AGREEMENT, (II) AFTER A DEFAULT BY MORTGAGOR TO PAY
OR PERFORM SAME, SUMS TO PAY IMPOSITIONS AS PROVIDED FOR HEREIN, (III) AFTER A
DEFAULT BY MORTGAGOR TO PAY OR PERFORM SAME, SUMS TO PAY PREMIUMS ON INSURANCE
POLICIES COVERING THE MORTGAGED PROPERTY AS PROVIDED FOR HEREIN, (IV) EXPENSES
INCURRED IN UPHOLDING OR ENFORCING THE LIEN OF THIS MORTGAGE, INCLUDING, BUT NOT
LIMITED TO, THE EXPENSES OF ANY LITIGATION TO PROSECUTE OR DEFEND THE RIGHTS AND
LIEN CREATED BY THIS MORTGAGE, (V) AFTER DEFAULT BY MORTGAGOR TO PAY OR PERFORM
SAME, EXPENSES INCURRED TO PROTECT THE PROPERTY SECURED BY THIS MORTGAGE, (VI)
ANY AMOUNT, COSTS OR CHARGE TO WHICH MORTGAGEE BECOMES SUBROGATED, UPON PAYMENT,
WHETHER UNDER RECOGNIZED PRINCIPLES OF LAW OR EQUITY, OR UNDER EXPRESS STATUTORY
AUTHORITY AND (VII) ANY OTHER AMOUNT SECURED BY THIS MORTGAGE WHICH IF NOT
LIMITED BY SUCH LIMITATION WOULD NOT RENDER THIS MORTGAGE INDEFINITE OR INCREASE
THE AMOUNT OF DOCUMENTARY STAMP AND NON-RECURRING INTANGIBLE PERSONAL PROPERTY
TAXES, IF ANY, PAYABLE WITH RESPECT TO THIS MORTGAGE. It shall be an Event of
Default hereunder if Mortgagor shall file for record a notice limiting the
maximum principal amount which may be secured by this Mortgage if the effect of
the filing of such notice would in any way prohibit Mortgagee from making future
advances to be secured by this Mortgage in the full amount hereinabove set
forth. Mortgagor will pay all applicable documentary stamp and non-recurring
intangible personal property taxes imposed pursuant to applicable Florida law
incurred in connection with the recordation of this Mortgage; and, if, at the
time any Lender is requested to make any Loan under the Credit Agreement, the
then outstanding principal balance of all Loans is less than the above-stated
maximum principal amount secured hereby (such requested Loan, a "Taxable
Advance"), Mortgagor shall pay all applicable documentary stamp and
non-recurring intangible personal property taxes imposed pursuant to applicable
Florida law on that portion of the Taxable Advance which equals the difference
between such then outstanding principal balance of all Loans prior to the
Taxable Advance and the above-stated maximum principal amount secured by this
Mortgage. As of the date such Taxable Advance is requested, Mortgagor shall
furnish the Administrative Agent with such documentation and affidavits signed
by a Responsible Officer as the Administrative Agent shall request, stating that
all applicable documentary stamp and non-recurring intangible personal property
taxes due in connection with such Taxable Advance have been paid.
39. Last Dollars Secured; Priority. This Mortgage secures only
a portion of the Indebtedness owing or which may become owing by the Mortgagor
to the Lenders. The
<PAGE> 27
parties agree that any payments or repayments of such Indebtedness shall be and
be deemed to be applied first to the portion of the Indebtedness that is not
secured hereby, it being the parties' intent that the portion of the
Indebtedness last remaining unpaid shall be secured hereby.
40. Maximum Rate of Interest. Nothing herein contained, nor in
the Notes, in the Credit Agreement or in any instrument or transaction related
thereto, shall be construed or so operate as to require Borrowers, Mortgagor or
any person liable for the payment of the Loans, to pay interest in an amount or
at a rate greater than the maximum allowed by law. Should any interest or other
charges in the nature of the interest paid by Borrowers, Mortgagor or any
parties liable for the payment of the Loans result in the computation or earning
of interest in excess of the maximum rate of interest allowed by applicable law,
then any and all such excess shall be and the same is hereby waived by the
Lenders, and all such excess shall be automatically ratably credited against and
in reduction of the principal balance, and any portion of said excess which
exceeds the principal balance shall be paid by the Lenders to Borrowers,
Mortgagor or any parties liable for the payment of the Loans, as the case may
be, it being the intent of the parties hereto that under no circumstances shall
Borrowers, Mortgagor or any parties liable for the payment of the Indebtedness
and the Loans be required to pay interest in excess of the maximum rate allowed
by law.
41. Homestead Exemptions. Mortgagor hereby represents and
declares that the Mortgaged Property forms no part of any property owned, used
or claimed by Mortgagor as exempted from forced sale under the laws of the State
of Florida, and disclaims, waives and renounces all and every claim to exemption
under any homestead exemption law or other laws.
<PAGE> 28
This Mortgage has been duly executed by Mortgagor on the date
first above written.
Signed, sealed and DAY INTERNATIONAL, INC.
delivered in the
presence of:
By: ______________________
Name:
______________________ Title:
Witness
[Corporate Seal]
______________________
Witness
<PAGE> 29
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
This instrument was acknowledged before me this _________ day
of January, 1998 by ____________________, the ___________________ of DAY
INTERNATIONAL, INC., a Delaware corporation, on behalf of the corporation.
_____________
Notary Public
[Notarial Stamp]
[Notarial Seal]
<PAGE> 30
Schedule A
The following land is located in Seminole County, Florida:
All of that part of Lot 5, Shuman's Addition to Eureka Hancock according to the
Plat thereof as recorded in Plat Book 2, Page 53, of the Public Records of
Seminole County, Florida, lying East of the Seaboard Coast Line Railroad
Company Right of Way, together with the Easterly 65 feet of the said Seaboard
Coast Line Railroad Company Right of Way lying within said Lot 5, which was
conveyed to Overstreet Investment Company by deed Dated July 10, 1979 for
Seaboard Coast Line Railroad Company, and recorded in O.R. Book 1247, Page
1322, of the Public Records of Seminole County, Florida.
Lot 6, Shuman's Addition to Eureka Hancock, according to the Plat thereof as
recorded in Plat Book 2, Page 53, of the Public Records of Seminole County,
Florida. (LESS road 419)
Also including the following described property:
The South 65 feet of Lot 3, lying East of the Atlantic Coast Line Railroad
right of way, the South 65 feet of the West 1/2 of Lot 4 and the West 30 feet
of the South 65 feet if the East 1/2 of Lot 4, Shuman's Addition to Eureka
Hancock, according to the plat thereof recorded in Plat Book 2, Page 53, Public
Records of Seminole County, Florida.
<PAGE> 1
Exhibit 4.11
[South Carolina]
MORTGAGE, ASSIGNMENT OF RENT
& SECURITY AGREEMENT
from
DAY INTERNATIONAL, INC., Mortgagor
to
SOCIETE GENERALE, as Administrative Agent, Mortgagee
DATED AS OF JANUARY 16, 1998
After recording, please return to:
SIMPSON THACHER & BARTLETT
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Dennis D. Kiely, Esq.
<PAGE> 2
[South Carolina]
This MORTGAGE, dated as of January 16, 1998 is made by DAY
INTERNATIONAL, INC., a Delaware corporation ("Mortgagor"), whose address is 333
West First Street, Dayton, Ohio 45401, to SOCIETE GENERALE, whose address is
1221 Avenue of the Americas, New York, New York 10020, as Administrative Agent
(in such capacity, "Mortgagee") for the several banks and other financial
institutions (the "Lenders") from time to time parties to the Senior Secured
Credit Agreement dated as January 16, 1998, (as the same may be amended,
supplemented, waived or otherwise modified from time to time the "Credit
Agreement") among Societe Generale Securities Corporation, as Arranger,
Mortgagee, the Lenders, and Day International Group, Inc. (the "Borrower").
References to this Mortgage shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Credit Agreement.
Background
A. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "Improvements"), being collectively referred to as the
"Real Estate").
B. Pursuant to the terms of the Credit Agreement, the Lenders
have agreed, among other things, to make the Loans and the Issuing Lender has
agreed to issue, and the L/C Participants have agreed to acquire, undivided
participating interests in the Letters of Credit for the account of the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement,
which conditions include the grant by Mortgagor to Mortgagee of all estate,
right, title and interest of Mortgagor in and to the Real Estate pursuant to the
terms hereof.
C. It is a condition precedent to the agreement of each Lender
to make Loans and issue Letters of Credit under the Credit Agreement that
Mortgagor executes and delivers this Mortgage. Mortgagor, a subsidiary of
Borrower, will receive substantial direct and indirect benefit from the
extensions of credit made to Borrower pursuant to the Credit Agreement.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
<PAGE> 3
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans (as they may be evidenced by the Notes from
time to time) and all other obligations (including the Reimbursement
Obligations) and liabilities of Mortgagor to Mortgagee, the Issuing
Lender and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, the Letters of Credit, the Security Documents,
any Guarantee Obligation of Mortgagor as to which any Lender is a
beneficiary, any Permitted Hedging Arrangement with any Lender or any
banking affiliate of any Lender (whether entered into directly, or
guaranteed by Mortgagor), the Guarantee and Collateral Agreement dated
as of the date hereof between Mortgagor, Holdings and Mortgagee (the
"Guarantee") or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent, the Issuing
Lender or any Lender that are required to be paid by any Loan Party
pursuant to the Credit Agreement) (the items set forth above being
referred to collectively as the "Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Mortgagor (the "Obligations") under or pursuant to
the provisions of the Credit Agreement, the Loans, this Mortgage, the
Guarantee, any other document securing payment of the Indebtedness (the
"Security Documents") and any amendments, supplements, extensions,
renewals, restatements, replacements or modifications of any of the
foregoing (the Credit Agreement, the Loans, the Letters of Credit, this
Mortgage, the Guarantee and all other documents and instruments from
time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same
may be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "Loan
Documents");
MORTGAGOR HEREBY CONVEYS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN,
AND HEREBY MORTGAGES, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water
<PAGE> 4
29
courses, water and riparian rights, development rights, air rights,
mineral rights and all estates, rights, titles, interests, privileges,
licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land
lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all right, title and interest of Mortgagor in and to all
of the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus
and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind
and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials to be used by Mortgagor whether stored at the Real
Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits,
<PAGE> 5
30
revenue, income and other benefits arising from the use and enjoyment
of the Mortgaged Property (as defined below) (collectively, the
"Rents");
(G) all books and records relating to or used in connection
with the operation of the Real Estate or the Equipment or any part
thereof;
(H) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all unearned premiums under insurance
policies now or subsequently obtained by Mortgagor relating to the Real
Estate or Equipment, (ii) any such insurance policies, (iii) all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth
below, and (iv) all awards and other compensation, including the
interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or
Equipment for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Real Estate or any easement or other right
therein, subject to the provisions relating to condemnation awards
generally set forth below;
(I) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "Contracts"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "Permits") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage;
(K) all accounts and revenues arising from the operation of
the Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E) are collectively referred to as the
"Premises", and those described in the foregoing clauses (A) through (L) are
collectively referred to as the "Mortgaged Property").
<PAGE> 6
31
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby granted unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed or as otherwise expressly provided in the Section of
this Mortgage entitled "Reconveyance of Mortgage".
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters that are set forth in Schedule B
of the title insurance policy or policies being issued to Mortgagee to insure
this Mortgage and any Liens expressly permitted under the Credit Agreement
(collectively, the "Permitted Exceptions") and Mortgagor shall warrant, defend
and preserve such title and the rights granted by this Mortgage thereon against
all claims of all persons and entities. Mortgagor further warrants that it has
the right to grant this Mortgage.
2. Payment of Indebtedness. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified in the Credit
Agreement and shall perform all the Obligations.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property, except to the extent
that failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements of every Governmental Authority applicable to Mortgagor or to any
of the Mortgaged Property and all covenants, restrictions, and conditions which
now or later may be applicable to any of the Mortgaged Property are collectively
referred to as the "Legal Requirements".
(b) From and after the date of this Mortgage, except as
expressly permitted under the Credit Agreement or herein, Mortgagor shall not by
act or omission permit, other than Permitted Exceptions, any building or other
improvement on any premises not subject to
<PAGE> 7
32
this Mortgage to rely on the Premises or any part thereof or any interest
therein to fulfill any Legal Requirement, and Mortgagor hereby assigns to
Mortgagee any and all rights to give consent for all or any portion of the
Premises or any interest therein to be so used. Mortgagor shall not by act or
omission impair the integrity of any of the Real Estate as a single zoning lot
separate and apart from all other premises. Mortgagor represents that each
parcel of the Real Estate constitutes a legally subdivided lot, in compliance
with all subdivision laws and similar Legal Requirements, except to the extent
that failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Any act or omission by Mortgagor
which would result in a violation of any of the provisions of this subsection
shall be void.
4. Payment of Taxes and Other Impositions. (a) Except as
expressly permitted under the Credit Agreement, Mortgagor, prior to delinquency,
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall within 30 days after the request of Mortgagee
deliver to Mortgagee (i) original or copies of receipted bills and cancelled
checks or other evidence of payment of such Imposition if it is a real estate
tax or other public charge and (ii) evidence acceptable to Mortgagee in its
reasonable discretion showing the payment of any other such Imposition. If by
law any Imposition, at Mortgagor's option, may be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition),
Mortgagor may elect to pay such Imposition in such installments and shall be
responsible for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become delinquent, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the rate of interest described in
subsection 2.15(c) of the Credit Agreement (the "Default Rate"). Any sums paid
by Mortgagee in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate as
set forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any taxes assessed against the Mortgaged Property
or any part thereof, and shall not claim any deduction from the taxable value of
the Mortgaged Property by reason of this Mortgage.
<PAGE> 8
33
(d) Mortgagor shall have the right pursuant to subsection 7.3
of the Credit Agreement to contest in good faith to the amount or validity of
any Imposition by appropriate proceedings diligently conducted with reserves in
conformity with GAAP, provided that Mortgagor shall demonstrate to Mortgagee's
reasonable satisfaction that such proceedings shall operate conclusively to
prevent the sale of the Mortgaged Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings.
(e) Upon written notice to Mortgagor, Mortgagee during the
continuance of an Event of Default (as defined below) shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss (provided, however, that the maintenance of insurance
against earthquake, windstorm, flood and freeze risks shall be subject
to availability of such insurance coverage on commercially reasonable
terms). The policy shall include building ordinance law endorsements
and the policy limits shall be automatically reinstated after each loss
(other than with respect to flood and earthquake coverage which shall
be reinstated on a commercially reasonable basis);
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury or
death, or property damage relating to any one occurrence plus such
excess limits as Mortgagee shall reasonably request from time to time;
(iii) when and to the extent reasonably required by Mortgagee,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality
or localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy shall include
coverage for independent contractors and completed operations. The
completed operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on an
<PAGE> 9
34
occurrence basis against claims for personal injury, including, without
limitation, bodily injury, and death, and property damage resulting
from Mortgagor's negligence or other behavior for which Mortgagor may
be adjudged tortiously liable, subject to standard policy terms,
conditions and exclusions, occurring on, in or about the Premises and
the adjoining streets, sidewalks and passageways, such insurance to
afford immediate minimum protection to a limit of not less than that
reasonably required by Mortgagee with respect to personal injury,
bodily injury or death to any one or more persons or damage to
property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts no less than the limits
established by law, or in the case of employer's liability insurance,
no less than $500,000, provided that Mortgagor may self-insure any or
all workers' compensation liabilities;
(vi) during the course of any construction, addition,
alteration or repair of the Improvements, builder's risk completed
value property insurance form against "all risks of physical loss"
(subject to standard policy exclusions), including collapse, water
damage, flood and earthquake and transit coverage, during construction
or repairs of the Improvements, with deductible approved by Mortgagee
in its reasonable discretion, in reporting form, covering the total
replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the
case of construction); provided, however, that the maintenance of
insurance against earthquake and flood risks shall be subject to
availability of such insurance coverage on commercially reasonable
terms;
(vii) boiler and machinery property insurance covering
pressure vessels, air tanks, boilers, machinery, pressure piping,
heating, air conditioning and elevator equipment and escalator
equipment, provided the Improvements contain equipment of such nature,
in such amounts as are reasonably satisfactory to Mortgagee but not
less than the lesser of $1,000,000 or 10% of the value of the
Improvements;
(viii) if any portion of the Premises are located in an area
identified in the Federal Register as having special flood hazards by
the Secretary of Housing and Urban Development or other applicable
agency, flood insurance covering any parcel of the Mortgaged Property
which contains improvements in an amount satisfactory to Mortgagee in
its reasonable discretion, but in no event less than the maximum limit
of coverage available with respect to the particular type of property
under the National Flood Insurance Act of 1968, as amended and with a
term ending not later than the maturity of the Indebtedness and
Mortgagee shall receive confirmation that Mortgagor has received the
notice required pursuant to Section 208.8(e)(3) of Regulation H of the
Board of Governors of The Federal Reserve System; and
(ix) such other insurance in such amounts as Mortgagee may
reasonably request from time to time.
<PAGE> 10
35
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or, in the case of
property and boiler and machinery insurance, materially amended without 30-days'
prior written notice to Mortgagee, (ii) with respect to all property insurance,
subject to availability on commercially reasonable terms, provide for
deductibles not to exceed $250,000, other than with respect to (a) flood,
freeze, windstorm and earthquake perils for which deductibles shall not exceed
the greater of $500,000 or 5% of values at risk per location involved in loss
and (b) boiler and machinery coverage for which deductibles shall not exceed the
greater of $500,000 or five times 100% of the daily time element value, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee in its reasonable discretion), with loss payable
solely to Mortgagee (modified, if necessary and to the extent available under
such policy, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee in its reasonable discretion and be written by insurance
companies having an A.M. Best Company, Inc. rating of A- or higher and a
financial size category of not less than VII, or otherwise as approved by
Mortgagee in its reasonable discretion and (iii) contain a "manuscript"
endorsement providing that Mortgagor may not unilaterally cancel such policy
without Mortgagee's prior written consent. Liability insurance policies shall
name Mortgagee as an additional insured and contain a waiver of subrogation
against Mortgagee; all such policies shall indemnify and hold Mortgagee harmless
from all liability claims occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, subject to standard policy terms,
conditions and exclusions. The amounts of each insurance policy and the form of
each such policy shall at all times be satisfactory to Mortgagee in its
reasonable discretion. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, Mortgagor shall immediately obtain new or additional insurance
satisfactory to Mortgagee in its reasonable discretion. Mortgagor shall not take
out any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise satisfactory to Mortgagee in
all respects in its reasonable discretion.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee in its reasonable discretion, together with a copy of
the declaration page for each such policy. Mortgagor shall (i) pay as they
become due all premiums for such insurance, (ii) not later than seven days prior
to the expiration of each policy to be furnished pursuant to the provisions of
this Section, deliver a renewed policy or policies, or certificates of insurance
acceptable to Mortgagee, in its reasonable discretion, or duplicate original or
originals thereof. Upon the reasonable request of Mortgagee, Mortgagor shall
cause its insurance underwriter or broker to certify to Mortgagee in writing
that all the requirements of this Mortgage governing insurance have been
satisfied.
<PAGE> 11
36
(c) If Mortgagor is in default of its obligations to insure or
deliver any such policy or policies, or certificates of insurance acceptable to
Mortgagee, in its reasonable discretion, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate and the same shall be deemed to be secured by this Mortgage
and shall be collectible in the same manner as the Indebtedness secured by this
Mortgage.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the Morgan & Swift Building Cost Index to determine whether
there shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall in all material respects comply
with and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Mortgagor or to any of the
Mortgaged Property or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Mortgaged Property.
Mortgagor shall not use or permit the use of the Mortgaged Property in any
manner which would permit any insurer to cancel any insurance policy or void
coverage required to be maintained by this Mortgage.
(f) (i) If the Mortgaged Property, or any part thereof, shall
be destroyed or damaged by fire or any other casualty, whether insured
or uninsured, or in the event any claim is made against Mortgagor for
any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall promptly give notice thereof to
Mortgagee.
(ii) If the Mortgaged Property is damaged by fire or other
casualty and the cost to repair such damage is less than $1,000,000,
then provided that no Event of Default shall have occurred and be
continuing, Mortgagor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss may be paid over to Mortgagor;
provided that Mortgagor shall, promptly after any such damage, repair
such damage to the extent required by subsection 6.5 of the Credit
Agreement regardless of whether any insurance proceeds have been
received or whether such proceeds, if received, are sufficient to pay
for the costs of repair.
(iii) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the limit in
Section 5(f)(ii) above, or if an Event of Default shall have occurred
and be continuing, then Mortgagor authorizes and empowers Mortgagee, at
Mortgagee's option and in Mortgagee's reasonable discretion, as
attorney-in-fact for Mortgagor, to make proof of loss, to adjust and
compromise any claim under any insurance policy, to appear in and
prosecute any action arising from
<PAGE> 12
37
any policy, to collect and receive insurance proceeds and to deduct
therefrom Mortgagee's reasonable expenses incurred in the collection
process. Each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to Mortgagee. Mortgagee
shall have the right to require Mortgagor to repair or restore the
Mortgaged Property to the extent required by subsection 6.5 of the
Credit Agreement, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to such repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee may be applied by Mortgagee toward reimbursement of all
reasonable costs and expenses of Mortgagee in collecting such proceeds,
and the balance, at Mortgagee's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of
maturity, if payable in installments) and interest due or to become due
under the Notes, the Credit Agreement or the other Loan Documents, to
fulfill any other Obligation of Mortgagor, to the restoration or repair
of the property damaged, or released to Mortgagor. Application by
Mortgagee of any insurance proceeds toward the last maturing
installments of principal and interest due or to become due on the
Loans shall not excuse Mortgagor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce
the amount of such payments. In the event Mortgagee elects to release
such proceeds to Mortgagor, Mortgagor shall be obligated to use such
proceeds to restore or repair the Mortgaged Property to the extent
required by subsection 6.5 of the Credit Agreement.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force, to the extent assignable or transferable, shall pass to
the purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee, during the
continuance of an Event of Default, shall be entitled to require Mortgagor to
pay monthly in advance to Mortgagee the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Mortgagee may commingle such funds with
its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
(i) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits and aggregates in such blanket policy applicable to the Premises
and the other Mortgaged Property, (B) each such blanket policy shall include an
endorsement providing that, in the event of a loss resulting from an insured
peril, insurance proceeds shall be allocated to the Mortgaged Property in an
amount equal to the coverages required to be maintained by Mortgagor as provided
above (subject to applicable sublimits and aggregates) and (C) the protection
afforded under any such blanket policy shall be no less than that which
<PAGE> 13
38
would have been afforded under a separate policy or policies relating only to
the Mortgaged Property (subject to applicable sublimits and aggregates).
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions and except as otherwise permitted
pursuant to the terms of the Credit Agreement, Mortgagor shall not further
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to this Mortgage and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may
be otherwise expressly permitted under the Credit Agreement, Mortgagor shall not
sell, transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. To the extent required under subsection 6.5 of the Credit
Agreement, Mortgagor shall repair, restore, replace or rebuild promptly any part
of the Premises which may be damaged or destroyed by any casualty whatsoever to
a condition substantially equivalent to its condition prior to the damage or
destruction. Except as permitted by the Credit Agreement, the Improvements shall
not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee, provided that Mortgagor may make
alterations or additions without the consent of Mortgagee that do not materially
reduce the value of the Mortgaged Property.
(b) Mortgagee and any persons authorized by Mortgagee shall,
upon reasonable notice and at any reasonable time, have the right to enter and
inspect the Premises and the right to inspect all work done, labor performed and
materials furnished in and about the Improvements and the right to inspect and
make copies, to the extent reasonable, of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
(c) Except as permitted under subsection 6.3 of the Credit
Agreement, Mortgagor shall pay or cause to be paid prior to delinquency, all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Promptly upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's
option and in Mortgagee's reasonable discretion, as attorney-in-fact for
Mortgagor, to commence, appear in and prosecute, in Mortgagee's or Mortgagor's
name, any action or proceeding relating to any condemnation of the Mortgaged
Property, or any portion thereof, and to settle or compromise any claim in
connection with such condemnation upon the occurrence and during the continuance
of an Event of Default. If Mortgagee elects not to participate in such
condemnation proceeding,
<PAGE> 14
39
then Mortgagor shall, at its expense, diligently prosecute any such proceeding
and shall consult with Mortgagee, its attorneys and experts and cooperate with
them in any defense of any such proceedings. All awards and proceeds of
condemnation shall be applied in the same manner as insurance proceeds, and to
the extent such awards and proceeds exceed $1,000,000 and no Event of Default
shall have occurred and be continuing, such awards and proceeds shall be
assigned to Mortgagee to be applied in the same manner as insurance proceeds, as
provided above in subsection 5(f)(iii) above, and Mortgagor agrees to execute
any such assignments of all such awards as Mortgagee may request.
10. Restoration. If Mortgagee elects or is required hereunder
to release funds to Mortgagor for restoration of any of the Mortgaged Property,
then such restoration shall be performed in accordance with such conditions as
Mortgagee shall impose in its reasonable discretion, and as are customarily
imposed by construction lenders.
11. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld or delayed, execute
or permit to exist any Lease of any of the Mortgaged Property, except for
Permitted Exceptions and except as may be otherwise expressly permitted under
the Credit Agreement.
(b) As to any Lease consented to by Mortgagee under subsection
11(a) above, Mortgagor shall:
(i) promptly perform in all material respects all of the
provisions of the Lease on the part of the lessor thereunder to be
performed;
(ii) promptly enforce all of the material provisions of the
Lease on the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 business days after a reasonable
request by Mortgagee, any right to request from the lessee a
certificate with respect to the status thereof;
(v) promptly deliver to Mortgagee copies of any notices of
default which Mortgagor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Mortgagee a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's
reasonable request, if permitted under such Lease, an assignment of the
Mortgagor's interest under such Lease.
<PAGE> 15
40
(c) Mortgagor shall deliver to Mortgagee, within 10 business
days after a reasonable request by Mortgagee, a written statement, certified by
Mortgagor as being true, correct and complete, containing the names of all
lessees and other occupants of the Mortgaged Property, the terms of all Leases
and the spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the default;
such statement shall be accompanied by such other information as Mortgagee may
reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage the lessee under each Lease shall, if requested by Mortgagee
or any other person succeeding to the interest of Mortgagee as a result of such
enforcement, and if provided, at such lessee's request, with a nondisturbance
agreement from Mortgagee or such person, attorn to Mortgagee or to such person
and shall recognize Mortgagee or such successor in interest as lessor under the
Lease without change in the provisions thereof; provided however, that Mortgagee
or such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the Premises or any portion
thereof; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Mortgagee or such successor in interest.
Each lessee or other occupant, upon request by Mortgagee or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Mortgagor agrees that each Lease entered into after the
date of this Mortgage shall include language to the effect of subsections (d)
and (e) of this Mortgage Section and language to the effect that if any act or
omission of Mortgagor would give any lessee under such Lease the right,
immediately or after lapse of a period of time, to cancel or terminate such
Lease, or to abate or offset against the payment of rent or to claim a partial
or total eviction, such lessee shall not exercise such right until it has given
written notice of such act or omission to Mortgagee and until a reasonable
period for remedying such act or omission shall have elapsed following the
giving of such notice without a remedy being effected; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of
<PAGE> 16
41
each Lease in recordable form) as may be reasonably required by Mortgagee to
confirm the rights or benefits conferred on Mortgagee by this Mortgage.
13. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee and the same shall be
secured by this Mortgage and shall be an encumbrance on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the date of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
14. Events of Default. The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, the Indebtedness
and all other amounts payable with respect to the Loans, the Letters of Credit,
the Credit Agreement, this Mortgage and the other Security Documents shall
become due and payable as provided in the Credit Agreement. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Mortgagee may determine, in its
sole discretion, without impairing or otherwise affecting the other rights and
remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law,
(A) institute and maintain an action of judicial foreclosure against
all or any part of the Mortgaged Property (as described below), (B)
institute and maintain an action on the Notes, the Credit Agreement or
the other Security Documents, (C) sell all or part of the Mortgaged
Property (Mortgagor expressly granting to Mortgagee the power of sale),
or (D) take such other action at law or in equity for the enforcement
of this Mortgage or any of the Loan Documents as the law may allow.
Mortgagee may proceed in any such action to final judgment and
execution thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including, without
limitation, reasonable attorneys' fees and disbursements. Interest at
the Default Rate shall be due on any judgment obtained by Mortgagee
from the date of judgment until actual payment is made of the full
amount of the judgment.
(ii) Mortgagee may personally, or by its agents, attorneys and
employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other
<PAGE> 17
42
collateral as security for the Indebtedness and Obligations enter into
and upon the Mortgaged Property and each and every part thereof and
exclude Mortgagor and its agents and employees therefrom without
liability for trespass, damage or otherwise (Mortgagor hereby agreeing
to surrender possession of the Mortgaged Property to Mortgagee upon
demand at any such time) and use, operate, manage, maintain and control
the Mortgaged Property and every part thereof. Following such entry and
taking of possession, Mortgagee shall be entitled, without limitation,
(x) to lease all or any part or parts of the Mortgaged Property for such
periods of time and upon such conditions as Mortgagee may, in its
discretion, deem proper, (y) to enforce, cancel or modify any Lease and
(z) generally to execute, do and perform any other act, deed, matter or
thing concerning the Mortgaged Property as Mortgagee shall deem
appropriate as fully as Mortgagor might do.
Mortgagor acknowledges that it has been advised that Mortgagee
recognizes the value of the security covered hereby is inextricably intertwined
with the effectiveness of the management, maintenance and general operation of
the Mortgaged Property, and that Mortgagee would not extend the Indebtedness
secured hereby unless it could be assured that such Mortgagee would have the
right to take possession of the Mortgaged Property in order to manage or to
control management thereof, and to enjoy the income, rents and profits
therefrom, immediately upon default by Mortgagor hereunder, notwithstanding that
foreclosure proceedings may not have been instituted, or are pending, or the
redemption period may not have expired. Accordingly, Mortgagor hereby knowingly,
intelligently and voluntarily waives all right to possession of the Mortgaged
Property from and after the occurrence of an Event of Default hereunder, upon
demand for possession by Mortgagee, and Mortgagor agrees not to assert any
objection or defense to Mortgagee's request or petition to a court for
possession. The rights hereby conferred upon Mortgagee have been agreed upon
prior to any default by Mortgagor hereunder and the exercise by Mortgagee of any
such rights shall not be deemed to put Mortgagee in the status of a "mortgagee
in possession". Mortgagor acknowledges that this provision is material to this
transaction and that Mortgagee would not extend the Indebtedness secured hereby
but for this paragraph.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a foreclosure
sale, the Real Estate may be sold, at Mortgagee's election, in one parcel or in
more than one parcel and if in more than one parcel the same may be divided as
Mortgagee may elect and Mortgagee is specifically empowered, (without being
required to do so, and in its sole and absolute discretion) to cause successive
sales of portions of the Mortgaged Property to be held. At the election of
Mortgagee, the Mortgaged Property may be offered first in parcels and then as a
whole, the offer producing the highest price for the entire property offered to
prevail. Mortgagor hereby waives any right to require any such sale to be made
in parcels or any right to select such parcels.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and notwithstanding
to the contrary any exculpatory or non-recourse language which may be contained
herein, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition
<PAGE> 18
43
and Mortgagee shall have the right to invoke any equitable right or remedy as
though other such rights and remedies were provided for in this Mortgage.
(d) In the event of a default because of the existence of any
lien upon the Mortgaged Property, Mortgagee shall have the right (without being
obligated to do so or to continue to do so), without notice to Mortgagor, to
advance on and for the account of Mortgagor such sums as Mortgagee in its sole
discretion deems necessary to cure such default or to induce the holder of any
such lien to forbear from exercising its rights thereunder. Notwithstanding
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
16. Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Notes and other
instruments evidencing the Indebtedness and any and all documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property,
without requiring the posting of a surety bond and without reference to the
adequacy or inadequacy of the value of the Mortgaged Property or the solvency or
insolvency of Mortgagor or any other party obligated for payment of all or any
part of the Indebtedness, and whether or not waste has occurred with respect to
the Mortgaged Property. Mortgagor hereby irrevocably consents to such
appointment and waives notice of any application therefor (except as may be
required by law). Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and duties
of Mortgagee in case of entry as provided in this Mortgage, including, without
limitation and to the extent permitted by law, the right to enter into leases of
all or any part of the Mortgaged Property, and shall continue as such and
exercise all such powers until the date of confirmation of sale of the Mortgaged
Property unless such receivership is sooner terminated.
18. Extension, Release, etc. (a) Without affecting the charge
of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the
<PAGE> 19
44
maturity or alter any of the terms of the Indebtedness or any guaranty thereof,
(iii) grant other indulgences, (iv) release or reconvey, or cause to be released
or reconveyed at any time at Mortgagee's option any parcel, portion or all of
the Mortgaged Property, (v) take or release any other or additional security for
any obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the encumbrance of this Mortgage until the encumbrance amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the encumbrance of this or any liens, rights,
powers or remedies of Mortgagee hereunder, and such liens, rights, powers and
remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid charge on the Mortgaged
Property for the amount secured hereby.
19. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"CODE") of the State in which the Mortgaged Property is located. If an Event of
Default shall occur under this Mortgage, then in addition to having any other
right or remedy available at law or in equity, Mortgagee shall have the option
of either (i) proceeding under the Code and exercising such rights and remedies
as may be provided to a secured party by the Code with respect to all or any
portion of the Mortgaged Property which is personal property (including, without
limitation, taking possession of and selling such property) or (ii) treating
such property as real property and proceeding with respect to both the real and
personal property constituting the Mortgaged Property; or in accordance with
Mortgagee's rights, powers and remedies with respect to the real property (in
which event the default provisions of the Code shall not apply). If Mortgagee
shall elect to proceed under the Code, then five days' notice of sale of the
personal property shall be deemed reasonable notice and the reasonable expenses
of retaking, holding, preparing for sale, selling and the like incurred by
Mortgagee shall include, but not be limited to, reasonable attorneys' fees and
legal expenses. At Mortgagee's request, during the continuance of an Event of
Default, Mortgagor shall assemble the personal property and make it available to
Mortgagee at a place designated by Mortgagee which is reasonably convenient to
both parties.
<PAGE> 20
45
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; (iv) the mailing addresses of Mortgagor and Mortgagee
are as set forth on the first page of this Mortgage; (v) Mortgagor's federal tax
identification number is 34-1658458 and (vi) Mortgagee's federal tax
identification number is 52-1128875. In addition, for purposes of Article 9 of
the Uniform Commercial Code, (i) Mortgagor is the "debtor", (ii) Mortgagee is
the "secured party" and (iii) information concerning the security interest
created hereby may be obtained from Mortgagee at its address on the first page
of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee in its reasonable
discretion, covering all or any part of the Mortgaged Property and will further
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Mortgagee may request in order to perfect,
preserve, maintain, continue or extend the security interest under and the
priority of this Mortgage and such security instrument. Mortgagor further agrees
to pay to Mortgagee on demand all reasonable costs and expenses incurred by
Mortgagee in connection with the preparation, execution, recording, filing and
re-filing of any such document and all reasonable costs and expenses of any
record searches for financing statements Mortgagee shall reasonably require. If
Mortgagor shall fail to furnish any financing or continuation statement within
10 days after request by Mortgagee, then pursuant to the provisions of the Code,
Mortgagor hereby authorizes Mortgagee, without the signature of Mortgagor, to
execute and file any such financing and continuation statements. The filing of
any financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this Mortgage
as real property, as set forth above.
20. Assignment of Rents. Mortgagor hereby absolutely and
unconditionally assigns, transfers, conveys and sets over to Mortgagee, the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for the purpose of collecting the same and to let the
Mortgaged Property or any part thereof and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents, letting the Mortgaged Property or any part thereof or
applying the Rents and Mortgagor shall be entitled to collect, receive, use and
retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to
<PAGE> 21
46
collect the Rents, any lease security deposits, and shall pay monthly in advance
to Mortgagee, or to any such receiver, the fair and reasonable rental value as
determined by Mortgagee for the use and occupancy of the Mortgaged Property or
of such part thereof as may be in the possession of Mortgagor or any affiliate
of Mortgagor, and upon default in any such payment Mortgagor and any such
affiliate will vacate and surrender the possession of the Mortgaged Property to
Mortgagee or to such receiver, and in default thereof may be evicted by summary
proceedings or otherwise. Mortgagor shall not accept prepayments of installments
of Rent to become due for a period of more than one month in advance (except for
security deposits and estimated payments of percentage rent, if any).
21. Trust Funds All lease security deposits of the Real Estate
shall be treated as trust funds not to be commingled with any other funds of
Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall furnish
Mortgagee satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Mortgagee under which such security deposits
are held, which statement shall be certified by Mortgagor.
22. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Mortgaged Property shall have no right to
terminate any Lease whether or not such Lease is subordinate to this Mortgage
nor shall any holder of any subordinate lien or subordinate mortgage join any
tenant under any Lease in any action to foreclose the lien or modify, interfere
with, disturb or terminate the rights of any tenant under any Lease. By
recordation of this Mortgage all subordinate lienholders under subordinate
mortgages are subject to and notified of this provision, and any action taken by
any such lienholder or mortgagee contrary to this provision shall be null and
void. Upon the occurrence of any Event of Default, Mortgagee may, in its sole
discretion and without regard to the adequacy of its security under this
Mortgage, apply all or any part of any amounts on deposit with Mortgagee under
this Mortgage against all or any part of the Indebtedness. Any such application
shall not be construed to cure or waive any Default or Event of Default or
invalidate any act taken by Mortgagee on account of such Default or Event of
Default.
23. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien or mortgage
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Mortgage shall have the right to declare the Indebtedness due on a date
to be specified by not less than 30 days' written notice to be given to
Mortgagor unless within such 30-day period Mortgagor shall assume as an
Obligation hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
24. Notices. Mortgagor and Mortgagee hereby request that a
copy of any notice of default and a copy of any notice of sale hereunder shall
be mailed to each of them at the addresses set forth herein.
