<PAGE>
1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) March 31, 1998
TEREX CORPORATION
- ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10702 34-1531521
- ------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
500 Post Road East, Suite 320, Westport, Connecticut 06880
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (203) 222-7170
NOT APPLICABLE
- ------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
==============================================================================
<PAGE>
2
Item 2. Acquisition and Disposition of Assets.
On March 31, 1998, Terex Corporation ("Terex" or the "Company"), through one or
more subsidiaries, completed the purchase of all of the outstanding shares of
O&K Mining GmbH ("O&K Mining"), an entity formed under the laws of the Republic
of Germany, for an aggregate cash consideration of DM307 million (approximately
$168.5 million) from O&K Orenstein & Koppel AG, an entity formed under the laws
of the Republic of Germany.
O&K Mining, which will be part of the Terex Earthmoving segment, is
headquartered in Dortmund, Germany, and has operations in the United States, the
United Kingdom, Australia, Canada, South Africa and Singapore. O&K Mining has,
and will continue to, manufacture and sell a complete range of large hydraulic
mining shovels serving the global surface mining industry and the global
construction and infrastructure development markets.
The Company obtained the funds necessary to complete the transaction through the
issuance by the Company of its New Senior Subordinated Notes (defined below) and
borrowings under its New Bank Credit Facility (defined below). See Item 5 below.
Item 5. Other Events.
On March 6, 1998, the Company completed the purchase or defeasance of all of the
$166.7 million in principal amount of its then outstanding 13.25% Senior Secured
Notes due 2002 (the "Senior Secured Notes"). Concurrently therewith, the Company
also amended or eliminated certain of the principal restrictive covenants
contained in the Indenture governing the Senior Secured Notes and refinanced
substantially all of its then existing domestic and foreign revolving credit
debt. The proceeds for the offer to purchase and the repayment of its then
existing revolving credit facility were obtained from borrowings under the
Company's new $500 million global bank credit facility (the "New Bank Credit
Facility").
The New Bank Credit Facility consists of a new secured global revolving credit
facility aggregating up to $125 million (the "New Revolving Credit Facility")
and two term loan facilities (collectively, the "Term Loan Facilities")
providing for loans in an aggregate principal amount of up to approximately $375
million. The New Revolving Credit Facility, which is currently undrawn, will be
used for working capital and general corporate purposes, including acquisitions.
Pursuant to the Term Loan Facilities, the Company has borrowed, or may borrow in
the future, (i) up to $175 million in aggregate principal amount pursuant to a
Term Loan A due March 2004 (the "Term A Loan") and (ii) up to $200 million in
aggregate principal amount pursuant to a Term Loan B due March 2005 (the "Term B
Loan"). The outstanding principal amount of the Term A Loan initially bears
interest, at Company's option, at an all-in drawn cost of 2% per annum in excess
of the adjusted eurocurrency rate or, with respect to U.S. dollar denominated
alternate base rate loans, at an all-in drawn cost of 1% per annum in excess of
the prime rate. The outstanding principal amount of the Term B Loan initially
bears interest, at the Company's option, at a rate of 2.5% per annum in excess
of the adjusted eurodollar rate or, with respect to U.S. dollar denominated
alternate base rate loans, 1.5% in excess of the prime rate. The Term A Loan
amortizes on a quarterly basis, in the annual percentages of 0%, 16%, 16%, 21%,
21% and 26%, respectively, during the six year term of the loan. The Term B Loan
amortizes in an annual percentage of 1% during each of the first six years of
the term of the loan and 94% in the seventh year of the term of the loan. The
Term A Loan and Term B Loan are subject to mandatory prepayment under certain
circumstances and are voluntarily prepayable without payment of a premium
(subject to reimbursement of the lenders' costs in case of prepayment of
eurodollar loans other than on the last day of an interest period). The
outstanding principal amount of loans under the New Revolving Credit Facility
initially bears interest, at the Company's option, at an all-in drawn cost of 1%
per annum in excess of the prime rate. The New Revolving Credit Facility
terminates on March 5, 2004. The Company has entered into certain interest rate
protection agreements with respect to a portion of the principal amount of the
New Bank Credit Facility.
With limited exceptions, the obligations of the Company under the New Bank
Credit Facility are secured by (i) a pledge of all of the capital stock of
domestic subsidiaries of the Company, (ii) a pledge of 65% of the stock of
<PAGE>
3
certain of the foreign subsidiaries of the Company and (iii) a first priority
security interest in, and mortgages on, substantially all of the assets of Terex
and its domestic subsidiaries. The New Bank Credit Facility contains covenants
limiting the Company's activities, including, without limitation, limitations on
dividends and other payments, liens, investments, incurrence of indebtedness,
mergers and asset sales, related party transactions and capital expenditures.
The New Bank Credit Facility also contains certain financial and operating
covenants, including a maximum leverage ratio, a minimum interest coverage ratio
and a minimum fixed charge coverage ratio. If for any reason the Company is
unable to comply with the terms of the New Bank Credit Facility, including the
covenants included therein, such noncompliance would result in an event of
default under the New Bank Credit Facility and could result in acceleration of
the payment of the indebtedness outstanding under the New Bank Credit Facility.
On March 31, 1998, the Company issued and sold $150 million aggregate principal
amount of 8-7/8% Senior Subordinated Notes Due 2008 (the "New Senior
Subordinated Notes"). The New Senior Subordinated Notes were issued and sold
pursuant to an exemption from registration under the Securities Act of 1933, as
amended. The New Senior Subordinated Notes are unsecured and repayment is
guaranteed on an unsecured basis by certain of the Company's domestic
subsidiaries. The proceeds of the issuance and sale of the New Senior
Subordinated Notes were used to fund a portion of the aggregate consideration
for the acquisition of O&K Mining and for general corporate purposes.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired; and
(b) Pro Forma Financial Information
Prior to the acquisition by the Company, O&K Mining was part of the consolidated
group of O&K Orenstein & Koppel AG, an entity organized under the laws of
Germany, for financial reporting purposes. As a result, financial statements of
the acquired businesses meeting the requirements of Regulation S-X promulgated
under the Securities Act of 1933, as amended, are not currently available.
Accordingly, it is not practical to provide the required historical and pro
forma financial statements at this time. The required financial statements will
be filed on Form 8-K/A as soon as practicable, but in any event within sixty
(60) days after the Current Report on Form 8-K is required to be filed.
(c) Exhibits
10.1 Share Purchase Agreement dated December 18, 1997 between O&K AG and
Terex Mining Equipment, Inc. (incorporated by reference to Exhibit
10.19 to the Form 10-K Annual Report for the year ended December 31,
1997, Commission File No. 1-10702).
10.2 Credit Agreement dated as of March 6, 1998 among Terex Corporation,
certain of its subsidiaries, the lenders named therein, Credit Suisse
First Boston, as Administrative Agent, Bank Boston N.A., as Syndication
Agent and Canadian Imperial Bank of Commerce and First Union National
Bank, as Co-Documentation Agents (incorporated by reference to Exhibit
10.14 to the Form 10-K Annual Report for the year ended December 31,
1997, Commission File No. 1-10702).
10.3 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation and
Credit Suisse First Boston, as Collateral Agent (incorporated by
reference to Exhibit 10.14 to the Form 10-K Annual Report for the year
ended December 31, 1997, Commission File No. 1-10702).
10.4 Guarantee Agreement dated as of March 6, 1998 of Terex Corporation,
each of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston, as Collateral Agent (incorporated by reference to
Exhibit 10.15 to the Form 10-K Annual Report for the year ended
December 31, 1997, Commission File No. 1-10702).
<PAGE>
4
10.5 Security Agreement dated as of March 6, 1998 of Terex Corporation, each
of the subsidiaries of Terex Corporation listed therein Credit Suisse
First Boston, as Collateral Agent (incorporated by reference to Exhibit
10.16 to the Form 10-K Annual Report for the year ended December 31,
1997, Commission File No. 1-10702).
10.6 Pledge Agreement dated as of March 6, 1998 of Terex Corporation, each
of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston, as Collateral Agent (incorporated by reference to
Exhibit 10.17 to the Form 10-K Annual Report for the year ended
December 31, 1997, Commission File No. 1-10702).
10.7 Form Mortgage, Leasehold Mortgage, Assignment of Leases and Rents,
Security Agreement and Financing entered into by Terex Corporation and
certain of the subsidiaries of Terex Corporation, as Mortgagor, and
Credit Suisse First Boston, as Mortgagee (incorporated by reference to
Exhibit 10.18 to the Form 10-K Annual Report for the year ended
December 31, 1997, Commission File No. 1-10702).
10.8 Purchase Agreement, dated as of March 24, 1998, of Terex Corporation,
each of the subsidiaries of Terex Corporation listed therein and Credit
Suisse First Boston Corporation, CIBC Oppenheimer Corp., Morgan Stanley
& Co. Incorporated, Salomon Brothers Inc and BancBoston Securities
Inc., for the issue and sale of U.S. $150,000,000 of 8-7/8% Senior
Subordinated Notes due 2008.
10.9 Indenture, dated as of March 31, 1998, between Terex Corporation, each
of the subsidiaries of Terex Corporation listed therein, as Issuer and
United States Trust Company of New York, as Trustee, for $150,000,000
of 8-7/8% Senior Subordinated Notes due 2008.
10.10 Registration Rights Agreement, dated as of March 31, 1998, of Terex
Corporation, each of the subsidiaries of Terex Corporation listed
therein and Credit Suisse First Boston Corporation, CIBC Oppenheimer
Corp., Morgan Stanley & Co. Incorporated, Salomon Brothers Inc and
BancBoston Securities Inc., for the issue and sale of U.S.
$150,000,000 of 8-7/8% Senior Subordinated Notes due 2008.
<PAGE>
5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 7, 1998
TEREX CORPORATION
By: /s/ Joseph F. Apuzzo
Joseph F. Apuzzo
Vice President Finance and Controller
(Principal Accounting Officer)
<PAGE>
1
$150,000,000
TEREX CORPORATION
8-7/8% Senior Subordinated Notes due 2008
PURCHASE AGREEMENT
March 24, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
CIBC OPPENHEIMER CORP.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
BANCBOSTON SECURITIES INC.
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. Terex Corporation, a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto (the
"Purchasers") U.S.$150,000,000 principal amount of its 8-7/8% Senior
Subordinated Notes due 2008 ("Notes") to be issued under an indenture, to be
dated as of March 31, 1998 (the "Indenture"), between the Company, the
guarantors named therein and United States Trust Company of New York, as
Trustee, which Notes will be unconditionally guaranteed by Koehring Cranes,
Inc., M&M Enterprises of Baraga, Inc., Payhauler Corp., PPM Cranes, Inc., Terex
Aerials, Inc., Terex Baraga Products, Inc., Terex Cranes, Inc., Terex Mining
Equipment, Inc., Terex-RO Corporation, and Terex-Telelect, Inc. (the
"Guarantors," and together with the Company, the "Issuers"). For purposes of
this agreement, (i) the term "Offered Securities" means the Notes, together with
the guarantees (the "Guarantees") thereof by the Guarantors and (ii) references
to "Subsidiaries" or "subsidiaries" of the Company shall include O&K Mining GmbH
and its subsidiaries. The United States Securities Act of 1933 is herein
referred to as the "Securities Act."