<PAGE> 22
47
25. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate mortgage, lien or encumbrance.
Mortgagor's execution of any written agreement between Mortgagor and Mortgagee
shall not be required for the effectiveness thereof as between Mortgagor and
Mortgagee.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
27. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisement, valuation, stay, exemption, extension or
redemption, or requiring foreclosure of this Mortgage before exercising any
other remedy granted hereunder and Mortgagor, for Mortgagor and its successors
and assigns, and for any and all persons ever claiming any interest in the
Mortgaged Property, to the extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisement, stay of execution, notice of
election to mature or declare due the whole of the secured indebtedness and
marshalling in the event of foreclosure of the liens hereby created.
28. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by deed of trust, mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, shall prejudice or in any manner affect
Mortgagee's right to realize upon or enforce any other security now or hereafter
held by Mortgagee, it being agreed that Mortgagee shall be entitled to enforce
this Mortgage and any other security now or hereafter held by Mortgagee in such
order and manner as Mortgagee may determine in its absolute discretion. No
remedy herein conferred upon or reserved to Mortgagee is intended
<PAGE> 23
48
to be exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which
either may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee. In no event shall Mortgagee, in the exercise of the remedies provided
in this Mortgage (including, without limitation, in connection with the
assignment of Rents, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession," and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.
29. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold or be the mortgagee of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Mortgagor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Indebtedness (including the Mortgaged
Property), which action may be brought or consolidated in the courts of any
county in which any of such collateral is located. Mortgagor acknowledges that
the right to maintain a consolidated foreclosure action is a specific inducement
to Mortgagee to extend the Indebtedness, and Mortgagor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any objections to the laying of venue or
based on the grounds of forum non conveniens which it may now or hereafter have.
Mortgagor further agrees that if Mortgagee shall be prosecuting one or more
foreclosure or other proceedings against a portion of the Mortgaged Property or
against any collateral other than the Mortgaged Property, which collateral
directly or indirectly secures the Indebtedness, or if Mortgagee shall have
obtained a judgment of foreclosure or similar judgment against such collateral,
then, whether or not such proceedings are being maintained or judgments were
obtained in or outside the State in which the Premises are located, Mortgagee
may commence or continue any foreclosure proceedings and exercise its other
remedies granted in this Mortgage against all or any part of the Mortgaged
Property and Mortgagor waives any objections to the commencement or continuation
of a foreclosure of this Mortgage or exercise of any other remedies hereunder
based on such other proceedings or judgments, and waives any right to seek to
dismiss, stay, remove, transfer or consolidate either any action under this
Mortgage or such other proceedings on such basis. Neither the commencement nor
continuation of proceedings to foreclose this Mortgage nor the exercise of any
other rights hereunder nor the recovery of any judgment by Mortgagee in any such
proceedings shall prejudice, limit or preclude Mortgagee's right to commence or
continue one or more foreclosure or other proceedings or obtain a judgment
against any other collateral (either in or outside the State in which the Real
Estate is located) which directly or indirectly secures the Indebtedness, and
Mortgagor expressly waives any objections to the commencement of, continuation
of, or entry of a judgment in such other proceedings or
<PAGE> 24
49
exercise of any remedies in such proceedings based upon any action or judgment
connected to this Mortgage, and Mortgagor also waives any right to seek to
dismiss, stay, remove, transfer or consolidate either such other proceedings or
any sale or action under this Mortgage on such basis. It is expressly understood
and agreed that to the fullest extent permitted by law, Mortgagee may, at its
election, cause the sale of all collateral which is the subject of a single
foreclosure action at either a single sale or at multiple sales conducted
simultaneously and take such other measures as are appropriate in order to
effect the agreement of the parties to dispose of and administer all collateral
securing the Indebtedness (directly or indirectly) in the most economical and
least time-consuming manner.
30. Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its respective successors and assigns, and no other person or
entity shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants, any or
all of which may be freely waived in whole or in part by Mortgagee at any time
if in its sole discretion such waiver is deemed advisable. All such covenants of
Mortgagor shall run with the land and bind Mortgagor, the successors and assigns
of Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee,
and its respective successors and assigns. The word "Mortgagor" shall be
construed as if it read "Mortgagors" whenever the sense of this Mortgage so
requires and if there shall be more than one Mortgagor, the obligations of the
Mortgagors shall be joint and several.
31. No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be deemed to be a waiver of any of the terms and provisions
hereof, and Mortgagee, notwithstanding any such failure, shall have the right
thereafter to insist upon the strict performance by Mortgagor of any and all of
the terms and provisions of this Mortgage to be performed by Mortgagor.
Mortgagee may release, regardless of consideration and without the necessity for
any notice to or consent by the mortgagee of any subordinate mortgage or the
holder of any subordinate lien on the Mortgaged Property, any part of the
security held for the obligations secured by this Mortgage without, as to the
remainder of the security, in anywise impairing or affecting the lien of this
Mortgage or the priority of such lien over any subordinate lien or mortgage.
32. Governing Law, etc. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by its terms the
Credit Agreement shall be governed and construed in accordance with the laws of
the State of New York, without regard to principles of conflict of law, and for
purposes of consistency, Mortgagor agrees that in any in personam proceeding
related to this Mortgage the rights of the parties to this Mortgage shall also
be governed by and construed in accordance with the laws of the State of New
York governing contracts made and to be performed in that State, without regard
to principles of conflict of law.
<PAGE> 25
50
33. Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim brought
therein.
34. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Mortgage shall be used interchangeably in singular or plural form and
the word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein," the
word "Mortgagee" shall mean "Mortgagee or any successor Administrative Agent,"
the word "Notes" shall mean "the notes that may from time to time be given
pursuant to the terms of the Credit Agreement or any other evidence of
indebtedness secured by this Mortgage" the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa. The captions
in this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
35. Reconveyance of Mortgage. Upon payment in full of the
Indebtedness, the termination of all Commitments under the Credit Agreement
secured hereby and the compliance with the Obligations then required to be
complied with, Mortgagee shall execute and deliver the encumbrance of this
Mortgage. If any of the Mortgaged Property shall be sold, transferred or
otherwise disposed of by Mortgagor in a transaction expressly permitted by the
Credit Agreement, then Mortgagee shall execute and deliver to Mortgagor (at the
sole cost and expense of Mortgagor) all releases, reconveyances or other
documents reasonably necessary or desirable for the release of such Mortgaged
Property from the encumbrance of this Mortgage.
36. Conflict with Credit Agreement. In the event of any
conflict or inconsistency between the terms and provisions of this Mortgage and
the terms and provisions of the Credit Agreement, the terms and provisions of
the Credit Agreement shall govern, other than with respect to the Section of
this Mortgage captioned "Governing Law, etc.". By their execution of the Credit
Agreement, each Lender hereby agrees that it shall not have the right to
institute any suit for enforcement of Notes or any other Indebtedness secured by
this Mortgage or any other Security Document, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver or loss of the Lien
of this Mortgage or any other Security Document or impede or delay the
enforcement of the Lien of this Mortgage or any other Security Document.
37. Revolving Credit Loans. A portion of the Indebtedness
secured by this Mortgage is a revolving line of credit under which advances,
payments and readvances may be made from time to time.
<PAGE> 26
51
This Mortgage has been duly executed by Mortgagor on the date
first above written.
DAY INTERNATIONAL, INC.
By: ______________________________
Name:
Title:
Attest:
By: ______________________________
Name:
Title:
ATTEST:
Signed, sealed and delivered in our Presence:
_________________________
Name:
_________________________
Name:
<PAGE> 27
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
PERSONALLY APPEARED before me the undersigned witness who
signed above and who being first duly sworn deposes and says that s/he saw the
within named DAY INTERNATIONAL, INC., by ________________, its ________________,
attested by ________________, its ________________, sign, seal and as its act
and deed deliver the within-written Mortgage for the uses and purposes therein
mentioned and that s/he with the other witness who signed above witnessed the
execution thereof.
____________________________
Signature of Proving Witness
SWORN TO BEFORE ME this ___ day of January, 1998
____________________________
Notary Public for _____________
My commission expires ____________
<PAGE> 28
Schedule A
Greenville, South Carolina
All that certain piece, parcel or tract of land, with any and all improvements
thereon, lying, being and situate on the northwest side of Drypocket Drive, in
Geenville County, South Carolina, containing 2.55 acres, more or less, and
having such courses and distances, metes and bounds as will be shown by
reference to a plat entitled "Property of Dayco Corporation", William B. Fant,
RLS, dated August, 1978, recorded in Plat Book 6-W at Page ( in the RMC Office
for Greenville County, which plat is incorporated herein by reference.
<PAGE> 1
Exhibit 4.12
Prepared by Dennis Kiely, Esq.
[North Carolina]
DEED OF TRUST, ASSIGNMENT OF RENT
& SECURITY AGREEMENT
from
DAY INTERNATIONAL, INC., Grantor
to
JOSEPH M. RITTER, Trustee
for the use and
benefit of
SOCIETE GENERALE, as Administrative Agent, Beneficiary
(COLLATERAL IS OR INCLUDES FIXTURES)
DATED AS OF JANUARY 16, 1997
After recording, please return to:
SIMPSON THACHER & BARTLETT
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Dennis D. Kiely, Esq.
<PAGE> 2
[North Carolina]
This DEED OF TRUST, dated as of January 16, 1997 is made by
DAY INTERNATIONAL, INC., a Delaware corporation ("Grantor"), whose address is
333 West First Street, Dayton, Ohio 45401, to JOSEPH M. RITTER ("Trustee") whose
address is c/o First American Title Insurance Company, 100 North Greene Street,
Greensboro, North Carolina 27420, for the use and benefit of SOCIETE GENERALE,
whose address is 1221 Avenue of the Americas, New York, New York 10020, as
Administrative Agent (in such capacity, "Beneficiary") for the several banks and
other financial institutions (the "Lenders") from time to time parties to the
Senior Secured Credit Agreement dated as January 16, 1997, (as the same may be
amended, supplemented, waived or otherwise modified from time to time the
"Credit Agreement") among Societe Generale Securities Corporation, as Arranger,
Beneficiary, the Lenders, and Day International Group, Inc. (the "Borrower").
References to this Deed of Trust shall mean this instrument and any and all
renewals, modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Credit Agreement.
Background
A. Grantor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "Improvements"), being collectively referred to as the
"Real Estate").
B. Pursuant to the terms of the Credit Agreement, the Lenders
have agreed among other things, to make the Loans and the Issuing Lender
has agreed to issue, and the L/C Participants have agreed to acquire, undivided
participating interests in the Letters of Credit for the account of the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement,
which conditions include the grant by Grantor to Beneficiary of all estate,
right, title and interest of Grantor in and to the Real Estate pursuant to the
terms hereof.
C. It is a condition precedent to the agreement of each Lender
to make Loans and issue Letters of Credit under the Credit Agreement that
Grantor executes and delivers this Deed of Trust. Grantor, a subsidiary of
Borrower, will receive substantial direct and indirect benefit from the
extensions of credit made to Borrower pursuant to the Credit Agreement.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor agrees that to secure:
<PAGE> 3
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans (as they may be evidenced by the Notes from
time to time) and all other obligations (including the Reimbursement
Obligations) and liabilities of Grantor to Beneficiary, the Issuing
Lender and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, the Letters of Credit, the Security Documents,
any Guarantee Obligation of Grantor as to which any Lender is a
beneficiary, any Permitted Hedging Arrangement with any Lender or any
banking affiliate of any Lender (whether entered into directly, or
guaranteed by Grantor), the Guarantee and Collateral Agreement dated as
of the date hereof between Grantor, Holdings and Beneficiary (the
"Guarantee") or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent, the Issuing
Lender or any Lender that are required to be paid by any Loan Party
pursuant to the Credit Agreement) (the items set forth above being
referred to collectively as the "Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Grantor (the "Obligations") under or pursuant to the
provisions of the Credit Agreement, the Loans, this Deed of Trust, the
Guarantee, any other document securing payment of the Indebtedness (the
"Security Documents") and any amendments, supplements, extensions,
renewals, restatements, replacements or modifications of any of the
foregoing (the Credit Agreement, the Loans, the Letters of Credit, this
Deed of Trust, the Guarantee and all other documents and instruments
from time to time evidencing, securing or guaranteeing the payment of
the Indebtedness or the performance of the Obligations, as any of the
same may be amended, supplemented, extended, renewed, restated,
replaced or modified from time to time, are collectively referred to as
the "Loan Documents");
GRANTOR HEREBY CONVEYS TO TRUSTEE AND HEREBY GRANTS, ASSIGNS, TRANSFERS AND SETS
OVER TO TRUSTEE, IN TRUST WITH POWER OF SALE FOR THE USE AND BENEFIT OF
BENEFICIARY, AND GRANTS BENEFICIARY AND TRUSTEE A SECURITY INTEREST IN:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Grantor, in possession or expectancy, in and to the Real Estate or
any part thereof;
<PAGE> 4
29
(C) all right, title and interest of Grantor in, to and under
all easements, rights of way, gores of land, streets, ways, alleys,
passages, sewer rights, waters, water courses, water and riparian
rights, development rights, air rights, mineral rights and all estates,
rights, titles, interests, privileges, licenses, tenements,
hereditaments and appurtenances belonging, relating or appertaining to
the Real Estate, and any reversions, remainders, rents, issues, profits
and revenue thereof and all land lying in the bed of any street, road
or avenue, in front of or adjoining the Real Estate to the center line
thereof;
(D) all right, title and interest of Grantor in and to all of
the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Grantor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus
and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind
and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Grantor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Grantor or constructed, assembled or placed by Grantor on the Real
Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials to be used by Grantor whether stored at the Real
Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Grantor;
(F) all right, title and interest of Grantor in, to and under
all leases, subleases, underlettings, concession agreements, management
agreements, licenses and other agreements relating to the use or
occupancy of the Real Estate or the Equipment or any part thereof, now
existing or subsequently entered into by Grantor and whether written or
oral and all guarantees of any of the foregoing (collectively, as any
of the foregoing may be amended, restated, extended, renewed or
modified from time to time, the "Leases"), and all rights of Grantor in
respect of cash and securities deposited thereunder and the right to
receive and collect the revenues, income, rents,
<PAGE> 5
30
issues and profits thereof, together with all other rents, royalties,
issues, profits, revenue, income and other benefits arising from the
use and enjoyment of the Trust Property (as defined below)
(collectively, the "Rents");
(G) all books and records relating to or used in connection
with the operation of the Real Estate or the Equipment or any part
thereof;
(H) all right, title and interest of Grantor, to the extent
assignable, in and to (i) all unearned premiums under insurance
policies now or subsequently obtained by Grantor relating to the Real
Estate or Equipment, (ii) any such insurance policies, (iii) all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth
below, and (iv) all awards and other compensation, including the
interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or
Equipment for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Real Estate or any easement or other right
therein, subject to the provisions relating to condemnation awards
generally set forth below;
(I) all right, title and interest of Grantor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Grantor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "Contracts"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "Permits") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Beneficiary as provided in this Deed of Trust ;
(K) all accounts and revenues arising from the operation of
the Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Grantor and described in the foregoing
clauses (A) through (E) are collectively referred to as the "Premises", and
those described in the foregoing clauses (A) through (L) are collectively
referred to as the "Trust Property").
<PAGE> 6
31
TO HAVE AND TO HOLD the Trust Property and the rights and
privileges hereby granted unto Trustee, its successors and assigns for the uses
and purposes set forth, until the Indebtedness is fully paid and the Obligations
fully performed or as otherwise expressly provided in the Section of this Deed
of Trust entitled "Reconveyance of Deed of Trust".
Terms and Conditions
Grantor further represents, warrants, covenants and agrees
with Beneficiary as follows:
1. Warranty of Title. Grantor warrants that Grantor has good
title to the Real Estate in fee simple and good title to the rest of the Trust
Property, subject only to the matters that are set forth in Schedule B of the
title insurance policy or policies being issued to Beneficiary to insure this
Deed of Trust and any Liens expressly permitted under the Credit Agreement
(collectively, the "Permitted Exceptions") and Grantor shall warrant, defend and
preserve such title and the rights granted by this Deed of Trust thereon against
all claims of all persons and entities. Grantor further warrants that it has the
right to grant this Deed of Trust.
2. Payment of Indebtedness. Grantor shall pay the Indebtedness
at the times and places and in the manner specified in the Credit Agreement and
shall perform all the Obligations.
3. Requirements.
(a) Grantor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the Trust
Property and all covenants, restrictions and conditions now or later of record
which may be applicable to any of the Trust Property, or to the use, manner of
use, occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of any of the Trust Property, except to the extent that failure
to comply therewith, in the aggregate, would not reasonably be expected to have
a Material Adverse Effect. All present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements of
every Governmental Authority applicable to Grantor or to any of the Trust
Property and all covenants, restrictions, and conditions which now or later may
be applicable to any of the Trust Property are collectively referred to as the
"Legal Requirements".
(b) From and after the date of this Deed of Trust, except as
expressly permitted under the Credit Agreement or herein, Grantor shall not by
act or omission permit, other than Permitted Exceptions, any building or other
improvement on any premises not
<PAGE> 7
32
subject to this Deed of Trust to rely on the Premises or any part thereof or any
interest therein to fulfill any Legal Requirement, and Grantor hereby assigns to
Beneficiary any and all rights to give consent for all or any portion of the
Premises or any interest therein to be so used. Grantor shall not by act or
omission impair the integrity of any of the Real Estate as a single zoning lot
separate and apart from all other premises. Grantor represents that each parcel
of the Real Estate constitutes a legally subdivided lot, in compliance with all
subdivision laws and similar Legal Requirements, except to the extent that
failure to comply therewith, in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. Any act or omission by Grantor which would
result in a violation of any of the provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Except as
expressly permitted under the Credit Agreement, Grantor, prior to delinquency,
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Trust Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Trust Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Grantor shall within 30 days after the request of Beneficiary
deliver to Beneficiary (i) original or copies of receipted bills and cancelled
checks or other evidence of payment of such Imposition if it is a real estate
tax or other public charge and (ii) evidence acceptable to Beneficiary in its
reasonable discretion showing the payment of any other such Imposition. If by
law any Imposition, at Grantor's option, may be paid in installments (whether or
not interest shall accrue on the unpaid balance of such Imposition), Grantor may
elect to pay such Imposition in such installments and shall be responsible for
the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Beneficiary under this Deed of Trust or otherwise, without notice or demand to
Grantor, to pay any Imposition after the date such Imposition shall have become
delinquent, and to add to the Indebtedness the amount so paid, together with
interest from the time of payment at the rate of interest described in
subsection 2.15(c) of the Credit Agreement (the "Default Rate"). Any sums paid
by Beneficiary in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Deed of Trust, and (ii)
payable on demand by Grantor to Beneficiary together with interest at the
Default Rate as set forth above.
(c) Grantor shall not claim, demand or be entitled to receive
any credit or credits toward the satisfaction of this Deed of Trust or on any
interest payable thereon for any taxes assessed against the Trust Property or
any part thereof, and shall not claim any deduction from the taxable value of
the Trust Property by reason of this Deed of Trust.
<PAGE> 8
33
(d) Grantor shall have the right pursuant to subsection 7.3 of
the Credit Agreement to contest in good faith to the amount or validity of any
Imposition by appropriate proceedings diligently conducted with reserves in
conformity with GAAP, provided that Grantor shall demonstrate to Beneficiary's
reasonable satisfaction that such proceedings shall operate conclusively to
prevent the sale of the Trust Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings.
(e) Upon written notice to Grantor, Beneficiary during the
continuance of an Event of Default (as defined below) shall be entitled to
require Grantor to pay monthly in advance to Beneficiary the equivalent of
1/12th of the estimated annual Impositions. Beneficiary may commingle such funds
with its own funds but Grantor shall be entitled to interest thereon at a rate
mutually agreed upon by Grantor and Beneficiary.
5. Insurance. (a) Grantor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss (provided, however, that the maintenance of insurance
against earthquake, windstorm, flood and freeze risks shall be subject
to availability of such insurance coverage on commercially reasonable
terms). The policy shall include building ordinance law endorsements
and the policy limits shall be automatically reinstated after each loss
(other than with respect to flood and earthquake coverage which shall
be reinstated on a commercially reasonable basis);
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury or
death, or property damage relating to any one occurrence plus such
excess limits as Beneficiary shall reasonably request from time to
time;
(iii) when and to the extent reasonably required by
Beneficiary, insurance against loss or damage by any other risk
commonly insured against by persons occupying or using like properties
in the locality or localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy shall include
coverage for independent contractors and completed operations. The
completed operations coverage shall stay in effect for two years after
construction of any Improvements has been completed. The policy shall
provide coverage on
<PAGE> 9
34
an occurrence basis against claims for personal injury, including,
without limitation, bodily injury, and death, and property damage
resulting from Grantor's negligence or other behavior for which Grantor
may be adjudged tortiously liable, subject to standard policy terms,
conditions and exclusions, occurring on, in or about the Premises and
the adjoining streets, sidewalks and passageways, such insurance to
afford immediate minimum protection to a limit of not less than that
reasonably required by Beneficiary with respect to personal injury,
bodily injury or death to any one or more persons or damage to
property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Grantor engaged on or with
respect to the Premises in such amounts no less than the limits
established by law, or in the case of employer's liability insurance,
no less than $500,000, provided that Grantor may self-insure any or all
workers' compensation liabilities;
(vi) during the course of any construction, addition, alteration or
repair of the Improvements, builder's risk completed value property
insurance form against "all risks of physical loss" (subject to
standard policy exclusions), including collapse, water damage, flood
and earthquake and transit coverage, during construction or repairs of
the Improvements, with deductible approved by Beneficiary in its
reasonable discretion, in reporting form, covering the total
replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the
case of construction); provided, however, that the maintenance of
insurance against earthquake and flood risks shall be subject to
availability of such insurance coverage on commercially reasonable
terms;
(vii) boiler and machinery property insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided
the Improvements contain equipment of such nature, in such amounts as
are reasonably satisfactory to Beneficiary but not less than the lesser
of $1,000,000 or 10% of the value of the Improvements;
(viii) if any portion of the Premises are located in an area
identified in the Federal Register as having special flood hazards by
the Secretary of Housing and Urban Development or other applicable
agency, flood insurance covering any parcel of the Trust Property which
contains improvements in an amount satisfactory to Beneficiary in its
reasonable discretion, but in no event less than the maximum limit of
coverage available with respect to the particular type of property
under the National Flood Insurance Act of 1968, as amended and with a
term ending not later than the maturity of the Indebtedness and
Beneficiary shall receive confirmation that Grantor has received the
notice required pursuant to Section 208.8(e)(3) of Regulation H of the
Board of Governors of The Federal Reserve System; and
(ix) such other insurance in such amounts as Beneficiary may
reasonably request from time to time.
<PAGE> 10
35
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or, in the case of
property and boiler and machinery insurance, materially amended without 30-days'
prior written notice to Beneficiary, (ii) with respect to all property
insurance, subject to availability on commercially reasonable terms, provide for
deductibles not to exceed $250,000, other than with respect to (a) flood,
freeze, windstorm and earthquake perils for which deductibles shall not exceed
the greater of $500,000 or 5% of values at risk per location involved in loss
and (b) boiler and machinery coverage for which deductibles shall not exceed the
greater of $500,000 or five times 100% of the daily time element value, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Beneficiary in its reasonable discretion), with loss payable
solely to Beneficiary (modified, if necessary and to the extent available under
such policy, to provide that proceeds in the amount of replacement cost may be
retained by Beneficiary without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Beneficiary in its reasonable discretion and be written by
insurance companies having an A.M. Best Company, Inc. rating of A- or higher and
a financial size category of not less than VII, or otherwise as approved by
Beneficiary in its reasonable discretion and (iii) contain a "manuscript"
endorsement providing that Grantor may not unilaterally cancel such policy
without Beneficiary's prior written consent. Liability insurance policies shall
name Beneficiary as an additional insured and contain a waiver of subrogation
against Beneficiary; all such policies shall indemnify and hold Beneficiary
harmless from all liability claims occurring on, in or about the Premises and
the adjoining streets, sidewalks and passageways, subject to standard policy
terms, conditions and exclusions. The amounts of each insurance policy and the
form of each such policy shall at all times be satisfactory to Beneficiary in
its reasonable discretion. Each policy shall expressly provide that any proceeds
which are payable to Beneficiary shall be paid by check payable to the order of
Beneficiary only and requiring the endorsement of Beneficiary only. If any
required insurance shall expire, be withdrawn, become void by breach of any
condition thereof by Grantor or by any lessee of any part of the Trust Property
or become void or unsafe by reason of the failure or impairment of the capital
of any insurer, Grantor shall immediately obtain new or additional insurance
satisfactory to Beneficiary in its reasonable discretion. Grantor shall not take
out any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise satisfactory to Beneficiary in
all respects in its reasonable discretion.
(b) Grantor shall deliver to Beneficiary an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Beneficiary in its reasonable discretion, together with a copy of
the declaration page for each such policy. Grantor shall (i) pay as they become
due all premiums for such insurance, (ii) not later than seven days prior to the
expiration of each policy to be furnished pursuant to the provisions of this
Section, deliver a renewed policy or policies, or certificates of insurance
acceptable to Beneficiary, in its reasonable discretion, or duplicate original
or originals thereof. Upon the reasonable request of Beneficiary, Grantor shall
cause its insurance underwriter or broker to certify to Beneficiary in writing
that all the requirements of this Deed of Trust governing insurance have been
satisfied.
<PAGE> 11
36
(c) If Grantor is in default of its obligations to insure or
deliver any such policy or policies, or certificates of insurance acceptable to
Beneficiary, in its reasonable discretion, then Beneficiary, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Grantor shall pay to Beneficiary on demand such
premium or premiums so paid by Beneficiary with interest from the time of
payment at the Default Rate and the same shall be deemed to be secured by this
Deed of Trust and shall be collectible in the same manner as the Indebtedness
secured by this Deed of Trust.
(d) Grantor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Deed of Trust and each successive 12 month period to occur
thereafter) by using the Morgan & Swift Building Cost Index to determine whether
there shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Grantor promptly shall in all material respects comply
with and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Grantor or to any of the Trust
Property or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Trust Property. Grantor shall
not use or permit the use of the Trust Property in any manner which would permit
any insurer to cancel any insurance policy or void coverage required to be
maintained by this Deed of Trust.
(f) (i) If the Trust Property, or any part thereof, shall be
destroyed or damaged by fire or any other casualty, whether insured or
uninsured, or in the event any claim is made against Grantor for any
personal injury, bodily injury or property damage incurred on or about
the Premises, Grantor shall promptly give notice thereof to
Beneficiary.
(ii) If the Trust Property is damaged by fire or other
casualty and the cost to repair such damage is less than $1,000,000,
then provided that no Event of Default shall have occurred and be
continuing, Grantor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss may be paid over to Grantor;
provided that Grantor shall, promptly after any such damage, repair
such damage to the extent required by subsection 6.5 of the Credit
Agreement regardless of whether any insurance proceeds have been
received or whether such proceeds, if received, are sufficient to pay
for the costs of repair.
(iii) If the Trust Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the limit in
Section 5(f)(ii) above, or if an Event of Default shall have occurred
and be continuing, then Grantor authorizes and empowers Beneficiary, at
Beneficiary's option and in Beneficiary's reasonable discretion, as
attorney-in-fact for Grantor, to make proof of loss, to adjust and
compromise any claim under any insurance policy, to appear in and
prosecute any action arising from
<PAGE> 12
37
any policy, to collect and receive insurance proceeds and to deduct
therefrom Beneficiary's reasonable expenses incurred in the collection
process. Each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to Beneficiary.
Beneficiary shall have the right to require Grantor to repair or
restore the Trust Property to the extent required by subsection 6.5 of
the Credit Agreement, and Grantor hereby designates Beneficiary as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to such repair or
restoration. The insurance proceeds or any part thereof received by
Beneficiary may be applied by Beneficiary toward reimbursement of all
reasonable costs and expenses of Beneficiary in collecting such
proceeds, and the balance, at Beneficiary's option in its sole and
absolute discretion, to the principal (to the installments in inverse
order of maturity, if payable in installments) and interest due or to
become due under the Notes, the Credit Agreement or the other Loan
Documents, to fulfill any other Obligation of Grantor, to the
restoration or repair of the property damaged, or released to Grantor.
Application by Beneficiary of any insurance proceeds toward the last
maturing installments of principal and interest due or to become due on
the Loans shall not excuse Grantor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce
the amount of such payments. In the event Beneficiary elects to release
such proceeds to Grantor, Grantor shall be obligated to use such
proceeds to restore or repair the Trust Property to the extent required
by subsection 6.5 of the Credit Agreement.
(g) In the event of foreclosure of this Deed of Trust or other
transfer of title to the Trust Property in extinguishment of the Indebtedness,
all right, title and interest of Grantor in and to any insurance policies then
in force, to the extent assignable or transferable, shall pass to the purchaser
or grantee and Grantor hereby appoints Beneficiary its attorney-in-fact, in
Grantor's name, to assign and transfer all such policies and proceeds to such
purchaser or grantee.
(h) Upon written notice to Grantor, Beneficiary, during the
continuance of an Event of Default, shall be entitled to require Grantor to pay
monthly in advance to Beneficiary the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Beneficiary may commingle such funds with
its own funds but Grantor shall be entitled to interest thereon at a rate
mutually agreed upon by Grantor and Beneficiary.
(i) Grantor may maintain insurance required under this Deed of
Trust by means of one or more blanket insurance policies maintained by Grantor;
provided, however, that (A) any such policy shall specify, or Grantor shall
furnish to Beneficiary a written statement from the insurer so specifying, the
maximum amount of the total insurance afforded by such blanket policy that is
allocated to the Premises and the other Trust Property and any sublimits and
aggregates in such blanket policy applicable to the Premises and the other Trust
Property, (B) each such blanket policy shall include an endorsement providing
that, in the event of a loss resulting from an insured peril, insurance proceeds
shall be allocated to the Trust Property in an amount equal to the coverages
required to be maintained by Grantor as provided above (subject to applicable
sublimits and aggregates) and (C) the protection afforded under any such blanket
policy shall be no less than that which would have been
<PAGE> 13
38
afforded under a separate policy or policies relating only to the Trust Property
(subject to applicable sublimits and aggregates).
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Deed of Trust and the Permitted Exceptions and except as otherwise
permitted pursuant to the terms of the Credit Agreement, Grantor shall not
further encumber the Trust Property nor create or suffer to exist any lien,
charge or encumbrance on the Trust Property, or any part thereof, whether
superior or subordinate to this Deed of Trust and whether recourse or
non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may
be otherwise expressly permitted under the Credit Agreement, Grantor shall not
sell, transfer, convey or assign all or any portion of, or any interest in, the
Trust Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Grantor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. To the extent required under subsection 6.5 of the Credit
Agreement, Grantor shall repair, restore, replace or rebuild promptly any part
of the Premises which may be damaged or destroyed by any casualty whatsoever to
a condition substantially equivalent to its condition prior to the damage or
destruction. Except as permitted by the Credit Agreement, the Improvements shall
not be demolished or materially altered, nor any material additions built,
without the prior written consent of Beneficiary, provided that Grantor may make
alterations or additions without the consent of Beneficiary that do not
materially reduce the value of the Trust Property.
(b) Beneficiary and any persons authorized by Beneficiary
shall, upon reasonable notice and at any reasonable time, have the right to
enter and inspect the Premises and the right to inspect all work done, labor
performed and materials furnished in and about the Improvements and the right to
inspect and make copies, to the extent reasonable, of all books, contracts and
records of Grantor relating to the Trust Property.
(c) Except as permitted under subsection 6.3 of the Credit
Agreement, Grantor shall pay or cause to be paid prior to delinquency, all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Promptly upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Trust Property, or any portion thereof, Grantor will notify Beneficiary of the
pendency of such proceedings. Grantor authorizes Beneficiary, at Beneficiary's
option and in Beneficiary's reasonable discretion, as attorney-in-fact for
Grantor, to commence, appear in and prosecute, in Beneficiary's or Grantor's
name, any action or proceeding relating to any condemnation of the Trust
Property, or any portion thereof, and to settle or compromise any claim in
connection with such condemnation upon the occurrence and during the continuance
of an Event of Default. If Beneficiary elects not to participate in such
condemnation proceeding, then Grantor shall, at its expense, diligently
prosecute any such proceeding and shall consult with Beneficiary, its
<PAGE> 14
39
attorneys and experts and cooperate with them in any defense of any such
proceedings. All awards and proceeds of condemnation shall be applied in the
same manner as insurance proceeds, and to the extent such awards and proceeds
exceed $1,000,000 and no Event of Default shall have occurred and be continuing,
such awards and proceeds shall be assigned to Beneficiary to be applied in the
same manner as insurance proceeds, as provided above in subsection 5(f)(iii)
above, and Grantor agrees to execute any such assignments of all such awards as
Beneficiary may request.
10. Restoration. If Beneficiary elects or is required
hereunder to release funds to Grantor for restoration of any of the Trust
Property, then such restoration shall be performed in accordance with such
conditions as Beneficiary shall impose in its reasonable discretion, and as are
customarily imposed by construction lenders.
11. Leases. (a) Grantor shall not (i) execute an assignment or
pledge of any Lease relating to all or any portion of the Trust Property other
than in favor of Beneficiary, or (ii) without the prior written consent of
Beneficiary, which consent shall not be unreasonably withheld or delayed,
execute or permit to exist any Lease of any of the Trust Property, except for
Permitted Exceptions and except as may be otherwise expressly permitted under
the Credit Agreement.
(b) As to any Lease consented to by Beneficiary under
subsection 11(a) above, Grantor shall:
(i) promptly perform in all material respects all of the
provisions of the Lease on the part of the lessor thereunder to be
performed;
(ii) promptly enforce all of the material provisions of the
Lease on the part of the lessee thereunder to be performed;
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Grantor as lessor or of the lessee thereunder;
(iv) exercise, within 5 business days after a reasonable
request by Beneficiary, any right to request from the lessee a
certificate with respect to the status thereof;
(v) promptly deliver to Beneficiary copies of any notices of
default which Grantor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Beneficiary a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Beneficiary, upon Beneficiary's
reasonable request, if permitted under such Lease, an assignment of the
Grantor's interest under such Lease.
<PAGE> 15
40
(c) Grantor shall deliver to Beneficiary, within 10 business
days after a reasonable request by Beneficiary, a written statement, certified
by Grantor as being true, correct and complete, containing the names of all
lessees and other occupants of the Trust Property, the terms of all Leases and
the spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the default;
such statement shall be accompanied by such other information as Beneficiary may
reasonably request.
(d) All Leases entered into by Grantor after the date hereof,
if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Deed of Trust
unless Beneficiary shall otherwise elect in writing.
(e) In the event of the enforcement by Beneficiary of any
remedy under this Deed of Trust the lessee under each Lease shall, if requested
by Beneficiary or any other person succeeding to the interest of Beneficiary as
a result of such enforcement, and if provided, at such lessee's request, with a
nondisturbance agreement from Beneficiary or such person, attorn to Beneficiary
or to such person and shall recognize Beneficiary or such successor in interest
as lessor under the Lease without change in the provisions thereof; provided
however, that Beneficiary or such successor in interest shall not be: (i) bound
by any payment of an installment of rent or additional rent which may have been
made more than 30 days before the due date of such installment; (ii) bound by
any amendment or modification to the Lease made without the consent of
Beneficiary or such successor in interest; (iii) liable for any previous act or
omission of Grantor (or its predecessors in interest); (iv) responsible for any
monies owing by Grantor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Grantor (or its predecessors in interest); (v) bound by any covenant to
undertake or complete any construction of the Premises or any portion thereof;
or (vi) obligated to make any payment to such lessee other than any security
deposit actually delivered to Beneficiary or such successor in interest. Each
lessee or other occupant, upon request by Beneficiary or such successor in
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Grantor agrees that each Lease entered into after the
date of this Deed of Trust shall include language to the effect of subsections
(d) and (e) of this Deed of Trust Section and language to the effect that if any
act or omission of Grantor would give any lessee under such Lease the right,
immediately or after lapse of a period of time, to cancel or terminate such
Lease, or to abate or offset against the payment of rent or to claim a partial
or total eviction, such lessee shall not exercise such right until it has given
written notice of such act or omission to Beneficiary and until a reasonable
period for remedying such act or omission shall have elapsed following the
giving of such notice without a remedy being effected; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further
assure Beneficiary's rights under this Deed of Trust, Grantor agrees upon demand
of Beneficiary to do any act or execute any additional documents (including, but
not limited to, security agreements on any personalty included or to be included
in the Trust Property and a separate assignment of each
<PAGE> 16
41
Lease in recordable form) as may be reasonably required by Beneficiary to
confirm the rights or benefits conferred on Beneficiary by this Deed of Trust.
13. Beneficiary's Right to Perform. If Grantor fails to
perform any of the covenants or agreements of Grantor, Beneficiary, without
waiving or releasing Grantor from any obligation or default under this Deed of
Trust, may, at any time (but shall be under no obligation to) pay or perform the
same, and the amount or cost thereof, with interest at the Default Rate, shall
immediately be due from Grantor to Beneficiary and the same shall be secured by
this Deed of Trust and shall be an encumbrance on the Trust Property prior to
any right, title to, interest in or claim upon the Trust Property attaching
subsequent to the date of this Deed of Trust. No payment or advance of money by
Beneficiary under this Section shall be deemed or construed to cure Grantor's
default or waive any right or remedy of Beneficiary.