Pursuant to the agreement dated as of December 18, 1997 (the
"Acquisition Agreement"), by and among Terex Mining Equipment Inc. and O&K
Orenstein & Koppel Aktiengesellshaft ("Orenstein & Koppel"), among other things,
(i) the Company will indirectly acquire all of the outstanding stock of O&K
Mining GmbH ("O&K Mining") and (ii) O&K Mining will become a wholly owned
indirect subsidiary of the Company (the above transactions are herein referred
to as the "Acquisition"). The net proceeds of the offering of the Notes will be
used, together with a portion of the borrowings under the New Credit Facility
(as defined below), to finance the Acquisition. At or prior to the issuance and
sale of the Notes, the Issuers intend to complete a refinancing plan (the
"Refinancing Plan"). The principal elements of the Refinancing Plan are: (i) the
issuance and sale of the Notes; (ii) the offer to purchase any and all of the
outstanding 13 1/4% Senior Secured Notes due May 15, 2002 (the "Existing Notes")
and the solicitation of consents from holders of such Existing Notes (together
with offer to purchase the Existing Notes, the "Offer") pursuant to an Offer to
Purchase and Consent Solicitation dated February 2, 1998 (the "Offer to
Purchase"); (iii) entering into a new secured global credit facility consisting
of up to approximately an aggregate of $375 million of term loan facilities and
<PAGE>
2
up to approximately an aggregate of $125 million of revolving credit facilities
(the "New Credit Facility") with the agents and lenders named therein; and (iv)
the repayment in full of indebtedness under the Company's existing domestic and
certain of its foreign secured revolving credit facilities (the "Existing Credit
Facilities") and the termination of such facilities.
Holders (including subsequent transferees) of the Notes will have the
registration rights set forth in the Registration Rights Agreement (the
"Registration Rights Agreement"), to be dated the Closing Date (as hereinafter
defined), in substantially the form of Exhibit A hereto. Pursuant to the
Registration Rights Agreement, the Company and the Guarantors will agree to file
with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein, (i) a registration statement under the
Securities Act (the "Exchange Offer Registration Statement") registering an
issue of senior subordinated notes identical in all material respects to the
Notes (the "Exchange Notes") to be offered in exchange for the Notes (the
"Exchange Offer") and (ii) under the circumstances set forth therein, a
registration statement pursuant to Rule 415 under the Securities Act (the "Shelf
Registration Statement").
This Agreement, the Indenture, the Offered Securities, the Registration
Rights Agreement, the Acquisition Agreement, the Offer to Purchase and the
supplemental indenture entered into in connection therewith (the "Supplemental
Indenture"), the New Credit Facility and the agreements creating security
interests in the assets of the Company for the benefit of the holders of
indebtedness arising under the New Credit Facility (together with the New Credit
Facility, the "Bank Agreement") are sometimes referred to in this Agreement,
individually, as a "Transaction Document" and, collectively, as the "Transaction
Documents," and the Acquisition, the Offer, the execution and delivery of the
Bank Agreements, the repayment and termination of the Existing Credit
Facilities, the execution and delivery of the Indenture and the issuance and
sale of the Offered Securities are sometimes referred to herein, individually,
as a "Transaction" and collectively, as the "Transactions."
Each of the Issuers, jointly and severally, hereby agrees with the
several Purchasers as follows:
2. Representations and Warranties of the Company. Each of the Issuers,
jointly and severally, represents and warrants to, and agrees with, the several
Purchasers that:
(a) A preliminary offering circular dated March 5, 1998, and
an offering circular relating to the Offered Securities to be offered
by the Purchasers have been prepared by the Company. Such preliminary
offering circular and offering circular (including material
incorporated by reference therein), as supplemented as of the date of
this Agreement, together with any other document approved by the
Company for use in connection with the contemplated resale of the
Offered Securities are hereinafter collectively referred to as the
"Offering Document". On the date of this Agreement, the Offering
Document does not include any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. The preceding sentence does not apply to
statements in or omissions from the Offering Document based upon
written information furnished to the Company by any Purchaser through
Credit Suisse First Boston Corporation ("CSFBC") specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b). Except as disclosed in the
Offering Document, the Company's Annual Report on Form 10-K most
recently filed with the Securities and Exchange Commission (the
"Commission") and all subsequent reports (collectively, the "Exchange
Act Reports") which have been filed by the Company with the Commission
or sent to stockholders pursuant to the Securities Exchange Act of 1934
(the "Exchange Act") did not include, as of their respective dates, any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading. Such documents, when they
were filed with the Commission, conformed in all material respects to
the requirements of the Exchange Act and the rules and regulations of
the Commission thereunder.
<PAGE>
3
(b) Each of the Issuers has been duly incorporated and is an
existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with the corporate power and
authority to own its properties and conduct its business as described
in the Offering Document; and each of the Issuers is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except where the
failure to be so qualified and in good standing could not reasonably be
expected, individually or in the aggregate, to have a material adverse
effect on the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect").
(c) Each subsidiary of the Company other than the Guarantors
that (i) generated 5% or more of the revenues, (ii) generated 5% or
more of the operating income, or (iii) held 5% or more of the assets,
in each case, of the Company and its subsidiaries on a consolidated
basis as reflected in the financial statements included in the Offering
Document under the heading "Pro Forma Financial Information" (each, a
"Significant Non-Guarantor Subsidiary," and, together with the
Guarantors, each a "Significant Subsidiary"), has been duly
incorporated and is an existing corporation in good standing under the
laws of the jurisdiction of its incorporation, with the corporate power
and authority to own its properties and conduct its business as
described in the Offering Document; and each Significant Non-Guarantor
Subsidiary of the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification, except where the failure to be so qualified and in
good standing could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; all of the issued and
outstanding capital stock of the Company and of each Significant
Subsidiary has been duly authorized and validly issued and is fully
paid and nonassessable; and, except as expressly disclosed or
incorporated by reference in the Offering Document and except for
pledges in favor of Credit Suisse First Boston, as collateral agent,
under the New Credit Facility, the capital stock of each Significant
Subsidiary owned by the Company, directly or through subsidiaries, is
owned free from liens, encumbrances and defects.
(d) The Indenture has been duly authorized by all necessary
corporate action; the Offered Securities have been duly authorized by
each of the Issuers by all necessary corporate action; and when the
Offered Securities are delivered and paid for pursuant to this
Agreement and the Indenture on the Closing Date (as defined below), the
Indenture will have been duly executed and delivered by each of the
Issuers, such Offered Securities will have been duly executed,
authenticated, issued and delivered by each of the Issuers and will
conform in all material respects to the description thereof contained
in the Offering Document and the Indenture and such Offered Securities
will constitute valid and legally binding obligations of each of the
Issuers, enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(e) Except as disclosed or reflected in the fees and expenses
set forth in the Offering Document, there are no contracts, agreements
or understandings between the Company and any person that would give
rise to a valid claim against the Company or any Purchaser for a
brokerage commission, finder's fee or other like payment in connection
with the Transactions.
(f) Except for (a) that certain Registration Rights Agreement,
dated as of December 9, 1994, by and among Randolph W. Lenz, David J.
Langevin, Marvin B. Rosenberg and the Company, (b) that certain Warrant
Registration Rights Agreement, dated as of December 20, 1993, by and
<PAGE>
4
among the Company and the parties signatory thereto, (c) that certain
Registration Rights Agreement, dated May 9, 1995, between the Company,
Jefferies & Company, Inc., and Dillon, Read & Co. Inc., and (d) that
certain Agreement, dated as of November 2, 1995, between the Company
and Randolph W. Lenz, there are no contracts, agreements or
understandings between the Company and any person granting such person
the right to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned
or to be owned by such person or to require the Company to include such
securities in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.
(g) Except for those which have been previously obtained or as
to which the failure to obtain would not, individually or in the
aggregate, have a material adverse effect on the consummation of the
Transactions by the Issuers, no consent, approval, authorization, or
order of, or filing with, any governmental agency or body or any court
is required for the consummation of the Transactions as contemplated by
(i) this Agreement in connection with the issuance and sale of the
Offered Securities by the Issuers, or (ii) any other Transaction
Documents in connection with the consummation of the transactions
contemplated therein.
(h) The execution, delivery and performance by each of the
Company and its subsidiaries (to the extent each is a party thereto) of
each of the Transaction Documents and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (i) any
statute, any rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the
Company or any Significant Subsidiary of the Company or any of their
properties, or (ii) any agreement or instrument to which the Company or
any such Significant Subsidiary is a party or by which the Company or
any such Significant Subsidiary is bound or to which any of the
properties of the Company or any such Significant Subsidiary is
subject, or (iii) the charter or by-laws of the Company or any such
Significant Subsidiary, except (A) in each case, that any rights to
indemnity and contribution may be limited by federal and state
securities laws and public policy considerations and (B) in the case of
clauses (i) and (ii) for such breaches, violations or defaults as would
not, individually or in the aggregate, have a material adverse effect
on the consummation of the Transactions by such parties; and each of
the Issuers has full corporate power and authority to authorize, issue
and sell the Offered Securities as contemplated by this Agreement.
(i) This Agreement has been duly authorized, executed and
delivered by the Company. Each of the other Transaction Documents has
been, or as of the Closing Date will have been, duly authorized,
executed and delivered by each of the Company and its subsidiaries (to
the extent each is a party thereto) and each Transaction Document
conforms or will conform in all material respects to the descriptions
thereof contained in the Offering Document and each Transaction
Document (other than this Agreement) is or will constitute valid and
legally binding obligations of the Company and its subsidiaries (to the
extent each is a party thereto), enforceable in accordance with its
respective terms, except that any rights to indemnity and contribution
may be limited by federal and state securities laws and public policy
considerations and subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(j) Except as disclosed in the Offering Document, the Company
and its Significant Subsidiaries have good title to all real properties
and all other properties and assets owned by them that are material to
the Company and its subsidiaries taken as a whole, in each case free
from liens and encumbrances that would materially affect the value
thereof or materially interfere with the use made or to be made thereof
by them; and except as disclosed in the Offering Document, the Company
and its Significant Subsidiaries hold any leased real or personal
property that is material to the Company and its subsidiaries taken as
<PAGE>
5
a whole under valid and enforceable leases with no exceptions that
would materially interfere with the use made or to be made thereof by
them.
(k) The Company and its subsidiaries possess all certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by them and have
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
(l) Except as disclosed in the Offering Document, no labor
strike, slowdown, stoppage or dispute (except for routine disciplinary
and grievance matters) with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent,
that would reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect.
(m) The Company and its subsidiaries own, possess, have the
right to use, or can acquire on reasonable terms, adequate trademarks,
trade names and other rights to inventions, know-how, patents,
copyrights, confidential information and other intellectual property
(collectively, "intellectual property rights") used in the conduct of
the business now operated by them, except for such failures to so own,
possess or have the right to use or acquire such intellectual property
rights which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect, and have not received any
notice of infringement of or conflict with asserted rights of others
with respect to any intellectual property rights that, if determined
adversely to the Company or any of its subsidiaries, would,
individually or in the aggregate, have a Material Adverse Effect.
(n) Except as disclosed in the Offering Document, neither the
Company nor any of its subsidiaries (i) is in violation of any statute,
any rule, regulation, decision or order of any governmental agency or
body or any court, domestic or foreign, relating to the use, disposal
or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, "environmental laws"),
(ii) owns or operates any real property that to the knowledge of the
Company is contaminated with any substance that is subject to any
environmental laws, (iii) is to the knowledge of the Company liable for
any off-site disposal or contamination pursuant to any environmental
laws, or (iv) is to the knowledge of the Company subject to any claim
relating to any environmental laws, in each case, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(o) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that have
a reasonable likelihood of being adversely determined and, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect, or
would materially and adversely affect the ability of the Company to
perform its obligations under the Transaction Documents, or which are
otherwise material in the context of the sale of the Offered Securities
and the consummation of the other Transactions; and no such actions,
suits or proceedings are threatened in writing or, to the Company's
knowledge, contemplated.
(p) The financial statements included or incorporated by
reference in the Offering Document present fairly in all material
respects the financial position, as applicable, (a) of the Company and
its consolidated subsidiaries, (b) of PPM Cranes, Inc. and its
consolidated subsidiaries, (c) of the Simon Access Companies (as
defined in the Offering Document), and (d) of O&K Mining GmbH and its
consolidated subsidiaries, in each case as of the dates shown and their
results of operations and cash flows for the periods shown (subject in
<PAGE>
6
the case of interim financial statements to normal year-end
adjustments), and such financial statements have been prepared in
conformity with generally accepted accounting principles in the United
States applied on a consistent basis and the schedules included or
incorporated by reference in the Offering Document present fairly the
information required to be stated therein. The assumptions used in
preparing the pro forma financial statements included in the Offering
Document provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to
those assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(q) Except as disclosed in the Offering Document, since the
date of the latest financial statements included in the Offering
Document, there has been no material adverse change, nor any
development or event that could reasonably be expected to result in a
material adverse change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in or
contemplated by the Offering Document, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(r) None of the Issuers is 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 United States
Investment Company Act of 1940 (the "Investment Company Act"); and each
of the Issuers is not and, after giving effect to the offering and sale
of the Offered Securities and the application of the proceeds thereof
as described in the Offering Document and the consummation of the other
Transactions, will not be an "investment company" as defined in the
Investment Company Act.
(s) No securities of the Company or any of its subsidiaries
the same class (within the meaning of Rule 144A(d)(3) under the
Securities Act) as the Offered Securities are listed on any national
securities exchange registered under Section 6 of Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
(t) Assuming the representations of the Purchasers set forth
in Section 4 below are true and correct in all material respects and
that the Purchasers comply in all material respects with applicable
federal and state securities laws and regulations in connection with
the initial resale of the Offered Securities, the offer and sale of the
Offered Securities in the manner contemplated by this Agreement will be
exempt from the registration requirements of the Securities Act by
reason of Section 4(2) thereof and Regulation S thereunder; and it is
not necessary to qualify an indenture in respect of the Offered
Securities under the United States Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act").
(u) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States
or to any U.S. person (as such terms are defined in Regulation S under
the Securities Act) the Offered Securities or any security of the same
class or series as the Offered Securities or (ii) has offered or will
offer or sell the Offered Securities (A) in the United States by means
of any form of general solicitation or general advertising within the
meaning of Rule 502(c) under the Securities Act or (B) with respect to
any such securities sold in reliance on Rule 903 of Regulation S
("Regulation S") under the Securities Act, by means of any directed
selling efforts within the meaning of Rule 902(b) of Regulation S. The
Company, its affiliates and any person acting on its or their behalf
have complied in all material respects and will comply in all material
respects with the offering restrictions requirement of Regulation S.
The Company has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for this Agreement.
<PAGE>
7
(v) The Company is subject to Section 13 or 15(d) of the
Exchange Act.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, at a purchase price of 96.576% of the principal amount thereof
plus accrued interest from March 31, 1998 to the Closing Date (as hereinafter
defined), the respective principal amounts of Securities set forth opposite the
names of the several Purchasers in Schedule A hereto.
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global securities in
definitive form (the " Global Securities") deposited with the Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Offering Document. Payment for the Offered
Securities shall be made by the Purchasers in Federal (same day) funds by
official check or checks drawn to the order of Terex Corporation or wire
transfer to an account at a bank designated by the Company and reasonably
acceptable to CSFBC at the office of Skadden, Arps, Slate, Meagher & Flom LLP at
9:00 A.M. (New York time), on March 31, 1998, or at such other time not later
than seven full business days thereafter as CSFBC and the Company determine,
such time being herein referred to as the "Closing Date," against delivery to
the Trustee as custodian for DTC of the Global Securities representing all of
the Securities. The Global Securities will be made available for checking at the
above office at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the
Company that it is a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act.
(b) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or
affiliates of the other Purchasers or with the prior written consent of
the Company.
(c) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation
or general advertising. Each Purchaser severally agrees, with respect
to resales made in reliance on Rule 144A of any of the Offered
Securities, to deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance
upon the exemption from the registration requirements of the Securities
Act provided by Rule 144A.
(d) Each of the Purchasers severally represents and agrees
that (i) it has not offered or sold and prior to the date six months
after the date of issue of the Offered Securities will not offer or
sell any Offered Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have
not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995; (ii) it has complied and will comply with all
<PAGE>
8
applicable provisions of the Financial Services Act 1986 with respect
to anything done by it in relation to the Offered Securities in, from
or otherwise involving the United Kingdom; and (iii) it has only issued
or passed on and will only issue or pass on in the United Kingdom any
document received by it in connection with the issue of the Offered
Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements)
(Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(e) Each Purchaser understands that the Offered Securities are
being sold to it hereunder in a transaction not involving a public
offering in the United States within the meaning of the Securities Act,
that the Offered Securities have not been, and except as described in
the Registration Rights Agreement, will not be registered under the
Securities Act, and that such Purchaser will only offer such Offered
Securities for resale only (i) inside the United States to persons whom
such Purchaser reasonably believes is a "qualified institutional buyer"
meeting the requirements of Rule 144A under the Securities Act, (ii)
outside the United States in a transaction complying with Rule 904
under the Securities Act, (iii) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 (if
available), or (iv) pursuant to an effective registration statement
under the Securities Act, and, in each case of clauses (i) through
(iv), in accordance with any applicable securities laws of any state of
the United States, and such Purchaser will notify any subsequent
purchaser from it of such Offered Securities of the resale restrictions
applicable to the Offered Securities referred to in the Indenture.
(f) Each Purchaser represents and agrees that it is not
acquiring the Offered Securities with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any state of the United States or any other
applicable jurisdiction.
(g) Each Purchaser understands and acknowledges that the
availability of an exemption from registration under the Securities Act
of the offer and sale of the Offered Securities depends in part on, and
the Issuers and, for the purposes of the opinions to be delivered to
the Purchasers pursuant to Section 6 hereof, counsel for the Issuers
and counsel for the Purchasers will rely upon, the accuracy of the
foregoing representations, and such Purchaser hereby consents to such
reliance.
5. Certain Agreements of the Company. Each of the Issuers, jointly and
severally, agrees with the several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent, which consent
shall not be unreasonably withheld or delayed. If, at any time prior to
the completion of the resale of the Offered Securities by the
Purchasers, any event occurs as a result of which the Offering Document
as then amended or supplemented would 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, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment
or supplement which will correct such statement or omission or effect
such compliance. Neither CSFBC's consent to, nor the Purchasers'
delivery of, any such amendment or supplement shall constitute a waiver
of any of the conditions set forth in Section 6.
(b) The Company will furnish to CSFBC copies of any
preliminary offering circular, the Offering Document and all amendments
and supplements to such documents, in each case in such quantities as
CSFBC reasonably requests. At any time when the Company is not subject
to Section 13 or 15(d) of the Exchange Act, the Company will promptly
furnish or cause to be furnished to CSFBC (and, upon request, to each
of the other Purchasers) and, upon request of holders and prospective
<PAGE>
9
purchasers of the Offered Securities, to such holders and purchasers,
copies of the information required to be delivered to holders and
prospective purchasers of the Offered Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision
thereto) in order to permit compliance with Rule 144A in connection
with resales by such holders of the Offered Securities. The Company
will pay the expenses of printing and distributing to the Purchasers
all such documents.
(c) The Company will arrange for the qualification of the
Offered Securities for sale and the determination of their eligibility
for investment under the laws of such jurisdictions as CSFBC reasonably
designates and will continue such qualifications in effect so long as
required for the resale of the Offered Securities by the Purchasers.
(d) During the period of two years hereafter, the Company will
furnish to CSFBC and, upon request, to each of the other Purchasers, as
soon as practicable after the end of each fiscal year, a copy of its
annual report to stockholders for such year; and the Company will
furnish to CSFBC and, upon request, to each of the other Purchasers as
soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange
Act, or mailed to stockholders.
(e) During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFBC and the other Purchaser
and any holder of Offered Securities a copy of the restrictions on
transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144 under the Securities Act) to, resell any of the Offered
Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date,
each of the Issuers will not be or become, 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.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement and the Indenture,
including (i) the fees and expenses of the Trustee and its professional
advisers; (ii) all expenses in connection with the execution, issue,
authentication, packaging and initial delivery of the Offered
Securities, the preparation and printing of this Agreement, the
Indenture, the Offered Securities, the Offering Document and amendments
and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities; (iii) the
cost of listing the Offered Securities and qualifying the Offered
Securities for trading in The PortalSM Market ("PORTAL") and any
expenses incidental thereto; (iv) the cost of any advertising approved
by the Company in connection with the issue of the Offered Securities;
(v) for any expenses (including reasonable fees and disbursements of
counsel) incurred in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and the printing of memoranda relating thereto; (vi) for any
fees charged by investment rating agencies for the rating of the
Securities; and (vii) for expenses incurred in distributing preliminary
offering circulars and the Offering Document (including any amendments
and supplements thereto) to the Purchasers. The Company will also pay
for any travel expenses of the Company's officers and employees and any
other expenses of the Company in connection with attending or hosting
meetings with prospective purchasers of the Offered Securities.