14. Events of Default. The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Beneficiary may have pursuant to
the Loan Documents, or as provided by law, and without limitation, the
Indebtedness and all other amounts payable with respect to the Loans, the
Letters of Credit, the Credit Agreement, this Deed of Trust and the other
Security Documents shall become due and payable as provided in the Credit
Agreement. Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
In addition, upon the occurrence of any Event of Default, Beneficiary may
immediately take such action, without notice or demand, as it deems advisable to
protect and enforce its rights against Grantor and in and to the Trust Property,
including, but not limited to, the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such manner as
Beneficiary may determine, in its sole discretion, without impairing or
otherwise affecting the other rights and remedies of Beneficiary:
(i) Beneficiary may direct Trustee to exercise Trustee's power
of sale with respect to the Trust Property, or any part thereof, in a
non-judicial procedure as permitted by applicable law. If Beneficiary
elects to exercise its power of sale with respect to the Real Estate
and Equipment, or any part thereof, Trustee shall record a notice of
default in each county in which any part of such Real Estate and
Equipment is located and shall mail copies of such notice in the manner
prescribed by applicable law. After the time required by applicable
law, Trustee shall give public notice of the sale to the persons and in
the manner prescribed by applicable law. Trustee, without demand on
Grantor, shall sell such Real Estate and Equipment at public auction to
the highest bidder at the time and place and under the terms designated
in the notice of sale in one or more parcels and in any order Trustee
determines. Trustee may postpone sale of all or any parcel of the Trust
Property in accordance with the provisions of applicable law. Trustee,
Beneficiary, or their designee, may purchase at any such sale. Upon
receipt of the price bid, Trustee shall deliver to the purchaser a
Trustee's deed conveying the Real Estate and Equipment that are sold.
The recitals in
<PAGE> 17
42
the deed of compliance with applicable law shall be prima facie
evidence of such compliance and conclusive evidence thereof in favor of
bona fide purchasers and encumbrancers for value and without notice.
(ii) Beneficiary may, to the extent permitted by applicable
law, (A) institute and maintain an action of judicial foreclosure
against all or any part of the Trust Property (as described below), (B)
institute and maintain an action on the Notes, the Credit Agreement or
the other Security Documents, (C) direct the Trustee to sell all or
part of the Trust Property, or (D) take such other action at law or in
equity for the enforcement of this Deed of Trust or any of the Loan
Documents as the law may allow. Beneficiary may proceed in any such
action to final judgment and execution thereon for all sums due
hereunder, together with interest thereon at the Default Rate and all
costs of suit, including, without limitation, reasonable attorneys'
fees and disbursements. Interest at the Default Rate shall be due on
any judgment obtained by Beneficiary from the date of judgment until
actual payment is made of the full amount of the judgment.
(iii) Beneficiary may personally, or by its agents, attorneys
and employees and without regard to the adequacy or inadequacy of the
Trust Property or any other collateral as security for the Indebtedness
and Obligations enter into and upon the Trust Property and each and
every part thereof and exclude Grantor and its agents and employees
therefrom without liability for trespass, damage or otherwise (Grantor
hereby agreeing to surrender possession of the Trust Property to
Beneficiary upon demand at any such time) and use, operate, manage,
maintain and control the Trust Property and every part thereof.
Following such entry and taking of possession, Beneficiary shall be
entitled, without limitation, (x) to lease all or any part or parts of
the Trust Property for such periods of time and upon such conditions as
Beneficiary may, in its discretion, deem proper, (y) to enforce, cancel
or modify any Lease and (z) generally to execute, do and perform any
other act, deed, matter or thing concerning the Trust Property as
Beneficiary shall deem appropriate as fully as Grantor might do.
Grantor acknowledges that it has been advised that Beneficiary
recognizes the value of the security covered hereby is inextricably intertwined
with the effectiveness of the management, maintenance and general operation of
the Trust Property, and that Beneficiary would not extend the Indebtedness
secured hereby unless it could be assured that Trustee would have the right to
take possession of the Trust Property in order to manage or to control
management thereof, and to enjoy the income, rents and profits therefrom,
immediately upon default by Grantor hereunder, notwithstanding that foreclosure
proceedings may not have been instituted, or are pending, or the redemption
period may not have expired. Accordingly, Grantor hereby knowingly,
intelligently and voluntarily waives all right to possession of the Trust
Property from and after the occurrence of an Event of Default hereunder, upon
demand for possession by Beneficiary, and Grantor agrees not to assert any
objection or defense to Beneficiary's request or petition to a court for
possession. The rights hereby conferred upon Beneficiary have been agreed upon
prior to any default by Grantor hereunder and the exercise by Beneficiary of any
such rights shall not be deemed to put Beneficiary in the status of a "mortgagee
in possession". Grantor acknowledges that this provision is material to this
<PAGE> 18
43
transaction and that Beneficiary would not extend the Indebtedness secured
hereby but for this paragraph.
(b) The holder of this Deed of Trust, in any action to
foreclose it, shall be entitled to the appointment of a receiver. In case of a
foreclosure sale, the Real Estate may be sold, at Beneficiary's election, in one
parcel or in more than one parcel and if in more than one parcel the same may be
divided as Beneficiary may elect and Beneficiary is specifically empowered,
(without being required to do so, and in its sole and absolute discretion) to
cause successive sales of portions of the Trust Property to be held. At the
election of Beneficiary, the Trust Property may be offered first in parcels and
then as a whole, the offer producing the highest price for the entire property
offered to prevail. Grantor hereby waives any right to require any such sale to
be made in parcels or any right to select such parcels.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Deed of Trust, and
notwithstanding to the contrary any exculpatory or non-recourse language which
may be contained herein, Beneficiary shall be entitled to enjoin such breach and
obtain specific performance of any covenant, agreement, term or condition and
Beneficiary shall have the right to invoke any equitable right or remedy as
though other such rights and remedies were provided for in this Deed of Trust.
(d) In the event of a default because of the existence of any
lien upon the Trust Property, Beneficiary shall have the right (without being
obligated to do so or to continue to do so), without notice to Grantor, to
advance on and for the account of Grantor such sums as Beneficiary in its sole
discretion deems necessary to cure such default or to induce the holder of any
such lien to forbear from exercising its rights thereunder. Notwithstanding
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
16. Right of Beneficiary to Credit Sale. Upon the occurrence
of any sale made under this Deed of Trust, whether made under the power of sale
or by virtue of judicial proceedings or of a judgment or decree of foreclosure
and sale, Beneficiary may bid for and acquire the Trust Property or any part
thereof. In lieu of paying cash therefor, Beneficiary may make settlement for
the purchase price by crediting upon the Indebtedness or other sums secured by
this Deed of Trust the net sales price after deducting therefrom the expenses of
sale and the cost of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust. In such event, this Deed of
Trust, the Notes and other instruments evidencing the Indebtedness and any and
all documents evidencing expenditures secured hereby may be presented to the
person or persons conducting the sale in order that the amount so used or
applied may be credited upon the Indebtedness as having been paid.
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Beneficiary as a matter of right and without notice
to Grantor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Trust Property or any other collateral as
security for the Indebtedness and Obligations or
<PAGE> 19
44
the interest of Grantor therein, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers or other manager of the
Trust Property, without requiring the posting of a surety bond and without
reference to the adequacy or inadequacy of the value of the Trust Property or
the solvency or insolvency of Grantor or any other party obligated for payment
of all or any part of the Indebtedness, and whether or not waste has occurred
with respect to the Trust Property. Grantor hereby irrevocably consents to
such appointment and waives notice of any application therefor (except as may
be required by law). Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers and
duties of Beneficiary in case of entry as provided in this Deed of Trust,
including, without limitation and to the extent permitted by law, the right to
enter into leases of all or any part of the Trust Property, and shall continue
as such and exercise all such powers until the date of confirmation of sale of
the Trust Property unless such receivership is sooner terminated.
18. Extension, Release, etc. (a) Without affecting the charge
of this Deed of Trust upon any portion of the Trust Property not then or
theretofore released as security for the full amount of the Indebtedness,
Beneficiary may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Beneficiary's option any parcel, portion or all of the Trust
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Deed of Trust shall secure
less than all of the principal amount of the Indebtedness, it is expressly
agreed that any repayments of the principal amount of the Indebtedness shall not
reduce the amount of the encumbrance of this Deed of Trust until the encumbrance
amount shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Beneficiary and no levy of
an execution under any judgment upon the Trust Property or upon any other
property of Grantor shall affect the encumbrance of this or any liens, rights,
powers or remedies of Beneficiary hereunder, and such liens, rights, powers and
remedies shall continue unimpaired.
(c) If Beneficiary shall have the right to foreclose this Deed
of Trust, Grantor authorizes Beneficiary at its option to foreclose the lien of
this Deed of Trust subject to the rights of any tenants of the Trust Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Grantor as a
defense to any proceeding instituted by Beneficiary to collect the Indebtedness
or to foreclose this Deed of Trust.
(d) Unless expressly provided otherwise, in the event that
ownership of this Deed of Trust and title to the Trust Property or any estate
therein shall become vested in the same person or entity, this Deed of Trust
shall not merge in such title but shall continue as a valid charge on the Trust
Property for the amount secured hereby.
<PAGE> 20
45
19. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Deed of Trust shall constitute
a Security Agreement within the meaning of the Uniform Commercial Code (the
"CODE") of the State in which the Trust Property is located. If an Event of
Default shall occur under this Deed of Trust, then in addition to having any
other right or remedy available at law or in equity, Beneficiary shall have the
option of either (i) proceeding under the Code and exercising such rights and
remedies as may be provided to a secured party by the Code with respect to all
or any portion of the Trust Property which is personal property (including,
without limitation, taking possession of and selling such property) or (ii)
treating such property as real property and proceeding with respect to both the
real and personal property constituting the Trust Property; or in accordance
with Beneficiary's rights, powers and remedies with respect to the real property
(in which event the default provisions of the Code shall not apply). If
Beneficiary shall elect to proceed under the Code, then five days' notice of
sale of the personal property shall be deemed reasonable notice and the
reasonable expenses of retaking, holding, preparing for sale, selling and the
like incurred by Beneficiary shall include, but not be limited to, reasonable
attorneys' fees and legal expenses. At Beneficiary's request, during the
continuance of an Event of Default, Grantor shall assemble the personal property
and make it available to Beneficiary at a place designated by Beneficiary which
is reasonably convenient to both parties.
(b) Grantor and Beneficiary agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed of
Trust upon recording or registration in the real estate records of the proper
office shall constitute a financing statement filed as a "fixture filing" within
the meaning of Sections 9-313 and 9-402 of the Code; (iii) Grantor is the record
owner of the Real Estate; (iv) the mailing addresses of Grantor and Beneficiary
are as set forth on the first page of this Deed of Trust; (v) Grantor's federal
tax identification number is 34-1658458 and (vi) Beneficiary's federal tax
identification number is 52-1128765. In addition, for purposes of Article 9 of
the Uniform Commercial Code, (i) Grantor is the "debtor", (ii) Beneficiary is
the "secured party" and (iii) information concerning the security interest
created hereby may be obtained from Beneficiary at its address on the first page
of this Deed of Trust.
(c) Grantor, upon request by Beneficiary from time to time,
shall execute, acknowledge and deliver to Beneficiary one or more separate
security agreements, in form satisfactory to Beneficiary in its reasonable
discretion, covering all or any part of the Trust Property and will further
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Beneficiary may request in order to perfect,
preserve, maintain, continue or extend the security interest under and the
priority of this Deed of Trust and such security instrument. Grantor further
agrees to pay to Beneficiary on demand all reasonable costs and expenses
incurred by Beneficiary in connection with the preparation, execution,
recording, filing and re-filing of any such document and all reasonable costs
and expenses of any record searches for financing statements Beneficiary shall
reasonably require. If Grantor shall fail to furnish any financing or
continuation statement within 10 days after request by Beneficiary, then
pursuant to the provisions of the Code, Grantor hereby authorizes
<PAGE> 21
46
Beneficiary, without the signature of Grantor, to execute and file any such
financing and continuation statements. The filing of any financing or
continuation statements in the records relating to personal property or chattels
shall not be construed as in any way impairing the right of Beneficiary to
proceed against any personal property encumbered by this Deed of Trust as real
property, as set forth above.
20. Assignment of Rents. Grantor hereby absolutely and
unconditionally assigns, transfers, conveys and sets over to Beneficiary, the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Grantor grants to Beneficiary the right to enter the Trust
Property for the purpose of collecting the same and to let the Trust Property or
any part thereof and to apply the Rents on account of the Indebtedness. The
foregoing assignment and grant is present and absolute and shall continue in
effect until the Indebtedness is paid in full, but Beneficiary hereby waives the
right to enter the Trust Property for the purpose of collecting the Rents,
letting the Trust Property or any part thereof or applying the Rents and Grantor
shall be entitled to collect, receive, use and retain the Rents until the
occurrence of an Event of Default under this Deed of Trust; such right of
Grantor to collect, receive, use and retain the Rents may be revoked by
Beneficiary upon the occurrence of any Event of Default under this Deed of Trust
by giving not less than five days' written notice of such revocation to Grantor;
in the event such notice is given, Grantor shall pay over to Beneficiary, or to
any receiver appointed to collect the Rents, any lease security deposits, and
shall pay monthly in advance to Beneficiary, or to any such receiver, the fair
and reasonable rental value as determined by Beneficiary for the use and
occupancy of the Trust Property or of such part thereof as may be in the
possession of Grantor or any affiliate of Grantor, and upon default in any such
payment Grantor and any such affiliate will vacate and surrender the possession
of the Trust Property to Beneficiary or to such receiver, and in default thereof
may be evicted by summary proceedings or otherwise. Grantor shall not accept
prepayments of installments of Rent to become due for a period of more than one
month in advance (except for security deposits and estimated payments of
percentage rent, if any).
21. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other funds
of Grantor. Within 10 days after request by Beneficiary, Grantor shall furnish
Beneficiary satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Beneficiary under which such security
deposits are held, which statement shall be certified by Grantor.
22. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Trust Property shall have no right to terminate
any Lease whether or not such Lease is subordinate to this Deed of Trust nor
shall any holder of any subordinate lien or subordinate mortgage join any tenant
under any Lease in any action to foreclose the lien or modify, interfere with,
disturb or terminate the rights of any tenant under any Lease. By recordation of
this Deed of Trust all subordinate lienholders under subordinate mortgages are
subject to and notified of this provision, and any action taken by any such
lienholder or mortgagee contrary to this provision shall be null and void. Upon
the occurrence of any Event of Default, Beneficiary may, in its sole discretion
and without regard to the adequacy
<PAGE> 22
47
of its security under this Deed of Trust, apply all or any part of any amounts
on deposit with Beneficiary under this Deed of Trust against all or any part of
the Indebtedness. Any such application shall not be construed to cure or waive
any Default or Event of Default or invalidate any act taken by Beneficiary on
account of such Default or Event of Default.
23. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien or mortgage
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Deed of Trust shall have the right to declare the Indebtedness due on a
date to be specified by not less than 30 days' written notice to be given to
Grantor unless within such 30-day period Grantor shall assume as an Obligation
hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
24. Notices. Grantor and Beneficiary hereby request that a
copy of any notice of default and a copy of any notice of sale hereunder shall
be mailed to each of them at the addresses set forth herein.
25. No Oral Modification. This Deed of Trust may not be
changed or terminated orally. Any agreement made by Grantor and Beneficiary
after the date of this Deed of Trust relating to this Deed of Trust shall be
superior to the rights of the holder of any intervening or subordinate mortgage,
lien or encumbrance. Grantor's execution of any written agreement between
Grantor and Beneficiary shall not be required for the effectiveness thereof as
between Grantor and Beneficiary.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Deed of Trust shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Deed of
Trust or in any provisions of the Indebtedness or Loan Documents, the
obligations of Grantor and of any other obligor under the Indebtedness or Loan
Documents shall be subject to the limitation that Beneficiary shall not charge,
take or receive, nor shall Grantor or any other obligor be obligated to pay to
Beneficiary, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Beneficiary.
27. Grantor's Waiver of Rights. To the fullest extent
permitted by law, Grantor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Trust Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Trust Property from attachment, levy or sale under execution or
exemption from civil process. To the full extent Grantor may do so, Grantor
agrees that Grantor will not
<PAGE> 23
48
at any time insist upon, plead, claim or take the benefit or advantage of any
law now or hereafter in force providing for any appraisement, valuation, stay,
exemption, extension or redemption, or requiring foreclosure of this Deed of
Trust before exercising any other remedy granted hereunder and Grantor, for
Grantor and its successors and assigns, and for any and all persons ever
claiming any interest in the Trust Property, to the extent permitted by law,
hereby waives and releases all rights of redemption, valuation, appraisement,
stay of execution, notice of election to mature or declare due the whole of the
secured indebtedness and marshalling in the event of foreclosure of the liens
hereby created.
28. Remedies Not Exclusive. Beneficiary shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Deed of Trust or under any of the
other Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by deed of trust, mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this
Deed of Trust nor its enforcement, shall prejudice or in any manner affect
Beneficiary's right to realize upon or enforce any other security now or
hereafter held by Beneficiary, it being agreed that Beneficiary shall be
entitled to enforce this Deed of Trust and any other security now or hereafter
held by Beneficiary in such order and manner as Beneficiary may determine in its
absolute discretion. No remedy herein conferred upon or reserved to Beneficiary
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Loan Documents to Beneficiary
or to which either may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Beneficiary. In no event shall Beneficiary, in the exercise of the remedies
provided in this Deed of Trust (including, without limitation, in connection
with the assignment of Rents, or the appointment of a receiver and the entry of
such receiver on to all or any part of the Trust Property), be deemed a
"mortgagee in possession," and Beneficiary shall not in any way be made liable
for any act, either of commission or omission, in connection with the exercise
of such remedies.
29. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Deed of Trust, Beneficiary shall now or
hereafter hold or be the mortgagee of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Grantor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Beneficiary may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Indebtedness (including the Trust Property),
which action may be brought or consolidated in the courts of any county in which
any of such collateral is located. Grantor acknowledges that the right to
maintain a consolidated foreclosure action is a specific inducement to
Beneficiary to extend the Indebtedness, and Grantor expressly and irrevocably
waives any objections to the commencement or consolidation of the foreclosure
proceedings in a single action and any
<PAGE> 24
49
objections to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have. Grantor further agrees that if
Beneficiary shall be prosecuting one or more foreclosure or other proceedings
against a portion of the Trust Property or against any collateral other than the
Trust Property, which collateral directly or indirectly secures the
Indebtedness, or if Beneficiary shall have obtained a judgment of foreclosure or
similar judgment against such collateral, then, whether or not such proceedings
are being maintained or judgments were obtained in or outside the State in which
the Premises are located, Beneficiary may commence or continue any foreclosure
proceedings and exercise its other remedies granted in this Deed of Trust
against all or any part of the Trust Property and Grantor waives any objections
to the commencement or continuation of a foreclosure of this Deed of Trust or
exercise of any other remedies hereunder based on such other proceedings or
judgments, and waives any right to seek to dismiss, stay, remove, transfer or
consolidate either any action under this Deed of Trust or such other proceedings
on such basis. Neither the commencement nor continuation of proceedings to
foreclose this Deed of Trust nor the exercise of any other rights hereunder nor
the recovery of any judgment by Beneficiary in any such proceedings shall
prejudice, limit or preclude Beneficiary's right to commence or continue one or
more foreclosure or other proceedings or obtain a judgment against any other
collateral (either in or outside the State in which the Real Estate is located)
which directly or indirectly secures the Indebtedness, and Grantor expressly
waives any objections to the commencement of, continuation of, or entry of a
judgment in such other proceedings or exercise of any remedies in such
proceedings based upon any action or judgment connected to this Deed of Trust,
and Grantor also waives any right to seek to dismiss, stay, remove, transfer or
consolidate either such other proceedings or any sale or action under this Deed
of Trust on such basis. It is expressly understood and agreed that to the
fullest extent permitted by law, Beneficiary may, at its election, cause the
sale of all collateral which is the subject of a single foreclosure action at
either a single sale or at multiple sales conducted simultaneously and take such
other measures as are appropriate in order to effect the agreement of the
parties to dispose of and administer all collateral securing the Indebtedness
(directly or indirectly) in the most economical and least time-consuming manner.
30. Successors and Assigns. All covenants of Grantor contained
in this Deed of Trust are imposed solely and exclusively for the benefit of
Beneficiary and its respective successors and assigns, and no other person or
entity shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants, any or
all of which may be freely waived in whole or in part by Beneficiary at any time
if in its sole discretion such waiver is deemed advisable. All such covenants of
Grantor shall run with the land and bind Grantor, the successors and assigns of
Grantor (and each of them) and all subsequent owners, encumbrancers and tenants
of the Trust Property, and shall inure to the benefit of Beneficiary, and its
respective successors and assigns. The word "Grantor" shall be construed as if
it read "Grantors" whenever the sense of this Deed of Trust so requires and if
there shall be more than one Grantor, the obligations of the Grantors shall be
joint and several.
31. No Waivers, etc. Any failure by Beneficiary to insist upon
the strict performance by Grantor of any of the terms and provisions of this
Deed of Trust shall not be deemed to be a waiver of any of the terms and
provisions hereof, and Beneficiary,
<PAGE> 25
50
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by Grantor of any and all of the terms and provisions of
this Deed of Trust to be performed by Grantor. Beneficiary may release,
regardless of consideration and without the necessity for any notice to or
consent by the mortgagee of any subordinate mortgage or the holder of any
subordinate lien on the Trust Property, any part of the security held for the
obligations secured by this Deed of Trust without, as to the remainder of the
security, in anywise impairing or affecting the lien of this Deed of Trust or
the priority of such lien over any subordinate lien or mortgage.
32. Governing Law, etc. This Deed of Trust shall be governed
by and construed in accordance with the laws of the State in which the Premises
are located, except that Grantor expressly acknowledges that by its terms the
Credit Agreement shall be governed and construed in accordance with the laws of
the State of New York, without regard to principles of conflict of law, and for
purposes of consistency, Grantor agrees that in any in personam proceeding
related to this Deed of Trust the rights of the parties to this Deed of Trust
shall also be governed by and construed in accordance with the laws of the State
of New York governing contracts made and to be performed in that State, without
regard to principles of conflict of law.
33. Waiver of Trial by Jury. Grantor and Beneficiary each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Deed of Trust and for any counterclaim
brought therein.
34. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Deed of Trust shall be used interchangeably in singular or plural form
and the word "Grantor" shall mean "each Grantor or any subsequent owner or
owners of the Trust Property or any part thereof or interest therein," the word
"Beneficiary" shall mean "Beneficiary or any successor Administrative Agent,"
the word "Notes" shall mean "the notes that may from time to time be given
pursuant to the terms of the Credit Agreement or any other evidence of
indebtedness secured by this Deed of Trust" the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Trust
Property" shall include any portion of the Trust Property or interest therein.
Whenever the context may require, any pronouns used herein shall include the
corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa. The captions in this
Deed of Trust are for convenience or reference only and in no way limit or
amplify the provisions hereof.
35. Reconveyance of Deed of Trust. Upon payment in full of the
Indebtedness, the termination of all Commitments under the Credit Agreement
secured hereby and the compliance with the Obligations then required to be
complied with, Beneficiary shall direct the Trustee to execute and deliver the
encumbrance of this Deed of Trust. If any of the Trust Property shall be sold,
transferred or otherwise disposed of by Grantor in a transaction expressly
permitted by the Credit Agreement, then Beneficiary shall execute and deliver to
Grantor (at the sole cost and expense of Grantor) all releases, reconveyances or
other
<PAGE> 26
51
documents reasonably necessary or desirable for the release of such Trust
Property from the encumbrance of this Deed of Trust.
36. Conflict with Credit Agreement. In the event of any
conflict or inconsistency between the terms and provisions of this Deed of Trust
and the terms and provisions of the Credit Agreement, the terms and provisions
of the Credit Agreement shall govern, other than with respect to the Section of
this Deed of Trust captioned "Governing Law, etc.". By their execution of the
Credit Agreement, each Lender hereby agrees that it shall not have the right to
institute any suit for enforcement of Notes or any other Indebtedness secured by
this Deed of Trust or any other Security Document, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver or loss of the Lien
of this Deed of Trust or any other Security Document or impede or delay the
enforcement of the Lien of this Deed of Trust or any other Security Document.
37. Revolving Credit Loans. A portion of the Indebtedness
secured by this Deed of Trust is a revolving line of credit under which
advances, payments and readvances may be made from time to time.
38. Successor Trustee. Beneficiary shall have the right to
appoint a substitute, or a successor trustee, to act as Trustee hereunder by
written designation. Such right shall extend to the appointment of other
successor and substitute trustees successively until the Indebtedness hereby
secured has been paid in full or until the Trust Property is sold hereunder, and
each substitute and successor trustee shall succeed to all the rights and powers
of the original Trustee named herein.
<PAGE> 27
52
This Deed of Trust has been duly executed by Grantor on the
date first above written.
DAY INTERNATIONAL, INC.
By: _______________________________
Name:
Title:
ATTEST:
__________________________________
Name:
Title:
<PAGE> 28
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
I, ___________ , a Notary Public of the County and State
aforesaid, certify that ___________________ personally came before me this day
and acknowledged that he (or she) is ______________________ of DAY
INTERNATIONAL, INC., a Delaware corporation, and that by authority duly given
and as the act of the corporation, the foregoing instrument was signed in its
name by ____________________ , its ______________ , sealed with its corporate
seal and attested by himself (or herself) as its __________________________ .
Witness my hand and official stamp or seal, this ____ day of January, 1998.
______________________________
Notary Public
My commission expires:
<PAGE> 29
Schedule A
Buncombe County, North Carolina
Beginning at a point, said point being at the intersection of the center lines
of Glenn Bridge Road and old Shoals Road, said point also being located South
63o25'00" West 133.34 feet; South 65o29'00" West 340.25 feet; South 66o25'00"
West 914.53 feet; South 63o74'00" West 61.82 feet; South 50o39'00" West 62.65
feet; South 37o28'00" West 68.95 feet; South 33o38'00" West 153.60 feet; South
40o58'00" West 181.74 feet; South 71o38'59" West 56.20 feet; South 65o49'00"
West 75.00 feet; South 89o08'00" West 104.55 feet from the beginning corner of
Tract 1 as set forth and described in Deed recorded in deed Book 1440, at page
175, of the Buncombe County public Registry, reference to which is hereby made,
and runs thence from said beginning point and following Glenn Bridge Road North
89o08'00" East 104.88 feet; thence North 85o49'00" East 75.00 feet; thence
North 71o36'59" East 56.20 feet; thence North 40o56'00" East 161.74 feet;
thence North 33o38'00" East 153.60 feet; thence North 37o26'00" East 68.95
feet; thence North 50o39'00" East 82.85 feet; thence North 63o14'00" East 61.82
feet; thence north 68o25'00" East 12.98 feet; thence leaving Glenn Bridge Road
South 31o22'51" East 953.50 feet to an iron pipe; thence South 23o30'33" East
670.81 feet to an iron pipe at the northeast corner of the property of Carolina
Power & Light Company recorded in Deed Book 1508, page 262; thence with the
north and west lines of said Carolina Power & Light tract South 58o39'57" West
233.68 feet to a concrete monument and South 31o20'04" East 342.14 to a point
in Old Shools Road: thence with Old Shools Road North 77o33'00" West 181.37
feet; thence north 74o30'00" West 100.00 feet; thence North 70o32'00" West
260.00 feet; thence North 51o05'00" West 100.00 feet; thence North 43o07'00"
West 300.00 feet; thence North 47o15'00" West 300.00 feet; thence North
36o17'00" West 50.00 feet; thence North 16o41'00" West 50.00 feet; thence North
10o26'00" West 140.00 feet; thence North 18o30'00" West 100.00 feet; thence
North 21o12'00" West 52.66 feet; thence North 22o60'47" West 100.99 feet;
thence North 25o33'00" West 307.85 feet to the place of beginning. Continuing
28.09 acres more or less, and being a portion of the 30 acre tract shown on a
survey of the property of Naige Company dated June 30, 1987, by Richard M.
Biggs, R.L.S., and being a portion of that property described in a deed from
Naige Company to Day International Corporation, dated July 9, 1987, and
recorded in Deed Book 1483, page 436. Buncombe County Registry.
TOGETHER WITH the drainage easement as set forth in Deed Book 1837, page 181.
<PAGE> 1
Exhibit 4.13
MORTGAGE
[Michigan]
from
DAY INTERNATIONAL, INC., Mortgagor, a Delaware corporation
whose address is 333 West Front
Street, Dayton, Ohio 45401
to
SOCIETE GENERALE, as Administrative Agent, Mortgagee,
whose address is 1221 Avenue of
the Americas, New York, New
York 10020
DATED AS OF JANUARY 16, 1998
After recording, please return to:
SIMPSON THACHER & BARTLETT
a partnership which includes
professional corporations
425 Lexington Avenue
New York, New York 10017
ATTN: Dennis D. Kiely, Esq.
<PAGE> 2
[Michigan]
This MORTGAGE, dated as of January 16, 1998 is made by DAY
INTERNATIONAL, INC., a Delaware corporation ("Mortgagor"), whose address is 333
West First Street, Dayton, Ohio 45401, to SOCIETE GENERALE, whose address is
1221 Avenue of the Americas, New York, New York 10020, as Administrative Agent
(in such capacity, "Mortgagee") for the several banks and other financial
institutions (the "Lenders") from time to time parties to the Senior Secured
Credit Agreement dated as January 16, 1998, (as the same may be amended,
supplemented, waived or otherwise modified from time to time the "Credit
Agreement") among Societe Generale Securities Corporation, as Arranger,
Mortgagee, the Lenders, and Day International Group, Inc. (the "Borrower").
References to this Mortgage shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Capitalized terms
used and not otherwise defined herein shall have the meanings assigned thereto
in the Credit Agreement.
Background
A. Mortgagor is the owner of the parcel(s) of real property
described on Schedule A attached hereto (such real property, together with all
of the buildings, improvements, structures and fixtures now or subsequently
located thereon (the "Improvements"), being collectively referred to as the
"Real Estate").
B. Pursuant to the terms of the Credit Agreement, the Lenders
have agreed, among other things, to make the Loans and the Issuing Lender has
agreed to issue, and the L/C Participants have agreed to acquire, undivided
participating interests in the Letters of Credit for the account of the Borrower
upon the terms and subject to the conditions set forth in the Credit Agreement,
which conditions include the grant by Mortgagor to Mortgagee of all estate,
right, title and interest of Mortgagor in and to the Real Estate pursuant to the
terms hereof.
C. It is a condition precedent to the agreement of each Lender
to make Loans and issue Letters of Credit under the Credit Agreement that
Mortgagor executes and delivers this Mortgage. Mortgagor, a subsidiary of
Borrower, will receive substantial direct and indirect benefit from the
extensions of credit made to Borrower pursuant to the Credit Agreement.
Granting Clauses
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Mortgagor agrees that to secure:
<PAGE> 3
(a) the repayment of principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans
and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether
or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans (as they may be evidenced by the Notes from
time to time) and all other obligations (including the Reimbursement
Obligations) and liabilities of Mortgagor to Mortgagee, the Issuing
Lender and the Lenders, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit
Agreement, the Loans, the Letters of Credit, the Security Documents,
any Guarantee Obligation of Mortgagor as to which any Lender is a
beneficiary, any Permitted Hedging Arrangement with any Lender or any
banking affiliate of any Lender (whether entered into directly, or
guaranteed by Mortgagor), the Guarantee and Collateral Agreement dated
as of the date hereof between Mortgagor, Holdings and Mortgagee (the
"Guarantee") or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent, the Issuing
Lender or any Lender that are required to be paid by any Loan Party
pursuant to the Credit Agreement) (the items set forth above being
referred to collectively as the "Indebtedness"); and
(b) the performance of all covenants, agreements, obligations
and liabilities of Mortgagor (the "Obligations") under or pursuant to
the provisions of the Credit Agreement, the Loans, this Mortgage, the
Guarantee, any other document securing payment of the Indebtedness (the
"Security Documents") and any amendments, supplements, extensions,
renewals, restatements, replacements or modifications of any of the
foregoing (the Credit Agreement, the Loans, the Letters of Credit, this
Mortgage, the Guarantee and all other documents and instruments from
time to time evidencing, securing or guaranteeing the payment of the
Indebtedness or the performance of the Obligations, as any of the same
may be amended, supplemented, extended, renewed, restated, replaced or
modified from time to time, are collectively referred to as the "Loan
Documents");
MORTGAGOR HEREBY CONVEYS TO MORTGAGEE A LIEN UPON AND A SECURITY INTEREST IN,
AND HEREBY MORTGAGES AND WARRANTS, GRANTS, ASSIGNS, TRANSFERS AND SETS OVER TO
MORTGAGEE:
(A) the Real Estate;
(B) all the estate, right, title, claim or demand whatsoever
of Mortgagor, in possession or expectancy, in and to the Real Estate or
any part thereof;
(C) all right, title and interest of Mortgagor in, to and
under all easements, rights of way, gores of land, streets, ways,
alleys, passages, sewer rights, waters, water
<PAGE> 4
courses, water and riparian rights, development rights, air rights,
mineral rights and all estates, rights, titles, interests, privileges,
licenses, tenements, hereditaments and appurtenances belonging,
relating or appertaining to the Real Estate, and any reversions,
remainders, rents, issues, profits and revenue thereof and all land
lying in the bed of any street, road or avenue, in front of or
adjoining the Real Estate to the center line thereof;
(D) all right, title and interest of Mortgagor in and to all
of the fixtures, chattels, business machines, machinery, apparatus,
equipment, furnishings, fittings and articles of personal property of
every kind and nature whatsoever, and all appurtenances and additions
thereto and substitutions or replacements thereof (together with, in
each case, attachments, components, parts and accessories) currently
owned or subsequently acquired by Mortgagor and now or subsequently
attached to, or contained in or used or usable in any way in connection
with any operation or letting of the Real Estate, including but without
limiting the generality of the foregoing, all screens, awnings, shades,
blinds, curtains, draperies, artwork, carpets, rugs, storm doors and
windows, furniture and furnishings, heating, electrical, and mechanical
equipment, lighting, switchboards, plumbing, ventilating, air
conditioning and air-cooling apparatus, refrigerating, and incinerating
equipment, escalators, elevators, loading and unloading equipment and
systems, stoves, ranges, laundry equipment, cleaning systems (including
window cleaning apparatus), telephones, communication systems
(including satellite dishes and antennae), televisions, computers,
sprinkler systems and other fire prevention and extinguishing apparatus
and materials, security systems, motors, engines, machinery, pipes,
pumps, tanks, conduits, appliances, fittings and fixtures of every kind
and description (all of the foregoing in this paragraph (D) being
referred to as the "Equipment");
(E) all right, title and interest of Mortgagor in and to all
substitutes and replacements of, and all additions and improvements to,
the Real Estate and the Equipment, subsequently acquired by or released
to Mortgagor or constructed, assembled or placed by Mortgagor on the
Real Estate, immediately upon such acquisition, release, construction,
assembling or placement, including, without limitation, any and all
building materials to be used by Mortgagor whether stored at the Real
Estate or offsite, and, in each such case, without any further
mortgage, conveyance, assignment or other act by Mortgagor;
(F) all right, title and interest of Mortgagor in, to and
under all leases, subleases, underlettings, concession agreements,
management agreements, licenses and other agreements relating to the
use or occupancy of the Real Estate or the Equipment or any part
thereof, now existing or subsequently entered into by Mortgagor and
whether written or oral and all guarantees of any of the foregoing
(collectively, as any of the foregoing may be amended, restated,
extended, renewed or modified from time to time, the "Leases"), and all
rights of Mortgagor in respect of cash and securities deposited
thereunder and the right to receive and collect the revenues, income,
rents, issues and profits thereof, together with all other rents,
royalties, issues, profits, revenue, income and other benefits arising
from the use and enjoyment of the
<PAGE> 5
Mortgaged Property (as defined below) (collectively, the "Rents")
including, but not limited to, all rights conferred by Act No. 210 of
the Michigan Public Acts of 1953 as amended by Act No. 151 of the
Michigan Public Acts of 1966 (MCLA 554.231 et seq.), and Act No. 228 of
the Michigan Public Acts of 1925 as amended by Act No. 55 of the
Michigan Public Acts of 1933 (MCLA 554.211 et seq.);
(G) all books and records relating to or used in connection
with the operation of the Real Estate or the Equipment or any part
thereof;
(H) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all unearned premiums under insurance
policies now or subsequently obtained by Mortgagor relating to the Real
Estate or Equipment, (ii) any such insurance policies, (iii) all
proceeds of any such insurance policies (including title insurance
policies) including the right to collect and receive such proceeds,
subject to the provisions relating to insurance generally set forth
below, and (iv) all awards and other compensation, including the
interest payable thereon and the right to collect and receive the same,
made to the present or any subsequent owner of the Real Estate or
Equipment for the taking by eminent domain, condemnation or otherwise,
of all or any part of the Real Estate or any easement or other right
therein, subject to the provisions relating to condemnation awards
generally set forth below;
(I) all right, title and interest of Mortgagor, to the extent
assignable, in and to (i) all contracts from time to time executed by
Mortgagor or any manager or agent on its behalf relating to the
ownership, construction, maintenance, repair, operation, occupancy,
sale or financing of the Real Estate or Equipment or any part thereof
and all agreements relating to the purchase or lease of any portion of
the Real Estate or any property which is adjacent or peripheral to the
Real Estate, together with the right to exercise such options
(collectively, the "Contracts"), (ii) all consents, licenses, building
permits, certificates of occupancy and other governmental approvals
relating to construction, completion, occupancy, use or operation of
the Real Estate or any part thereof (collectively, the "Permits") and
(iii) all drawings, plans, specifications and similar or related items
relating to the Real Estate (collectively, the "Plans");
(J) any and all monies now or subsequently on deposit for the
payment of real estate taxes or special assessments against the Real
Estate or for the payment of premiums on insurance policies covering
the foregoing property or otherwise on deposit with or held by
Mortgagee as provided in this Mortgage;
(K) all accounts and revenues arising from the operation of
the Improvements; and
(L) all proceeds, both cash and noncash, of the foregoing;
(All of the foregoing property and rights and interests now
owned or held or subsequently acquired by Mortgagor and described in the
foregoing clauses (A) through (E)
<PAGE> 6
are collectively referred to as the "Premises", and those described in the
foregoing clauses (A) through (L) are collectively referred to as the "Mortgaged
Property").
TO HAVE AND TO HOLD the Mortgaged Property and the rights and
privileges hereby granted unto Mortgagee, its successors and assigns for the
uses and purposes set forth, until the Indebtedness is fully paid and the
Obligations fully performed or as otherwise expressly provided in the Section of
this Mortgage entitled "Reconveyance of Mortgage".
Terms and Conditions
Mortgagor further represents, warrants, covenants and agrees
with Mortgagee as follows:
1. Warranty of Title. Mortgagor warrants that Mortgagor has
good title to the Real Estate in fee simple and good title to the rest of the
Mortgaged Property, subject only to the matters that are set forth in Schedule B
of the title insurance policy or policies being issued to Mortgagee to insure
this Mortgage and any Liens expressly permitted under the Credit Agreement
(collectively, the "Permitted Exceptions") and Mortgagor shall warrant, defend
and preserve such title and the rights granted by this Mortgage thereon against
all claims of all persons and entities. Mortgagor further warrants that it has
the right to grant this Mortgage.
2. Payment of Indebtedness. Mortgagor shall pay the
Indebtedness at the times and places and in the manner specified in the Credit
Agreement and shall perform all the Obligations.
3. Requirements.
(a) Mortgagor shall promptly comply with, or cause to be
complied with, and conform to all present and future laws, statutes, codes,
ordinances, orders, judgments, decrees, rules, regulations and requirements, and
irrespective of the nature of the work to be done, of each of the United States
of America, any State and any municipality, local government or other political
subdivision thereof and any agency, department, bureau, board, commission or
other instrumentality of any of them, now existing or subsequently created
(collectively, "Governmental Authority") which has jurisdiction over the
Mortgaged Property and all covenants, restrictions and conditions now or later
of record which may be applicable to any of the Mortgaged Property, or to the
use, manner of use, occupancy, possession, operation, maintenance, alteration,
repair or reconstruction of any of the Mortgaged Property, except to the extent
that failure to comply therewith, in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. All present and future laws,
statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and
requirements of every Governmental Authority applicable to Mortgagor or to any
of the Mortgaged Property and all covenants, restrictions, and conditions which
now or later may be applicable to any of the Mortgaged Property are collectively
referred to as the "Legal Requirements".
<PAGE> 7
(b) From and after the date of this Mortgage, except as
expressly permitted under the Credit Agreement or herein, Mortgagor shall not by
act or omission permit, other than Permitted Exceptions, any building or other
improvement on any premises not subject to this Mortgage to rely on the Premises
or any part thereof or any interest therein to fulfill any Legal Requirement,
and Mortgagor hereby assigns to Mortgagee any and all rights to give consent for
all or any portion of the Premises or any interest therein to be so used.
Mortgagor shall not by act or omission impair the integrity of any of the Real
Estate as a single zoning lot separate and apart from all other premises.
Mortgagor represents that each parcel of the Real Estate constitutes a legally
subdivided lot, in compliance with all subdivision laws and similar Legal
Requirements, except to the extent that failure to comply therewith, in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
Any act or omission by Mortgagor which would result in a violation of any of the
provisions of this subsection shall be void.
4. Payment of Taxes and Other Impositions. (a) Except as
expressly permitted under the Credit Agreement, Mortgagor, prior to delinquency,
shall pay and discharge all taxes of every kind and nature (including, without
limitation, all real and personal property, income, franchise, withholding,
transfer, gains, profits and gross receipts taxes), all charges for any easement
or agreement maintained for the benefit of any of the Mortgaged Property, all
general and special assessments, levies, permits, inspection and license fees,
all water and sewer rents and charges and all other public charges even if
unforeseen or extraordinary, imposed upon or assessed against or which may
become a lien on any of the Mortgaged Property, or arising in respect of the
occupancy, use or possession thereof, together with any penalties or interest on
any of the foregoing (all of the foregoing are collectively referred to as the
"Impositions"). Mortgagor shall within 30 days after the request of Mortgagee
deliver to Mortgagee (i) original or copies of receipted bills and cancelled
checks or other evidence of payment of such Imposition if it is a real estate
tax or other public charge and (ii) evidence acceptable to Mortgagee in its
reasonable discretion showing the payment of any other such Imposition. If by
law any Imposition, at Mortgagor's option, may be paid in installments (whether
or not interest shall accrue on the unpaid balance of such Imposition),
Mortgagor may elect to pay such Imposition in such installments and shall be
responsible for the payment of such installments with interest, if any.
(b) Nothing herein shall affect any right or remedy of
Mortgagee under this Mortgage or otherwise, without notice or demand to
Mortgagor, to pay any Imposition after the date such Imposition shall have
become delinquent, and to add to the Indebtedness the amount so paid, together
with interest from the time of payment at the rate of interest described in
subsection 2.15(c) of the Credit Agreement (the "Default Rate"). Any sums paid
by Mortgagee in discharge of any Impositions shall be (i) a charge on the
Premises secured hereby prior to any right or title to, interest in, or claim
upon the Premises subordinate to the lien of this Mortgage, and (ii) payable on
demand by Mortgagor to Mortgagee together with interest at the Default Rate as
set forth above.
(c) Mortgagor shall not claim, demand or be entitled to
receive any credit or credits toward the satisfaction of this Mortgage or on any
interest payable thereon for any
<PAGE> 8
taxes assessed against the Mortgaged Property or any part thereof, and shall not
claim any deduction from the taxable value of the Mortgaged Property by reason
of this Mortgage.
(d) Mortgagor shall have the right pursuant to subsection 7.3
of the Credit Agreement to contest in good faith to the amount or validity of
any Imposition by appropriate proceedings diligently conducted with reserves in
conformity with GAAP, provided that Mortgagor shall demonstrate to Mortgagee's
reasonable satisfaction that such proceedings shall operate conclusively to
prevent the sale of the Mortgaged Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings.
(e) Upon written notice to Mortgagor, Mortgagee during the
continuance of an Event of Default (as defined below) shall be entitled to
require Mortgagor to pay monthly in advance to Mortgagee the equivalent of
1/12th of the estimated annual Impositions. Mortgagee may commingle such funds
with its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
5. Insurance. (a) Mortgagor shall maintain or cause to be
maintained on all of the Premises:
(i) property insurance against loss or damage by fire,
lightning, windstorm, tornado, water damage, flood, earthquake and by
such other further risks and hazards as now are or subsequently may be
covered by an "all risk" policy or a fire policy covering "special"
causes of loss (provided, however, that the maintenance of insurance
against earthquake, windstorm, flood and freeze risks shall be subject
to availability of such insurance coverage on commercially reasonable
terms). The policy shall include building ordinance law endorsements
and the policy limits shall be automatically reinstated after each loss
(other than with respect to flood and earthquake coverage which shall
be reinstated on a commercially reasonable basis);
(ii) commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), covering all claims
for personal injury, bodily injury or death, or property damage,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises in an amount not less than $10,000,000
combined single limit with respect to personal injury, bodily injury or
death, or property damage relating to any one occurrence plus such
excess limits as Mortgagee shall reasonably request from time to time;
(iii) when and to the extent reasonably required by Mortgagee,
insurance against loss or damage by any other risk commonly insured
against by persons occupying or using like properties in the locality
or localities in which the Real Estate is situated;
(iv) during the course of any construction or repair of
Improvements, commercial general liability insurance under a policy
including the "broad form CGL endorsement" (or which incorporates the
language or similar language of such endorsement), (including coverage
for elevators and escalators, if any). The policy
<PAGE> 9
shall include coverage for independent contractors and completed
operations. The completed operations coverage shall stay in effect for
two years after construction of any Improvements has been completed.
The policy shall provide coverage on an occurrence basis against claims
for personal injury, including, without limitation, bodily injury, and
death, and property damage resulting from Mortgagor's negligence or
other behavior for which Mortgagor may be adjudged tortiously liable,
subject to standard policy terms, conditions and exclusions, occurring
on, in or about the Premises and the adjoining streets, sidewalks and
passageways, such insurance to afford immediate minimum protection to a
limit of not less than that reasonably required by Mortgagee with
respect to personal injury, bodily injury or death to any one or more
persons or damage to property;
(v) during the course of any construction or repair of the
Improvements, workers' compensation insurance (including employer's
liability insurance) for all employees of Mortgagor engaged on or with
respect to the Premises in such amounts no less than the limits
established by law, or in the case of employer's liability insurance,
no less than $500,000, provided that Mortgagor may self-insure any or
all workers' compensation liabilities;
(vi) during the course of any construction, addition, alteration or
repair of the Improvements, builder's risk completed value property
insurance form against "all risks of physical loss" (subject to
standard policy exclusions), including collapse, water damage, flood
and earthquake and transit coverage, during construction or repairs of
the Improvements, with deductible approved by Mortgagee in its
reasonable discretion, in reporting form, covering the total
replacement value of work performed and equipment, supplies and
materials furnished (with an appropriate limit for soft costs in the
case of construction); provided, however, that the maintenance of
insurance against earthquake and flood risks shall be subject to
availability of such insurance coverage on commercially reasonable
terms;
(vii) boiler and machinery property insurance covering pressure
vessels, air tanks, boilers, machinery, pressure piping, heating, air
conditioning and elevator equipment and escalator equipment, provided
the Improvements contain equipment of such nature, in such amounts as
are reasonably satisfactory to Mortgagee but not less than the lesser
of $1,000,000 or 10% of the value of the Improvements;
(viii) if any portion of the Premises are located in an area
identified in the Federal Register as having special flood hazards by
the Secretary of Housing and Urban Development or other applicable
agency, flood insurance covering any parcel of the Mortgaged Property
which contains improvements in an amount satisfactory to Mortgagee in
its reasonable discretion, but in no event less than the maximum limit
of coverage available with respect to the particular type of property
under the National Flood Insurance Act of 1968, as amended and with a
term ending not later than the maturity of the Indebtedness and
Mortgagee shall receive confirmation that Mortgagor has received the
notice required pursuant to Section 208.8(e)(3) of Regulation H of the
Board of Governors of The Federal Reserve System; and
<PAGE> 10
(ix) such other insurance in such amounts as Mortgagee may reasonably
request from time to time.
Each insurance policy (other than flood insurance written under the National
Flood Insurance Act of 1968, as amended, in which case to the extent available)
shall (i) provide that it shall not be cancelled, non-renewed or, in the case of
property and boiler and machinery insurance, materially amended without 30-days'
prior written notice to Mortgagee, (ii) with respect to all property insurance,
subject to availability on commercially reasonable terms, provide for
deductibles not to exceed $250,000, other than with respect to (a) flood,
freeze, windstorm and earthquake perils for which deductibles shall not exceed
the greater of $500,000 or 5% of values at risk per location involved in loss
and (b) boiler and machinery coverage for which deductibles shall not exceed the
greater of $500,000 or five times 100% of the daily time element value, contain
a "Replacement Cost Endorsement" without any deduction made for depreciation and
with no co-insurance penalty (or attaching an agreed amount endorsement
satisfactory to Mortgagee in its reasonable discretion), with loss payable
solely to Mortgagee (modified, if necessary and to the extent available under
such policy, to provide that proceeds in the amount of replacement cost may be
retained by Mortgagee without the obligation to rebuild) as its interest may
appear, without contribution, under a "standard" or "New York" mortgagee clause
acceptable to Mortgagee in its reasonable discretion and be written by insurance
companies having an A.M. Best Company, Inc. rating of A- or higher and a
financial size category of not less than VII, or otherwise as approved by
Mortgagee in its reasonable discretion and (iii) contain a "manuscript"
endorsement providing that Mortgagor may not unilaterally cancel such policy
without Mortgagee's prior written consent. Liability insurance policies shall
name Mortgagee as an additional insured and contain a waiver of subrogation
against Mortgagee; all such policies shall indemnify and hold Mortgagee harmless
from all liability claims occurring on, in or about the Premises and the
adjoining streets, sidewalks and passageways, subject to standard policy terms,
conditions and exclusions. The amounts of each insurance policy and the form of
each such policy shall at all times be satisfactory to Mortgagee in its
reasonable discretion. Each policy shall expressly provide that any proceeds
which are payable to Mortgagee shall be paid by check payable to the order of
Mortgagee only and requiring the endorsement of Mortgagee only. If any required
insurance shall expire, be withdrawn, become void by breach of any condition
thereof by Mortgagor or by any lessee of any part of the Mortgaged Property or
become void or unsafe by reason of the failure or impairment of the capital of
any insurer, Mortgagor shall immediately obtain new or additional insurance
satisfactory to Mortgagee in its reasonable discretion. Mortgagor shall not take
out any separate or additional insurance which is contributing in the event of
loss unless it is properly endorsed and otherwise satisfactory to Mortgagee in
all respects in its reasonable discretion.
(b) Mortgagor shall deliver to Mortgagee an original of each
insurance policy required to be maintained, or a certificate of such insurance
acceptable to Mortgagee in its reasonable discretion, together with a copy of
the declaration page for each such policy. Mortgagor shall (i) pay as they
become due all premiums for such insurance, (ii) not later than seven days prior
to the expiration of each policy to be furnished pursuant to the provisions of
this Section, deliver a renewed policy or policies, or certificates of insurance
acceptable to Mortgagee, in its reasonable discretion, or duplicate original or
originals thereof.
<PAGE> 11
Upon the reasonable request of Mortgagee, Mortgagor shall cause its insurance
underwriter or broker to certify to Mortgagee in writing that all the
requirements of this Mortgage governing insurance have been satisfied.
(c) If Mortgagor is in default of its obligations to insure or
deliver any such policy or policies, or certificates of insurance acceptable to
Mortgagee, in its reasonable discretion, then Mortgagee, at its option and
without notice, may effect such insurance from year to year, and pay the premium
or premiums therefor, and Mortgagor shall pay to Mortgagee on demand such
premium or premiums so paid by Mortgagee with interest from the time of payment
at the Default Rate and the same shall be deemed to be secured by this Mortgage
and shall be collectible in the same manner as the Indebtedness secured by this
Mortgage.
(d) Mortgagor shall increase the amount of property insurance
required to equal 100% replacement cost pursuant to the provisions of this
Section at the time of each renewal of each policy (but not later than 12 months
from the date of this Mortgage and each successive 12 month period to occur
thereafter) by using the Morgan & Swift Building Cost Index to determine whether
there shall have been an increase in the replacement value since the most recent
adjustment and, if there shall have been such an increase, the amount of
insurance required shall be adjusted accordingly.
(e) Mortgagor promptly shall in all material respects comply
with and conform to (i) all provisions of each such insurance policy, and (ii)
all requirements of the insurers applicable to Mortgagor or to any of the
Mortgaged Property or to the use, manner of use, occupancy, possession,
operation, maintenance, alteration or repair of any of the Mortgaged Property.
Mortgagor shall not use or permit the use of the Mortgaged Property in any
manner which would permit any insurer to cancel any insurance policy or void
coverage required to be maintained by this Mortgage.
(f) (i) If the Mortgaged Property, or any part thereof, shall
be destroyed or damaged by fire or any other casualty, whether insured
or uninsured, or in the event any claim is made against Mortgagor for
any personal injury, bodily injury or property damage incurred on or
about the Premises, Mortgagor shall promptly give notice thereof to
Mortgagee.
(ii) If the Mortgaged Property is damaged by fire or other
casualty and the cost to repair such damage is less than $1,000,000,
then provided that no Event of Default shall have occurred and be
continuing, Mortgagor shall have the right to adjust such loss, and the
insurance proceeds relating to such loss may be paid over to Mortgagor;
provided that Mortgagor shall, promptly after any such damage, repair
such damage to the extent required by subsection 6.5 of the Credit
Agreement regardless of whether any insurance proceeds have been
received or whether such proceeds, if received, are sufficient to pay
for the costs of repair.
(iii) If the Mortgaged Property is damaged by fire or other
casualty, and the cost to repair such damage exceeds the limit in
Section 5(f)(ii) above, or if an Event
<PAGE> 12
of Default shall have occurred and be continuing, then Mortgagor
authorizes and empowers Mortgagee, at Mortgagee's option and in
Mortgagee's reasonable discretion, as attorney-in-fact for Mortgagor,
to make proof of loss, to adjust and compromise any claim under any
insurance policy, to appear in and prosecute any action arising from
any policy, to collect and receive insurance proceeds and to deduct
therefrom Mortgagee's reasonable expenses incurred in the collection
process. Each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to Mortgagee. Mortgagee
shall have the right to require Mortgagor to repair or restore the
Mortgaged Property to the extent required by subsection 6.5 of the
Credit Agreement, and Mortgagor hereby designates Mortgagee as its
attorney-in-fact for the purpose of making any election required or
permitted under any insurance policy relating to such repair or
restoration. The insurance proceeds or any part thereof received by
Mortgagee may be applied by Mortgagee toward reimbursement of all
reasonable costs and expenses of Mortgagee in collecting such proceeds,
and the balance, at Mortgagee's option in its sole and absolute
discretion, to the principal (to the installments in inverse order of
maturity, if payable in installments) and interest due or to become due
under the Notes, the Credit Agreement or the other Loan Documents, to
fulfill any other Obligation of Mortgagor, to the restoration or repair
of the property damaged, or released to Mortgagor. Application by
Mortgagee of any insurance proceeds toward the last maturing
installments of principal and interest due or to become due on the
Loans shall not excuse Mortgagor from making any regularly scheduled
payments due thereunder, nor shall such application extend or reduce
the amount of such payments. In the event Mortgagee elects to release
such proceeds to Mortgagor, Mortgagor shall be obligated to use such
proceeds to restore or repair the Mortgaged Property to the extent
required by subsection 6.5 of the Credit Agreement.
(g) In the event of foreclosure of this Mortgage or other
transfer of title to the Mortgaged Property in extinguishment of the
Indebtedness, all right, title and interest of Mortgagor in and to any insurance
policies then in force, to the extent assignable or transferable, shall pass to
the purchaser or grantee and Mortgagor hereby appoints Mortgagee its
attorney-in-fact, in Mortgagor's name, to assign and transfer all such policies
and proceeds to such purchaser or grantee.
(h) Upon written notice to Mortgagor, Mortgagee, during the
continuance of an Event of Default, shall be entitled to require Mortgagor to
pay monthly in advance to Mortgagee the equivalent of 1/12th of the estimated
annual premiums due on such insurance. Mortgagee may commingle such funds with
its own funds but Mortgagor shall be entitled to interest thereon at a rate
mutually agreed upon by Mortgagor and Mortgagee.
(i) Mortgagor may maintain insurance required under this
Mortgage by means of one or more blanket insurance policies maintained by
Mortgagor; provided, however, that (A) any such policy shall specify, or
Mortgagor shall furnish to Mortgagee a written statement from the insurer so
specifying, the maximum amount of the total insurance afforded by such blanket
policy that is allocated to the Premises and the other Mortgaged Property and
any sublimits and aggregates in such blanket policy applicable to the Premises
and the other Mortgaged Property, (B) each such blanket policy shall include an
endorsement
<PAGE> 13
providing that, in the event of a loss resulting from an insured peril,
insurance proceeds shall be allocated to the Mortgaged Property in an amount
equal to the coverages required to be maintained by Mortgagor as provided above
(subject to applicable sublimits and aggregates) and (C) the protection afforded
under any such blanket policy shall be no less than that which would have been
afforded under a separate policy or policies relating only to the Mortgaged
Property (subject to applicable sublimits and aggregates).
6. Restrictions on Liens and Encumbrances. Except for the lien
of this Mortgage and the Permitted Exceptions and except as otherwise permitted
pursuant to the terms of the Credit Agreement, Mortgagor shall not further
encumber the Mortgaged Property nor create or suffer to exist any lien, charge
or encumbrance on the Mortgaged Property, or any part thereof, whether superior
or subordinate to this Mortgage and whether recourse or non-recourse.
7. Due on Sale and Other Transfer Restrictions. Except as may
be otherwise expressly permitted under the Credit Agreement, Mortgagor shall not
sell, transfer, convey or assign all or any portion of, or any interest in, the
Mortgaged Property.
8. Maintenance; No Alteration; Inspection; Utilities. (a)
Mortgagor shall maintain or cause to be maintained all the Improvements in good
condition and repair and shall not commit or suffer any waste of the
Improvements. To the extent required under subsection 6.5 of the Credit
Agreement, Mortgagor shall repair, restore, replace or rebuild promptly any part
of the Premises which may be damaged or destroyed by any casualty whatsoever to
a condition substantially equivalent to its condition prior to the damage or
destruction. Except as permitted by the Credit Agreement, the Improvements shall
not be demolished or materially altered, nor any material additions built,
without the prior written consent of Mortgagee, provided that Mortgagor may make
alterations or additions without the consent of Mortgagee that do not materially
reduce the value of the Mortgaged Property.
Except as expressly permitted by paragraph 4 of this Mortgage,
Mortgagor's failure to pay (i) any Imposition assessed against the Premises, or
any installment thereof, or (ii) any insurance premium upon policies required to
be carried by the terms of this Mortgage, shall constitute waste (although the
meaning of the term "waste" shall not be limited to such nonpayment) as provided
by Act No. 236 of the Michigan Public Acts of 1961 (Revised Judicature Act),
Section 600.2927, as and if amended and shall entitle Mortgagee to all remedies
provided for therein; and Mortgagor agrees to and hereby does consent to the
appointment of a receiver under said statute, should Mortgagee elect to seek
such relief thereunder.
(b) Mortgagee and any persons authorized by Mortgagee shall,
upon reasonable notice and at any reasonable time, have the right to enter and
inspect the Premises and the right to inspect all work done, labor performed and
materials furnished in and about the Improvements and the right to inspect and
make copies, to the extent reasonable, of all books, contracts and records of
Mortgagor relating to the Mortgaged Property.
<PAGE> 14
(c) Except as permitted under subsection 6.3 of the Credit
Agreement, Mortgagor shall pay or cause to be paid prior to delinquency, all
utility charges which are incurred for gas, electricity, water or sewer services
furnished to the Premises and all other assessments or charges of a similar
nature, whether public or private, affecting the Premises or any portion
thereof, whether or not such assessments or charges are liens thereon.
9. Condemnation/Eminent Domain. Promptly upon obtaining
knowledge of the institution of any proceedings for the condemnation of the
Mortgaged Property, or any portion thereof, Mortgagor will notify Mortgagee of
the pendency of such proceedings. Mortgagor authorizes Mortgagee, at Mortgagee's
option and in Mortgagee's reasonable discretion, as attorney-in-fact for
Mortgagor, to commence, appear in and prosecute, in Mortgagee's or Mortgagor's
name, any action or proceeding relating to any condemnation of the Mortgaged
Property, or any portion thereof, and to settle or compromise any claim in
connection with such condemnation upon the occurrence and during the continuance
of an Event of Default. If Mortgagee elects not to participate in such
condemnation proceeding, then Mortgagor shall, at its Expense, diligently
prosecute any such proceeding and shall consult with Mortgagee, its attorneys
and experts and cooperate with them in any defense of any such proceedings. All
awards and proceeds of condemnation shall be applied in the same manner as
insurance proceeds, and to the extent such awards and proceeds exceed $1,000,000
and no Event of Default shall have occurred and be continuing, such awards and
proceeds shall be assigned to Mortgagee to be applied in the same manner as
insurance proceeds, as provided above in subsection 5(f)(iii) above, and
Mortgagor agrees to execute any such assignments of all such awards as Mortgagee
may request.
10. Restoration. If Mortgagee elects or is required hereunder
to release funds to Mortgagor for restoration of any of the Mortgaged Property,
then such restoration shall be performed in accordance with such conditions as
Mortgagee shall impose in its reasonable discretion, and as are customarily
imposed by construction lenders.
11. Leases. (a) Mortgagor shall not (i) execute an assignment
or pledge of any Lease relating to all or any portion of the Mortgaged Property
other than in favor of Mortgagee, or (ii) without the prior written consent of
Mortgagee, which consent shall not be unreasonably withheld or delayed, execute
or permit to exist any Lease of any of the Mortgaged Property, except for
Permitted Exceptions and except as may be otherwise expressly permitted under
the Credit Agreement.
(b) As to any Lease consented to by Mortgagee under subsection
11(a) above, Mortgagor shall:
(i) promptly perform in all material respects all of the
provisions of the Lease on the part of the lessor thereunder to be
performed;
(ii) promptly enforce all of the material provisions of the
Lease on the part of the lessee thereunder to be performed;
<PAGE> 15
(iii) appear in and defend any action or proceeding arising
under or in any manner connected with the Lease or the obligations of
Mortgagor as lessor or of the lessee thereunder;
(iv) exercise, within 5 business days after a reasonable
request by Mortgagee, any right to request from the lessee a
certificate with respect to the status thereof;
(v) promptly deliver to Mortgagee copies of any notices of
default which Mortgagor may at any time forward to or receive from the
lessee;
(vi) promptly deliver to Mortgagee a fully executed
counterpart of the Lease; and
(vii) promptly deliver to Mortgagee, upon Mortgagee's
reasonable request, if permitted under such Lease, an assignment of the
Mortgagor's interest under such Lease.
(c) Mortgagor shall deliver to Mortgagee, within 10 business
days after a reasonable request by Mortgagee, a written statement, certified by
Mortgagor as being true, correct and complete, containing the names of all
lessees and other occupants of the Mortgaged Property, the terms of all Leases
and the spaces occupied and rentals payable thereunder, and a list of all Leases
which are then in default, including the nature and magnitude of the default;
such statement shall be accompanied by such other information as Mortgagee may
reasonably request.
(d) All Leases entered into by Mortgagor after the date
hereof, if any, and all rights of any lessees thereunder shall be subject and
subordinate in all respects to the lien and provisions of this Mortgage unless
Mortgagee shall otherwise elect in writing.
(e) In the event of the enforcement by Mortgagee of any remedy
under this Mortgage the lessee under each Lease shall, if requested by Mortgagee
or any other person succeeding to the interest of Mortgagee as a result of such
enforcement, and if provided, at such lessee's request, with a nondisturbance
agreement from Mortgagee or such person, attorn to Mortgagee or to such person
and shall recognize Mortgagee or such successor in interest as lessor under the
Lease without change in the provisions thereof; provided however, that Mortgagee
or such successor in interest shall not be: (i) bound by any payment of an
installment of rent or additional rent which may have been made more than 30
days before the due date of such installment; (ii) bound by any amendment or
modification to the Lease made without the consent of Mortgagee or such
successor in interest; (iii) liable for any previous act or omission of
Mortgagor (or its predecessors in interest); (iv) responsible for any monies
owing by Mortgagor to the credit of such lessee or subject to any credits,
offsets, claims, counterclaims, demands or defenses which the lessee may have
against Mortgagor (or its predecessors in interest); (v) bound by any covenant
to undertake or complete any construction of the Premises or any portion
thereof; or (vi) obligated to make any payment to such lessee other than any
security deposit actually delivered to Mortgagee or such successor in interest.
Each lessee or other occupant, upon request by Mortgagee or such successor in
<PAGE> 16
interest, shall execute and deliver an instrument or instruments confirming such
attornment. In addition, Mortgagor agrees that each Lease entered into after the
date of this Mortgage shall include language to the effect of subsections (d)
and (e) of this Mortgage Section and language to the effect that if any act or
omission of Mortgagor would give any lessee under such Lease the right,
immediately or after lapse of a period of time, to cancel or terminate such
Lease, or to abate or offset against the payment of rent or to claim a partial
or total eviction, such lessee shall not exercise such right until it has given
written notice of such act or omission to Mortgagee and until a reasonable
period for remedying such act or omission shall have elapsed following the
giving of such notice without a remedy being effected; provided that the
provisions of such subsections shall be self-operative and any failure of any
Lease to include such language shall not impair the binding effect of such
provisions on any lessee under such Lease.
12. Further Assurances/Estoppel Certificates. To further
assure Mortgagee's rights under this Mortgage, Mortgagor agrees upon demand of
Mortgagee to do any act or execute any additional documents (including, but not
limited to, security agreements on any personalty included or to be included in
the Mortgaged Property and a separate assignment of each Lease in recordable
form) as may be reasonably required by Mortgagee to confirm the rights or
benefits conferred on Mortgagee by this Mortgage.
13. Mortgagee's Right to Perform. If Mortgagor fails to
perform any of the covenants or agreements of Mortgagor, Mortgagee, without
waiving or releasing Mortgagor from any obligation or default under this
Mortgage, may, at any time (but shall be under no obligation to) pay or perform
the same, and the amount or cost thereof, with interest at the Default Rate,
shall immediately be due from Mortgagor to Mortgagee and the same shall be
secured by this Mortgage and shall be an encumbrance on the Mortgaged Property
prior to any right, title to, interest in or claim upon the Mortgaged Property
attaching subsequent to the date of this Mortgage. No payment or advance of
money by Mortgagee under this Section shall be deemed or construed to cure
Mortgagor's default or waive any right or remedy of Mortgagee.
14. Events of Default. The occurrence of an Event of Default
under the Credit Agreement shall constitute an Event of Default hereunder.
15. Remedies. (a) Upon the occurrence of any Event of Default,
in addition to any other rights and remedies Mortgagee may have pursuant to the
Loan Documents, or as provided by law, and without limitation, the Indebtedness
and all other amounts payable with respect to the Loans, the Letters of Credit,
the Credit Agreement, this Mortgage and the other Security Documents shall
become due and payable as provided in the Credit Agreement. Except as expressly
provided above in this Section, presentment, demand, protest and all other
notices of any kind are hereby expressly waived. In addition, upon the
occurrence of any Event of Default, Mortgagee may immediately take such action,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, the following actions, each of which may be pursued concurrently
or otherwise, at such time and in such manner as Mortgagee may
<PAGE> 17
determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:
(i) Mortgagee may, to the extent permitted by applicable law,
(A) institute and maintain an action of judicial foreclosure against
all or any part of the Mortgaged Property (as described below), (B)
institute and maintain an action on the Notes, the Credit Agreement or
the other Security Documents, (C) sell all or part of the Mortgaged
Property (Mortgagor expressly granting to Mortgagee the power of sale),
or (D) take such other action at law or in equity for the enforcement
of this Mortgage or any of the Loan Documents as the law may allow.
Mortgagee may proceed in any such action to final judgment and
execution thereon for all sums due hereunder, together with interest
thereon at the Default Rate and all costs of suit, including, without
limitation, reasonable attorneys' fees and disbursements. Interest at
the Default Rate shall be due on any judgment obtained by Mortgagee
from the date of judgment until actual payment is made of the full
amount of the judgment.
(ii) Mortgagee may immediately commence foreclosure
proceedings against the Mortgaged Property pursuant to applicable law.
The commencement by Mortgagee of foreclosure proceedings by
advertisement or in equity shall be deemed an exercise by Mortgagee of
its option set forth above to accelerate the due date of all sums
secured hereby. Mortgagor hereby grants power to Mortgagee, in the
event of the occurrence of an Event of Default hereunder, to grant,
bargain, sell, release and convey the Mortgaged Property at public
auction or venue, and upon such sale to execute and deliver to the
purchaser(s) instruments of conveyance pursuant to the terms hereof and
to the applicable laws. Mortgagor acknowledges that the foregoing
sentence confers a power of sale upon Mortgagee, and that upon the
occurrence of an Event of Default this Mortgage may be foreclosed by
advertisement as described below and in the applicable Michigan
statutes. Mortgagor understands that upon default, Mortgagee is hereby
authorized and empowered to sell the Mortgaged Property, or cause the
same to be sold and to convey the same to the purchaser in any lawful
manner, including but not limited to that provided by Chapter 32 of the
Revised Judicature Act of Michigan, entitled "Foreclosure of Mortgage
by Advertisement", which permits Mortgagee to sell the Mortgaged
Property without affording Mortgagor a hearing, or giving it actual
personal notice. The only notice required under such Chapter 32 is to
publish notice in a local newspaper and to post a copy of the notice on
the Mortgaged Property.
WAIVER: By conferring this power of sale upon Mortgagee, Mortgagor, for
itself, its successors and assigns, after an opportunity for
consultation with its legal counsel, hereby voluntarily, knowingly and
intelligently waives all rights under the Constitution and Laws of the
United States and under the Constitution and Laws of the State of
Michigan, both to a hearing on the right to exercise and the exercise
of the power of sale, and to notice except as required by the Michigan
statute which provides for Foreclosure of Mortgages by Advertisement.
<PAGE> 18
(iii) Mortgagee may personally, or by its agents, attorneys
and employees and without regard to the adequacy or inadequacy of the
Mortgaged Property or any other collateral as security for the
Indebtedness and Obligations enter into and upon the Mortgaged Property
and each and every part thereof and exclude Mortgagor and its agents
and employees therefrom without liability for trespass, damage or
otherwise (Mortgagor hereby agreeing to surrender possession of the
Mortgaged Property to Mortgagee upon demand at any such time) and use,
operate, manage, maintain and control the Mortgaged Property and every
part thereof. Following such entry and taking of possession, Mortgagee
shall be entitled, without limitation, (x) to lease all or any part or
parts of the Mortgaged Property for such periods of time and upon such
conditions as Mortgagee may, in its discretion, deem proper, (y) to
enforce, cancel or modify any Lease and (z) generally to execute, do
and perform any other act, deed, matter or thing concerning the
Mortgaged Property as Mortgagee shall deem appropriate as fully as
Mortgagor might do.
In connection with Mortgagee's right to possession of the
Mortgaged Property as specified in this paragraph, Mortgagor acknowledges that
it has been advised that there is a significant body of case law in Michigan
which purportedly provides that in the absence of a showing of waste of a
character sufficient to endanger the value of the Mortgaged Property, or other
special factors, a mortgagor is entitled to remain in possession of Mortgaged
Property, and to enjoy the income, rents and profits therefrom, during the
pendency of foreclosure proceedings and until the expiration of the redemption
period, even if the mortgage documents expressly provide to the contrary.
Mortgagor further acknowledges that it has been advised that Mortgagee
recognizes the value of the security covered hereby is inextricably intertwined
with the effectiveness of the management, maintenance and general operation of
the Mortgaged Property, and that Mortgagee would not extend the Indebtedness
secured hereby unless it could be assured that such Mortgagee would have the
right to take possession of the Mortgaged Property in order to manage or to
control management thereof, and to enjoy the income, rents and profits
therefrom, immediately upon default by Mortgagor hereunder, notwithstanding that
foreclosure proceedings may not have been instituted, or are pending, or the
redemption period may not have expired. Accordingly, Mortgagor hereby knowingly,
intelligently and voluntarily waives all right to possession of the Mortgaged
Property from and after the occurrence of an Event of Default hereunder, upon
demand for possession by Mortgagee, and Mortgagor agrees not to assert any
objection or defense to Mortgagee's request or petition to a court for
possession. The rights hereby conferred upon Mortgagee have been agreed upon
prior to any default by Mortgagor hereunder and the exercise by Mortgagee of any
such rights shall not be deemed to put Mortgagee in the status of a "mortgagee
in possession". Mortgagor acknowledges that this provision is material to this
transaction and that Mortgagee would not extend the Indebtedness secured hereby
but for this paragraph.
(b) The holder of this Mortgage, in any action to foreclose
it, shall be entitled to the appointment of a receiver. In case of a foreclosure
sale, the Real Estate may be sold, at Mortgagee's election, in one parcel or in
more than one parcel and if in more than one parcel the same may be divided as
Mortgagee may elect and Mortgagee is specifically empowered, (without being
required to do so, and in its sole and absolute discretion) to cause
<PAGE> 19
successive sales of portions of the Mortgaged Property to be held. At the
election of Mortgagee, the Mortgaged Property may be offered first in parcels
and then as a whole, the offer producing the highest price for the entire
property offered to prevail. Mortgagor hereby waives any right to require any
such sale to be made in parcels or any right to select such parcels. At the
election of Mortgagee, the Mortgaged Property may be offered first in parcels
and then as a whole, the offer producing the highest price for the entire
property offered to prevail. Mortgagor hereby waives any right to require any
such sale to be made in parcels or any right to select such parcels.
(c) In the event of any breach of any of the covenants,
agreements, terms or conditions contained in this Mortgage, and notwithstanding
to the contrary any exculpatory or non-recourse language which may be contained
herein, Mortgagee shall be entitled to enjoin such breach and obtain specific
performance of any covenant, agreement, term or condition and Mortgagee shall
have the right to invoke any equitable right or remedy as though other such
rights and remedies were provided for in this Mortgage.
(d) In the event of a default because of the existence of any
lien upon the Mortgaged Property, Mortgagee shall have the right (without being
obligated to do so or to continue to do so), without notice to Mortgagor, to
advance on and for the account of Mortgagor such sums as Mortgagee in its sole
discretion deems necessary to cure such default or to induce the holder of any
such lien to forbear from exercising its rights thereunder. Notwithstanding
anything herein to the contrary, the repayment of all such advances, with
interest thereon at the Default Rate from the date of each such advance, shall
be immediately due and payable without demand.
16. Right of Mortgagee to Credit Sale. Upon the occurrence of
any sale made under this Mortgage, whether made under the power of sale or by
virtue of judicial proceedings or of a judgment or decree of foreclosure and
sale, Mortgagee may bid for and acquire the Mortgaged Property or any part
thereof. In lieu of paying cash therefor, Mortgagee may make settlement for the
purchase price by crediting upon the Indebtedness or other sums secured by this
Mortgage the net sales price after deducting therefrom the expenses of sale and
the cost of the action and any other sums which Mortgagee is authorized to
deduct under this Mortgage. In such event, this Mortgage, the Notes and other
instruments evidencing the Indebtedness and any and all documents evidencing
expenditures secured hereby may be presented to the person or persons conducting
the sale in order that the amount so used or applied may be credited upon the
Indebtedness as having been paid.
17. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, Mortgagee as a matter of right and without notice to
Mortgagor, unless otherwise required by applicable law, and without regard to
the adequacy or inadequacy of the Mortgaged Property or any other collateral as
security for the Indebtedness and Obligations or the interest of Mortgagor
therein, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers or other manager of the Mortgaged Property,
without requiring the posting of a surety bond and without reference to the
adequacy or inadequacy of the value of the Mortgaged Property or the solvency or
insolvency
<PAGE> 20
of Mortgagor or any other party obligated for payment of all or any part of the
Indebtedness, and whether or not waste has occurred with respect to the
Mortgaged Property. Mortgagor hereby irrevocably consents to such appointment
and waives notice of any application therefor (except as may be required by
law). Any such receiver or receivers shall have all the usual powers and duties
of receivers in like or similar cases and all the powers and duties of Mortgagee
in case of entry as provided in this Mortgage, including, without limitation and
to the extent permitted by law, the right to enter into leases of all or any
part of the Mortgaged Property, and shall continue as such and exercise all such
powers until the date of confirmation of sale of the Mortgaged Property unless
such receivership is sooner terminated.