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its
affiliates has a beneficial interest any Offered Securities or attempt
to induce any person to purchase any Offered Securities; and neither it
nor any of its affiliates will make bids or purchases for the purpose
<PAGE>
10
of creating actual, or apparent, active trading in, or of raising the
price of, the Offered Securities.
(j) During the period beginning on the date hereof and
continuing to and including the Closing Date, none of the Issuers will
offer, sell, contract to sell, announce their intention to sell, pledge
or otherwise dispose of, directly or indirectly, any United States
dollar- or Deutsche Mark- denominated debt securities issued or
guaranteed by any of the Issuers and having a maturity of more than one
year from the date of issue. None of the Issuers will at any time
offer, sell, contract to sell, pledge or otherwise dispose of, directly
or indirectly, any securities under circumstances where such offer,
sale, pledge, contract or disposition would cause the exemption
afforded by Section 4(2) of the Securities Act or the safe harbor of
Regulation S thereunder to cease to be applicable to the offer and sale
of the Offered Securities.
6. Conditions of the Obligations of the Purchasers. The obligations of
the Purchasers to purchase and pay for the Offered Securities will be subject to
the accuracy in all material respects of the representations and warranties on
the part of the Issuers herein, to the accuracy in all material respects of the
statements of officers of the Issuers made pursuant to the provisions hereof, to
the performance by the Issuers of their respective obligations hereunder and to
the following additional conditions precedent:
(a) (I) The Purchasers shall have received a letter, dated the
date of this Agreement, of Price Waterhouse LLP confirming that they
are independent public accountants within the meaning of the Securities
Act and the applicable published rules and regulations thereunder
("Rules and Regulations") and stating to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included or incorporated by
reference in the Offering Document comply as to form in all
material respects with the applicable accounting requirements
of the Securities Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
or incorporated by reference in the Offering Document;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Company, and of all subsidiaries
of the Company for which such interim financial statements are
provided, inquiries of officials of the Company, and of such
subsidiaries, who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) with respect to the unaudited financial
statements included in or incorporated by reference
in the Offering Document, that any material
modifications should be made to such unaudited
financial statements for them to be in conformity
with generally accepted accounting principles;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
increase in long-term debt of the Company and its
consolidated subsidiaries or, as compared with
amounts shown on the latest balance sheet included in
the Offering Document; or
<PAGE>
11
(C) for the period from the closing date of
the latest income statement included in the Offering
Document to the closing date of the latest available
income statement read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year and with the period of
corresponding length ended the date of the latest
income statement included in the Offering Document,
in consolidated net sales or in the total amounts of
consolidated net income;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Document
disclose have occurred or may occur or which are described in
such letter;
(iv) they have performed the procedures specified
therein on the pro forma financial statements included in or
incorporated by reference in the Offering Document;
(v) on the basis of the review referred to in clause
(iv) above, nothing came to their attention that caused them
to believe that the pro forma financial statements included in
or incorporated by reference in the Offering Document do not
comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published
Rules and Regulations or that the pro forma adjustments have
not been properly applied to the historical amounts in the
compilation of those statements; and
(vi) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document (in
each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general
accounting records of the Company and its subsidiaries subject
to the internal controls of the Company's accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
(II) The Purchasers shall have received a letter,
dated the date of this Agreement, of C&L Treuhand-Vereinigung
confirming that they are independent public accountants within the
meaning of the Securities Act and the Rules and Regulations and stating
to the effect that:
(i) in their opinion the financial statements and
schedules examined by them and included in the Offering
Document comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and
the related published Rules and Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on the unaudited financial statements included in
the Offering Document;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of O&K Mining GmbH, and of all
subsidiaries of O&K Mining GmbH for which such interim
financial statements are provided, inquiries of officials of
O&K Mining GmbH, and of such subsidiaries, who have
responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that
caused them to believe that:
<PAGE>
12
(A) the unaudited financial statements
included in the Offering Document do not comply as to
form in all material respects with the applicable
accounting requirements of the Securities Act and the
related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available
balance sheet read by such accountants, or at a
subsequent specified date not more than three
business days prior to the date of this Agreement,
there was any change in the capital stock or any
material increase in long-term debt of O&K Mining
GmbH and its consolidated subsidiaries or, as
compared with amounts shown on the latest balance
sheet included in the Offering Document; or
(C) for the period from the closing date of
the latest income statement included in the Offering
Document to the closing date of the latest available
income statement read by such accountants there were
any decreases, as compared with the corresponding
period of the previous year and with the period of
corresponding length ended the date of the latest
income statement included in the Offering Document,
in consolidated net sales or in the total or per
share amounts of consolidated net income or in the
ratio of earnings to fixed charges of O&K Mining GmbH
and its subsidiaries;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Offering Document
disclose have occurred or may occur or which are described in
such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document (in
each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general
accounting records of O&K Mining GmbH and its subsidiaries
subject to the internal controls of O&K Mining GmbH's
accounting system or are derived directly from such records by
analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise
specified in such letter.
(III) The Purchasers shall have received a letter,
dated the date of this Agreement, of KPMG Peat Marwick LLP confirming
that they are independent public accountants within the meaning of the
Securities Act and the Rules and Regulations and stating to the effect
that:
They have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Offering Document (in
each case to the extent that such dollar amounts, percentages
and other financial information are derived from the general
accounting records of the Payhauler Corp. subject to the
internal controls of Payhauler Corp.'s accounting system or
are derived directly from such records by analysis or
computation) with the results obtained from inquiries, a
reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in
such letter.
<PAGE>
13
(b) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (A) any change, or any
development or event that could reasonably be expected to result in a
change, in the condition (financial or other), business, properties or
results of operations of the Company and its subsidiaries taken as a
whole, which, in the judgment of a majority in interest of the
Purchasers including CSFBC, is material and adverse to the Company and
its subsidiaries taken as a whole and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of
and payment for the Offered Securities; (B) any downgrading in the
rating of any debt securities of the Company by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Securities Act), or any public announcement that
any such organization has under surveillance or review its rating in
effect on the date of this Agreement of any debt securities of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (C) any suspension or material limitation of trading in
securities generally on the New York Stock Exchange, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (D) any banking moratorium declared by U.S.
Federal or New York authorities; or (E) any outbreak or escalation of
major hostilities in which the United States is involved, any
declaration of war by Congress or any other substantial national or
international calamity or emergency if, in the judgment of a majority
in interest of the Purchasers including CSFBC, the effect of any such
outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the offering
or sale of and payment for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated such
Closing Date, of Robinson Silverman Pearce Aronsohn & Berman LLP,
counsel for the Company, that:
(i) The Issuers organized under the laws of the State
of Delaware and each Significant Subsidiary organized under
the laws of the State of Delaware have been duly incorporated
and are existing corporations in good standing under the laws
of their respective jurisdictions of incorporation, with
corporate power and authority to own their respective
properties and conduct their respective businesses as
described in the Offering Document;
(ii) Each of this Agreement, the Indenture, the
Offered Securities, the Registration Rights Agreement, the
Supplemental Indenture and any documents delivered to the
holders of Existing Notes in connection with the Offer to
Purchase (collectively, the "Closing Documents") has been duly
authorized, executed and delivered by each of the Company and
its subsidiaries (to the extent each is a party thereto); the
Offered Securities have been duly authorized, executed,
authenticated, issued and delivered by each of the Issuers and
each of the Closing Documents conforms in all material
respects to the description thereof contained in the Offering
Document; and each of the Closing Documents (other than this
Agreement) constitutes valid and legally binding obligations
of the each of the Company and its subsidiaries (to the extent
each is a party thereto) enforceable in accordance with its
respective terms, except that any rights to indemnity and
contribution thereunder may be limited by federal and state
securities laws and public policy consideration and subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles;
(iii) Each of the Issuers is not and, after giving
effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the
<PAGE>
14
Offering Document and the consummation of the other Closing
Transactions (as defined below), will not be an "investment
company" as defined in the Investment Company Act;
(iv) Except for (a) filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, (b) the filing made with the German Federal Cartel
Office, (c) the telephonic no-action position expressed on
January 30, 1998, by the Securities and Exchange Commission in
connection with the Offer, and (d) those consents as to which
the failure to obtain would not, individually or in the
aggregate, have a material adverse effect on the consummation
of the relevant Closing Transaction, no consent, approval,
authorization or order of, or filing with, any governmental
agency or body or any court is required to be obtained or made
by the Company or any Significant Subsidiary incorporated
under the laws of the State of New York or the State of
Delaware ("Domestic Significant Subsidiaries") under any
Applicable Law (as defined) for the consummation of the
transactions contemplated by the Closing Documents or
otherwise in connection with the Offer, the execution and
delivery of the Indenture and the issuance and sale of the
Offered Securities (the "Closing Transactions"), except such
as may be required under state securities laws (with respect
to which such counsel need express no opinion);
(v) The execution and delivery by the Company and its
subsidiaries (to the extent each is a party thereto) of, and
performance by such parties of their respective obligations
under, each of the Closing Documents (including the issuance
and sale of the Offered Securities) and compliance with the
terms and provisions thereof will not result in a breach or
violation of any of the terms and provisions of, or constitute
a default under, any Applicable Law or order known to such
counsel of any governmental agency or body or any court having
jurisdiction over the Company or any Domestic Significant
Subsidiary or any material portion of their respective
properties (except that any rights to indemnity and
contribution herein may be limited by federal and state
securities laws and public policy considerations), or any
agreement or instrument filed as an exhibit to the Company's
Exchange Act Reports, or the charter or by-laws of the Company
or any Domestic Significant Subsidiary;
(vi) While such counsel is not passing upon and does
not assume responsibility for, and shall not be deemed to have
independently verified the accuracy, completeness or fairness
of the statements contained in any of the Closing Documents or
in the Bank Agreements (except statements made under the
caption "Description of the Notes" and "Description of the New
Bank Credit Facility" of the Offering Document insofar as they
relate to legal matters), such counsel shall state that no
facts have come to such counsel's attention in the course of
participating with officers and representatives of the Company
in the preparation of the Offering Document (except for
financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel
need express no opinion) to lead it to believe that any part
of the Offering Document, as of the Closing Date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading; or that the
Offering Document, as of its date or as of the Closing Date,
contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; the descriptions in the
Offering Document of statutes, legal and governmental
proceedings and contracts and other documents are accurate in
all material respects and fairly present the information
required to be shown; and such counsel do not know of any
legal or governmental proceedings that were required to be
described in any of the Exchange Act Reports as of their
<PAGE>
15
respective dates which are not described as required or of any
contracts or documents of a character that were required to be
described in any of the Exchange Act Reports as of their
respective dates or to be filed as exhibits to the respective
Exchange Act Reports as of their respective dates which are
not described and filed as required.
(vii) Assuming that the representations of the
Purchasers set forth in Section 4 of this Agreement are true
and correct in all material respects and that the Purchasers
comply in all material respects with applicable federal and
state securities laws and regulations in connection with the
initial resale of the Offered Securities, it is not necessary
in connection with (i) the offer, sale and delivery of the
Offered Securities by the Company to the several Purchasers
pursuant to this Agreement or (ii) the resales of the Offered
Securities by the several Purchasers in the manner
contemplated by this Agreement, to register the Offered
Securities under the Securities Act or to qualify an indenture
in respect thereof under the Trust Indenture Act.
Such counsel may state that, as it relates to
enforceability, the opinions expressed in clause (v) are
limited by (1) bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally and (2)
equitable principles of general applicability. Such counsel
may also qualify such opinion in other respects reasonably
acceptable to the Purchasers.
(d) The Underwriter shall have received an opinion, dated such
Closing Date, of Eric I Cohen, general counsel of the Company, to the
effect that:
(i) The Issuers and each Significant Subsidiary
incorporated within the United States of America (the
"Domestic Significant Subsidiaries") have been duly
incorporated and are existing corporations in good standing
under the laws of their respective jurisdictions of
incorporation, with corporate power and authority to own their
respective properties and conduct their respective businesses
as described in the Offering Documents; and the Issuers and
each Domestic Significant Subsidiary are duly qualified to do
business as foreign corporations in good standing in all other
jurisdictions in which their ownership or lease of property or
the conduct of their business requires such qualifications,
except to the extent that the failure to be so qualified and
in good standing could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse
Effect. Based on my review of organizational documents (or
English translations thereof) of each Significant Subsidiary
incorporated outside the United States of America (the
"Foreign Significant Subsidiaries") and interviews and
statements of persons who are informed as to the formation and
status of the Foreign Significant Subsidiaries, the Foreign
Significant Subsidiaries have been duly incorporated and are
existing corporations in good standing under the laws of their
respective countries of organization, with corporate power and
authority to own their respective properties and conduct their
respective businesses as described in the Offering Document;
based on my review of organizational documents (or English
translations thereof) of the Foreign Significant Subsidiaries
and interviews and statements of persons who are informed as
to the formation and status of the Foreign Significant
Subsidiaries, the Foreign Significant Subsidiaries are duly
qualified to do business as foreign corporations in good
standing in all other jurisdictions in which their ownership
or lease of property or the conduct of their business requires
such qualifications, except to the extent that the failure to
be so qualified and in good standing could not reasonably be
expected, individually or in the aggregate, to have a Material
Adverse Effect.
<PAGE>
16
(ii) Based upon my examination of the corporate stock
books and records of each of the Domestic Significant
Subsidiaries and the corporate stock books and records (or
English translations thereof) of the Foreign Significant
Subsidiaries and interviews and statements of persons who are
informed as to the status of the Foreign Significant
Subsidiaries, all outstanding shares of the capital stock of
the Company and each Significant Subsidiary have been duly
authorized and validly issued, are fully paid and
nonassessable and conform in all material respects to the
description thereof contained in the Exchange Act Reports; and
the securityholders of each the Issuers have no preemptive
rights with respect to the Offered Securities;
(iii) Except for those agreements referred to in the
representation set forth in Section 2(f) hereof, there are no
contracts, agreements or understandings known to such counsel
between any of the Issuers and any person granting such person
the right to require any of the Issuers to file a registration
statement under the Act with respect to any securities of any
of the Issuers owned or to be owned by such person or to
require any of the Issuers to include such securities in
securities being registered pursuant to any other registration
statement filed by any of the Issuers under the Securities
Act;
(iv) Except for (a) filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, (b) the filing made with the German Federal Cartel
Office, (c) the telephonic no-action position expressed on
January 30, 1998, by the Securities and Exchange Commission in
connection with the Offer, and (d) those consents as to which
the failure to obtain would not, individually or in the
aggregate, have a material adverse effect on the consummation
of the relevant Transaction, no consent, approval,
authorization or order of, or filing with, any governmental
agency or body or any court is required to be obtained or made
by the Company or any Significant Subsidiary under any
Applicable Law for the consummation of the Transactions or
otherwise in connection with the sale of the Offered
Securities, except such as may be required under state
securities laws (with respect to which such counsel need
express no opinion);
(v) The execution and delivery of, and performance
by, each of the Company and its subsidiaries (to the extent
each is a party thereto) of its obligation under, each of the
Transaction Documents (including the issuance and sale of the
Offered Securities) will not result in a breach or violation
of any of the terms and provisions of, or constitute a default
under, any Applicable Law or order known to such counsel of
any governmental agency or body or any court having
jurisdiction over the Company or any Significant Subsidiary or
any of their respective properties (except that any rights to
indemnity and contribution herein may be limited by federal
and state securities laws and public policy considerations),
or any agreement or instrument to which the Company or any
Significant Subsidiary is a party or by which the Company or
any Significant Subsidiary is bound or to which any of the
properties of the Company or any Significant Subsidiary is
subject, or the charter or by-laws of the Company or any
Significant Subsidiary, and each of the Issuers has full power
and authority to authorize, issue and sell the Offered
Securities as contemplated by this Agreement;
(vi) This Agreement has been duly authorized,
executed and delivered by each of the Issuers. Each of the
other Transaction Documents has been duly authorized, executed
and delivered by each of the Company and its subsidiaries (to
the extent each is a party thereto); the Offered Securities
have been duly authorized, executed, authenticated, issued and
delivered by each of the Issuers and each of the Transaction
Documents conforms in all material respects to the description
thereof contained in the Offering Document; and each of the
Transaction Documents (other than this Agreement and the
Acquisition Agreement) constitutes valid and legally binding
obligations of the each of the Company and its subsidiaries
<PAGE>
17
(to the extent each is a party thereto) enforceable in
accordance with its respective terms, except that any rights
to indemnity and contribution thereunder may be limited by
federal and state securities laws and public policy
considerations and subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(vii)While such counsel is not passing upon and does
not assume responsibility for, and shall not be deemed to have
independently verified the accuracy, completeness or fairness
of the statements contained in any of the Transaction
Documents (except statements made under the caption
"Description of the Notes" and "Description of the New Bank
Credit Facility" of the Offering Document insofar as they
relate to legal matters), such counsel shall state that no
facts have come to such counsel's attention in the course of
participating with officers and representatives of the Company
in the preparation of the Offering Document (except for
financial statements and schedules and other financial and
statistical data contained therein, as to which such counsel
need express no opinion) to lead it to believe that any part
of the Offering Document, as of the Closing Date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary
to make the statements therein not misleading; or that the
Offering Document, as of its date or as of the Closing Date,
contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; the descriptions in the
Offering Document of statutes, legal and governmental
proceedings and contracts and other documents are accurate and
fairly present the information required to be shown; and such
counsel does not know of any legal or governmental proceedings
that were required to be described in any of the Exchange Act
Reports as of their respective dates which are not described
as required or of any contracts or documents of a character
that were required to be described in any of the Exchange Act
Reports as of their respective dates or to be filed as
exhibits to the respective Exchange Act Reports as of their
respective dates which are not described or filed as required.
Such counsel may state that, as it relates to
enforceability, the opinions expressed in clause (vi) are
limited by (1) bankruptcy, insolvency, fraudulent conveyance
and similar laws affecting creditors' rights generally and (2)
equitable principles of general applicability. Such counsel
may also qualify such opinion in other respects reasonably
acceptable to the Purchasers.
(e) The Purchasers shall have received from Skadden, Arps,
Slate, Meagher & Flom LLP, counsel for the Purchasers, such opinion or
opinions, dated such Closing Date, with respect to the incorporation of
the Company, the validity of the Offered Securities, the Offering
Document, the exemption from registration for the offer and sale of the
Offered Securities by the Company to the several Purchasers and the
resales by the several Purchasers as contemplated hereby and other
related matters as CSFBC may require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(f) The Purchasers shall have received a certificate, dated
the Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the each of the Issuers in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that the representations and warranties of
such Issuer in this Agreement are true and correct, that such Issuer
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, and that, subsequent to the date of the most recent financial
<PAGE>
18
statements in the Offering Document, there has been no material adverse
change, nor any development or event involving a prospective material
adverse change, in the condition (financial or other), business,
properties or results of operations of the Company and its
subsidiaries, taken as a whole, except as set forth in or contemplated
by the Offering Document or as described in such certificate.
(g) The Purchasers shall have received letters, dated the
Closing Date, of Price Waterhouse LLP which meets the requirements of
subsection (a)(I) of this Section, of C&L Treuhand-Vereinigung which
meets the requirements of subsection (a)(II) of this Section, and of
KPMG Peat Marwick LLP which meets the requirements of subsection
(a)(III) of this Section, except that, in each case, the specified date
referred to in such subsections will be a date not more than three
business days prior to the Closing Date for the purposes of this
subsection.
(h) The Company, the Guarantors and the Trustee shall have
entered into the Indenture and you shall have received counterparts,
conformed as executed, thereof.
(i) The Company and the Guarantors shall have entered into the
Registration Rights Agreement and you shall have received counterparts,
conformed as executed, thereof.
(j) The Offered Securities shall have been designated PORTAL
securities in accordance with the rules and regulations adopted by the
NASD relating to trading in the PORTAL market.
(k) On or prior to the Closing Date, (i)(a) the Issuers shall
have entered into the Bank Agreements and all conditions precedent to
the effectiveness thereof shall have been satisfied or waived and (b)
each of the Transactions shall have been consummated; (ii) such
transactions described in the foregoing clause (i) shall continue to be
in full force and effect in accordance with the terms thereof; and
(iii) the Company shall have provided to each of the Purchasers and
counsel to the Purchasers copies of all Transaction Documents delivered
to the parties relating to the Transactions (including but not limited
to legal opinions relating thereto).
(l) The Purchasers shall have been furnished with a copy of
the opinions delivered on behalf of Issuers in connection with the
Transactions, which opinions shall expressly state that the Purchasers
are justified in relying upon the opinions therein.
(m) The Purchasers shall have received an opinion, dated such
Closing Date, of Wessing & Berrenberg-Gossler, special German counsel
for the Company, regarding the enforceability of the Acquisition
Agreement and such other matters as reasonably requested by the
Purchasers, which opinion shall be in form and substance reasonably
satisfactory to counsel for the Purchasers.
The Company will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder.
7. Indemnification and Contribution. (a) Each of the Issuers, jointly
and severally, will indemnify and hold harmless each Purchaser against any
losses, claims, damages or liabilities, joint or several, to which such
Purchaser may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Offering Document, or any amendment or
supplement thereto, or any related preliminary offering circular, or arise out
of or are based upon 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, and will reimburse each Purchaser for any legal or other
<PAGE>
19
expenses reasonably incurred by such Purchaser in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Company will not be liable in any such
case to the extent that any such loss, claim, damage or liability (or actions in
respect thereof) arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from any of such documents
in conformity with written information furnished to the Company by any Purchaser
through CSFBC specifically for use therein, it being understood and agreed that
the only such information consists of the information described as such in
subsection (b) below.