18. Extension, Release, etc. (a) Without affecting the charge
of this Mortgage upon any portion of the Mortgaged Property not then or
theretofore released as security for the full amount of the Indebtedness,
Mortgagee may, from time to time and without notice, agree to (i) release any
person liable for the Indebtedness, (ii) extend the maturity or alter any of the
terms of the Indebtedness or any guaranty thereof, (iii) grant other
indulgences, (iv) release or reconvey, or cause to be released or reconveyed at
any time at Mortgagee's option any parcel, portion or all of the Mortgaged
Property, (v) take or release any other or additional security for any
obligation herein mentioned, or (vi) make compositions or other arrangements
with debtors in relation thereto. If at any time this Mortgage shall secure less
than all of the principal amount of the Indebtedness, it is expressly agreed
that any repayments of the principal amount of the Indebtedness shall not reduce
the amount of the encumbrance of this Mortgage until the encumbrance amount
shall equal the principal amount of the Indebtedness outstanding.
(b) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect the encumbrance of this or any liens, rights,
powers or remedies of Mortgagee hereunder, and such liens, rights, powers and
remedies shall continue unimpaired.
(c) If Mortgagee shall have the right to foreclose this
Mortgage, Mortgagor authorizes Mortgagee at its option to foreclose the lien of
this Mortgage subject to the rights of any tenants of the Mortgaged Property.
The failure to make any such tenants parties defendant to any such foreclosure
proceeding and to foreclose their rights will not be asserted by Mortgagor as a
defense to any proceeding instituted by Mortgagee to collect the Indebtedness or
to foreclose this Mortgage.
(d) Unless expressly provided otherwise, in the event that
ownership of this Mortgage and title to the Mortgaged Property or any estate
therein shall become vested in the same person or entity, this Mortgage shall
not merge in such title but shall continue as a valid charge on the Mortgaged
Property for the amount secured hereby.
19. Security Agreement under Uniform Commercial Code. (a) It
is the intention of the parties hereto that this Mortgage shall constitute a
Security Agreement within the meaning of the Uniform Commercial Code (the
"Code") of the State in which the Mortgaged Property is located. If an Event of
Default shall occur under this Mortgage, then in addition to having any other
right or remedy available at law or in equity, Mortgagee shall
<PAGE> 21
have the option of either (i) proceeding under the Code and exercising such
rights and remedies as may be provided to a secured party by the Code with
respect to all or any portion of the Mortgaged Property which is personal
property (including, without limitation, taking possession of and selling such
property) or (ii) treating such property as real property and proceeding with
respect to both the real and personal property constituting the Mortgaged
Property; or in accordance with Mortgagee's rights, powers and remedies with
respect to the real property (in which event the default provisions of the Code
shall not apply). If Mortgagee shall elect to proceed under the Code, then five
days' notice of sale of the personal property shall be deemed reasonable notice
and the reasonable expenses of retaking, holding, preparing for sale, selling
and the like incurred by Mortgagee shall include, but not be limited to,
reasonable attorneys' fees and legal expenses. At Mortgagee's request, during
the continuance of an Event of Default, Mortgagor shall assemble the personal
property and make it available to Mortgagee at a place designated by Mortgagee
which is reasonably convenient to both parties.
(b) Mortgagor and Mortgagee agree, to the extent permitted by
law, that: (i) all of the goods described within the definition of the word
"Equipment" are or are to become fixtures on the Real Estate; (ii) this Mortgage
upon recording or registration in the real estate records of the proper office
shall constitute a financing statement filed as a "fixture filing" within the
meaning of Sections 9-313 and 9-402 of the Code; (iii) Mortgagor is the record
owner of the Real Estate; (iv) the mailing addresses of Mortgagor and Mortgagee
are as set forth on the first page of this Mortgage; (v) Mortgagor's federal tax
identification number is 34-1658458 and (vi) Mortgagee's federal tax
identification number is 52-112-8875. In addition, for purposes of Article 9 of
the Uniform Commercial Code, (i) Mortgagor is the "debtor", (ii) Mortgagee is
the "secured party" and (iii) information concerning the security interest
created hereby may be obtained from Mortgagee at its address on the first page
of this Mortgage.
(c) Mortgagor, upon request by Mortgagee from time to time,
shall execute, acknowledge and deliver to Mortgagee one or more separate
security agreements, in form satisfactory to Mortgagee in its reasonable
discretion, covering all or any part of the Mortgaged Property and will further
execute, acknowledge and deliver, or cause to be executed, acknowledged and
delivered, any financing statement, affidavit, continuation statement or
certificate or other document as Mortgagee may request in order to perfect,
preserve, maintain, continue or extend the security interest under and the
priority of this Mortgage and such security instrument. Mortgagor further agrees
to pay to Mortgagee on demand all reasonable costs and expenses incurred by
Mortgagee in connection with the preparation, execution, recording, filing and
re-filing of any such document and all reasonable costs and expenses of any
record searches for financing statements Mortgagee shall reasonably require. If
Mortgagor shall fail to furnish any financing or continuation statement within
10 days after request by Mortgagee, then pursuant to the provisions of the Code,
Mortgagor hereby authorizes Mortgagee, without the signature of Mortgagor, to
execute and file any such financing and continuation statements. The filing of
any financing or continuation statements in the records relating to personal
property or chattels shall not be construed as in any way impairing the right of
Mortgagee to proceed against any personal property encumbered by this Mortgage
as real property, as set forth above.
<PAGE> 22
20. Assignment of Rents. Mortgagor hereby absolutely and
unconditionally assigns, transfers, conveys and sets over to Mortgagee, the
Rents as further security for the payment of the Indebtedness and performance of
the Obligations, and Mortgagor grants to Mortgagee the right to enter the
Mortgaged Property for the purpose of collecting the same and to let the
Mortgaged Property or any part thereof and to apply the Rents on account of the
Indebtedness. The foregoing assignment and grant is present and absolute and
shall continue in effect until the Indebtedness is paid in full, but Mortgagee
hereby waives the right to enter the Mortgaged Property for the purpose of
collecting the Rents, letting the Mortgaged Property or any part thereof or
applying the Rents and Mortgagor shall be entitled to collect, receive, use and
retain the Rents until the occurrence of an Event of Default under this
Mortgage; such right of Mortgagor to collect, receive, use and retain the Rents
may be revoked by Mortgagee upon the occurrence of any Event of Default under
this Mortgage by giving not less than five days' written notice of such
revocation to Mortgagor; in the event such notice is given, Mortgagor shall pay
over to Mortgagee, or to any receiver appointed to collect the Rents, any lease
security deposits, and shall pay monthly in advance to Mortgagee, or to any such
receiver, the fair and reasonable rental value as determined by Mortgagee for
the use and occupancy of the Mortgaged Property or of such part thereof as may
be in the possession of Mortgagor or any affiliate of Mortgagor, and upon
default in any such payment Mortgagor and any such affiliate will vacate and
surrender the possession of the Mortgaged Property to Mortgagee or to such
receiver, and in default thereof may be evicted by summary proceedings or
otherwise. Mortgagor shall not accept prepayments of installments of Rent to
become due for a period of more than one month in advance (except for security
deposits and estimated payments of percentage rent, if any). Mortgagee shall be
entitled to all of the rights and benefits conferred by Act No. 210 of the
Michigan Public Acts of 1953 as it may be amended, including by Act No. 151 of
the Michigan Public Acts of 1966 (MCLA 554.231 et seq.), and Act No. 228 of the
Michigan Public Acts of 1925 as it may be amended, including by Act No. 55 of
the Michigan Public Acts of 1933 (MCLA 554.211 et seq.). The collection of rents
by Mortgagee shall in no way waive the right of Mortgagee to foreclose this
Mortgage in the event of any default.
21. Trust Funds. All lease security deposits of the Real
Estate shall be treated as trust funds not to be commingled with any other funds
of Mortgagor. Within 10 days after request by Mortgagee, Mortgagor shall furnish
Mortgagee satisfactory evidence of compliance with this subsection, together
with a statement of all lease security deposits by lessees and copies of all
Leases not previously delivered to Mortgagee under which such security deposits
are held, which statement shall be certified by Mortgagor.
22. Additional Rights. The holder of any subordinate lien or
subordinate deed of trust on the Mortgaged Property shall have no right to
terminate any Lease whether or not such Lease is subordinate to this Mortgage
nor shall any holder of any subordinate lien or subordinate mortgage join any
tenant under any Lease in any action to foreclose the lien or modify, interfere
with, disturb or terminate the rights of any tenant under any Lease. By
recordation of this Mortgage all subordinate lienholders under subordinate
mortgages are subject to and notified of this provision, and any action taken by
any such lienholder or mortgagee contrary to this provision shall be null and
void. Upon the occurrence of any Event of Default, Mortgagee may, in its sole
discretion and without regard to the adequacy of
<PAGE> 23
its security under this Mortgage, apply all or any part of any amounts on
deposit with Mortgagee under this Mortgage against all or any part of the
Indebtedness. Any such application shall not be construed to cure or waive any
Default or Event of Default or invalidate any act taken by Mortgagee on account
of such Default or Event of Default.
23. Changes in Method of Taxation. In the event of the passage
after the date hereof of any law of any Governmental Authority deducting from
the value of the Premises for the purposes of taxation any lien or mortgage
thereon, or changing in any way the laws for the taxation of mortgages or deeds
of trust or debts secured thereby for federal, state or local purposes, or the
manner of collection of any such taxes, and imposing a tax, either directly or
indirectly, on mortgages or deeds of trust or debts secured thereby, the holder
of this Mortgage shall have the right to declare the Indebtedness due on a date
to be specified by not less than 30 days' written notice to be given to
Mortgagor unless within such 30-day period Mortgagor shall assume as an
Obligation hereunder the payment of any tax so imposed until full payment of the
Indebtedness and such assumption shall be permitted by law.
24. Notices. Mortgagor and Mortgagee hereby request that a
copy of any notice of default and a copy of any notice of sale hereunder shall
be mailed to each of them at the addresses set forth herein.
25. No Oral Modification. This Mortgage may not be changed or
terminated orally. Any agreement made by Mortgagor and Mortgagee after the date
of this Mortgage relating to this Mortgage shall be superior to the rights of
the holder of any intervening or subordinate mortgage, lien or encumbrance.
Mortgagor's execution of any written agreement between Mortgagor and Mortgagee
shall not be required for the effectiveness thereof as between Mortgagor and
Mortgagee.
26. Partial Invalidity. In the event any one or more of the
provisions contained in this Mortgage shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included. Notwithstanding to the contrary anything contained in this Mortgage or
in any provisions of the Indebtedness or Loan Documents, the obligations of
Mortgagor and of any other obligor under the Indebtedness or Loan Documents
shall be subject to the limitation that Mortgagee shall not charge, take or
receive, nor shall Mortgagor or any other obligor be obligated to pay to
Mortgagee, any amounts constituting interest in excess of the maximum rate
permitted by law to be charged by Mortgagee.
27. Mortgagor's Waiver of Rights. To the fullest extent
permitted by law, Mortgagor waives the benefit of all laws now existing or that
may subsequently be enacted providing for (i) any appraisement before sale of
any portion of the Mortgaged Property, (ii) any extension of the time for the
enforcement of the collection of the Indebtedness or the creation or extension
of a period of redemption from any sale made in collecting such debt and (iii)
exemption of the Mortgaged Property from attachment, levy or sale under
execution or exemption from civil process. To the full extent Mortgagor may do
so, Mortgagor agrees
<PAGE> 24
that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, exemption, extension or redemption, or requiring
foreclosure of this Mortgage before exercising any other remedy granted
hereunder and Mortgagor, for Mortgagor and its successors and assigns, and for
any and all persons ever claiming any interest in the Mortgaged Property, to the
extent permitted by law, hereby waives and releases all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the event
of foreclosure of the liens hereby created.
28. Remedies Not Exclusive. Mortgagee shall be entitled to
enforce payment of the Indebtedness and performance of the Obligations and to
exercise all rights and powers under this Mortgage or under any of the other
Loan Documents or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the Indebtedness and Obligations may now or
hereafter be otherwise secured, whether by deed of trust, mortgage, security
agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this
Mortgage nor its enforcement, shall prejudice or in any manner affect
Mortgagee's right to realize upon or enforce any other security now or hereafter
held by Mortgagee, it being agreed that Mortgagee shall be entitled to enforce
this Mortgage and any other security now or hereafter held by Mortgagee in such
order and manner as Mortgagee may determine in its absolute discretion. No
remedy herein conferred upon or reserved to Mortgagee is intended to be
exclusive of any other remedy herein or by law provided or permitted, but each
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute. Every
power or remedy given by any of the Loan Documents to Mortgagee or to which
either may otherwise be entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Mortgagee. In no event shall Mortgagee, in the exercise of the remedies provided
in this Mortgage (including, without limitation, in connection with the
assignment of Rents, or the appointment of a receiver and the entry of such
receiver on to all or any part of the Mortgaged Property), be deemed a
"mortgagee in possession," and Mortgagee shall not in any way be made liable for
any act, either of commission or omission, in connection with the exercise of
such remedies.
29. Multiple Security. If (a) the Premises shall consist of
one or more parcels, whether or not contiguous and whether or not located in the
same county, or (b) in addition to this Mortgage, Mortgagee shall now or
hereafter hold or be the mortgagee of one or more additional mortgages, liens,
deeds of trust or other security (directly or indirectly) for the Indebtedness
upon other property in the State in which the Premises are located (whether or
not such property is owned by Mortgagor or by others) or (c) both the
circumstances described in clauses (a) and (b) shall be true, then to the
fullest extent permitted by law, Mortgagee may, at its election, commence or
consolidate in a single foreclosure action all foreclosure proceedings against
all such collateral securing the Indebtedness (including the Mortgaged
Property), which action may be brought or consolidated in the courts of any
county in which any of such collateral is located. Mortgagor acknowledges that
the right to maintain a consolidated foreclosure action is a specific inducement
to Mortgagee to extend the Indebtedness, and Mortgagor expressly and irrevocably
waives any objections to the
<PAGE> 25
commencement or consolidation of the foreclosure proceedings in a single action
and any objections to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have. Mortgagor further agrees that if
Mortgagee shall be prosecuting one or more foreclosure or other proceedings
against a portion of the Mortgaged Property or against any collateral other than
the Mortgaged Property, which collateral directly or indirectly secures the
Indebtedness, or if Mortgagee shall have obtained a judgment of foreclosure or
similar judgment against such collateral, then, whether or not such proceedings
are being maintained or judgments were obtained in or outside the State in which
the Premises are located, Mortgagee may commence or continue any foreclosure
proceedings and exercise its other remedies granted in this Mortgage against all
or any part of the Mortgaged Property and Mortgagor waives any objections to the
commencement or continuation of a foreclosure of this Mortgage or exercise of
any other remedies hereunder based on such other proceedings or judgments, and
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either any action under this Mortgage or such other proceedings on such basis.
Neither the commencement nor continuation of proceedings to foreclose this
Mortgage nor the exercise of any other rights hereunder nor the recovery of any
judgment by Mortgagee in any such proceedings shall prejudice, limit or preclude
Mortgagee's right to commence or continue one or more foreclosure or other
proceedings or obtain a judgment against any other collateral (either in or
outside the State in which the Real Estate is located) which directly or
indirectly secures the Indebtedness, and Mortgagor expressly waives any
objections to the commencement of, continuation of, or entry of a judgment in
such other proceedings or exercise of any remedies in such proceedings based
upon any action or judgment connected to this Mortgage, and Mortgagor also
waives any right to seek to dismiss, stay, remove, transfer or consolidate
either such other proceedings or any sale or action under this Mortgage on such
basis. It is expressly understood and agreed that to the fullest extent
permitted by law, Mortgagee may, at its election, cause the sale of all
collateral which is the subject of a single foreclosure action at either a
single sale or at multiple sales conducted simultaneously and take such other
measures as are appropriate in order to effect the agreement of the parties to
dispose of and administer all collateral securing the Indebtedness (directly or
indirectly) in the most economical and least time-consuming manner.
30. Successors and Assigns. All covenants of Mortgagor
contained in this Mortgage are imposed solely and exclusively for the benefit of
Mortgagee and its respective successors and assigns, and no other person or
entity shall have standing to require compliance with such covenants or be
deemed, under any circumstances, to be a beneficiary of such covenants, any or
all of which may be freely waived in whole or in part by Mortgagee at any time
if in its sole discretion such waiver is deemed advisable. All such covenants of
Mortgagor shall run with the land and bind Mortgagor, the successors and assigns
of Mortgagor (and each of them) and all subsequent owners, encumbrancers and
tenants of the Mortgaged Property, and shall inure to the benefit of Mortgagee,
and its respective successors and assigns. The word "Mortgagor" shall be
construed as if it read "Mortgagors" whenever the sense of this Mortgage so
requires and if there shall be more than one Mortgagor, the obligations of the
Mortgagors shall be joint and several.
31. No Waivers, etc. Any failure by Mortgagee to insist upon
the strict performance by Mortgagor of any of the terms and provisions of this
Mortgage shall not be
<PAGE> 26
deemed to be a waiver of any of the terms and provisions hereof, and Mortgagee,
notwithstanding any such failure, shall have the right thereafter to insist upon
the strict performance by Mortgagor of any and all of the terms and provisions
of this Mortgage to be performed by Mortgagor. Mortgagee may release, regardless
of consideration and without the necessity for any notice to or consent by the
mortgagee of any subordinate mortgage or the holder of any subordinate lien on
the Mortgaged Property, any part of the security held for the obligations
secured by this Mortgage without, as to the remainder of the security, in
anywise impairing or affecting the lien of this Mortgage or the priority of such
lien over any subordinate lien or mortgage.
32. Governing Law, etc. This Mortgage shall be governed by and
construed in accordance with the laws of the State in which the Premises are
located, except that Mortgagor expressly acknowledges that by its terms the
Credit Agreement shall be governed and construed in accordance with the laws of
the State of New York, without regard to principles of conflict of law, and for
purposes of consistency, Mortgagor agrees that in any in personam proceeding
related to this Mortgage the rights of the parties to this Mortgage shall also
be governed by and construed in accordance with the laws of the State of New
York governing contracts made and to be performed in that State, without regard
to principles of conflict of law.
33. Waiver of Trial by Jury. Mortgagor and Mortgagee each
hereby irrevocably and unconditionally waive trial by jury in any action, claim,
suit or proceeding relating to this Mortgage and for any counterclaim brought
therein.
34. Certain Definitions. Unless the context clearly indicates
a contrary intent or unless otherwise specifically provided herein, words used
in this Mortgage shall be used interchangeably in singular or plural form and
the word "Mortgagor" shall mean "each Mortgagor or any subsequent owner or
owners of the Mortgaged Property or any part thereof or interest therein," the
word "Mortgagee" shall mean "Mortgagee or any successor Administrative Agent,"
the word "Notes" shall mean "the notes that may from time to time be given
pursuant to the terms of the Credit Agreement or any other evidence of
indebtedness secured by this Mortgage" the word "person" shall include any
individual, corporation, partnership, trust, unincorporated association,
government, governmental authority, or other entity, and the words "Mortgaged
Property" shall include any portion of the Mortgaged Property or interest
therein. Whenever the context may require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns and pronouns shall include the plural and vice versa. The captions
in this Mortgage are for convenience or reference only and in no way limit or
amplify the provisions hereof.
35. Reconveyance of Mortgage. Upon payment in full of the
Indebtedness, the termination of all Commitments under the Credit Agreement
secured hereby and the compliance with the Obligations then required to be
complied with, Mortgagee shall execute and deliver the encumbrance of this
Mortgage. If any of the Mortgaged Property shall be sold, transferred or
otherwise disposed of by Mortgagor in a transaction expressly permitted by the
Credit Agreement, then Mortgagee shall execute and deliver to Mortgagor (at the
sole cost and expense of Mortgagor) all releases, reconveyances or other
documents reasonably
<PAGE> 27
necessary or desirable for the release of such Mortgaged Property from the
encumbrance of this Mortgage.
36. Conflict with Credit Agreement. In the event of any
conflict or inconsistency between the terms and provisions of this Mortgage and
the terms and provisions of the Credit Agreement, the terms and provisions of
the Credit Agreement shall govern, other than with respect to the Section of
this Mortgage captioned "Governing Law, etc.". By their execution of the Credit
Agreement, each Lender hereby agrees that it shall not have the right to
institute any suit for enforcement of Notes or any other Indebtedness secured by
this Mortgage or any other Security Document, if and to the extent that the
institution or prosecution thereof or the entry of judgment therein would, under
applicable law, result in the surrender, impairment, waiver or loss of the Lien
of this Mortgage or any other Security Document or impede or delay the
enforcement of the Lien of this Mortgage or any other Security Document.
37. Revolving Credit Loans. A portion of the Indebtedness
secured by this Mortgage is a revolving line of credit under which advances,
payments and readvances may be made from time to time.
<PAGE> 28
This Mortgage has been duly executed by Mortgagor on the date
first above written.
In the Presence of: DAY INTERNATIONAL, INC.
____________________________ By: _______________________________
Print name: Name:
Title:
____________________________
Print name:
<PAGE> 29
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ____
day of January, 1998, by ______________, the [ ] President of DAY INTERNATIONAL,
INC., a Delaware corporation, on behalf of the corporation.
__________________________________
Notary Public
My Commission Expires
[seal]
<PAGE> 30
Schedule A
St. Joseph County, Michigan
Land situated in the City of Three Rivers.
All that part of the Southeast quarter of Section 13, Township 6 South, Range
12 West, described as follows:
Commencing at the Southeast corner of said Section 13 and running thence South
88o42' West, along the Section line, 1290 feet to the West line of Day Road,
which is the point of beginning of this description; thence North 00o51' West,
along said West line of Day Road, 932.60 feet to the Southerly right of way of
Highway M-60, thence Southwesterly, along said Highway right of way along a
785.51 foot radius curve to the left, an arc distance of 686.61 feet (said
curve being subtended by a chord which bears South 52o45'11" West 664.96 feet)
thence South 67o36'00" East 120.00 feet, thence North 88o42'00" East 243.59
feet, thence South 00o07' East, along the East line of the Pilasters on the
existing building wall and its extension, 103.93 feet, thence North 89o56'25"
East 45.79 feet, thence South 00o10'00" East, along the West side of an
existing concrete block building and its extensions, 389.18 feet, thence North
88o42'00" East, along the South line of said Section 13, a distance of 142.49
feet to the point of beginning.
Also, all that part of the Northeast quarter of the Northeast quarter of
Section 24, Township 6 South, Range 12 West, described as follows:
Commencing at the Northeast corner of said Section 24 and running thence South
89o48' West along the North line of said section, 1,122 feet to the point of
beginning of this description; the boundary runs thence South 00o57'40" West,
parallel with the east line of said section, 660 feet, thence South 89o48' West
186.90 feet, thence North 00o57' East 330 feet, thence North 89o48' East 132
feet; thence North 00o57' East 330 feet, thence North 89o48' East, along the
section line, 55.11 feet to the point of beginning.
<PAGE> 1
Exhibit 10.1
STOCKHOLDERS AGREEMENT
Dated as of January 16, 1998
Among
GSD ACQUISITION CORP.
AND ITS STOCKHOLDERS
<PAGE> 2
TABLE OF CONTENTS
Page
Section 1. Restructuring......................................... 2
Section 2. Definitions........................................... 3
Section 3. Voting Arrangements................................... 7
(a) Election of Directors................................. 7
(b) Removal of Directors.................................. 7
(c) Vacancies............................................. 7
(d) Rights Unimpaired..................................... 7
(e) Board Observer........................................ 8
Section 4. Repurchase Option..................................... 8
(a) Termination of Employment............................. 8
(b) Repurchase Procedure for Employee Stock............... 8
Section 5. Restrictions on Transfer of Employee Stock............ 9
(a) Restrictions on Transfer.............................. 9
(b) Certain Permitted Transfers........................... 9
Section 6. Restrictions on Transfer of SG Stock.................. 10
(a) Restrictions on Transfer.............................. 10
(b) Certain Permitted Transfers........................... 10
(c) Right of First Refusal................................ 10
Section 7. Additional Restrictions on Transfer................... 11
(a) Stock Legend.......................................... 11
(b) Additional Legends.................................... 11
(c) Opinion of Counsel.................................... 12
Section 8. Sale of the Company................................... 12
Section 9. Participation Rights.................................. 12
Section 10. Registration Rights................................... 13
(a) Demand Registration................................... 13
(b) Company Registration.................................. 14
(d) Costs of Registration................................. 15
(f) Registration Procedures............................... 15
i
<PAGE> 3
(g) Other Limitations..................................... 15
Section 11. Assignment of Rights; Representations on Sale......... 16
Section 12. Equity Issuances...................................... 16
Section 13. Transfers in Violation of Agreement................... 16
Section 14. New Employee Stockholders............................. 16
Section 15. Amendment and Waiver.................................. 17
Section 16. Severability.......................................... 17
Section 17. Entire Agreement...................................... 17
Section 18. Successors and Assigns................................ 17
Section 19. Counterparts.......................................... 17
Section 20. Remedies.............................................. 18
Section 21. Notices............................................... 18
Section 22. Governing Law......................................... 20
Section 23. Descriptive Headings.................................. 20
Section 24. Termination; Survival................................. 20
ii
<PAGE> 4
STOCKHOLDERS AGREEMENT
This STOCKHOLDERS AGREEMENT (this "AGREEMENT") is dated as of
January 16, 1998 among GSD ACQUISITION CORP, a Delaware corporation (the
"COMPANY"), GREENWICH IV LLC, a Delaware limited liability company
("GREENWICH"), Societe Generale Capital Corporation ("SG"), the Employee
Stockholders set forth on Schedule A hereto and each other individual who
hereafter executes a counterpart of this Agreement (or otherwise agrees to be
bound by the provisions hereof) and who is designated as an Employee Stockholder
(the "EMPLOYEE STOCKHOLDERS" and, together with Greenwich and SG, the
"STOCKHOLDERS").
W I T N E S S E T H :
WHEREAS, Greenwich, the Company, and Day International Group,
Inc. ("DAY INTERNATIONAL") are party to that certain Stock Purchase Agreement,
dated as of December 18, 1997 as amended (the "STOCK PURCHASE AGREEMENT"),
providing for the acquisition by the Company of all of the outstanding shares of
common stock of Day International, except for the Retained Shares and the
Retained Options as defined in the Stock Purchase Agreement;
WHEREAS, the Company has two classes of Common Stock, Class A
Common Stock, par value $.01 per share (the "VOTING COMMON STOCK") and Class B
Common Stock, par value $.01 per share (the "NON-VOTING COMMON STOCK", together
with the Voting Common Stock, the "COMMON STOCK");
WHEREAS, immediately after the closing under the Stock
Purchase Agreement (a) Greenwich will own approximately 100% of the total
outstanding shares of Voting Common Stock and 83.4% of the total outstanding
shares of Common Stock; (b) SG will own approximately 100% of the Non-Voting
Common Stock and 16.6% of the total outstanding shares of Common Stock, (c) the
Company will own 93.9% of the total outstanding equity of Day International, and
(d) each Employee Stockholder will hold shares, or options to acquire shares, of
common stock of Day International as set forth opposite such Employee
Stockholder's name on the portion of Section 2.1(a) of the Disclosure Schedule
of the Stock Purchase Agreement which is applicable to such Employee
Stockholder;
WHEREAS, after the closing under the Stock Purchase Agreement,
Day International will seek the consents of certain noteholders of Day
International to a restructuring involving the Company and Day International and
if such consents are obtained, then Greenwich and SG will become stockholders of
Day International and if
<PAGE> 5
such consents are not obtained, then the Employee Stockholders will either
become stockholders and optionholders of the Company or this Agreement will be
amended in an appropriate fashion to include the Employee Stockholders' equity
interests in Day International;
WHEREAS, after the closing under the Stock Purchase Agreement
either the Company or Day International will adopt a stock option plan under
which certain employees of Day International or one or more of its subsidiaries
will be granted options to acquire common stock of the Company or Day
International, as the case may be; and
WHEREAS, the parties hereto believe it to be in their best
interests that they enter into this Agreement providing for certain rights and
restrictions with respect to the shares of common stock or options to acquire
shares of common stock of the Company owned from time to time by them or their
transferees.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations set forth in this Agreement, the parties hereto agree as follows:
SECTION 1. RESTRUCTURING. (a) After the closing under the
Stock Purchase Agreement, Day International and the Company intend to solicit
the consents of certain of Day International's noteholders to effect a
restructuring (the "RESTRUCTURING"), structured as a liquidation, exchange,
merger or otherwise, which would result in all of the stockholders of the
Company becoming stockholders of Day International and all of the obligations of
the Company, including without limitation, all of its indebtedness for borrowed
money, becoming obligations of Day International. The Restructuring may occur in
several stages or in one integrated transaction. Immediately following the
Restructuring, the Employee Stockholders will, in the aggregate, own 14.5% of
the equity of Day International (with each Employee Stockholder owning the same
proportion of such equity as it owns in the equity of Day International owned by
all Employee Stockholders immediately after the closing under the Stock Purchase
Agreement) and Greenwich and SG will, in the aggregate, own 85.5% of the equity
of Day International (of which 83.4% will be owned by Greenwich and 16.6% will
be owned by SG). Societe Generale will hold SG Warrants exercisable into 10% of
the common stock of Day International which would dilute the Employee
Stockholders, Greenwich and SG on a pro rata basis. SG and each Employee
Stockholder hereby consents to the Restructuring and agrees to fully cooperate
with and take all necessary and desirable actions requested by Day International
or the Company in connection with the consummation of the Restructuring and each
Stockholder agrees that the terms of this Agreement will apply to any shares of
common stock received by it in connection with the Restructuring and, if
requested by Greenwich, will execute an amended and restated version of this
Agreement
2
<PAGE> 6
which substitutes Day International as the "Company" herein, in each case so
long as the relative economic and other rights of the Stockholders are not
materially altered.
(b) If such consents to the Restructuring are not obtained,
then each of the employees who hold equity securities of Day International after
the closing under the Stock Purchase Agreement will, at the request of Day
International, either (a) exchange such equity securities for equity securities
of the Company and execute and deliver this Agreement as Employee Stockholders
(with the objective of achieving the same economic result for such Employee
Stockholders which would have been obtained had the Restructuring occurred) or
(b) execute and deliver an amended and restated version of this Agreement which
provides substantially the same benefits and imposes substantially the same
restrictions on the equity securities held by such employees in Day
International as those provided to and imposed on the Employee Stockholders in
this Agreement with respect to equity securities of the Company.
SECTION 2. DEFINITIONS. For purposes of this Agreement, the
following terms have the indicated meanings:
"AFFILIATE" of a Person means any other Person controlling,
controlled by or under common control with such Person, whether by ownership of
voting securities, by contract or otherwise.
"APPROVED SALE" is defined in Section 8.
"BOARD" means the Company's Board of Directors.
"CAUSE" means (a) with respect to any Employee Stockholder
with an employment agreement that explicitly defines "Cause," the definition set
forth in such employment agreement and (b) with respect to any other Employee
Stockholder, (i) such Employee Stockholder's willful and repeated failure to
perform substantially his duties as an employee of the Company or any
Subsidiary, including, without limitation, such Employee Stockholder's willful
and repeated failure to comply with reasonable and lawful directives of the
Board (as set at any meeting of the Board in accordance with the Company's
bylaws) or such Employee Stockholder's supervisory personnel (provided such
directives are consistent with his or her position), (ii) any conviction of, or
the entering of a plea of guilty or nolo contendere to, a crime that constitutes
a felony, or any willful or material violation by such Employee Stockholder of
any federal, state or foreign securities laws, (iii) any conviction of any other
criminal act or act of material dishonesty, disloyalty or misconduct by such
Employee Stockholder (other than minor traffic offenses and similar acts) that
is materially injurious to the property, operations, business or reputation of
the Company or any of its Subsidiaries, (iv) the failure to
3
<PAGE> 7
comply with the terms of any equity plan, arrangement or agreement of the
Company or any Affiliate, in which such Employee Stockholder is a participant or
to which such Employee Stockholder is a party or (v) the willful and material
breach by such Employee Stockholder of any written covenant or agreement with
the Company, any Subsidiary or any Affiliate not to disclose any information
pertaining to the Company, any Subsidiaries or any Affiliates or not to compete
or interfere with the Company, any of its Subsidiaries or Affiliates.
"COMMON STOCK" is defined in the second "Whereas" clause.
"COMPANY" is defined in the preface.
"COMPANY REGISTRATION" is defined in Section 10(b).
"DAY INTERNATIONAL" is defined in the first "Whereas" clause.
"DEMAND REGISTRATION" is defined in Section 10(a).
"EMPLOYEE STOCK" means Stockholder Shares held by the Employee
Stockholders and their respective Permitted Transferees.
"EMPLOYEE STOCKHOLDER" is defined in the preface.
"FAIR MARKET VALUE" as of any date means (a) with respect to
publicly traded Common Stock, the market trading price of such Common Stock, (b)
with respect to non-publicly traded Common Stock, the fair market value of such
Common Stock (expressed on a per-share basis) as of such date, as determined in
good faith by the Board based on the consolidated results of operations,
financial condition and future prospects of the Company and such other factors
as the Board may deem appropriate and (c) with respect to Options, the
difference of (i) the product of the amount described in clause (a) or (b) above
(as appropriate) multiplied by the number of shares of Common Stock issuable
upon exercise of the Option, minus (ii) the aggregate exercise price of the
Option.
"FAMILY GROUP" is defined in Section 5(b).
"GREENWICH" is defined in the preface.
"GREENWICH STOCK" means Stockholder Shares held by Greenwich,
its Affiliates and their respective transferees.
4
<PAGE> 8
"INDEPENDENT THIRD PARTY" means any person who does not own in
excess of 10% of the Common Stock on a fully-diluted basis, who is not
controlling, controlled by or under common control with any such 10% owner of
Common Stock and who is not the spouse, ancestor or descendant (by birth or
adoption) of any such 10% owner of Common Stock.
"NON-VOTING COMMON STOCK" is defined in the second "Whereas"
clause.
"OPTIONS" means options to purchase shares of Common Stock.
"ORIGINAL COST" means for any Employee Stockholder and with
respect to any share of Employee Stock, such Employee Stock's original purchase
price for such share of Employee Stock acquired from the Company and held by
such Employee Stockholder, as reflected in the records of the Company, provided
that (a) for any shares of Employee Stock which were Retained Shares, the
"original cost" of each such share will be $4,030.03, (b) for any shares of
Employee Stock which were acquired by the exercise of Retained Options, the
"original cost" of each such share will be the excess of $4,030.03 minus the
exercise price for such Retained Option and (c) for any Options which were
Retained Options, the "original cost" of each such Option will be the excess of
$4,030.03 minus the exercise price for such Option.
"OTHER STOCKHOLDERS" is defined in Section 8.
"PARTICIPATING STOCKHOLDERS" is defined in Section 9.
"PERMITTED TRANSFEREE" is defined in Section 5(b).
"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, limited liability company, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or other
legal entity.
"QUALIFIED PUBLIC OFFERING" means the sale, in an underwritten
public offering registered under the Securities Act, of shares of Common Stock
having an aggregate offering value (before underwriters' discounts and selling
commissions) of at least $50 million, but excluding any offering relating to any
of the SG Warrants or the shares of Common Stock into which the SG Warrants are
exercisable.
"REPURCHASE NOTICE" is defined in Section 4(b).
"RESTRUCTURING" is defined in Section 1(a).
5
<PAGE> 9
"RETAINED OPTIONS" is defined in Section 2.1(a) of the Stock
Purchase Agreement.
"RETAINED SHARES" is defined in Section 2.1(a) of the Stock
Purchase Agreement.
"SALE NOTICE" is defined in Section 9.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SG" is defined in the preface.
"SG STOCK" means Stockholder Shares held by SG and its
transferees.
"SG WARRANTS" means the Warrants held by Societe Generale
pursuant to the Warrant Agreement, dated as of January 15, 1998, between the
Company and ChaseMellon Shareholder Services, L.L.C. as the Warrant Agent.
"SOCIETE GENERALE" means Societe Generale or transferees of SG
Warrants.
"STOCK PURCHASE AGREEMENT" is defined in the first "Whereas"
clause.
"STOCKHOLDER" is defined in the preface.
"STOCKHOLDER SHARES" means (i) all shares of Common Stock
acquired by the Stockholders, including all shares of Common Stock acquired
pursuant to the exercise of Options and, for purposes of Sections 8, 9 and 10
only, the SG Warrants and all shares of Common Stock acquired pursuant to the
exercise of the SG Warrants and (ii) all shares of Common Stock or other
securities issued or issuable directly or indirectly with respect to the
securities referred to in clause (i) by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. Stockholder Shares shall cease to be such
when they have been sold (x) pursuant to a registered public offering under the
Securities Act or (y) to the public pursuant to Rule 144 under the Securities
Act, or any successor provision.
"SUBSIDIARY" means, with respect to any Person, any other
Person of which at least a majority of the outstanding shares or other equity
interests having ordinary voting power for the election of directors or
comparable managers of such Person are owned, directly or indirectly, by the
first Person or one or more Subsidiaries of such first Person.
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"TRANSFER NOTICE" is defined in Section 6(c).
"TRANSFER OFFER" is defined in Section 6(c).
"TRANSFER SECURITIES" is defined in Section 6(c).
"VESTED OPTIONS" means Options that are exercisable by the
holder thereof on the date of determination.
"VOTING COMMON STOCK" is defined in the second "Whereas"
clause.
"WARRANT AGREEMENT" means the agreement, dated as of January
15, 1998, between the Company and ChaseMellon Shareholder Services, L.L.C. as
the Warrant Agent.
SECTION 3. VOTING ARRANGEMENTS.
(a) ELECTION OF DIRECTORS. Each holder of Stockholder Shares
hereby agrees that such Person will vote, or cause to be voted, all voting
securities of the Company over which such Person has the power to vote or direct
the voting, and will take all other necessary or desirable action within such
Person's control, and the Company will take all necessary and desirable actions
within its control to cause the authorized number of directors for the Board to
be such number as designated by Greenwich, which initially shall be five, and to
elect or cause to be elected to the Board and cause to be continued in such
office, four individuals as designated by Greenwich from time to time and, for
so long as SG holds 5% of the outstanding Common Stock, one individual
designated by SG from time to time.
(b) REMOVAL OF DIRECTORS. If at any time Greenwich or SG shall
notify any or all of the other holders of Stockholder Shares of its desire to
remove, with or without cause, any individual from a directorship for which such
Person has designation rights pursuant to Section 3(a) above, all such Persons
so notified will vote, or cause to be voted, all voting securities of the
Company over which they have the power to vote or direct the voting, and shall
take all such other actions promptly as shall be necessary or desirable to cause
the removal of such director.
(c) VACANCIES. If at any time any Greenwich or SG director
ceases to serve on the Board (whether due to resignation, removal or otherwise),
then Greenwich or SG, as the case may be, shall be entitled to designate a
successor director to fill the vacancy created thereby on the terms and subject
to the conditions of Section 3(a) above. Each holder of Stockholder Shares
agrees that he, she or it will vote, or cause to be voted,
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all voting securities of the Company over which such Person has the power to
vote or direct the voting, and shall take all such other actions as shall be
necessary or desirable, to cause the designated successor to be elected to fill
such vacancy.
(d) RIGHTS UNIMPAIRED. Nothing in this Agreement shall be
construed to impair any rights that the stockholders of the Company may have to
remove any director for cause. No removal for cause of an individual designated
pursuant to this Section 3 shall affect the right of Greenwich or SG, as the
case may be, to designate a different individual pursuant to Section 3 to fill
the directorship from which such individual was removed.
(e) BOARD OBSERVER. SG shall have the right, at any time upon
notice to the Company and to Greenwich, to have its right to designate a
director become a right to designate a non-voting observer. Such observer shall
have the right to receive notice of and attend and participate in discussions at
each regular and special meeting of the Board and will be entitled to receive at
the same time they are provided to the Board copies of any information
concerning the Company that is provided to each of the directors of the Company
with respect to such meetings, provided that such observer acknowledges and
agrees that such observer will be bound by the same duties and obligations of
loyalty and confidentiality with respect to such information that the directors
of the Company must satisfy. Observers will have no voting rights or any other
rights not expressly set forth above.
SECTION 4. REPURCHASE OPTION.
(a) TERMINATION OF EMPLOYMENT. Upon the termination of an
Employee Stockholder's employment by the Company or its Subsidiaries:
(i) if such termination is for any reason other than
for Cause (A) the Company may elect to repurchase all or any portion of
the Employee Stock or Vested Options held by such Employee Stockholder
and his or her Permitted Transferees at a price per share equal to Fair
Market Value as of the date of termination of the shares of Employee
Stock to be purchased (and, in the case of Vested Options, at the
excess of the aggregate Fair Market Value of all of the shares of
Common Stock which are subject to the Vested Options to be purchased
over the aggregate exercise price therefor) and (B) all Options held by
such Employee Stockholder other than Vested Options shall be
automatically canceled; and
(ii) if such termination is for Cause, the Company
may elect to repurchase all or any portion of the Employee Stock held
by such Employee
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Stockholder and his or her Permitted Transferees at a price per share
equal to the lesser of Fair Market Value (as of the date of
termination) and Original Cost, and all Options (including Vested
Options other than Retained Options) held by such Employee Stockholder
shall be canceled automatically.
(b) REPURCHASE PROCEDURE FOR EMPLOYEE STOCK. The Company shall
exercise any election to purchase Employee Stock or Options pursuant to Section
4(a) by delivery to the Employee Stockholder, within 90 days after the
termination of such Employee Stockholder's employment, a written notice (the
"REPURCHASE NOTICE") specifying the number of shares of Employee Stock and
Options to be repurchased. The closing of any repurchase of Employee Stock or
Options shall take place not later than 190 days following the date on which the
Repurchase Notice is delivered to the Employee Stockholder. The shares of
Employee Stock or Options to be repurchased by the Company shall be satisfied
(i) first, from the shares of Employee Stock or Options held by the Employee
Stockholder at the time of delivery of the Repurchase Notice and (ii) second, if
the number of such shares is less than the number of shares elected to be
repurchased by the Company, from the shares of Employee Stock or Options held by
the Permitted Transferees of such Employee Stockholder in such proportions as
shall be determined by the Company. The Company will pay cash for any shares of
Employee Stock or Options to be repurchased under this Section 4, payable by
delivery of a check or wire transfer of funds in the amount of the aggregate
purchase price of the Employee Stock or Options being purchased by the Company;
provided, however, that in the event that any such repurchase is prohibited by
or would cause a default under any of the Company's or its Subsidiaries'
agreements for borrowed money, the Company may elect to pay for any shares of
Employee Stock or Options to be repurchased through the delivery of a three year
subordinated promissory note of the Company, which note shall accrue interest at
8% per annum, payable at maturity of the note, and shall be fully subordinated
in right of payment, including, without limitation, payment upon maturity of
such promissory note, and exercise of remedies to the lenders' rights under such
agreements for borrowed money.
SECTION 5. RESTRICTIONS ON TRANSFER OF EMPLOYEE STOCK.
(a) RESTRICTIONS ON TRANSFER. Prior to the later to occur of
(i) the fifth anniversary of the date of this Agreement and (ii) the
consummation of a Qualified Public Offering, no Employee Stock or Options may be
transferred except as provided in Section 5(b).
(b) CERTAIN PERMITTED TRANSFERS. Section 5(a) shall not apply
to transfers of (i) Employee Stock by will or pursuant to applicable laws of
descent and distribution or within an Employee Stockholder's family group;
provided that, in
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connection with any such transfer, each such transferee (a "PERMITTED
TRANSFEREE") agrees in writing to be bound by the provisions of this
Agreement (ii) Employee Stock or Options pursuant to Section 4
(Repurchase Option) or (iii) Employee Stock pursuant to Section 8 (Sale
of the Company), Section 9 (Participation Rights) or Section 10(b)
(Company Registration). Any shares of Employee Stock transferred to a
Permitted Transferee shall continue to be Employee Stock for purposes
of this Agreement. An Employee Stockholder's "FAMILY GROUP" means such
Employee Stockholder's spouse and lineal descendants (whether natural
or adopted) and any trust formed and maintained solely for the benefit
of such Employee Stockholder, such Employee Stockholder's spouse or
such Employee Stockholder's lineal descendants.
SECTION 6. RESTRICTIONS ON TRANSFER OF SG STOCK.
(a) RESTRICTIONS ON TRANSFER. Prior to the earlier to occur of
(i) the fifth anniversary of the date of this Agreement and (ii) the
consummation of a Qualified Public Offering, no SG Stock may be transferred
except as set forth in Section 6(b).
(b) CERTAIN PERMITTED TRANSFERS. Section 6(a) shall not apply
to transfers by SG of SG Stock (i) to any of its Affiliates who agree to become
a party to, and to be bound to the same extent as its transferor by the terms of
this Agreement (ii) pursuant to Section 8 (Sales of the Company), Section 9
(Participation Rights) or Section 10 (Registration Rights) or (iii) pursuant to
Section 6(c) hereof.
(c) RIGHT OF FIRST REFUSAL. SG may transfer its shares of
Common Stock at any time provided that SG complies with the provisions of this
Section 6(c). SG agrees that if it or any of its Affiliates receives a bona fide
offer (a "TRANSFER OFFER") to purchase any or all the SG Stock (the "TRANSFER
SECURITIES") from any Person (the "OFFEROR") and intends to accept such offer,
SG shall provide a written notice (the "TRANSFER NOTICE") of such Transfer Offer
and the material terms thereof to the Company and Greenwich. The Transfer Notice
shall also contain an irrevocable offer to sell the Transfer Securities to
Greenwich (in a manner set forth below) at a price contained in, and upon
substantially the same terms and conditions as the terms and conditions
contained in, the Transfer Offer and shall identify the Offeror, the Transfer
Securities, the price contained in the Transfer Offer and the other material
terms and conditions of the Transfer Offer. At any time within 30 days after the
date of the receipt by the Company and Greenwich of the Transfer Notice,
Greenwich shall have the option to exercise its right to purchase (or assign its
rights to one of its Affiliates) all of the Transfer Securities at the same
price and on such substantially the same terms and conditions as the Transfer
Offer, in which event Greenwich will be obligated to purchase the Transfer
Securities in accordance with such terms within 60 days after the date of the
receipt by the Company and Greenwich of the Transfer Notice. At the closing of
such
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<PAGE> 14
purchase, Greenwich or one or more of its Affiliates shall deliver a certified
bank check or checks in the appropriate amount to SG against delivery of
certificates or other instruments representing the Transfer Securities so
purchased, appropriately endorsed by SG. If the Company or Greenwich or one or
more of its Affiliates has not given notice of its intention to exercise such
right to purchase within such 30 day period or has not tendered the purchase
price for such Securities in the manner set forth above within such 60 day
period, SG shall be free for a period of 60 days from the end of such 30 day or
60 day period, as the case may be, to transfer the Transfer Securities to the
Offeror on terms which are no more favorable in any material respect to the
transferee than the terms and conditions set forth in the Transfer Notice. If
for any reason SG does not transfer the Transfer Securities to the Offeror on
such terms and conditions or if SG wishes to sell the Transfer Securities on
terms which are more favorable in any material respect to the transferee than
those set forth in the Transfer Notice, the provisions of this Section 6(c)
shall again be applicable to the Transfer Securities. SG shall cause the
transferee of such shares to agree in writing to be bound by the provisions of
this Agreement, and such shares of SG Stock shall continue to be SG Stock for
purposes of this Agreement.
SECTION 7. ADDITIONAL RESTRICTIONS ON TRANSFER.
(a) STOCK LEGEND. The certificates representing Stockholder
Shares shall bear the following legends:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON , , HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR UNDER ANY STATE SECURITIES LAWS AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION THEREUNDER.
THE ISSUER WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OR SERIES
OF SHARES AUTHORIZED TO BE ISSUED AND THE QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
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(b) ADDITIONAL LEGENDS. The certificates representing SG Stock
and Employee Stock shall bear the following legend in addition to the legends
set forth in Section 7(a) above:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO A
STOCKHOLDERS AGREEMENT DATED AS OF JANUARY 15, 1998 AMONG GSD
ACQUISITION CORP. AND CERTAIN STOCKHOLDERS THEREOF, A COPY OF WHICH MAY
BE OBTAINED WITHOUT CHARGE BY THE HOLDER HEREOF AT THE PRINCIPAL PLACE
OF BUSINESS OF GSD ACQUISITION CORP.
(c) OPINION OF COUNSEL. No Employee Stockholder may sell,
transfer or dispose of any such stock (other than pursuant to an effective
registration statement under the Securities Act) without first delivering to the
Company, if the Company so requests, an opinion of counsel reasonably acceptable
in form and substance to the Company that registration under the Securities Act
is not required in connection with such transfer.
SECTION 8. SALE OF THE COMPANY. If Greenwich approves the sale
of the Company to an Independent Third Party, whether by merger, consolidation,
sale of all or substantially all of its assets, sale of more than 50% of the
outstanding voting securities of the Company or otherwise (an "APPROVED SALE"),
the other holders of Stockholder Shares (the "OTHER STOCKHOLDERS") shall consent
to and raise no objections against such Approved Sale (and shall waive any
rights of appraisal) and shall fully cooperate with and take all necessary and
desirable actions in connection with the consummation of such Approved Sale,
including without limitation executing a purchase and sale agreement in the form
to be entered into by Greenwich. If the Approved Sale is structured as a sale of
stock, the Other Stockholders shall agree to sell all of their shares of Common
Stock and rights to acquire shares of Common Stock on the terms and conditions
approved by the Board and Greenwich. The obligations of the Other Stockholders
with respect to any Approved Sale are subject to the condition that (a) upon the
consummation of such Approved Sale, all of the holders of Common Stock will
receive the same form and amount of consideration per share of Common Stock as
is received by Greenwich, or if Greenwich is given an option as to the form and
amount of consideration to be received, all holders will be given the same
option and (b) no stockholder shall be required to incur indemnification
obligations which are joint and several (unless Greenwich and the Other
Stockholders enter into a contribution agreement which effectively provides for
several liability) or which are in excess of the net proceeds received by such
stockholder in connection with such Approved Sale. "COMMON STOCK" for purposes
of this Section 8 shall include the shares of Common Stock issuable upon the
exercise of the SG Warrants provided that such SG Warrants are exercised prior
to or at the closing of the Approved
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Sale, it being understood that under the Warrant Agreement the SG Warrants must
be exercised in connection with an Approved Sale if requested by the Company.
SECTION 9. PARTICIPATION RIGHTS. Not less than 20 days prior
to any proposed transfer (including by merger, consolidation or otherwise) of
Common Stock by Greenwich, Greenwich shall deliver to the Other Stockholders and
the Warrant Agent a written notice (the "SALE NOTICE") specifying in reasonable
detail the identity of the proposed transferee(s) and the terms and conditions
of the proposed transfer. Any Other Stockholder may elect to participate in the
proposed transfer by delivering to Greenwich a written notice of such election
within the 10 business day period following delivery of the Sale Notice. If one
or more Other Stockholders elect to participate in such transfer (the
"PARTICIPATING STOCKHOLDERS"), Greenwich and each such Participating Stockholder
will be entitled to sell in such proposed transfer, at the same price and on the
same terms, a number of shares of Common Stock equal to the product of (i) the
quotient determined by dividing the percentage of the Company's Common Stock
then held by Greenwich or such Participating Stockholder, as the case may be, by
the aggregate percentage of the Common Stock then held by Greenwich and all
Participating Stockholders, multiplied by (ii) the number of shares of Common
Stock to be sold in such proposed transfer. For purposes of this Section 9, the
amount of Common Stock held by each Participating Stockholder who is an Employee
Stockholder shall be deemed to include all shares of Common Stock acquirable
pursuant to the exercise of Vested Options then held by such Participating
Stockholder, provided that such Employee Stockholder exercises such Vested
Options prior to or in connection with such transfer. The Participating
Stockholders shall pay a pro rata portion of the transaction expenses associated
with such transfer. Notwithstanding the foregoing, this Section 9 shall not
apply to (i) transfers by Greenwich of up to an aggregate of 20% of the
outstanding Common Stock, (ii) transfers by Greenwich to Affiliates of
Greenwich, provided that each such Affiliate agrees in writing to be bound by
the provisions of this Agreement binding Greenwich, (iii) transfers pursuant to
Rule 144 under the Securities Act (or any successor provision), (iv) transfers
pursuant to Section 8, or (v) transfers pursuant to Section 10. "COMMON STOCK"
for purposes of this Section 9 shall include the shares of Common Stock issuable
upon the exercise of the SG Warrants provided that the SG Warrants are exercised
prior to or at the closing of the Approved Sale. The parties hereto acknowledge
that this Section 9 is for the benefit of the holder(s) of SG Warrants and the
shares of Common Stock into which the SG Warrants are exercisable and their
successors or assigns. The Company agrees to provide notice to the Warrant Agent
(as defined in the Warrant Agreement) of any Sale Notice delivered pursuant to
this Section 9.
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SECTION 10. REGISTRATION RIGHTS.
(a) DEMAND REGISTRATION. From and after the date hereof, the
holders of a majority of the then outstanding Greenwich Stock shall have the
right to require the Company to effect up to two registrations of their Common
Stock on Form S-1 under the Securities Act and, if available, unlimited
registrations on Form S-2 or S-3 under the Securities Act and from and after a
Qualified Public Offering, SG shall have the right to require the Company to
effect up to two registrations of Common Stock on Form S-2 or S-3 (any such
registration, a "DEMAND REGISTRATION"), each such request to specify the
intended method or methods of distribution thereof (which may include a
distribution in an underwritten offering). Upon receipt of any request for a
Demand Registration, the Company shall give prompt written notice of such
request to each Stockholder and the Warrant Agent, and, subject to the
provisions set forth below, shall include in such Demand Registration all
Stockholder Shares with respect to which the Company has received written
requests for inclusion therein within 30 days after the delivery of the
Company's notice (including shares covered by Vested Options to the extent that
the Company receives appropriate assurances that such Options will be exercised
upon effectiveness of such registration). If other securities are included in
any Demand Registration that is not an underwritten offering, all Stockholder
Shares included in such offering shall be sold prior to the sale of any of such
other securities. If other securities are included in any Demand Registration
that is an underwritten offering, and the managing underwriter for such offering
advises the Company that in its opinion the number of securities to be included
exceeds the number of securities which can be sold in such offering without
adversely affecting the pricing or marketability thereof, the Company will
include in such registration first, the Stockholder Shares of Greenwich and SG,
on a pro rata basis, second, the Stockholder Shares of Societe Generale and its
assigns on a pro rata basis and third, all other Stockholder Shares, pro rata
among the holders thereof, based on the percentage of the outstanding
Stockholder Shares held by each such Stockholder (assuming the exercise of all
Vested Options held by participating Stockholders). The Company shall have the
right to select the investment banker(s) and manager(s) to administer any Demand
Registration that is an underwritten offering, subject to the approval of the
holders of a majority of the Greenwich Stock to be included in such Demand
Registration. The parties hereto acknowledge that this Section 10 is for the
benefit of the holder(s) of SG Warrants and the shares of Common Stock into
which the SG Warrants are exercisable and their successors or assigns. The
Company agrees to provide notice to the Warrant Agent of any Demand Registration
or Company Registration pursuant to this Section 10.
(b) COMPANY REGISTRATION. In the event that the Company
proposes to register any Common Stock under the Securities Act in connection
with a public offering (other than a Demand Registration) on any form (other
than (i) a registration on
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Form S-4 or Form S-8 or (ii) a registration statement filed in connection with
an exchange offer or an offering of securities solely to the Company's existing
security holders) that would legally permit the inclusion of Stockholder Shares
(any such registration, a "COMPANY REGISTRATION"), the Company shall give each
of the Stockholders written notice thereof as soon as practicable but in no
event less than 30 days prior to such registration, and shall include in such
registration all Stockholder Shares requested in writing to be included therein
(including shares covered by Vested Options to the extent that the Company
receives appropriate assurances that such Options will be exercised upon
effectiveness of such registration), subject to the limitations set forth in
this Section 10(b). If in connection with such proposed registration the
managing underwriter for such offering advises the Company that the number of
Stockholder Shares requested to be included therein exceeds the number of shares
that can be sold in such offering without affecting the pricing or marketability
thereof, the Company will include in such registration to the extent of the
number which the Company is so advised can be sold in such offering first, the
shares to be sold by the Company, second, the Stockholder Shares of Greenwich
and SG, on a pro rata basis, third, the Stockholder Shares of Societe Generale
and its assigns and fourth, all other Stockholder Shares, pro rata among the
holders thereof, based on the number of shares of Common Stock held by such
Stockholder (assuming the exercise of all Vested Options held by all
participating Stockholders) and all other holders (other than the Company)
exercising similar registration rights.
(c) MANAGEMENT PARTICIPATION. Notwithstanding the foregoing,
the Employee Stockholders shall not be entitled to participate in a Demand
Registration or a Company Registration pursuant to Sections 10(a) or 10(b),
respectively, to the extent that the managing underwriter (or, in the case of an
offering that is not underwritten, a nationally recognized investment banking
firm) shall determine in good faith that the participation of management would
adversely affect the marketability of the securities being sold by the Company
in such registration.
(d) COSTS OF REGISTRATION. The Company shall bear the costs of
each registration in which Stockholders participate pursuant to this Section 10,
including the reasonable fees and expenses of one counsel for the selling
Stockholders (to be selected by the holders of a majority of the Greenwich Stock
to be included in such registration or, if no Greenwich Stock has been requested
to be included, by the holders of a majority of the Stockholder Shares to be
included in such registration) but excluding any underwriting discounts or
commissions on the sale of Stockholder Shares or the fees and expenses of any
additional counsel retained by the Stockholders. As a condition to the inclusion
of Stockholder Shares in any registration, the participating Stockholder and the
Company shall execute an underwriting agreement or similar agreement in a form
reasonably acceptable to the Company and the underwriter(s), if any, for such
offering
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containing customary indemnification and holdback provisions. Notwithstanding
the foregoing, no Stockholder shall be required to incur indemnification
obligations which are in excess of the net proceeds received by such Stockholder
pursuant to such registration or which relate to information not supplied by
such Stockholder for inclusion in the registration statement.
(e) HOLDBACK AGREEMENT. If and whenever the Company proposes
to register any of its Common Stock for its own account or for the account of
any of its security holders under the Securities Act (other than on Forms S-4 or
S-8 or any successor form) or is required to use its best efforts to effect the
registration of any shares of Common Stock pursuant to Section 10(a) hereof,
each Stockholder agrees not to effect any public sale or distribution, including
any sale pursuant to Rule 144 under the Securities Act, of any Stockholder
Shares within 30 days prior to and 90 days after the date of such offering
(except as part of such offering) or such longer period as required by the
underwriters of such offering, but in no event to exceed 120 days.
(f) REGISTRATION PROCEDURES. The Company shall enter into such
agreements and take such other actions as the selling Stockholders or the
underwriters reasonably request in order to expedite and facilitate the
disposition of Stockholder Shares pursuant to this Section 10, including,
without limitation, preparing for, and participating in, such number of "road
shows" and all other customary selling efforts as the underwriters reasonably
request in order to expedite and facilitate such disposition, and generally use
its best efforts to take all other steps necessary to effect the registration of
such Stockholder Shares.
(g) OTHER LIMITATIONS. Notwithstanding any other provision of
this Section 10, (i) the Company shall not be required to include Stockholder
Shares in a registration that relates to the Company's initial public offering
of Common Stock if no Greenwich Stock or SG Stock is sold in such offering, (ii)
the Company shall not be required to include in any registration pursuant to
this Section 10 any Stockholder Shares (other than any Greenwich Stock or SG
Stock in the case of a Demand Registration) that are then eligible for transfer
pursuant to Rule 144 under the Securities Act or may otherwise be freely
transferred without registration under the Securities Act.
SECTION 11. ASSIGNMENT OF RIGHTS; REPRESENTATIONS ON SALE. The
Company may assign to Greenwich and SG (on a pro rata basis) or one or more
third parties its right to repurchase shares of Employee Stock pursuant to
Section 4, subject only to compliance with applicable securities laws. To the
extent that an Employee Stockholder purchased Employee Stock with a promissory
note that has not been repaid in full, the Company may apply the unpaid
principal balance of such promissory note and accrued and unpaid interest
thereon to a reduction of the repurchase price for such
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Employee Stock. The purchasers of Employee Stock pursuant to Section 4 shall be
entitled to receive customary representations and warranties from the seller
regarding the seller's good title to, and freedom from liens, encumbrances and
restrictions on the sale of, such Employee Stock.
SECTION 12. EQUITY ISSUANCES. The Company shall not issue
additional equity Securities to Greenwich or any of its Affiliates unless, prior
to such issuance, the Company notifies SG in writing thereof and grants to SG
the right, which SG may assign to any of its Affiliates, to subscribe for and
purchase such additional shares or units of securities so issued at the same
price and upon the same terms and conditions as those to be issued to Greenwich
or any of its Affiliates and in an amount equal to the product of (a) the amount
of equity securities proposed to be issued to Greenwich or any of its Affiliates
times (b) the quotient of the number of shares of Common Stock owned by SG and
its Affiliates, on a fully-diluted basis, divided by the number of shares of
Common Stock owned by SG, Greenwich and their respective Affiliates, on a
fully-diluted basis. If requested by SG, the Company will issue to SG (or any
Affiliate designated by SG) a different class of such equity securities which is
identical to those proposed to be issued but non-voting and convertible into
those equity securities which Greenwich is purchasing.
SECTION 13. TRANSFERS IN VIOLATION OF AGREEMENT. Any transfer
or attempted transfer of any Stockholder in violation of this Agreement shall be
void, and the Company shall not be obligated to record such transfer on its
books or treat any purported transferee of such Stockholder Shares as the owner
of such shares for any purpose.
SECTION 14. NEW EMPLOYEE STOCKHOLDERS. Each Stockholder hereby
agrees that any employee of the Company or any of its subsidiaries who after the
date of this Agreement is offered shares of Common Stock or Options shall, as a
condition precedent to the acquisition of such shares of Common Stock or
Options, as the case may be, become a party to this Agreement by executing the
same. Upon such execution and delivery, such employee shall be an Employee
Stockholder for all purposes of this Agreement.
SECTION 15. AMENDMENT AND WAIVER. Except as otherwise provided
herein, no amendment or waiver of any provision of this Agreement shall be
effective against the Company or Stockholders unless such amendment or waiver is
approved in writing by the Company, Greenwich, SG and the holders of at least a
majority of the then outstanding Employee Stock, respectively. The failure of
any party to enforce any provision of this Agreement shall not be construed as a
waiver of such provision and shall
17
<PAGE> 21
not affect the right of such party thereafter to enforce each provision of this
Agreement in accordance with its terms.
SECTION 16. SEVERABILITY. If any provision of this Agreement
is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
SECTION 17. ENTIRE AGREEMENT. Except as otherwise expressly
set forth herein, this document, together with the Stock Purchase Agreement, as
amended, embodies the complete agreement and understanding among the parties
hereto with respect to the subject matter hereof and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
SECTION 18. SUCCESSORS AND ASSIGNS. This Agreement shall bind
and inure to the benefit of and be enforceable by the Company and its successors
and assigns. Prior to the transfer of any shares of SG Stock or Employee Stock
after the fifth anniversary hereof, SG or the applicable Employee Stockholder,
as the case may be, will cause the transferee of such shares to agree in writing
to be bound by the provisions of this Agreement and such shares of SG Stock or
Employee Stock will continue to be SG Stock or Employee Stock, respectively, for
purposes of this Agreement.
SECTION 19. COUNTERPARTS. This Agreement may be executed in
separate counterparts each of which shall be an original and all of which taken
together shall constitute one and the same agreement.
SECTION 20. REMEDIES. The Company and the Stockholders shall
be entitled to enforce their rights under this Agreement specifically to recover
damages by reason of any breach of any provision of this Agreement and to
exercise all other rights existing in their favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that the Company or any Stockholder may in
its sole discretion apply to any court of law or equity of competent
jurisdiction for specific performance and/or injunctive relief (without posting
a bond or other security) in order to enforce or prevent any violation of the
provisions of this Agreement.
SECTION 21. NOTICES. Any notice provided for in this Agreement
shall be in writing and shall be deemed to have been duly given if personally
delivered, or
18
<PAGE> 22
mailed, certified or registered mail (postage prepaid) or sent by reputable
next-day or overnight mail courier service (charges prepaid) or sent by fax to
the Company, Greenwich or SG at the addresses set forth below and to any
Employee Stockholder at the address indicated on Schedule A hereto and to any
subsequent holder of Stockholder Shares subject to this Agreement at such
address as indicated by the Company's records, or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party.
(a) If to the Company, to:
Day International Group, Inc.
130 West Second Street
Suite 1700
Dayton, OH 45402
Fax: (937) 226-0052
Attention: David B. Freimuth
with a copy to:
Greenwich Street Capital Partners, Inc.
388 Greenwich Street
New York, New York 10033
Fax: (212) 816-0166
Attention: Alfred C. Eckert, III
and a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Fax: (212) 909-6836
Attention: Andrew L. Sommer, Esq.
(b) If to Greenwich, to:
Greenwich Street Capital Partners, Inc.
388 Greenwich Street, 36th Floor
New York, New York 10013
Fax: (212) 816-0166
Attention: Alfred C. Eckert, III
19
<PAGE> 23
With a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Fax: (212) 909-6836
Attention: Andrew L. Sommer, Esq.
(c) If to SG, to:
SG Capital Partners, LLC
1221 Avenue of the Americas
New York, New York 10020
Fax: (212) 278-5454
Attention: James N. Lane
With a copy to:
Kirkland & Ellis
153 East 53rd Street
New York, New York 10022
Fax: (212) 446-4900
Attention: John L. Kuehn, Esq.
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (A) if by personal delivery on the day after such
delivery, (B) if by certified or registered mail, on the fifth business day
after the mailing thereof, (C) if by next-day or overnight mail or delivery, on
the day delivered, or (D) if by fax, on the next day following the day on which
such fax was sent, provided that a copy is also sent by certified or registered
mail.
SECTION 22. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder and the Persons subject hereto shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Delaware, without giving effect to the conflicts of laws principles
thereof.
SECTION 23. DESCRIPTIVE HEADINGS. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement.
20
<PAGE> 24
SECTION 24. TERMINATION; SURVIVAL. Sections 3, 6, 8 and 9
hereof shall terminate on the date on which Greenwich collectively holds less
than 20% of the outstanding Common Stock of the Company. Section 4 hereof shall
terminate upon the occurrence of a Qualified Public Offering. Any Stockholder
that ceases to own any equity securities of the Company shall cease to be bound
by this Agreement; provided, however, that any transfer of such securities was
made in accordance with this Agreement and provided, further, any Employee
Stockholder transferring any shares of Employee Stock to a Permitted Transferee
shall remain subject to this Agreement with respect to such shares.
SECTION 25. THIRD-PARTY BENEFICIARY. The parties agree that
Sections 9 and 10 of this Agreement, insofar as such Sections relate to the SG
Warrants or the shares of Common Stock into which the Warrants held by Societe
Generale or its successors or assigns are exercisable, including the sale or
registration of the shares of Common Stock into which the Warrants are
exercisable, are for the benefit of Societe Generale and its successors and
assigns.
21
<PAGE> 25
IN WITNESS WHEREOF, the parties have executed this
Stockholders Agreement as of the date first above written.
GSD ACQUISITION CORP.
By: /s/ Christine K. Vanden Beukel
-----------------------------------
Name: Christine K. Vanden Beukel
Title:
GREENWICH IV LLC
By: /s/ Christine K. Vanden Beukel
-----------------------------------
Name: Christine K. Vanden Beukel
Title:
SOCIETE GENERALE CAPITAL
CORPORATION
By: /s/ Elan A. Schultz
-----------------------------------
Name: Elan A. Schultz
Title:
EMPLOYEE STOCKHOLDERS:
22
<PAGE> 26
Schedule A
Name of Employee Stockholder Address of Employee Stockholder
Dennis R. Wolters 2518 Fairmont Avenue
Dayton, OH 45419
David B. Freimuth 4215 Overland Trail
Kettering, OH 45429
Christian Balderman Rosenweg 12
D72531 Hohenstein 1
Germany
John R. Elia 2 Quail Hollow Drive
Arden, NC 28704
Michael E. McLean 123 Greenwood Forest North
Etowah, NC 28729
Dermot Healy Royston
Castleray
Boughty Ferry
Dundee, Scotland
DD5 2JN
Dwaine R. Brooks 210 Riva Ridge Road
Fairview, NC 28730
William M. Howle 107 Merrifield Court
Greenville, SC 29615
William B. Branson 11 Bent Oak Lane
Asheville, NC 28803
<PAGE> 27
Name of Employee Stockholder Address of Employee Stockholder
Michael P. Neroni 3143 Wrenford
Kettering, OH 45342
Edward P. Dzierzynski 2010 Brevard Road
Arden, NC 28704
Jean Boret 191 Rue Dopcteur Vinaver
78520-Limay
France
Lawrence E. Gates 501 Hunters Glen Lane
Hendersonville, NC 28739
Thomas Powlas 61155 CR 657
Lawton, MI 49065
Mario Stevenel 158 Gomez Palacio
Col. Hipodromo Condesa
Mexico D.F. 06170
<PAGE> 1
Exhibit 10.2.1
DAY INTERNATIONAL GROUP, INC.
STOCK OPTION PLAN
ARTICLE I
PURPOSE OF PLAN
The Stock Option Plan (the "Plan") of Day International Group,
Inc. (the "Company") adopted by the Board of Directors (the "Board") and
stockholders of the Company effective July 6, 1995, is intended to advance the
best interests of the Company by allowing certain Executives and key members of
management of the Company and its Subsidiaries to acquire an ownership interest
in the Company, thereby motivating them to contribute to the success of the
Company and to remain in the employ of the Company and its Subsidiaries. The
Plan is a compensatory benefit plan within the meaning of Rule 701 of the
Securities Act of 1933 (the "Securities Act"). The issuance of Common Stock
pursuant to the Plan is intended to qualify for the exemption from registration
under the Securities Act provided by Rule 701.
ARTICLE II
DEFINITIONS
For the purposes of the Plan the following terms have the
meanings indicated below:
"ACQUISITION" means the acquisition by Day International
Group, Inc., a Delaware corporation, of the outstanding capital stock of Day
International, Inc. from Cadillac Plastic Group, Inc., a Michigan corporation.
"AIP" means American Industrial Partners Capital Fund, L.P.
and American Industrial Partners Capital Fund II, L.P.
"BOARD" means the Board of Directors of the Company.
"CEO" means the Chief Executive Officer of the Company.
"CODE" means the Internal Revenue Code of 1986, as amended,
and any successor statute.
<PAGE> 2
"COMMITTEE" means the compensation committee or such other
committee of the Board as the Board may designate to administer the Plan, or if
for any reason the Board has not designated such a committee, the Board. The
Committee, if other than the Board, shall be composed of two or more directors
as appointed from time to time by the Board.
"COMMON STOCK" means the Company's Class A Common Stock, par
value $0.01 per share and any capital stock of any class of the Company
hereafter authorized which is not limited to a fixed sum or percentage of par or
stated value in respect to the rights of the holders thereof to participate in
dividends or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"COMPANY" means Day International Group, Inc., a Delaware
Corporation.
"CAUSE" means with respect to a Participant, (i) such
Participant's willful and repeated failure to comply with the lawful directives
of the Board (as set at a meeting of the Board in accordance with the Company's
bylaws) or such Participants supervisory personnel (provided such directives are
consistent with such Participant's position), (ii) any indictment for a felony,
(iii) any indictment for any other criminal act or act of material dishonesty,
disloyalty, misconduct by such Participant (other than minor traffic offenses
and similar acts) or any act of moral turpitude by such Participant that is
materially injurious to the property, operations, business or reputation of the
Company or any Subsidiary thereof (as determined by the Board in its reasonable
good faith discretion) or (iv) the failure to comply with the terms of the Plan
or the Stockholders Agreement.
"COMPANY SALE" means a transaction with one or more
independent third parties, pursuant to which such party or parties (a) acquire
(whether by merger, consolidation or transfer or issuance of capital stock)
capital stock of the Company (or any surviving or resulting corporation)
possessing the voting power to elect a majority of the board of directors of the
Company (or such surviving or resulting corporation) or (b) acquire all or
substantially all of the Company's assets determined on a consolidated basis.
"EBITDA" means, with reference to any period, Net Income for
such period adjusted (a) by adding thereto the amount of all (i) interest
expense to the extent included in determining Net Income for such period, (ii)
depreciation and amortization expenses and noncash charges for compensation
costs recognized pursuant to Accounting Principles Board Opinion No. 25 in
connection with Options granted to employees of the
2
<PAGE> 3
Company and its Subsidiaries to the extent included in determining Net Income
for such period, (iii) all taxes to the extent included in determining Net
Income, and (iv) the management fee payable under the Management Agreement and
all directors' fees, in each case, to the extent included in determining Net
Income for such period, and (b) by subtracting therefrom (i) all interest income
to the extent included in determining Net Income for such period and (ii) all
tax credits to the extent included in determining Net Income for such period.
"EXECUTIVE" means any specific member of management.
"EXERCISE PRICE" means the amount payable for an Option Share
upon exercise of an Option.
"FISCAL YEAR" means January 1 thru December 31 of any given
year.
"FULLY-DILUTED SHARES" means, as of any date, the number of
shares of Common Stock outstanding as of such date plus the aggregate number of
shares of Common Stock issuable upon the exercise of all outstanding Options,
warrants and rights to acquire shares of Common Stock (including outstanding
Options which are not then exercisable) and the aggregate number of shares of
Common Stock issuable upon the conversion of all outstanding securities that are
convertible into shares of Common Stock.
"FAIR MARKET VALUE" means, (a) with respect to publicly traded
Common Stock, the market trading price of such Common Stock and (b) with respect
to non-publicly traded Common Stock, the fair market value of such Common Stock
(expressed on a pre-share basis) as of such date, as determined in good faith by
the Board based on the consolidated results of operations, financial condition
and future prospects of the Company and such other factors as the Board may deem
appropriate.
"MANAGEMENT AGREEMENT" means the Management Services Agreement
dated as of June 6, 1995 among the Company, Day International, Inc., and AIP.
"NET INCOME" means, with reference to any period, the net
income (or deficit) of the Company and its Subsidiaries for such period, after
deducting all operating expenses, provisions for taxes, reserves and all other
proper deductions, all determined in accordance with generally accepted
accounting principles applied on a consolidated basis and on a basis consistent
with prior periods after eliminating all intercompany transactions and after
deducting portions of income properly attributable to minority interests, if
any, in the stock and surplus of Subsidiaries; provided, however, that there
3
<PAGE> 4
shall be excluded (a) any aggregate net gain or net loss during such period
arising from the sale, exchange or other disposition of capital assets, (b) any
net income or gain from indemnification payments under the Acquisition
agreements (other than indemnification payments in respect of Damages (as
defined in the Acquisition agreements)) to the extent that such Damages reduced
Net Income for such period or from the collection of the proceeds of insurance
policies (other than proceeds of business interruption insurance for lost income
to the extent such loss reduced Net Income for such period and proceeds of other
insurance in respect of claims or losses to the extent such claims or losses
reduced Net Income for such period), (c) any gain or loss arising from the
acquisition of any securities of, or the extinguishment under generally accepted
accounting principles of any indebtedness of, the Company or any of its
Subsidiaries, or (d) any extraordinary items of income gain or loss.
"OPTION" means, with respect to any Participant, (a) any
option to purchase Option Shares issued to such Participant pursuant to Article
V of this Plan, and (b) any option, warrant or right to acquire shares of
capital stock of the Company issued in respect of an option referred to in
clause (a) above, by way of a distribution or in connection with a merger,
consolidation, reorganization or other recapitalization.