(b) Each Purchaser will severally and not jointly indemnify
and hold harmless each of the Issuers against any losses, claims, damages or
liabilities to which such Issuers may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Offering
Document, or any amendment or supplement thereto, or any related preliminary
offering circular, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary in order to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in conformity with
information furnished to the Company by such Purchaser through CSFBC
specifically for use therein, and will reimburse each Issuer for any legal or
other expenses reasonably incurred by the Issuers in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Purchaser consists of (i) the following information
in the Offering Document furnished on behalf of each Purchaser: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Purchasers, the legend concerning over-allotments and stabilizing on the
inside front cover page, and the information concerning over-allotments and
stabilizing appearing in the seventh paragraph under the caption of "Plan of
Distribution";
(ii) the following information in the Offering
Document furnished on behalf of CSFBC, CIBC Oppenheimer Corp.,
BancBoston Securities Inc. and Salomon Brothers Inc, as
applicable:
Credit Suisse First Boston and its affiliates
provide, and have in the past provided, certain
financial and investment advisory services to the
Company. In July 1997, Credit Suisse First Boston
Corporation and Salomon Brothers Inc acted as
underwriters in connection with a public offering by
the Company and certain selling stockholders of
shares of common stock of the Company. In December
1997, Credit Suisse First Boston Corporation acted as
the underwriter for a public offering by certain
selling stockholders of the Company of shares of
common stock of the Company. Credit Suisse First
Boston Corporation is also acting as a financial
advisor to the Company in connection with the O&K
Acquisition, and Credit Suisse First Boston, an
affiliate of Credit Suisse First Boston Corporation,
will be a lender and the Administrative Agent under
the New Bank Credit Facility. Canadian Imperial Bank
of Commerce, an affiliate of CIBC Oppenheimer Corp.,
will be a lender and a Co-Documentation Agent under
the New Bank Credit Facility, and BankBoston, N.A.,
an affiliate of BancBoston Securities Inc., was the
Agent and a lender under one of the Existing Credit
Facilities and will be a lender and the Syndication
Agent under the New Bank Credit Facility. Credit
Suisse First Boston Corporation and Salomon Brothers
Inc are acting as Dealer Managers and Solicitation
Agents in connection with the Offer to Purchase and
the Consent Solicitation.
<PAGE>
20
and (iii) the following information in the Offering
Document furnished on behalf of CIBC Oppenheimer Corp.:
Bruce I. Raben, a director of the Company, is a
managing director of CIBC Oppenheimer Corp., one of
the Initial Purchasers.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above, notify the indemnifying party of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In case any such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. In no event shall an
indemnifying party be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action. An indemnifying party shall not be liable for any settlement of
any proceeding effected without its prior written consent; provided, however,
that if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees it shall be liable for any settlement effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (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.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Issuers on the one hand and the Purchasers on the other from the offering of
the Offered 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 Issuers on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuers on the one hand
and the Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received by
the Issuers bear to the total discounts and commissions received by the
Purchasers from the Issuers under this Agreement. 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 Issuers or the Purchasers
and the parties' relative intent, knowledge, access to information and
<PAGE>
21
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Purchaser shall be required to contribute
any amount in excess of the amount by which the total price at which the Offered
Securities purchased by it were resold exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchase obligations and not joint. 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.
(e) The obligations of the Issuers under this Section shall be
in addition to any liability which the Issuers may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Purchaser within the meaning of the Securities Act or the Exchange Act; and
the obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions to each person, if any, who controls the
Issuers within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total
principal amount of Offered Securities, CSFBC may make arrangements satisfactory
to the Company for the purchase of such Offered Securities by other persons,
including any of the Purchasers, but if no such arrangements are made by the
Closing Date, the non-defaulting Purchasers shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Purchasers agreed but failed to purchase. If any
Purchaser or Purchasers so default and the aggregate principal amount of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Offered Securities and arrangements satisfactory
to CSFBC and the Company for the purchase of such Offered Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Purchaser or the
Company, except as provided in Section 9. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
Nothing herein will relieve a defaulting Purchaser from liability for its
default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
each of the Issuers or its officers and of the several Purchasers set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation, or statement as to the results thereof, made by
or on behalf of any Purchaser, the Issuers or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the
Offered Securities by the Purchasers is not consummated, the Issuers shall
remain responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 and the respective obligations of the Issuers and the Purchasers
pursuant to Section 7 shall remain in effect; if any Offered Securities have
been purchased hereunder, the Issuers shall remain responsible for the expenses
to be paid or reimbursed by them pursuant to Section 5 and the respective
obligations of the Issuers and the Purchasers pursuant to Section 7 shall remain
in effect, and the representations and warranties in Section 2 and all other
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Purchasers is not consummated other than solely
because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (C), (D) or (E) of Section 6(b)(ii),
the Company will reimburse the Purchasers for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
<PAGE>
22
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telegraphed and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison
Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking Department -
Transactions Advisory Group, or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Terex Corporation, 500 Post Road
East, Westport, CT 06880, Attention: Eric I Cohen; provided, however, that any
notice to a Purchaser pursuant to Section 7 will be mailed, delivered or
telegraphed and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
12. Representation of Purchasers. You will act for the several
Purchasers in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Purchasers jointly or by CSFBC
will be binding on all of the Purchasers.
13. 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 Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
EACH OF THE ISSUERS HEREBY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
THE FEDERAL AND STATE COURTS IN THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK
IN ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
23
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Issuers and the several
Purchasers in accordance with its terms.
Very truly yours,
TEREX CORPORATION
By.......................
Name:
Title:
KOEHRING CRANES, INC.
By.......................
Name:
Title:
M&M ENTERPRISES OF BARAGA, INC.
By.......................
Name:
Title:
PAYHAULER CORP.
By........................
Name:
Title:
PPM CRANES, INC.
By.......................
Name:
Title:
<PAGE>
24
TEREX AERIALS, INC.
By.......................
Name:
Title:
TEREX BARAGA PRODUCTS, INC.
By.......................
Name:
Title:
TEREX CRANES, INC.
By......................
Name:
Title:
TEREX MINING EQUIPMENT, INC.
By......................
Name:
Title:
TEREX-RO CORPORATION
By......................
Name:
Title:
TEREX-TELELECT, INC.
By......................
Name:
Title:
<PAGE>
25
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
CIBC OPPENHEIMER CORP.
MORGAN STANLEY & CO. INCORPORATED
SALOMON BROTHERS INC
BANCBOSTON SECURITIES INC.
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By..............................
Name:
Title:
<PAGE>
26
SCHEDULE A
Principal Amount of
Initial Purchaser Offered Securities
---------------------- -----------------------
Credit Suisse First Boston Corporation.......... $75,000,000
CIBC Oppenheimer Corp........................... 22,500,000
Morgan Stanley & Co. Incorporated............... 22,500,000
Salomon Brothers Inc............................ 22,500,000
BancBoston Securities Inc....................... 7,500,000
------------
Total....................... $150,000,000
============
<PAGE>
TEREX CORPORATION,
as Issuer
THE SUBSIDIARY GUARANTORS NAMED HEREIN,
as Subsidiary Guarantors
and
UNITED STATES TRUST COMPANY OF NEW YORK,
as Trustee
INDENTURE
Dated as of March 31, 1998
$150,000,000
8-7/8% Senior Subordinated Notes due 2008
<PAGE>
1
INDENTURE, dated as of March 31, 1998, among TEREX
CORPORATION, a Delaware corporation (the "Company"), KOEHRING CRANES, INC., a
Delaware corporation, M&M ENTERPRISES OF BARAGA, INC., a Michigan corporation,
PAYHAULER CORP., an Illinois corporation, PPM CRANES, INC., a Delaware
corporation, TEREX AERIALS, INC., a Wisconsin corporation, TEREX BARAGA
PRODUCTS, INC., a Michigan corporation, TEREX CRANES, INC., a Delaware
corporation, TEREX MINING EQUIPMENT, INC., a Delaware corporation, TEREX-RO
CORPORATION, a Kansas corporation, AND TEREX-TELELECT, INC., a Delaware
corporation (the "Subsidiary Guarantors"), and UNITED STATES TRUST COMPANY OF
NEW YORK, a New York banking corporation, as Trustee (the "Trustee").
The Company has duly authorized the creation of an issue of
8-7/8% Senior Subordinated Notes due 2008 (the "Initial Notes") and, if and when
issued pursuant to a registered exchange for the Initial Notes, 8-7/8% Senior
Subordinated Exchange Notes due 2008 (the "Exchange Notes") and, if and when
issued pursuant to a private exchange for the Initial Notes, 8-7/8% Senior
Subordinated Private Exchange Notes due 2008 (the "Private Exchange Notes," and
together with the Initial Notes and the Exchange Notes, the "Notes") and, to
provide therefor, the Company and each of the Subsidiary Guarantors has duly
authorized the execution and delivery of this Indenture. The Subsidiary
Guarantors have agreed to guarantee the Notes on a senior subordinated basis.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the Notes.
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions
"Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries (the "Acquired Person") (i) existing at the time such Person
becomes a Restricted Subsidiary of the Company or at the time it merges or
consolidates with the Company or any of its Restricted Subsidiaries or (ii)
assumed in connection with the acquisition of assets from such Person.
"Adjusted Maximum Amount" has the meaning provided in Section 11.05.
<PAGE>
2
"Affiliate" of any specified Person means (i) any other Person which,
directly or indirectly, is in control of, is controlled by or is under common
control with such specified Person or (ii) any other Person who is a director or
officer (A) of such specified Person, (B) of any subsidiary of such specified
Person or (C) any Person described in clause (i) above. For purposes of this
definition, control of a Person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-Registrar.
"Aggregate Payments" has the meaning provided in Section 11.05.
"Asset Disposition" means any sale, lease, transfer, conveyance or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger or consolidation (each referred to for the purposes of this definition
as a "disposition"), of (i) any shares of Capital Stock of a Restricted
Subsidiary (other than directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Restricted
Subsidiary), (ii) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary or (iii) any other assets
of the Company or any Restricted Subsidiary outside of the ordinary course of
business of the Company or such Restricted Subsidiary (other than, in the case
of (i), (ii) and (iii) above, a disposition by a Restricted Subsidiary to the
Company or by the Company or a Restricted Subsidiary to a Wholly Owned
Subsidiary; provided, however, that each of (a) the consummation of any sale or
series of related sales of assets or properties of the Company and the
Restricted Subsidiaries by the Company and any Restricted Subsidiaries having an
aggregate fair market value of less than $1 million in any fiscal year and (b)
the discounting of accounts receivable or the sale of inventory, in each case in
the ordinary course of business, shall not be deemed an Asset Disposition.
"Authenticating Agent" has the meaning provided in Section 2.02.
"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 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 (i) the Indebtedness outstanding or arising under
the Credit Facility up to a maximum principal amount of $500 million, (ii) all
obligations and other amounts owing to the holders of such Indebtedness or any
agent or representative thereof outstanding or arising under the Credit Facility
(including, but not limited to, interest (including interest accruing on or
after the filing of any petition in bankruptcy, reorganization or similar
proceeding relating to the Company or any Restricted Subsidiary, whether or not
a claim for such interest is allowed in such proceeding), fees, charges,
indemnities, expense reimbursement obligations and other claims under the Credit
Facility), and (iii) all Hedging Obligations arising in connection therewith
with any party to the Credit Facility.
<PAGE>
3
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal, state or
foreign law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or any
committee thereof duly authorized to act on behalf of such Board.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligations" of a Person means any obligation which is
required to be classified and accounted for as a capital lease on the face of a
balance sheet of such Person prepared in accordance with GAAP; the amount of
such obligation shall be the capitalized amount thereof, 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 prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated), including any Preferred Stock, but excluding
any debt securities convertible into or exchangeable for such equity.
"Cash Equivalents" means (i) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Rating Services or Moody's Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Services or at least P-1 from Moody's
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by (x) any
bank organized under the laws of the United States of America or any state
thereof or the District of Columbia or (y) a commercial banking institution
<PAGE>
4
organized and located in a country recognized by the United States of America,
in each case having at the date of acquisition thereof combined capital and
surplus of not less than $200 million (or the foreign currency equivalent
thereof); (v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; (vi)
investments in money market funds which invest substantially all their assets in
securities of the types described in clauses (i) through (v) above; and (vii)
other short-term investments utilized by foreign Restricted Subsidiaries in
accordance with normal investment practices for cash management not exceeding
$1.0 million in aggregate principal amount outstanding at any time.
"Cash Flow" for any period means the Consolidated Net Income for such
period, plus the following (but without duplication) to the extent deducted in
calculating such Consolidated Net Income for such period: (i) income tax
expense, (ii) Consolidated Interest Expense, (iii) depreciation expense and
amortization expense, provided that consolidated depreciation and amortization
expense of a Subsidiary that is not a Wholly Owned Subsidiary shall only be
added to the extent of the equity interest of the Company in such Subsidiary and
(iv) all other non-cash charges (other than any recurring non-cash charges to
the extent such charges represent an accrual of or reserve for cash expenditures
in any future period). Notwithstanding clause (iv) above, there shall be
deducted from Cash Flow in any period any cash expended in such period that
funds a non-recurring, non-cash charge accrued or reserved in a prior period
which was added back to Cash Flow pursuant to clause (iv) in such prior period.
"Change of Control" means the occurrence of any of the following events:
(1) any "person"or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the beneficial owner (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person shall be deemed to have beneficial ownership of all shares that such
Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of
more than 40% of the total voting power of the Voting Stock of the Company,
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 or otherwise.
(2) (A) another corporation merges into the Company or the Company
consolidates with or merges into any other corporation, or (B) the Company
conveys, transfers or leases all or substantially all its assets (computed
on a consolidated basis) to any person or group, in one transaction or a
series of transactions other than any conveyance, transfer or lease between
the Company and a Wholly Owned Subsidiary of the Company, in each case in
one transaction or a series of related transactions with the effect that
either (x) immediately after such transaction any person or entity or group
(as so defined) of persons or entities (other than a Permitted Holder)
<PAGE>
5
shall have become the beneficial owner of securities of the surviving
corporation of such merger or consolidation representing a majority of the
combined voting power of the outstanding securities of the surviving
corporation ordinarily having the right to vote in the election of
directors or (y) the securities of the Company that are outstanding
immediately prior to such transaction and which represent 100% of the
combined voting power of the securities of the Company ordinarily having
the right to vote in the election of directors are changed into or
exchanged for cash, securities or property, unless pursuant to such
transaction such securities are changed into or exchanged for, in addition
to any other consideration, securities of the surviving corporation that
represent immediately after such transaction, at least a majority of the
combined voting power of the securities of the surviving corporation
ordinarily having the right to vote in the election of directors; or
(3) during any period of two consecutive 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 such Board of Directors
or whose nomination for election by the shareholders of the Company was
approved by a vote of 60% 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 of the
Company then in office.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock Appreciation Rights" means up to 1,000,000 common stock
appreciation rights issued on May 9, 1995 pursuant to a Common Stock
Appreciation Rights Agreement between the Company and United States Trust
Company of New York, as agent.
"Company" means the party named as such in this Indenture until a successor
replaces it pursuant to this Indenture and thereafter means such successor.
"Consolidated Cash Flow Coverage Ratio" as of any date of determination
means the ratio of (i) the aggregate amount of Cash Flow for the period of the
most recent four consecutive fiscal quarters for which financial statements are
available to (ii) Consolidated Interest Expense for such four fiscal quarters;
provided, however, that (1) if the Company or any Restricted Subsidiary has
issued any Indebtedness since the beginning of such period that remains
outstanding or if the transaction giving rise to the need to calculate the
Consolidated Cash Flow Coverage Ratio is an issuance of Indebtedness, or both,
Cash Flow 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 issued on the first day of such period 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, (2) if since the beginning of such period the
Company or any Restricted Subsidiary shall have made any Asset Disposition, the
<PAGE>
6
Cash Flow for such period shall be reduced by an amount equal to the Cash Flow
(if positive) directly attributable to the assets which are the subject of such
Asset Disposition for such period, or increased by an amount equal to the Cash
Flow (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 Dispositions for such
period (or, 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 Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary)
or an acquisition of assets (including Capital Stock of a Subsidiary), including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, Cash Flow and Consolidated Interest Expense
for such period shall be calculated after giving pro forma effect thereto
(including the issuance 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 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, Cash
Flow and Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto as if such Asset Disposition or Investment
occurred on the first day of such period. For purposes of this definition,
whenever pro forma effect is to be given to an acquisition of assets, the amount
of income or earnings relating thereto, and the amount of Consolidated Interest
Expense associated with any Indebtedness issued in connection therewith, the pro
forma calculations shall be determined in good faith by a responsible financial
or accounting Officer of the Company. If any Indebtedness bears a floating rate
of interest and is being given pro forma effect, the interest of such
Indebtedness shall be calculated as if the average interest rate for the period
up to the date of determination had been the applicable rate for the entire
period (taking into account any Interest Rate Protection Agreement applicable to
such Indebtedness if such Interest Rate Protection Agreement has a remaining
term in excess of 12 months). For purposes of this definition, whenever pro
forma effect is to be given to any Indebtedness Incurred pursuant to a revolving
credit facility the amount outstanding under such Indebtedness shall be equal to
the average of the amount outstanding during the period commencing on the first
day of the first of the four most recent fiscal quarters for which financial
statements are available and ending on the date of determination.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, plus, to
the extent not included in such interest expense but Incurred by the Company or
its Restricted Subsidiaries, (i) interest expense attributable to capital
leases, (ii) amortization of debt discount, (iii) capitalized interest, (iv)
<PAGE>
7
original issue discount and non-cash interest payments or accruals, (v)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (vi) net costs under Hedging
Obligations (including amortization of fees), (vii) dividends in respect of all
Disqualified Stock held by Persons other than the Company, a Subsidiary
Guarantor or a Wholly Owned Subsidiary, (viii) interest Incurred in connection
with investments in discontinued operations, (ix) the interest portion of any
deferred payment obligations constituting Indebtedness, and (x) 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 or fees
to any Person (other than the Company) in connection with Indebtedness Incurred
by such plan or trust. For purposes of this definition, interest expense
attributable to any Indebtedness represented by the guarantee (other than (a)
Guarantees permitted by the terms of clauses (b)(x) and (xi), respectively, of
Sections 4.13 and 4.18 and (b) Guarantees by the Company of Indebtedness of a
consolidated Restricted Subsidiary or by a consolidated Restricted Subsidiary of
the Company or another consolidated Restricted Subsidiary) by such person or a
Subsidiary of such person of an obligation of another person shall be deemed to
be the interest expense attributable to the Indebtedness guaranteed.
"Consolidated Net Income" means, for any period, the net income of the
Company and its consolidated Subsidiaries; provided, however, that there shall
not be included in such Consolidated Net Income:
(4) any net income of any Person if such Person is not a Restricted
Subsidiary, except that (A) 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 a net loss of any such Person for such period shall
be included in determining such Consolidated Net Income;
(5) any net income of any Person acquired by the Company or a Subsidiary in
a pooling of interests transaction for any period prior to the date of such
acquisition;
(6) any net income of any Restricted Subsidiary if such Restricted
Subsidiary is subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly or
indirectly, to the Company, except that (A) 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 actually
distributed by such Restricted Subsidiary during such period to the Company or
another Restricted Subsidiary as a dividend or other distribution (subject, in
<PAGE>
8
the case of a dividend or other distribution to another Restricted Subsidiary,
to the limitation contained in this clause) and (B) the Company's equity in a
net loss of any such Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(7) any gain or loss realized upon the sale or other disposition of any
property, plant or equipment of the Company or its consolidated subsidiaries
(including pursuant to any sale and leaseback arrangement) which is not sold or
otherwise disposed of in the ordinary course of business and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any Person;
(8) all extraordinary, unusual or non-recurring gains, and any
extraordinary or non-recurring loss as recorded on the statement of operations
in accordance with GAAP; and
(9) the cumulative effect of a change in accounting principles.
"covenant defeasance option" has the meaning provided in Section 8.01.
"Credit Facility" means a collective reference to any term loan and
revolving credit facilities (including, but not limited to, the credit agreement
dated March 6, 1998, by and among the Company, certain of its subsidiaries and
certain financial institutions providing for an aggregate $500 million of term
loan and revolving credit facilities), including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, as such credit facilities and/or related documents may be further
amended, restated, supplemented, renewed, replaced or otherwise modified from
time to time whether or not with the same agent, trustee, representative lenders
or holders, and irrespective of any changes in the terms and conditions thereof.
Without limiting the generality of the foregoing, the term "Credit Facility"
shall include agreements in respect of reimbursement of letters of credit issued
pursuant to the Credit Facility and agreements in respect of Hedging Obligations
with lenders party to the Credit Facility and shall also include any amendment,
amendment and restatement, renewal, extension, restructuring, supplement or
modification to any Credit Facility and all refunding, refinancings (in whole or
in part) and replacements of any Credit Facility, including any agreement (i)
extending the maturity of any Indebtedness incurred thereunder or contemplated
thereby, or (ii) adding or deleting borrowers or guarantors thereunder, so long
as borrowers and issuers include one or more of the Company and its Restricted
Subsidiaries and their respective successors and assigns.