"OPTION SHARES" means, with respect to any Participant, (a)
any shares of Common Stock (or other shares of capital stock of the Company)
issued by the Company upon exercise of any Option by such Participant, and (b)
any shares of the capital stock of the Company issued in respect of any of the
securities described in clause (a) above, by way of stock dividend, stock split,
merger, consolidation, reorganization or other recapitalization.
"PARTICIPANT" means any Executive or other key member of
management who has been selected to participate in the Plan by the Board.
"PERFORMANCE LEVEL" means with respect to any fiscal year, the
product of (i) 100 multiplied by (ii) a fraction, the numerator of which is the
EBITDA for such fiscal year and the denominator of which is the Target for such
fiscal year.
"STOCKHOLDERS AGREEMENT" means the agreement dated as of June
6, 1995 among the Company and its stockholders.
"SUBSIDIARY" means any entity of which the Company owns,
directly or indirectly, a majority of the outstanding shares or other equity
interests having ordinary voting power for the election of directors or
comparable managers of such entity.
4
<PAGE> 5
"TARGET" means, for each of the following Fiscal Years, the
EBITDA of the Company on a consolidated basis as follows:
<TABLE>
<CAPTION>
YEAR TARGET (IN MILLIONS)
<S> <C>
1995 $32.6
1996 $35.3
1997 $38.5
</TABLE>
For subsequent Fiscal Years the Target shall be determined by the Committee
after the receipt of audited financials for the immediately preceding Fiscal
Year.
"TRANSFER" means, with respect to any Option, the gift, sale,
assignment, transfer, pledge, hypothecation or other disposition (whether for or
without consideration and whether voluntary, involuntary or by operation of law)
of such Option or any interest therein.
ARTICLE III
ADMINISTRATION
The Plan shall be administered by the Committee. Subject to
the limitations of the Plan, the Committee shall have the sole and complete
authority to: (i) select Participants; (ii) grant Options to Participants in
such forms and as it shall determine; (iii) impose such limitations,
restrictions and conditions upon such Options as it shall deem appropriate; (iv)
interpret the Plan and adopt, amend and rescind administrative guidelines and
other rules and regulations relating to the Plan; (v) correct any defect or
omission or reconcile any inconsistency in the Plan or in any Options granted
under the Plan; and (vi) make all other determinations and take all other
actions necessary or advisable for the implementation and administration of the
Plan. The Committee's determinations on matters within its authority shall be
conclusive and binding upon the Participants, the Company and all other persons.
All expenses associated with the administration of the Plan shall be borne by
the Company. The Committee may, as approved by the Board and to the extent
permissible by law, delegate any of its authority hereunder to such persons or
entities as it deems appropriate.
5
<PAGE> 6
ARTICLE IV
LIMITATION ON AVAILABLE OPTION SHARES
4.1 OPTION SHARES. The aggregate number of shares of Common
Stock with respect to which Options may be granted under the Plan shall not
exceed 3,720 shares; provided, however, that the aggregate number of shares of
Common Stock with respect to which Options may be granted shall be subject to
adjustment in accordance with section 9.3 below.
4.2 STATUS OF OPTION SHARES. The shares of Common Stock for
which Options may be granted under the Plan may be either authorized and
unissued shares, treasury shares or a combination thereof, as the Board shall
determine and shall be reserved by the Board for issuance as provided in the
Plan.
ARTICLE V
GRANT OF OPTIONS
5.1 OPTIONS. The Company shall grant Options to Participants
in accordance with this Article V. Options granted under the Plan are
nonqualified stock options within the meaning of Section 422A of the Code or any
successor provisions. Options shall be exercisable upon vesting (as determined
pursuant to Article VI) and shall thereafter be exercisable until they expire or
are terminated (as determined pursuant to Article VIII).
5.2 CLOSING OPTIONS. On the date this Plan is adopted, the
Board will grant Options (the "Closing Options") to purchase up to 2,930 shares
of Common Stock of the Company to Participants. The Options granted to each
Participant shall be determined by the Board. Closing Options will be awarded at
an Exercise Price equal to the per share purchase price of the common stock
purchased by AIP at Closing (i.e., $1,000.00 per share).
5.3 BOARD POOL OPTIONS. Options to purchase an amount equal to
the difference between the total option shares (i.e. 3,720) and the Closing
Options granted on the date this Plan is adopted of Common Stock will be
available for award to employees under the Plan (the "Board Pool Options").
Board Pool Options will be awarded at an Exercise Price as determined by the
Committee at the time of the grant. Awards of Board Pool Options will be made at
such times, in such amounts and to such persons as determined by the Committee.
6
<PAGE> 7
5.4 OPTION AGREEMENT. Each Option granted hereunder to a
Participant shall be evidenced by a certificate substantially in the form
attached hereto as Annex I (or in such other form as the Board may from time to
time adopt) (the "Option Certificate") which shall be signed by the CEO or such
other officer of the Company as the Board shall designate. For purposes of the
Plan, no Option shall be deemed to be outstanding until it has been granted to a
Participant by the Board and an Option Certificate has been executed and
delivered by the Company and an Option shall cease to be outstanding when it is
repurchased by the Company, terminates or is exercised pursuant to the Plan.
5.5 STOCKHOLDERS AGREEMENT. As a condition to receiving any
grant of Options hereunder, any Participant who is not already a party to the
Stockholders Agreement shall be required to execute a counterpart of the
Stockholders Agreement and thereby become a party to the Stockholders Agreement
with respect to any Options granted under this Plan and all related Option
Shares.
ARTICLE VI
VESTING OF OPTIONS
6.1 GENERALLY. Options issued pursuant to this Plan may be
exercised only to the extent that they have vested. All Common Stock issued to
Participants at Closing or issued upon the exercise of Options awarded to
Participants will be 100% vested upon issuance.
6.2 VESTING AND ACCELERATED VESTING OF OPTIONS. All options
awarded under the Plan will vest on the ninth anniversary of the date of grant,
subject to acceleration of vesting as set forth in sections 6.4 and 6.5 below if
certain performance targets (for each Fiscal Year, a "Target") are achieved;
provided, in each case, that the Participant remains continuously employed with
the Company or its Subsidiaries from the date of award through the date of
determination. For purposes of accelerated vesting, each Participant will be
deemed to be employed by the Company or its Subsidiaries with respect to any
Fiscal Year if such Participant has been continuously employed by the Company or
its Subsidiaries from the beginning of such Fiscal Year through December 31 of
such Fiscal Year.
6.3 TARGET ADJUSTMENT. The Committee, in consultation with the
CEO, shall set the Target for each Fiscal Year after 1997. The Committee, in
consultation with the CEO, may make equitable adjustment to the Target to
reflect the
7
<PAGE> 8
effects of acquisitions, dispositions and equity and debt offerings occurring
during such Fiscal Year and the anticipated effect on the EBITDA therefrom.
6.4 CLOSING OPTIONS. Vesting of the Closing Options shall be
accelerated as follows:
(i) if the Performance Level for the applicable
Fiscal Year equals or exceeds 100,
<TABLE>
<CAPTION>
Percentage of Closing
Options that Vest as of the
Fiscal Year Last Day of Such Fiscal Year
----------- ----------------------------
<S> <C>
1995 11.11
1996 22.22
1997 22.22
1998 22.22
1999 22.23
</TABLE>
(ii) if the Performance Level for the applicable
Fiscal Year is less than 100 but exceeds 90,
<TABLE>
<CAPTION>
Percentage of Closing
Options that Vest as of the
Fiscal Year Last Day of Such Fiscal Year
----------- ----------------------------
<S> <C>
1995 11.11 (Performance Level - 90)
----------------------
10
1996 22.22 (Performance Level - 90)
----------------------
10
1997 22.22 (Performance Level - 90)
----------------------
10
1998 22.22 (Performance Level - 90)
----------------------
10
1999 22.23 (Performance Level - 90)
----------------------
10
</TABLE>
8
<PAGE> 9
(iii) if the Performance Level for the applicable
Fiscal Year is less than 90, subject to section 6.6 below, the
vesting of Closing Options shall not be accelerated for such
Fiscal Year.
6.5 BOARD POOL OPTIONS. Vesting of Board Pool Options shall be
accelerated over the four consecutive Fiscal Years beginning with the Fiscal
Year in which such Option was awarded as follows:
(i) if the Performance Level for a Fiscal Year,
beginning with the Fiscal Year in which such Board Pool
Options were awarded and continuing through the third Fiscal
Year thereafter, equals or exceeds 100, 25% of such Board Pool
Options shall vest as of the last day of such Fiscal Year;
(ii) if the Performance Level for a Fiscal Year,
beginning with the Fiscal Year in which such Board Pool
Options were awarded and continuing through the third Fiscal
Year thereafter, is less than 100 but exceeds 90, a percentage
of such Board Pool Options determined as follows shall vest as
of the last day of such Fiscal Year:
25 (Performance Level - 90)
----------------------
10
(iii) if the Performance Level for the applicable
Fiscal Year is less than 90, subject to section 6.6 below, the
vesting of Board Pool Options shall not be accelerated for
such Fiscal Year.
6.6 CATCH-UP VESTING. If the Performance Level is less than
100, but at least equal to 90, for a given Fiscal Year and the Performance Level
for the following Fiscal Year (the "Catch-up Year") equals or exceeds 100, then
all Closing Options and Board Pool Options that would have vested in such
preceding Fiscal Year pursuant to sections 6.4 or 6.5 above if the Performance
Level for such preceding Fiscal Year was calculated by adding to the EBITDA for
such preceding Fiscal Year an amount equal to the excess of the EBITDA for the
Catch-up Year over the EBITDA that would have resulted in a Performance Level of
100 for the Catch-up Year shall vest as of the last day of such following Fiscal
Year. Except as provided in the preceding sentence, no Options will be
accelerated for any Fiscal Year in which the Performance Level is less than 90.
"Catch-up vesting" of Options only applies to the first three Fiscal Years
during which the vesting of such Options may be accelerated.
9
<PAGE> 10
ARTICLE VII
EXERCISE OF OPTIONS
7.1 RIGHT TO EXERCISE. Options may only be exercised to the
extent they have vested and have not expired.
7.2 PROCEDURE FOR EXERCISE.
(a) Any Participant may exercise all or any portion of any of
such Participant's Options, to the extent they have vested pursuant to Article
VI and are outstanding, at any time and from time to time prior to its
expiration, by completing, signing and delivering to the Company (to the
attention of the Company's Secretary) a notice of exercise substantially in the
form attached hereto as Annex II (or in such other form as the Board may from
time to time adopt and provide to the Participant) (the "Exercise Notice"),
together with the related Option Certificate(s) and payment in full of the
Exercise Price. Payment of the Exercise Price shall be made in cash (including
check, bank draft or money order); provided, that at any time when the Company
is subject to the reporting requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 (the "Securities Exchange Act"), a Participant
may, in lieu of paying the Exercise Price in cash, deliver Option Certificates
representing the Options to be exercised together with an Exercise Notice and be
entitled to receive in respect thereof Option Shares with an aggregate Fair
Market Value equal to the difference of (i) the aggregate Fair Market Value of
the Option Shares issuable upon the exercise of the Options being exercised,
minus (ii) the aggregate Exercise Price of the Options being exercised.
Notwithstanding anything in this Section 7.2(a) to the contrary, in the event
that any Option certificate representing Options granted to a Participant is
lost, stolen or destroyed, the Participant may, in lieu of delivering such
Option Certificate at the time of exercise, deliver an affidavit as to its loss,
theft or destruction and any indemnity that the Company may reasonably request.
A Participant's right to exercise an Option shall be subject to the satisfaction
of all conditions set forth in the Exercise Notice. If a Participant exercises
any Options for less than all of the Option Shares covered by the relevant
Option Certificate, the Company shall issue a new Option Certificate to such
Participant in respect of the portion of such Option remaining unexercised.
(b) The Company Shall, to the extent possible, give
Participants at least twenty (20) business days advance notice of the
consummation of any Company Sale. Any Participant holding vested Options may
notify the Company of his or her intent to exercise such Options upon the
consummation of the Company Sale by executing and delivering an Exercise Notice
to the Company on or prior to the date such
10
<PAGE> 11
Company Sale is consummated. Such exercise shall be considered a conditional
exercise of such Option and shall become binding upon such Participant (and such
Participant shall become obligated to pay the Exercise Price therefor) upon
consummation of such Company Sale.
7.3 SECURITIES LAWS RESTRICTIONS ON TRANSFER OF OPTION SHARES.
Each Participant exercising an Option will be required to represent to the
Company in the Exercise Notice that when such Participant exercises his or her
Option such Participant will be purchasing Option Shares for his or her own
account for investment and not on behalf of others or otherwise with a view
toward distributing them (except to the extent such Options are exercised in
connection with a sale of such Option Shares in a public offering). Each
Participant is advised that federal and state securities laws govern and
restrict each Participant's right to Transfer, or offer to Transfer, any Option
Shares unless such Participant's Transfer, or offer to Transfer, is registered
under the Securities Act and state securities laws, or such Transfer, or offer
to Transfer, is exempt for registration or qualification thereunder.
7.4 WITHHOLDING OF TAXES. The Company shall be entitled, if
necessary or desirable, to withhold from any Participant from any amounts due
and payable by the Company to such Participant (or secure payment from such
Participant in lieu of withholding) the amount of any withholding or other tax
due from the Company with respect to any Option Shares issuable under the Plan,
and the Company may defer such issuance unless indemnified to its satisfaction.
ARTICLE VIII
EXPIRATION OF OPTIONS
8.1 EXPIRATION DATE. All Options (vested and unvested) which
have not expired or been exercised previously, will expire on the earlier of (i)
the tenth anniversary of the date of grant and (ii) the consummation of the
first Company Sale.
8.2 ACCELERATED EXPIRATION: TERMINATION OF EMPLOYMENT. All
unvested Options held by a Participant whose employment with the Company or its
Subsidiaries is terminated will expire as of the date of termination. All vested
Options held by a Participant whose employment is terminated for Cause will
expire as of the date of termination. All vested Options held by a Participant
whose employment terminates other than for Cause will expire 30 days after the
date of termination. Any Options that expire or are terminated when employment
is terminated shall be added to the Board Pool Options.
11
<PAGE> 12
ARTICLE IX
GENERAL PROVISIONS
9.1 LISTING, REGISTRATION AND LEGAL COMPLIANCE. If at any time
the Committee determines, in its discretion, that the listing, registration or
qualification of the shares subject to Options upon any securities exchange or
under any state or federal securities or other law or regulation, or the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition to or in connection with the granting of Options, no Options may be
granted or exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Committee. The holders of such Options will
supply the Company with such certificates, representations and information as
the Company shall request and shall otherwise cooperate with the Company in
obtaining such listing, registration, qualification, consent or approval. In the
case of officers and other persons subject to Section 16(b) of the Securities
Exchange Act, as amended, the Committee may at any time impose any limitations
upon the exercise of Options that, in the Committee's discretion, are necessary
or desirable in order to comply with such Section 16(b) and the rules and
regulations thereunder. If the Company, as part of an offering of securities or
otherwise, finds it desirable because of federal or state regulatory
requirements to reduce the period during which Options may be exercised, the
Committee may, in its discretion and without the Participant's consent, so
reduce such period on not less than 10 days written notice to the holders
thereof.
9.2 NONTRANSFERABILITY. Options may not be transferred other
than by will or the laws of descent and distribution, and during the lifetime of
the Participant to whom they were granted, may be exercised only by such
Participant (or his or her legal guardian or legal representative). In the event
of the death of a Participant, exercise of Options granted hereunder to such
Participant may be made only by the executor or administrator of such
Participant's estate or the person or persons to whom such Participant's rights
under the Options will pass by will or the laws of descent and distribution.
9.3 ADJUSTMENTS. In the event of a reorganization,
recapitalization, stock dividend or stock split, or combination or other change
in the shares of Common Stock, the Board or the Committee may, in order to
prevent the dilution or enlargement of rights under outstanding Options, make
such adjustments in the number and type of shares authorized by the Plan, the
number and type of shares covered by outstanding Options and the exercise prices
specified therein as may be determined to be appropriate and equitable.
12
<PAGE> 13
9.4 RIGHTS OF PARTICIPANTS. Nothing in the Plan shall
interfere with or limit in any way the right of the Company or any Subsidiary to
terminate any Participant's employment at any time (with or without cause), or
confer upon any Participant any right to continue in the employ of the Company
or any Subsidiary for any period of time or to continue to receive such
Participant's current (or other) rate of compensation. No employee shall have a
right to be selected as a Participant or, having been so selected, to be
selected again as a Participant.
9.5 AMENDMENT, SUSPENSION AND TERMINATION OF PLAN. The Board
or the Committee may suspend or terminate the Plan or any portion thereof at any
time and may amend it from time to time in such respects as the Board or the
Committee may deem advisable; provided, however, that no such amendment shall be
made without stockholder approval to the extent such approval is required by
law, agreement or the rules of any exchange upon which the Common Stock is
listed, and no such amendment, suspension or termination shall impair the rights
of Participants under outstanding Options without the consent of the
Participants affected thereby, except as provided below. No Options shall be
granted hereunder after the tenth anniversary of the approval of the Plan by the
stockholders of the Company.
9.6 AMENDMENT OF OUTSTANDING OPTIONS. The Committee may amend
or modify any Option in any manner to the extent that the Committee would have
had the authority under the Plan initially to grant such Option; provided that,
except as expressly contemplated elsewhere herein or in any agreement evidencing
such Option, no such amendment or modification shall impair the rights of any
Participant under any outstanding Option without the consent of such
Participant.
9.7 INDEMNIFICATION. In addition to such other rights of
indemnification as they may have as members of the Board or the Committee, the
members of the Committee shall be indemnified by the Company against all costs
and expenses reasonably incurred by them in connection with any action, suit or
proceeding to which they or any of them may be party by reason of any action
taken or failure to act under or in connection with the Plan or any Option
granted under the Plan, and against all amounts paid by them in settlement
thereof (provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
such action, suit or proceeding; provided, however, that any such Committee
member shall be entitled to the indemnification rights set forth in this
paragraph 9.7 only if such member has acted in good faith and in a manner that
such member reasonably believed to be in or not opposed to the best interests of
the Company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that such conduct was unlawful, and further provided
that upon the institution of
13
<PAGE> 14
any such action, suit or proceeding a Committee member shall give the Company
written notice thereof and an opportunity to handle and defend the same before
such Committee member undertakes to handle and defend it on his own behalf.
14
<PAGE> 15
ANNEX I
THIS OPTION AND THE OPTION SHARES ISSUABLE UPON THE EXERCISE
HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
UNDER THE SECURITIES LAWS OF ANY STATE. THIS OPTION IS ISSUED PURSUANT TO A
STOCK OPTION PLAN ADOPTED JULY 6, 1995 BY THE BOARD OF DIRECTORS OF THE ISSUER
(THE "PLAN") AND THIS OPTION IS SUBJECT TO THE TERMS SET FORTH IN THE PLAN.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE CONSTITUTE
"EMPLOYEE STOCK" UNDER A CERTAIN STOCKHOLDERS AGREEMENT DATED AS OF JUNE 6,1995
AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND ITS STOCKHOLDERS AND, AS
SUCH, ARE SUBJECT TO CERTAIN PURCHASE RIGHTS AND CERTAIN RESTRICTIONS ON
TRANSFER SET FORTH IN THE STOCKHOLDERS AGREEMENT. A COPY OF SUCH STOCKHOLDERS
AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF
UPON WRITTEN REQUEST.
OPTION TO PURCHASE __________ SHARES OF
COMMON STOCK OF
DAY INTERNATIONAL GROUP, INC.
OPTION NO. _______ JULY 6,1995
VOID AFTER JULY _____, 2005
This certifies that ________, ("Participant") is entitled,
upon the due exercise hereof, to purchase up to ____ shares of Common Stock, par
value $0.01 per share (the "Option Shares") of Day International Group, Inc., a
Delaware corporation (the "Company") at a price (the "Exercise Price") of
$1000.00 per Option Share. This option (this "Option") is issued pursuant to a
Stock Option Plan adopted July 6, 1995 by the Company's Board of Directors (the
"Plan") and is subject in its entirety to the terms
15
<PAGE> 16
and conditions of the Plan, as amended from time to time, all of which are
hereby incorporated in the terms of this Option. Capitalized terms which are
used but not defined herein shall have the respective meanings ascribed to them
in the Plan.
This Option and the related Option Shares constitute "Employee
Stock" under the Shareholders Agreement and are subject to the provisions
contained therein regarding Employee Stock. This Option is [a "Closing Option"]
[a "Board Pool Option"] as defined in the Plan.
To the extent otherwise permitted by the Plan, the Participant
may exercise all or any portion of the Option by executing and delivering to the
Company an Exercise Notice (a copy of which may be obtained from the Company)
together with full payment of the aggregate Exercise Price for all Options
Shares being so purchased, such payment to be made by cash, check, bank draft or
money order made payable to "Day International Group, Inc." Except as otherwise
expressly provided by the Plan, this Option shall be deemed to have been
exercised and the Option Shares issuable upon such exercise shall be deemed to
have been issued as of the close of business on the date upon which all or the
forgoing items are received by the Company. If the Participant exercises only a
portion of the Option, the Company shall reissue a new Option Certificate for
the remaining unexercised portion.
In the event of reorganization, recapitalization, shock
dividend, stock split, share combination or other change in the Common Stock of
the Company, the number and, if applicable, the type of Option Shares issuable
upon exercise of this Option and the Exercise Price therefor shall be adjusted
as Provided in the Plan.
THIS OPTION MAY NOT BE TRANSFERRED BY THE PARTICIPANT EXCEPT
IF AND AS OTHERWISE PERMITTED BY THE PLAN.
Prior to the exercise of this Option as permitted by the Plan,
the Participant shall not, with respect to the Option Shams issuable upon the
due exercise hereof, be entitled to any of the rights of a stockholder of the
Company including, without limitation, the right as a stockholder to (i) vote on
or consent to any proposed action of the Company, or (ii) receive dividends or
other distributions made to stockholders, (iii) receive notice of or attend any
meetings of stockholders of the Company, or (iv) receive notice of any other
proceedings of the Company.
16
<PAGE> 17
IN WITNESS WHEREOF, the Company has executed this Option as of
the dated first above written.
DAY INTERNATIONAL GROUP, INC.
By:_______________________________
Its:______________________________
17
<PAGE> 18
ANNEX II
EXERCISE NOTICE
This Exercise Notice (this "Notice") is given by the
undersigned participant ("Participant") to Day International Group, Inc., a
Delaware corporation (the "Company") in connection with the Participant's
exercise of an Option granted pursuant to the Company's Stock Option Plan,
adopted July 6, 1995 (the "Plan") to purchase Option Shares (as defined in the
Plan). Capitalized terms used but not defined herein shall have the respective
meanings ascribed to them in the Plan.
1. PURCHASE AND SALE OF OPTION SHARES.
(a) Upon delivery to the Company of this Notice and
the Option to which it relates, the Company will sell and issue to Participant,
the Option Shares that Participant elects to purchase hereunder. Participant
will deliver to the Company herewith the aggregate Exercise Price for the Option
Shares purchased hereunder by check, bank draft or money order made payable to
"Day International Group, Inc."
PARTICIPANT IS ADVISED THAT IT MAY BE IN PARTICIPANT'S OWN
BEST INTEREST TO MAKE AN EFFECTIVE ELECTION WITH THE INTERNAL REVENUE SERVICE
UNDER SECTION 83(b) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS PROMULGATED
THEREUNDER, AND THAT PARTICIPANT SHOULD CONSULT WITH PARTICIPANT'S TAX ADVISOR
ABOUT THE DESIRABILITY OF AND PROCEDURE FOR MAKING SUCH AN ELECTION BEFORE
EXERCISING THE OPTION TO WHICH THIS NOTICE RELATES.
(b) In connection with the purchase and sale of the
Option Shares hereunder, Participant represents and warrants to the Company
that:
(i) The Option Shares to be acquired by
Participant pursuant to Participant's exercise of the Option
will be acquired for Participant's own account and not with a
view to, or intention of, distribution thereof in violation of
the Securities Act, or any applicable state securities laws,
and the Option Shares will not be disposed of in contravention
of the Securities Act or any applicable state securities laws;
18
<PAGE> 19
(ii) Participant is sophisticated in
financial matters and is able to evaluate the risks and
benefits of the investment in the Option Shares;
(iii) Participant is able to bear the
economic risk of his or her investment in the Option Shares
for an indefinite period of time because the Option Shares
have not been registered under the Securities Act and,
therefore, cannot be sold unless subsequently registered under
the Securities Act or an exemption form such registration is
available; and
(iv) Participant has had an opportunity to
ask questions and receive answers concerning the terms and
conditions of the Option Shares and has had full access to
such other information concerning the Company as he or she has
requested; and
(c) Participant further acknowledges and agrees that:
(i) neither the issuance of the Option
Shares to the Participant nor any provision contained herein
shall entitle Participant to remain in the employment of the
Company and its Subsidiaries or affect the right of the
Company to terminate Participant's employment at any time for
any reason;
(ii) the Company shall have no duty or
obligation to disclose to Participant and Participant shall
have no right to be advised of, any material information
regarding the Company and its Subsidiaries in connection with
the repurchase of Option Shares upon the termination of the
Participant's employment with the Company and its Subsidiaries
or as otherwise provided hereunder; and
(iii) the Company shall be entitled to
withhold from Participant from any amounts due and payable by
the Company to Participant (or secure payment from Participant
in lieu of withholding) the amount of any withholding or other
tax due from the Company with respect to such Option Shares
and the Company may defer issuance until indemnified to its
satisfaction.
(d) The Company and Participant acknowledge and agree
that the Option Shares issued in connection herewith hereunder, are issued as a
part of the compensation and incentive arrangements between the Company and the
Participant.
19
<PAGE> 20
2. RESTRICTIONS ON OPTION SHARES. Participant acknowledges
that the Option Shares being purchased hereunder are being issued pursuant to
the Plan, the terms and conditions of which are incorporated herein as if set
forth fully herein, and that such Option Shares are subject to certain
restrictions on transfer, rights of repurchase and other provisions set forth in
the Plan and the Stockholders Agreement. Participant acknowledges that the
certificates evidencing such Option Shares shall be imprinted with a legend
providing notice of such restrictions substantially in the form set forth in
section 5 of the Stockholders Agreement.
20
<PAGE> 21
IN WITNESS WHEREOF, the Participant has executed this Notice
as of the date written below.
<TABLE>
<S> <C>
Number of Shares of Common Stock: ___________
Aggregate Purchase Price: ___________
_______________________________ ___________
Signature of Participant Date
_______________________________ ____________________________________
Print Participant's Name Participant's Social Security Number
Participant's Residence Address: Mailing Address if different from
Residence Address:
__________________________________________ _________________________________________
Street Street
__________________________________________ _________________________________________
City State Zip Code City State Zip Code
</TABLE>
Acknowledge Receipt of Notice as of______________.
DAY INTERNATIONAL GROUP, INC.
By:_________________________________
Title:______________________________
21
<PAGE> 1
Exhibit 10.2.2
AMENDMENT TO STOCK OPTION PLAN
WHEREAS, the Board of Directors of Day International Group,
Inc. (the "Corporation") deems it advisable and in the best interest of the
Corporation for the Corporation to amend the Stock Option Plan of the
Corporation dated as of June 6, 1995 (the "Option Plan") to provide for an
acceleration of the vesting of Options amended thereunder upon the occurrence of
any transaction constituting a "Company Sale" thereunder in the manner provided
for herein.
NOW, THEREFORE, BE IT RESOLVED, that the Option Plan be, and
it hereby is, amended by adding new Sections 6.7 and 6.8 to the Option Plan,
which shall read in their entirety as follows:
"6.7 CLOSING OPTION VESTING ON COMPANY SALE. If a Company Sale
is consummated prior to January 1, 2000, then that portion of the Closing
Options held by a Participant that would, in the aggregate, have vested for all
Fiscal Years ended after the date of such Company Sale is consummated (not to
exceed 22.22% of such Closing Options for any such Fiscal Year) if the
Performance Level for such Fiscal Year was equal to the product of (a) 100 and
(b) a fraction, (i) the numerator of which is the actual cumulative EBITDA for
the Company and its Subsidiaries during the period beginning January 1, 1995 and
ending on the last day of the latest Fiscal Year ended before such Company Sale
is consummated (treated for this purpose as a single accounting period) and (ii)
the denominator of which is the sum of the Plan Targets for all such Fiscal
Years included in such period, will vest immediately prior to the consummation
of such Company Sale.
"6.8 BOARD OPTION VESTING ON COMPANY SALE. If a Company Sale
is consummated on or prior to the last day of the third consecutive Fiscal Year
beginning after the Fiscal Year in which any Board Option is awarded (with
respect to such Board Option, the "Board Option Plan End Date"), then that
portion of such Board Option held by a Participant that would, in the aggregate,
have vested for all Fiscal Years ended on or before the related Board Option
Plan End Date and after the date of such Company Sale is consummated (not to
exceed 25% of such Board Options for any such Fiscal Year) if the Performance
Level for such Fiscal Year was equal to the product of (a) 100 and (b) a
fraction, (i) the numerator of which is the actual cumulative EBITDA for the
Company and its Subsidiaries during the period be January 1 of the Fiscal Year
in which such Board Option was awarded and ending on the last day of the latest
Fiscal Year ended before such Company Sale is consummated (treated for this
purpose as a single accounting period) and (ii) the denominator of which is the
sum of the Plan Targets for
<PAGE> 2
all such Fiscal Years included in such period, will vest immediately prior to
the consummation of such Company Sale."
RESOLVED, FURTHER, that the president, any vice president, the
treasurer and the secretary and such other officers of the Corporation as shall
be designated by the president (the "Proper Officers") be, and hereby are,
authorized, empowered and directed to take all such further action as may be
necessary or advisable to implement or give further effect to the resolutions
adopted herein.
2
<PAGE> 1
Exhibit 10.2.3
SECOND AMENDMENT TO THE DAY INTERNATIONAL
GROUP, INC. STOCK OPTION PLAN (the "Plan")
Acting pursuant to Section 9.5 of the Plan, Day International
Group, Inc. (the "Corporation") hereby amends the Plan, effective as of January
16, 1998 unless otherwise indicated.
1. The Plan is amended by adding the following sentence at the
end of the definition of "Stockholders Agreement" in Article II:
Effective as of January 16, 1998, "Stockholders Agreement"
means the stockholders agreement in effect from time to time
among the Company and its stockholders.
2. The Plan is amended by adding a new Section 5.6 at the end
of Article V thereof, reading in its entirety as follows:
5.6 Acquisition Transaction. Notwithstanding anything
to the contrary in this Plan (including, without limitation,
Section 9.2), (i) effective immediately prior to the
consummation of the transactions contemplated by the Stock
Purchase Agreement, dated as of December 18, 1997, by and
among Greenwich IV, LLC, GSD Acquisition Corp.("GSD"), and
each of the persons named therein, as amended (the "Stock
Purchase Agreement"), all then outstanding Options shall be
fully vested, (ii) each of the Options set forth on Schedule I
hereto (such Options, the "Retained Options"), shall not
expire, but shall remain exercisable and outstanding in
accordance with the terms of the Plan, following the
consummation of the transactions contemplated by the Stock
Purchase Agreement (the "Closing"), (iii) in connection with
the Closing and subject to Section 7.4, each Participant shall
transfer all his outstanding Options, other than Retained
Options, to GSD and shall receive, in respect thereof, an
amount equal to the excess of (x) the aggregate Fair Market
Value of the Option Shares subject to such Options as of the
date of the Closing, over (y) the aggregate per share Exercise
Price of such Options.
3. The Plan is amended by adding the following language at the
end of Section 8.1:
<PAGE> 2
; provided that, the Retained Options shall not expire, but
shall remain exercisable and outstanding in accordance with
the terms of the Plan, following the Closing. Notwithstanding
anything to the contrary in this Plan or in any option
agreement hereunder, Retained Options shall be subject to the
stockholders agreement in effect from time to time among the
Corporation and its stockholders.
4. The Plan is amended by adding the following sentence at the
end of Section 9.5:
Effective as of January 16, 1998, no further Options may be
granted under this Plan.
2
<PAGE> 3
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Dennis R. Wolters 1200.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
<PAGE> 4
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
David B. Freimuth 200.0 C $1,000.00
110.0 BP $1,200.00
</TABLE>
C = Closing Options
BP = Board Pool Options
2
<PAGE> 5
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Christian Baldermann 200.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
3
<PAGE> 6
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
John R. Elia 200.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
4
<PAGE> 7
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Michael E. McLean 200.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
5
<PAGE> 8
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Dermot Healy 200.0 BP $1,200.00
</TABLE>
C = Closing Options
BP = Board Pool Options
6
<PAGE> 9
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Dwaine R. Brooks 112.5 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
7
<PAGE> 10
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
William M. Howle 112.5 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
8
<PAGE> 11
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
William B. Branson 112.5 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
9
<PAGE> 12
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Michael P. Neroni 60.0 BP $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
10
<PAGE> 13
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Edward P. Dzierzynski 10.0 C $1,000.00
15.0 BP $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
11
<PAGE> 14
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Jean Boret 10.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
12
<PAGE> 15
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Lawrence E. Gates 10.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
13
<PAGE> 16
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Thomas Powlas 10.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
14
<PAGE> 17
SCHEDULE I
RETAINED OPTIONS
<TABLE>
<CAPTION>
NAME NUMBER OF TYPE PER SHARE
RETAINED OPTIONS EXERCISE PRICE
- --------------------- ------------------- ---------- -------------------------
<S> <C> <C> <C>
Mario Stevenel 10.0 C $1,000.00
</TABLE>
C = Closing Options
BP = Board Pool Options
15
<PAGE> 1
Exhibit 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") made
as of the 16th day of January, 1998, by and between DAY INTERNATIONAL, INC., a
Delaware corporation (the "Company") and DENNIS R. WOLTERS (the "Executive").
WHEREAS, the Executive is currently employed by the Company as its
President and Chief Executive Officer pursuant to an employment agreement dated
as of October 21, 1997 (the "Prior Agreement");
WHEREAS, the Company is a wholly owned subsidiary of Day
International Group, Inc. (the "Parent");
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of December
18, 1997, as amended, among Greenwich IV, L.L.C., a Delaware limited liability
company, GSD Acquisition Corp., a Delaware corporation ("GSD"), and each of the
other persons named therein (the "Stock Purchase Agreement"), GSD purchased
substantially all the outstanding shares of Parent (the "Acquisition"); and
WHEREAS, the Company desires to secure the continued services of the
Executive, and the Executive desires to continue in the employment of the
Company, following the Acquisition, and in connection therewith, the Company and
the Executive desire to amend and restate the terms and provisions of the Prior
Agreement to, among other things, set forth the terms of such continued
employment;
NOW, THEREFORE, in consideration of the foregoing, and in
consideration of the covenants and agreements set forth herein, the parties
hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ the Executive, and he
agrees to serve the Company, on the terms and subject to the
conditions set forth herein, for a period commencing on the
date hereof (the "Effective Date") and continuing for a period
of five (5) years (the "Term"), unless terminated earlier as
provided herein; provided, however, this Agreement shall be
automatically renewed for successive one (1) year terms
thereafter, unless Company gives Executive at least sixty (60)
days notice of non-renewal prior to the end of said Term.
Should Company not renew at the end of the Term, or any
extension thereof, severance shall be payable to Executive as
set forth in Subsection 8(b)(iii)(C) of this Agreement. This
Agreement will continue to be operational in its entirety in
the event of a sale of the Company's stock, its assets, or any
other change of ownership or directorship.
2. SERVICES. The Executive shall serve in the capacity of
President and Chief Executive Officer of the Company, or in
such other capacity as mutually agreed in writing by the
parties, and shall have the duties and responsibilities
normally carried out by an executive in that capacity, subject
to the supervision and control of the
<PAGE> 2
Board of Directors of the Company. The Executive shall devote
his best efforts in all of his normal business time (vacations
and other leaves of absence permitted under the policies of
the Company excepted) to the business of the Company and to
faithfully, diligently, honestly and to the utmost of
Executive's ability performing all duties and responsibilities
as may be reasonably designated by the Board of Directors of
the Company from time to time.
3. COMPENSATION. During the Term and any extension thereof, the
Executive shall receive the following compensation:
(a) A base salary (per annum) at the rate set forth in
Exhibit A attached hereto (the "Base Compensation"), or
at a higher rate as may be increased from time to time
by the Board of Directors of the Company payable in
installments in accordance with the practice followed by
the Company for its executives;
(b) Annual executive incentive bonus compensation, which if
the Company performs at 100 percent of its annual plan
target, is at least equal to the amount set forth in
Exhibit A attached hereto, or at a higher rate as may be
increased from time to time by the Board of Directors of
the Company (the "Executive Incentive Bonus
Compensation"), payable not later than the end of the
first calendar quarter of the year following the year in
which earned, in conformity with the Company executive
incentive guidelines in effect on the Effective Date;
and
(c) Employee benefits and perquisites on terms and in
amounts no less favorable to Executive than applicable
under the policies and practices of the Company to its
executives on the Effective Date, including, but not
limited to, life insurance, long and short-term
disability benefits, health and prescription drug
benefits, defined contribution profit sharing, 401(k)
deferral and Company matching, tax and financial
planning, Company provided vehicle and parking,
vacation, and holidays.
4. CONFIDENTIALITY. During the term of Executive's employment
pursuant to this Agreement or any extension thereof, and for a
period of five (5) years after the termination of Executive's
employment with the Company, the Executive shall not (i)
disclose or make accessible to any unauthorized individual
Specialized Knowledge Information (as defined below) which he
shall have obtained during his employment by the Company and
which shall not be generally known or recognized as a standard
industry practice or information within the public domain,
other than by reason of the Executive's breach of this Section
4; or (ii) make use of any Specialized Knowledge Information
to the competitive disadvantage of the Company. "Specialized
Knowledge Information", for purposes of this Agreement,
comprises any proprietary or trade secret technical, economic,
financial or marketing information, business plans, customer
lists, sales plans, manufacturing plans, information relating
to product development, management organization
2
<PAGE> 3
information, or other information whether patented or not, on
processes, products, research, development, operations,
customers and equipment relating to the Company or its
subsidiaries, or other information designated as confidential
or proprietary that the Company or any of its subsidiaries
receives from suppliers, customers, or others who do business
with the Company or any of its subsidiaries.