"Currency Agreement Obligations" means the obligations of any person under
a foreign exchange contract, currency swap agreement or other similar agreement
or arrangement to protect such person against fluctuations in currency values.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
<PAGE>
9
"Default Notice" has the meaning provided in Section 10.02.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Designated Senior Indebtedness" means (i) so long as any Bank Indebtedness
is outstanding, such Bank Indebtedness and (ii) provided no Bank Indebtedness is
outstanding (or if Bank Indebtedness is outstanding, to the extent permitted by
the terms of, or the lenders under, such Bank Indebtedness), any other Senior
Indebtedness of the Company permitted to be incurred under the Indenture which,
at the date of determination, has an aggregate principal amount outstanding of,
or under which, at the date of determination, the holders thereof are committed
to lend up to, at least $20 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
which by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (i) matures
or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
prior to the 91st day after the Stated Maturity of the Notes, (ii) is
convertible or exchangeable for Indebtedness or Disqualified Stock prior to the
91st day after the Stated Maturity of the Notes or (iii) is redeemable at the
option of the holder thereof, in whole or in part on or prior to the 91st day
after the Stated Maturity of the Notes; provided, however, that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to repurchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the Notes
shall not constitute Disqualified Stock if the "asset sale" or "change of
control" provisions applicable to such Capital Stock are not more favorable to
the holders of such Capital Stock than the provisions described under Sections
4.17 and 4.16 below.
"Event of Default" has the meaning provided in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor statute or statutes thereto.
"Exchange Notes" has the meaning provided in the preamble to this
Indenture.
"Fair Share" has the meaning provided in Section 11.05.
"Fair Share Shortfall" has the meaning provided in Section 11.05.
"Floor Plan Guarantees" means guarantees (including but not limited to
repurchase or remarketing obligations) by the Company or a Restricted Subsidiary
<PAGE>
10
Incurred in the ordinary course of business consistent with past practice of
Indebtedness Incurred by a franchise dealer, or other purchaser or lessor, for
the purchase of inventory manufactured or sold by the Company or a Restricted
Subsidiary, the proceeds of which Indebtedness is used solely to pay the
purchase price of such inventory to such franchise dealer and any related
reasonable fees and expenses (including financing fees), provided, however, that
(1) to the extent commercially practicable, the Indebtedness so guaranteed is
secured by a perfected first priority Lien on such inventory in favor of the
holder of such Indebtedness and (2) if the Company or such Restricted Subsidiary
is required to make payment with respect to such guarantee, the Company or such
Restricted Subsidiary will have the right to receive either (q) title to such
inventory, (r) a valid assignment of a perfected first priority Lien in such
inventory or (s) the net proceeds of any resale of such inventory.
"Fraudulent Transfer Laws" has the meaning provided in Section 11.05.
"Funding Subsidiary Guarantor" has the meaning provided in Section 11.05.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of this 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.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing in any manner any Indebtedness or other
obligation of any Person and any 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 other obligation of such 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 the 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 of negotiable instruments for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantee Obligations" has the meaning provided in Section 12.01.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any interest rate swap agreement, foreign currency exchange
agreement, interest rate collar agreement, option or futures contract or other
similar agreement or arrangement designed to protect such Person against changes
in interest rates or foreign exchange rates.
<PAGE>
11
"Holder" or "Noteholder" means the Person in whose name a Note is
registered on the Registrar's books.
"Inactive Subsidiary" means a Subsidiary which at the time of determination
(i) owns assets having a fair market value of less than $50,000, (ii) does not
conduct any business activity and (iii) is not an obligor with respect to any
Indebtedness.
"Incur" means create, issue, assume, Guarantee, incur or otherwise become
liable for, directly or indirectly, or otherwise become responsible for,
contingently or otherwise, Indebtedness or Disqualified Stock; provided,
however, that any Indebtedness or Disqualified 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. The term "Incurrence" when used as a noun
shall have a correlative meaning.
"Indebtedness" of any Person means, without duplication, and whether or not
contingent,
(10) the principal of and premium (if any) in respect of (A)
indebtedness of such Person for money borrowed and (B) indebtedness
evidenced by notes, debentures, bonds or other similar instruments for the
payment of which such Person is responsible or liable;
(11) all Capital Lease Obligations of such Person;
(12) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such Person
and all obligations of such Person under any title retention agreement (but
excluding trade accounts payable arising in the ordinary course of
business);
(13) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction;
(14) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock
(measured at the greater of its voluntary or involuntary maximum fixed
repurchase price plus accrued and unpaid dividends);
(15) to the extent not otherwise included in this definition, all
Hedging Obligations;
(16) all obligations of the type referred to in clauses (i) through
(vi) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
<PAGE>
12
Guarantee (other than in each case by reason of activities described in the
proviso to the definition of "Guarantee"); and
(17) all obligations of the type referred to in clauses (i) through
(vii) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets or the amount of the obligation so secured.
For purposes hereof, the "maximum fixed repurchase price" of any
Disqualified Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Stock as if such
Disqualified Stock were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is based
upon, or measured by, the fair market value of such Disqualified Stock, such
fair market value to be determined in good faith by the Board of Directors. For
purposes hereof, the amount of any Indebtedness issued with original issue
discount shall be the original purchase price plus accrued interest, provided,
however, that such accretion shall not be deemed an incurrence of Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof.
"Initial Notes" has the meaning provided in the preamble to this Indenture.
"Initial Purchasers" means Credit Suisse First Boston Corporation, CIBC
Oppenheimer Corp., Salomon Brothers Inc, BancBoston Securities Inc. and Morgan
Stanley & Co. Incorporated.
"Interest Payment Date" means the stated maturity of an installment of
interest on the Notes.
"Interest Rate Protection Agreement" means any interest rate swap
agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect the Company or any Restricted Subsidiary against
fluctuations in interest rates.
"Investment" in any Person means any direct or indirect advance, loan
(other than advances to customers in the ordinary course of business that are
recorded as accounts receivable or deposits on the balance sheet of the Person
making the advance or loan, in each case in accordance with GAAP) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person and shall include the designation of a
Restricted Subsidiary as an Unrestricted Subsidiary. For purposes of the
<PAGE>
13
definition of "Unrestricted Subsidiary," the definition of "Restricted Payment"
and the covenant described under Section 4.10, (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. Notwithstanding the foregoing, in no event shall any issuance of
Capital Stock (other than Preferred Stock or Disqualified Stock, or Capital
Stock exchangeable, exercisable or convertible for any of the foregoing) of the
Company in exchange for Capital Stock, property or assets of another Person
constitute an Investment by the Company in such Person.
"issue" means issue, assume, Guarantee, 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 issued by such
Subsidiary at the time it becomes a Subsidiary; and the term "issuance" has a
corresponding meaning.
"Issue Date" means the date of original issuance of the Notes.
"legal defeasance option" has the meaning provided in Section 8.01.
"Legal Holiday" has the meaning provided in Section 13.07.
"Lien" means any mortgage, pledge, security interest, privilege,
conditional sale or other title retention agreement or other similar lien
(statutory or otherwise), or encumbrance upon or with respect to any property of
any kind, real or personal, moveable or immovable, now owned or hereafter
acquired.
"Maturity Date" means April 1, 2008.
"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 such properties or assets or received in any other non-cash 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 on any
<PAGE>
14
Indebtedness which (A) is secured by any assets subject to such Asset
Disposition, in accordance with the terms of any lien upon or other security
agreement of any kind with respect to such assets, or (B) which 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 and (iv) reasonable amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed of in such Asset Disposition and retained by the Company
or any Restricted Subsidiary after such Asset Disposition, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Disposition. Further, with respect to an
Asset Disposition by a Subsidiary which is not a Wholly Owned Subsidiary, Net
Available Cash shall be reduced pro rata for the portion of the equity of such
Subsidiary which is not owned by the Company.
"Net Cash Proceeds", with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale plus, in the case of an
issuance of Capital Stock upon any exercise, exchange or conversion of
securities (including options, warrants, rights and convertible exchangeable
debt), of the Company that were issued for cash on or after the Issue Date, the
amount of cash originally received by the Company upon the issuance of such
securities (including options, warrants, rights and convertible or exchangeable
debt), net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
and expenses actually Incurred or required to be Incurred in connection with
such issuance or sale and also net of taxes paid or payable as a result thereof.
"Notes" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that are
issued pursuant to this Indenture.
"Obligations" means with respect to any Indebtedness all obligations for
principal, premium, interest (including, without limitation, interest after the
commencement of any bankruptcy, reorganization, insolvency or similar proceeding
against the Company or any of its Subsidiaries, whether or not allowed in any
such proceeding), penalties, fees, indemnifications, reimbursements, and other
amounts payable pursuant to the documentation governing such Indebtedness.
"Offer" has the meaning provided in Section 4.17.
"Offer Amount" has the meaning provided in Section 4.17.
"Offer Period" has the meaning provided in Section 4.17.
"Offering Memorandum" means the Offering Memorandum dated March 24, 1998,
pursuant to which the Initial Notes were offered, and any supplement thereto.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Controller, the Treasurer, or the Secretary of such Person, or any
other officer designated by the Board of Directors serving in a similar
capacity.
<PAGE>
15
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two Officers or by an Officer and either a Treasurer or Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 13.04 and 13.05, to the extent they relate to the
making of an Officers' Certificate.
"Opinion of Counsel" means a written opinion from legal counsel, who may be
counsel for the Company, and who is reasonably acceptable to the Trustee
complying with the requirements of Sections 13.04 and 13.05, to the extent they
relate to the giving of an Opinion of Counsel.
"Paying Agent" has the meaning provided in Section 2.03.
"Payment Blockage Period" has the meanings provided in Sections 10.02 and
12.02.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) the Company, a Restricted Subsidiary or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a Related
Business; (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;
provided, however, that such Person's primary business is a Related Business;
(iii) Investments in Cash Equivalents; (iv) receivables owing to the Company or
any Restricted Subsidiary if created or acquired in the ordinary course of
business; (v) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary; (vi) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments; (vii) any Person to the
extent such Investment represents the non-cash portion of the consideration
received for an Asset Disposition as permitted pursuant to the covenant
described under Section 4.17; (viii) so long as no Default has occurred and is
continuing (or would result therefrom), any Investment made by the issuance of,
or with the proceeds of a substantially concurrent sale of, Capital Stock (other
than Disqualified Stock) of the Company; provided, however, that the Net Cash
Proceeds from such sale shall be excluded from clause 3(B) of Section (a) of the
covenant described under Section 4.10; (ix) Investments by the Company or any
Restricted Subsidiary, in an aggregate amount not to exceed $3 million, in an
Unrestricted Subsidiary formed primarily for the purposes of financing purchases
and leases of inventory manufactured by the Company or any Restricted
Subsidiary; (x) Investments in