5. NON-COMPETITION BY EXECUTIVE. During the Executive's term of
employment pursuant to this Agreement or any extension
thereof, and for a period of two (2) years after the
termination of Executive's employment with the Company (the
"Restriction Period"), the Executive agrees that he will not
accept employment by, or act as a consultant to, or become a
partner, principal or shareholder (other than a holder of less
than 1% of the outstanding voting shares of any publicly held
company) of, any direct competitor of the Company, or any firm
or corporation which, to the knowledge of the Executive,
intends to become such a direct competitor, or otherwise
engage in any business directly competitive with the Company
without first obtaining the written consent of the Company;
provided, however, that in the event the Company elects to
terminate this Agreement for any reason other than Cause (as
defined in Section 8), the Executive shall be released as of
the Termination Date (as defined in Section 8) from the
obligations of this Section 5.
6. NON-SOLICITATION OF EMPLOYEES OR CUSTOMERS. During the
Restriction Period, except in connection with the performance
of Executive's duties hereunder during the Term or any
extension thereof, Executive shall not directly or indirectly:
(a) Induce any employee of the Company or any of its
subsidiaries to terminate employment with such entity,
and shall not directly or indirectly, either
individually or as an owner, agent, employee, consultant
or otherwise, employ or offer to employ any person who
is, or was employed by the Company or any subsidiary
thereof, unless such person shall have ceased to be
employed by such entity for a period of at least six (6)
months.
(b) Solicit or otherwise attempt to establish for himself or
any other person, firm or entity, any business
relationship of a nature that is to the competitive
disadvantage of the Company with a business or
relationship of the Company or any of its subsidiaries,
with any firm, corporation or person which, during the
twelve (12) month period preceding the Termination Date
(as defined in Section 8), was a customer, client, or
distributor of the Company or its subsidiaries;
provided, however, that in the event the Company elects
to terminate this Agreement for any reason other than
Cause (as defined in Section 8), the Executive shall be
released as of the Termination Date from the obligations
of this Subsection 6(b).
3
<PAGE> 4
7. ARBITRATION OF CONFIDENTIALITY, COMPETITION, OR
NON-SOLICITATION. The determination that the Executive has
breached Sections 4, 5, or 6 of this Agreement and remedies
for such breach, if any, shall be determined by a neutral
party mutually agreed upon by the Company and the Executive,
and, failing such agreement, by arbitration pursuant to the
rules and procedures of the American Arbitration Association.
8. TERMINATION. The Executive and the Company may each terminate
this Agreement or any extension thereof at any time for any
reason by giving twenty (20) business days' prior written
notice to the other party. The termination shall become
effective upon the expiration of such twenty (20) day period
(the "Termination Date").
(a) If the Executive elects to terminate this Agreement or
any extension thereof, he shall not thereafter be
entitled to receive any payments under this Agreement
except his Base Compensation at the rate in effect on
the Termination Date paid through said Termination Date,
and his Executive Incentive Bonus Compensation, as if
100% of the annual plan target was met, calculated on a
pro-rata basis for the portion of the current annual
bonus period during which he was employed, plus, if
applicable, any Executive Incentive Bonus Compensation
amounts due and payable with respect to the prior year,
plus any accrued and unused vacation.
(b) If the Company elects to terminate this Agreement or any
extension thereof, the Executive shall be entitled to
receive the following compensation:
(i) Executive's Base Compensation at the rate in
effect on the Termination Date paid through said
Termination Date; and
(ii) Executive's Executive Incentive Bonus
Compensation, as if 100% of the annual plan target
was met, calculated on a pro-rata basis for the
portion of the current annual bonus period during
which he was employed, plus, if applicable, any
Executive Incentive Bonus Compensation amounts due
and payable with respect to the prior year, plus
any accrued and unused vacation; and
(iii) Either
(A) In the event that the Company terminates
this Agreement prior to the first
anniversary of the Effective Date, a lump
sum amount equal to the amount of three
(3) times the aggregate of the Executive's
Base Compensation and annual Executive
Incentive Bonus Compensation, as if 100%
of the annual plan target was met, payable
to the Executive as described in Section 3
of this Agreement; or
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<PAGE> 5
(B) In the event that the Company terminates
this Agreement on or after the first
anniversary of the Effective Date, but
before the end of the Term, a lump sum
amount equal to two (2) times the
aggregate of Executive's Base Compensation
and annual Executive Incentive Bonus
Compensation, as if 100% of the annual
plan target was met, payable to the
Executive as described in Section 3 of
this Agreement; or
(C) In the event that the Company terminates
this Agreement or any extension thereof
on or after the end of the Term, a lump
sum amount equal to one (1) times the
aggregate of the Executive's Base
Compensation and Annual Executive Incentive
Bonus Compensation, as if 100% of the
annual plan target was met, payable to the
Executive as described in Section 3 of
this Agreement; and
(iv) Continuation of all benefits and perquisites, as
described in Section 3(c) for a period of one (1)
year, and thereafter, continuation of health and
Section 125 benefits under COBRA provisions, as
prescribed by the Company's group health benefits
plan.
(c) For purposes of Subsection 8(b) above, Executive shall
be deemed to have been terminated by the Company should
any of the following occur following the Effective Date:
(i) Failure to elect, reelect or otherwise maintain
the Executive in the office or position in the
Company which the Executive is currently holding,
or in a position substantially equivalent or
higher to which the Executive has agreed in
writing; or
(ii) Any action effecting a significant change in the
nature or scope of the business or other
activities for which the Executive was or is
responsible, a substantial reduction in any of the
authorities, powers, functions, responsibilities
or duties attached to the position held by the
Executive, or a significant hindrance to the
Executive's ability to perform his duties, any
which situation is not remedied within ten (10)
business days after written notice to the Company
from the Executive; or
(iii) Transfer of the Executive's office out of the
Dayton, Ohio, area; or
(iv) In the event of sale of the Company, either its
assets or capital stock or any other change in
control of the Company, the purchaser or new
directorship of the Company makes any substantial
reduction in the employee benefits package in
effect on the date of such sale.
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<PAGE> 6
(d) Notwithstanding the foregoing, in the event the Company
elects to terminate the Executive for Cause (as defined
below), the Executive shall not thereafter be entitled
to receive any payments under this Agreement other than
his Base Compensation at the rate in effect on the
Termination Date paid through said date, plus any
accrued and unused vacation. For purposes of this
Agreement, "Cause" means:
(i) Executive's wilful and repeated failure to perform
substantially his duties as an employee hereunder,
including without limitation, Executive's wilful
and repeated failure to comply with reasonable and
lawful directives of the Board of Directors of the
Company (as set at any meeting of the Board of
Directors of the Company in accordance with the
Company's bylaws) (provided such directives are
consistent with the Executive's position);
(ii) Executive's conviction of, or the entering of a
plea of guilty or nolo contendere by Executive
to, a crime that constitutes a felony, or any
wilful or material violation by Executive of any
federal, state, or foreign securities laws;
(iii) Any conviction of any other criminal act or act of
material dishonesty, disloyalty or misconduct by
Executive (other than minor traffic offenses and
similar acts) that is materially injurious to the
property, operations, business or reputation of
the Company or any of its subsidiaries;
(iv) Failure to comply with the terms of any equity
plan, arrangement or agreement of the Company,
the Parent or their respective affiliates, in
which Executive is a participant or to which
Executive is a party; or
(v) The wilful and material breach by the Executive of
Sections 4, 5, or 6 of this Agreement.
(e) In the case of any termination of this Agreement or any
extension thereof due to a disability of the Executive
(the Executive is unable to perform the essential
functions of his position due to a disability of the
Executive which qualifies the Executive for disability
benefits under the Company's long term disability
benefits program), this Agreement shall terminate,
however, the payments to the Executive shall be made as
prescribed in Subsection 8(b), and shall not be reduced
or set off against any benefit(s) payable or accrued
under any disability or salary continuation benefits
that Executive is entitled to receive as a result of the
Company's disability benefits program(s) in place at the
time of the payment of the amounts payable under
Subsection 8(b).
(f) Notwithstanding anything to the contrary in this
Agreement, this Agreement shall be terminated by the
death of the Executive, in which case, the Company shall
pay to the estate of the Executive the following
amounts:
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<PAGE> 7
(i) Executive's Base Compensation in effect on the
date of death payable through the date of death;
(ii) Executive's Executive Incentive Bonus
Compensation, as if 100% of the annual plan target
was met, on a pro rata basis for the portion of
the current annual bonus period during which he
was employed, plus, if applicable, any Executive
Incentive Bonus Compensation amounts due and
payable with respect to the prior year, plus any
accrued and unused vacation; and
(iii) Executive's life insurance benefit calculated on a
basis consistent with the employee benefits
described in Section 3(c) as well as any other
benefit afforded an employee of Company terminated
as a result of death.
(g) Any payments to be made to the Executive pursuant to
this Section 8 shall be paid within thirty (30) days of
the Termination Date. Payments paid after said thirty
(30) day period shall bear interest at a rate of 10% per
annum, compounded daily, until payments and interest are
paid in full.
9. WAIVER. The Executive agrees to waive the portion of his
compensation and benefits described in Section 8 that exceeds
299% of his "base amount" within the meaning of Section
280G(b)(3) of the Internal Revenue Code of 1986, as amended,
(the "Code") in the event that payment of such compensation
and benefits is not approved by a vote of shareholders in
accordance with Section 280G(b)(5) of the Code, such vote to
be taken as soon as administratively practicable after the
Parent obtains the requisite consents from its bondholders to
the restructuring contemplated by the Interim Stockholders
Agreement, dated as of January 16, 1998, among Parent, GSD,
Greenwich IV LLC, and the other parties thereto.
10. TERMINATION OF MEMORANDUM OF AGREEMENT FOR SALES COMMISSION:
RELEASE. In consideration of the Company's payment to the
Executive of the sum set forth in Exhibit A attached hereto,
upon the closing of the transactions contemplated by the Stock
Purchase Agreement, the Executive hereby agrees that upon such
payment the Memorandum of Agreement for Sales Commission
dated as of October 15, 1997, between the Company and the
Executive (the "Sales Commission Agreement") shall terminate
in its entirety without any further liability or obligation on
the part of the Company, the Parent, or any of their
respective subsidiaries or affiliates. Further, from and after
the payment referred to in this Section 10, in consideration
of such payment, the Executive, on behalf of himself, his
agents, representatives, assigns, heirs, executors and
administrators (individually and collectively the "Releasor"),
hereby releases and forever discharges the Company, the
Parent, each of their respective subsidiaries and affiliates,
and each of their respective officers, directors, trustees,
employees, agents, representatives, successors and assigns
(individually and collectively the "Releasee") from and
against any and all claims, liabilities, obligations, demands
or causes of action, however denominated, whether known or
unknown, whether at law or equity, and whether or not
previously asserted, that the Releasor has or could have
against the Releasee for any
7
<PAGE> 8
sums owed or allegedly owed under the Sales Commission
Agreement or the termination of any alleged breach of the
Sales Commission Agreement.
11. NOTICES. All notices hereunder shall be in writing, and
delivered or mailed by registered or certified mail, return
receipt requested, to the following addresses:
(a) If to the Company, at its offices at:
P.O. Box 338
130 West Second Street
Dayton, Ohio 45401-0338
Attention: Corporate Secretary
with a copy to each of:
GSD Acquisition Corp.
c/o Greenwich Street Capital Partners, Inc.
388 Greenwich Street
New York, New York 10033
Attention: Alfred E. Eckert, III
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Andrew L. Sommer, Esq.
(b) and if to the Executive, at the address set forth on the
signature page hereto,
or to such other address as the Company or the Executive may
hereinafter designate to the other in writing for such
purpose.
12. ASSIGNMENT AND SUCCESSORS. (a) This Agreement shall be
assignable by the Company, with the written consent of the
Executive, to any unaffiliated purchaser of substantially all
the assets and liabilities of the Company. Upon any such
assignment, the Company shall be released and fully discharged
from any and all obligations hereunder, and this Agreement
shall bind and run to the benefits of the assignee, which as
successor, shall thereafter be deemed to be the "Company" for
purposes of this Agreement.
(b) The Executive may not assign, pledge or encumber his
interest in this Agreement or any part thereof without
the express written consent of the Company, this
Agreement being personal to the Executive and the
beneficiaries designated by him.
8
<PAGE> 9
13. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of Ohio. The parties
agree that any arbitrations or court proceedings with regard
to this Agreement shall be held in Montgomery County, Ohio,
unless otherwise agreed to in writing by the parties.
14. PARTIAL INVALIDITY. If any provision of this Agreement is held
by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless
continue in full force and effect without being impaired or
invalidated in any way.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto with respect to the
matters addressed herein, and all prior negotiations,
understandings, representations, and agreements (including,
without limitation, the Prior Agreement), whether oral or
written, of any nature whatsoever, with respect to the terms
and conditions of employment that are the subject matter
hereof are merged herein and are hereby superseded. This
Agreement cannot be changed, modified or terminated unless in
writing and signed by the parties hereto.
16. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which
together shall be deemed to be one in the same instrument.
9
<PAGE> 10
IN WITNESS WHEREOF, the Executive and the Company, by a duly authorized
officer, have executed this Agreement on the day and year first above written.
DAY INTERNATIONAL, INC.
By:
--------------------------------------
Name: Dennis R. Wolters
Title: President and Chief Executive Officer
------------------------------------------
DENNIS R. WOLTERS
Address: 2518 Fairmont Avenue
Dayton, OH 45419
<PAGE> 11
EXHIBIT A
Base salary: $200,000/year
Annual executive incentive bonus if the
Company performs at 100% of the annual plan target: $200,000
Sales commission: $4,868,750
<PAGE> 1
Exhibit 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (the "Agreement") made
as of the 16th day of January, 1998, by and between DAY INTERNATIONAL, INC., a
Delaware corporation (the "Company") and DAVID B. FREIMUTH (the "Executive").
WHEREAS, the Executive is currently employed by the Company as its
Vice President and Chief Financial Officer pursuant to an employment agreement
dated as of October 21, 1997 (the "Prior Agreement");
WHEREAS, the Company is a wholly owned subsidiary of Day
International Group, Inc. (the "Parent");
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of December
18, 1997, as amended, among Greenwich IV, L.L.C., a Delaware limited liability
company, GSD Acquisition Corp., a Delaware corporation ("GSD"), and each of the
other persons named therein (the "Stock Purchase Agreement"), GSD purchased
substantially all the outstanding shares of Parent (the "Acquisition"); and
WHEREAS, the Company desires to secure the continued services of the
Executive, and the Executive desires to continue in the employment of the
Company, following the Acquisition, and in connection therewith, the Company and
the Executive desire to amend and restate the terms and provisions of the Prior
Agreement to, among other things, set forth the terms of such continued
employment;
NOW, THEREFORE, in consideration of the foregoing, and in
consideration of the covenants and agreements set forth herein, the parties
hereto agree as follows:
1. EMPLOYMENT. The Company agrees to employ the Executive,
and he agrees to serve the Company, on the terms and
subject to the conditions set forth herein, for a period
commencing on the date hereof (the "Effective Date") and
continuing for a period of five (5) years (the "Term"),
unless terminated earlier as provided herein; provided,
however, this Agreement shall be automatically renewed for
successive one (1) year terms thereafter, unless Company
gives Executive at least sixty (60) days notice of
non-renewal prior to the end of said Term. Should Company
not renew at the end of the Term, or any extension
thereof, severance shall be payable to Executive as set
forth in Subsection 8(b)(iii)(C) of this Agreement. This
Agreement will continue to be operational in its entirety
in the event of a sale of the Company's stock, its assets,
or any other change of ownership or directorship.
2. SERVICES. The Executive shall serve in the capacity of
Vice President and Chief Financial Officer of the Company,
or in such other capacity as mutually agreed in writing by
the parties, and shall have the duties and
responsibilities normally carried out by an executive in
that capacity, subject to the supervision and control of
the
<PAGE> 2
President and the Board of Directors of the Company. The
Executive shall devote his best efforts in all of his
normal business time (vacations and other leaves of
absence permitted under the policies of the Company
excepted) to the business of the Company and to
faithfully, diligently, honestly and to the utmost of
Executive's ability performing all duties and
responsibilities as may be reasonably designated by the
President and the Board of Directors of the Company from
time to time.
3. COMPENSATION. During the Term and any extension thereof,
the Executive shall receive the following compensation:
(a) A base salary (per annum) at the rate set forth
in Exhibit A attached hereto (the "Base
Compensation"), or at a higher rate as may be
increased from time to time by the Board of
Directors of the Company payable in
installments in accordance with the practice
followed by the Company for its executives;
(b) Annual executive incentive bonus compensation,
which if the Company performs at 100 percent of
its annual plan target, is at least equal to
the amount set forth in Exhibit A attached
hereto, or at a higher rate as may be increased
from time to time by the Board of Directors of
the Company (the "Executive Incentive Bonus
Compensation"), payable not later than the end
of the first calendar quarter of the year
following the year in which earned, in
conformity with the Company executive incentive
guidelines in effect on the Effective Date; and
(c) Employee benefits and perquisites on terms and
in amounts no less favorable to Executive than
applicable under the policies and practices of
the Company to its executives on the Effective
Date, including, but not limited to, life
insurance, long and short-term disability
benefits, health and prescription drug
benefits, defined contribution profit sharing,
401(k) deferral and Company matching, tax and
financial planning, Company provided vehicle
and parking, vacation, and holidays.
4. CONFIDENTIALITY. During the term of Executive's employment
pursuant to this Agreement or any extension thereof, and
for a period of five (5) years after the termination of
Executive's employment with the Company, the Executive
shall not (i) disclose or make accessible to any
unauthorized individual Specialized Knowledge Information
(as defined below) which he shall have obtained during his
employment by the Company and which shall not be generally
known or recognized as a standard industry practice or
information within the public domain, other than by reason
of the Executive's breach of this Section 4; or (ii) make
use of any Specialized Knowledge Information to the
competitive disadvantage of the Company. "Specialized
Knowledge Information", for purposes of this Agreement,
comprises any proprietary or trade secret technical,
economic, financial or marketing information, business
plans, customer lists, sales plans, manufacturing plans,
information relating to product development, management
organization
2
<PAGE> 3
information, or other information whether patented or not,
on processes, products, research, development, operations,
customers and equipment relating to the Company or its
subsidiaries, or other information designated as
confidential or proprietary that the Company or any of its
subsidiaries receives from suppliers, customers, or others
who do business with the Company or any of its
subsidiaries.
5. NON-COMPETITION BY EXECUTIVE. During the Executive's term
of employment pursuant to this Agreement or any extension
thereof, and for a period of two (2) years after the
termination of Executive's employment with the Company
(the "Restriction Period"), the Executive agrees that he
will not accept employment by, or act as a consultant to,
or become a partner, principal or shareholder (other than
a holder of less than 1% of the outstanding voting shares
of any publicly held company) of, any direct competitor of
the Company, or any firm or corporation which, to the
knowledge of the Executive, intends to become such a
direct competitor, or otherwise engage in any business
directly competitive with the Company without first
obtaining the written consent of the Company; provided,
however, that in the event the Company elects to terminate
this Agreement for any reason other than Cause (as defined
in Section 8), the Executive shall be released as of the
Termination Date (as defined in Section 8) from the
obligations of this Section 5.
6. NON-SOLICITATION OF EMPLOYEES OR CUSTOMERS. During the
Restriction Period, except in connection with the
performance of Executive's duties hereunder during the
Term or any extension thereof, Executive shall not
directly or indirectly:
(a) Induce any employee of the Company or any of
its subsidiaries to terminate employment with
such entity, and shall not directly or
indirectly, either individually or as an owner,
agent, employee, consultant or otherwise,
employ or offer to employ any person who is, or
was employed by the Company or any subsidiary
thereof, unless such person shall have ceased
to be employed by such entity for a period of
at least six (6) months.
(b) Solicit or otherwise attempt to establish for
himself or any other person, firm or entity,
any business relationship of a nature that is
to the competitive disadvantage of the Company
with a business or relationship of the Company
or any of its subsidiaries, with any firm,
corporation or person which, during the twelve
(12) month period preceding the Termination
Date (as defined in Section 8), was a customer,
client, or distributor of the Company or its
subsidiaries; provided, however, that in the
event the Company elects to terminate this
Agreement for any reason other than Cause (as
defined in Section 8), the Executive shall be
released as of the Termination Date from the
obligations of this Subsection 6(b).
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<PAGE> 4
7. ARBITRATION OF CONFIDENTIALITY, COMPETITION, OR
NON-SOLICITATION. The determination that the Executive has
breached Sections 4, 5, or 6 of this Agreement and
remedies for such breach, if any, shall be determined by a
neutral party mutually agreed upon by the Company and the
Executive, and, failing such agreement, by arbitration
pursuant to the rules and procedures of the American
Arbitration Association.
8. TERMINATION. The Executive and the Company may each
terminate this Agreement or any extension thereof at any
time for any reason by giving twenty (20) business days'
prior written notice to the other party. The termination
shall become effective upon the expiration of such twenty
(20) day period (the "Termination Date").
(a) If the Executive elects to terminate this
Agreement or any extension thereof, he shall
not thereafter be entitled to receive any
payments under this Agreement except his Base
Compensation at the rate in effect on the
Termination Date paid through said Termination
Date, and his Executive Incentive Bonus
Compensation, as if 100% of the annual plan
target was met, calculated on a pro-rata basis
for the portion of the current annual bonus
period during which he was employed, plus, if
applicable, any Executive Incentive Bonus
Compensation amounts due and payable with
respect to the prior year, plus any accrued and
unused vacation.
(b) If the Company elects to terminate this
Agreement or any extension thereof, the
Executive shall be entitled to receive the
following compensation:
(i) Executive's Base Compensation at the
rate in effect on the Termination
Date paid through said Termination
Date; and
(ii) Executive's Executive Incentive
Bonus Compensation, as if 100% of
the annual plan target was met,
calculated on a pro-rata basis for
the portion of the current annual
bonus period during which he was
employed, plus, if applicable, any
Executive Incentive Bonus
Compensation amounts due and payable
with respect to the prior year, plus
any accrued and unused vacation; and
(iii)Either
(A) In the event that the
Company terminates this
Agreement prior to the
first anniversary of the
Effective Date, a lump
sum amount equal to the
amount of three (3) times
the aggregate of the
Executive's Base
Compensation and annual
Executive Incentive Bonus
Compensation, as if 100%
of the annual plan target
was met, payable to the
Executive as described in
Section 3 of this
Agreement; or
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<PAGE> 5
(B) In the event that the Company terminates this
Agreement on or after the first anniversary of
the Effective Date, but before the end of the
Term, a lump sum amount equal to two (2) times
the aggregate of Executive's Base Compensation
and annual Executive Incentive Bonus
Compensation, as if 100% of the annual plan
target was met, payable to the Executive as
described in Section 3 of this Agreement; or
(C) In the event that the Company terminates this
Agreement or any extension thereof on or after
the end of the Term, a lump sum amount equal to
one (1) times the aggregate of the Executive's
Base Compensation and Annual Executive
Incentive Bonus Compensation, as if 100% of the
annual plan target was met, payable to the
Executive as described in Section 3 of this
Agreement; and
(iv) Continuation of all benefits and perquisites, as described
in Section 3(c) for a period of one (1) year, and
thereafter, continuation of health and Section 125
benefits under COBRA provisions, as prescribed by the
Company's group health benefits plan.
(c) For purposes of Subsection 8(b) above, Executive shall be deemed to
have been terminated by the Company should any of the following occur
following the Effective Date:
(i) Failure to elect, reelect or otherwise maintain the
Executive in the office or position in the Company which
the Executive is currently holding, or in a position
substantially equivalent or higher to which the Executive
has agreed in writing; or
(ii) Any action effecting a significant change in the nature or
scope of the business or other activities for which the
Executive was or is responsible, a substantial reduction
in any of the authorities, powers, functions,
responsibilities or duties attached to the position held
by the Executive, or a significant hindrance to the
Executive's ability to perform his duties, any which
situation is not remedied within ten (10) business days
after written notice to the Company from the Executive; or
(iii) Transfer of the Executive's office out of the Dayton,
Ohio, area; or
(iv) In the event of sale of the Company, either its assets or
capital stock or any other change in control of the
Company, the purchaser or new directorship of the Company
makes any substantial reduction in the employee benefits
package in effect on the date of such sale.
5
<PAGE> 6
(d) Notwithstanding the foregoing, in the event the Company elects to
terminate the Executive for Cause (as defined below), the Executive
shall not thereafter be entitled to receive any payments under this
Agreement other than his Base Compensation at the rate in effect on
the Termination Date paid through said date, plus any accrued and
unused vacation. For purposes of this Agreement, "Cause" means:
(i) Executive's wilful and repeated failure to perform
substantially his duties as an employee hereunder,
including without limitation, Executive's wilful and
repeated failure to comply with reasonable and lawful
directives of the Board of Directors of the Company (as
set at any meeting of the Board of Directors of the
Company in accordance with the Company's bylaws) or
Executive's supervisory personnel (provided such
directives are consistent with the Executive's position);
(ii) Executive's conviction of, or the entering of a plea of
guilty or nolo contendere by Executive to, a crime that
constitutes a felony, or any wilful or material violation
by Executive of any federal, state, or foreign securities
laws;
(iii) Any conviction of any other criminal act or act of
material dishonesty, disloyalty or misconduct by Executive
(other than minor traffic offenses and similar acts) that
is materially injurious to the property, operations,
business or reputation of the Company or any of its
subsidiaries;
(iv) Failure to comply with the terms of any equity plan,
arrangement or agreement of the Company, the Parent or
their respective affiliates, in which Executive is a
participant or to which Executive is a party; or
(v) The wilful and material breach by the Executive of
Sections 4, 5, or 6 of this Agreement.
(e) In the case of any termination of this Agreement or any extension
thereof due to a disability of the Executive (the Executive is unable
to perform the essential functions of his position due to a
disability of the Executive which qualifies the Executive for
disability benefits under the Company's long term disability benefits
program), this Agreement shall terminate, however, the payments to
the Executive shall be made as prescribed in Subsection 8(b), and
shall not be reduced or set off against any benefit(s) payable or
accrued under any disability or salary continuation benefits that
Executive is entitled to receive as a result of the Company's
disability benefits program(s) in place at the time of the payment of
the amounts payable under Subsection 8(b).
(f) Notwithstanding anything to the contrary in this Agreement, this
Agreement shall be terminated by the death of the Executive, in which
case, the Company shall pay to the estate of the Executive the
following amounts:
6
<PAGE> 7
(i) Executive's Base Compensation in effect on the
date of death payable through the date of
death;
(ii) Executive's Executive Incentive Bonus
Compensation, as if 100% of the annual plan
target was met, on a pro rata basis for the
portion of the current annual bonus period
during which he was employed, plus, if
applicable, any Executive Incentive Bonus
Compensation amounts due and payable with
respect to the prior year, plus any accrued and
unused vacation; and
(iii) Executive's life insurance benefit calculated
on a basis consistent with the employee
benefits described in Section 3(c) as well as
any other benefit afforded an employee of
Company terminated as a result of death.
(g) Any payments to be made to the Executive pursuant to this
Section 8 shall be paid within thirty (30) days of the
Termination Date. Payments paid after said thirty (30) day
period shall bear interest at a rate of 10% per annum,
compounded daily, until payments and interest are paid in
full.
9. WAIVER. The Executive agrees to waive the portion of his compensation
and benefits described in Section 8 that exceeds 299% of his "base
amount" within the meaning of Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended, (the "Code") in the event that
payment of such compensation and benefits is not approved by a vote
of shareholders in accordance with Section 280G(b)(5) of the Code,
such vote to be taken as soon as administratively practicable after
the Parent obtains the requisite consents from its bondholders to the
restructuring contemplated by the Interim Stockholders Agreement,
dated as of January 16, 1998, among Parent, GSD, Greenwich IV LLC,
and the other parties thereto.
10. TERMINATION OF MEMORANDUM OF AGREEMENT FOR SALES COMMISSION: RELEASE.
In consideration of the Company's payment to the Executive of the sum
set forth in Exhibit A attached hereto, upon the closing of the
transactions contemplated by the Stock Purchase Agreement, the
Executive hereby agrees that upon such payment the Memorandum of
Agreement for Sales Commission dated as of October 15, 1997, between
the Company and the Executive (the "Sales Commission Agreement")
shall terminate in its entirety without any further liability or
obligation on the part of the Company, the Parent, or any of their
respective subsidiaries or affiliates. Further, from and after the
payment referred to in this Section 10, in consideration of such
payment, the Executive, on behalf of himself, his agents,
representatives, assigns, heirs, executors and administrators
(individually and collectively the "Releasor"), hereby releases and
forever discharges the Company, the Parent, each of their respective
subsidiaries and affiliates, and each of their respective officers,
directors, trustees, employees, agents, representatives, successors
and assigns (individually and collectively the "Releasee") from and
against any and all claims, liabilities, obligations, demands or
causes of action, however denominated, whether known or unknown,
whether at law or equity, and whether or not previously asserted,
that the Releasor has or could have against the Releasee for any
7
<PAGE> 8
sums owed or allegedly owed under the Sales Commission Agreement or
the termination of any alleged breach of the Sales Commission
Agreement.
11. NOTICES. All notices hereunder shall be in writing, and delivered or
mailed by registered or certified mail, return receipt requested, to
the following addresses:
(a) If to the Company, at its offices at:
P.O. Box 338
130 West Second Street
Dayton, Ohio 45401-0338
Attention: Corporate Secretary
with a copy to each of:
GSD Acquisition Corp.
c/o Greenwich Street Capital Partners, Inc.
388 Greenwich Street
New York, New York 10033
Attention: Alfred E. Eckert, III
and
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
Attention: Andrew L. Sommer, Esq.
(b) and if to the Executive, at the address set forth on the
signature page hereto,
or to such other address as the Company or the Executive may
hereinafter designate to the other in writing for such purpose.
12. ASSIGNMENT AND SUCCESSORS. (a) This Agreement shall be assignable by
the Company, with the written consent of the Executive, to any
unaffiliated purchaser of substantially all the assets and
liabilities of the Company. Upon any such assignment, the Company
shall be released and fully discharged from any and all obligations
hereunder, and this Agreement shall bind and run to the benefits of
the assignee, which as successor, shall thereafter be deemed to be
the "Company" for purposes of this Agreement.
(b) The Executive may not assign, pledge or encumber his
interest in this Agreement or any part thereof without the
express written consent of the Company, this Agreement
being personal to the Executive and the beneficiaries
designated by him.
8
<PAGE> 9
13. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Ohio. The parties agree that any
arbitrations or court proceedings with regard to this Agreement shall
be held in Montgomery County, Ohio, unless otherwise agreed to in
writing by the parties.
14. PARTIAL INVALIDITY. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, void, or
unenforceable, the remaining provisions shall nevertheless continue
in full force and effect without being impaired or invalidated in any
way.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters addressed
herein, and all prior negotiations, understandings, representations,
and agreements (including, without limitation, the Prior Agreement),
whether oral or written, of any nature whatsoever, with respect to
the terms and conditions of employment that are the subject matter
hereof are merged herein and are hereby superseded. This Agreement
cannot be changed, modified or terminated unless in writing and
signed by the parties hereto.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall be
deemed to be one in the same instrument.
9
<PAGE> 10
IN WITNESS WHEREOF, the Executive and the Company, by a duly authorized
officer, have executed this Agreement on the day and year first above written.
DAY INTERNATIONAL, INC.
By:
--------------------------------------------
Name: Dennis R. Wolters
Title: President and Chief Executive Officer
------------------------------------------
DAVID B. FREIMUTH
Address: 4215 Overland Trail
Kettering, OH 45429
<PAGE> 11
EXHIBIT A
Base Salary: $105,000/year
Annual executive incentive bonus if the
Company performs at 100% of the annual plan target: $55,000
Sales commission: $2,434,375
<PAGE> 1
EXHIBIT 21.1
The active subsidiaries of Day International Group, Inc. as listed below, do
business under the name under which they are organized, and are included in the
consolidated financial statements of the Company. The names, jurisdiction of
incorporation of such subsidiaries, and percentage of voting securities owned by
the Company are set forth below.
<TABLE>
<CAPTION>
Jurisdiction of Percentage of Voting
Name of Subsidiary Incorporation Securities Owned
------------------ ------------------ ----------------
<S> <C> <C>
Day International, Inc. Delaware 100%
Day Holdings I, Inc. Delaware 100% (1)
Day Holdings II, Inc. Delaware 100% (1)
Day International (U.K.)
Holdings Limited United Kingdom 100% (3)
Day International (U.K.),
Ltd. United Kingdom 100% (2)
Day International (Canada)
Holdings Limited Ontario, Canada 100% (1)
Day International
France S.A.R.L France 100% (1)
Day International
(BRD) Gmbh Germany 100% (1)
Day International de Mexico
S.A. de C.V. Mexico 100% (1)
(1) Subsidiaries of Day International, Inc.
(2) Subsidiary of Day International (U.K.) Holdings Limited
(3) Subsidiary of Day Holdings I, Inc. and Day Holdings II, Inc.
</TABLE>
<PAGE> 1
Exhibit 25.1
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
DAY INTERNATIONAL GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 31-1436349
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 338
130 West Second Street
Dayton, Ohio 45401-0338
(Address of principal executive offices) (Zip code)
----------------------
9-1/2% Senior Subordinated Notes
due 2008
(Title of the indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
Name Address
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 1st day of May, 1998.
THE BANK OF NEW YORK
By: /s/JAMES W.P. HALL
-------------------------
Name: JAMES W.P. HALL
Title: VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 5,742,986
Interest-bearing balances .......... 1,342,769
Securities:
Held-to-maturity securities ........ 1,099,736
Available-for-sale securities ...... 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell..... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,019,608
LESS: Allowance for loan and
lease losses ..............627,350
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 34,392,258
Assets held in trading accounts ...... 2,521,451
Premises and fixed assets (including
capitalized leases) ................ 659,209
Other real estate owned .............. 11,992
Investments in unconsolidated
subsidiaries and associated
companies .......................... 226,263
Customers' liability to this bank on
acceptances outstanding ............ 1,187,449
Intangible assets .................... 781,684
Other assets ......................... 1,736,574
-----------
Total assets ......................... $56,153,587
===========
LIABILITIES
Deposits:
In domestic offices ................ $27,031,362
Noninterest-bearing ......11,899,507
Interest-bearing .........15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 13,794,449
Noninterest-bearing .........590,999
Interest-bearing .........13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase. 2,338,881
Demand notes issued to the U.S.
Treasury ........................... 173,851
Trading liabilities .................. 1,695,216
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,905,330
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,664
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,195,923
Subordinated notes and debentures .... 1,012,940
Other liabilities .................... 2,018,960
-----------
Total liabilities .................... 51,192,576
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 36,866
Cumulative foreign currency transla-
tion adjustments ................... ( 36,184)
------------
Total equity capital ................. 4,961,011
------------
Total liabilities and equity
capital ............................ $56,153,587
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
}
Thomas A. Renyi }
Alan R. Griffith } Directors
J. Carter Bacot }
}
<PAGE> 1
Exhibit 25.2
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
DAY INTERNATIONAL GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 31-1436349
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 338
130 West Second Street
Dayton, Ohio 45401-0338
(Address of principal executive offices) (Zip code)
----------------------
12-1/4% Senior Exchangeable Preferred
Stock due 2010
(Title of the indenture securities)
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE
TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO
WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
Name Address
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 1st day of May, 1998.
THE BANK OF NEW YORK
By: /s/JAMES W.P. HALL
----------------------------
Name: JAMES W.P. HALL
Title: VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS in Thousands
<S> <C>
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ................. $ 5,742,986
Interest-bearing balances .......... 1,342,769
Securities:
Held-to-maturity securities ........ 1,099,736
Available-for-sale securities ...... 3,882,686
Federal funds sold and Securities pur-
chased under agreements to resell..... 2,568,530
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,019,608
LESS: Allowance for loan and
lease losses ..............627,350
LESS: Allocated transfer risk
reserve..........................0
Loans and leases, net of unearned
income, allowance, and reserve 34,392,258
Assets held in trading accounts ...... 2,521,451
Premises and fixed assets (including
capitalized leases) ................ 659,209
Other real estate owned .............. 11,992
Investments in unconsolidated
subsidiaries and associated
companies .......................... 226,263
Customers' liability to this bank on
acceptances outstanding ............ 1,187,449
Intangible assets .................... 781,684
Other assets ......................... 1,736,574
-----------
Total assets ......................... $56,153,587
===========
LIABILITIES
Deposits:
In domestic offices ................ $27,031,362
Noninterest-bearing ......11,899,507
Interest-bearing .........15,131,855
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 13,794,449
Noninterest-bearing .........590,999
Interest-bearing .........13,203,450
Federal funds purchased and Securities
sold under agreements to repurchase. 2,338,881
Demand notes issued to the U.S.
Treasury ........................... 173,851
Trading liabilities .................. 1,695,216
Other borrowed money:
With remaining maturity of one year
or less .......................... 1,905,330
With remaining maturity of more than
one year through three years...... 0
With remaining maturity of more than
three years ...................... 25,664
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,195,923
Subordinated notes and debentures .... 1,012,940
Other liabilities .................... 2,018,960
-----------
Total liabilities .................... 51,192,576
-----------
EQUITY CAPITAL
Common stock ......................... 1,135,284
Surplus .............................. 731,319
Undivided profits and capital
reserves ........................... 3,093,726
Net unrealized holding gains
(losses) on available-for-sale
securities ......................... 36,866
Cumulative foreign currency transla-
tion adjustments ................... ( 36,184)
------------
Total equity capital ................. 4,961,011
------------
Total liabilities and equity
capital ............................ $56,153,587
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
}
Thomas A. Renyi }
Alan R. Griffith } Directors
J. Carter Bacot }
}
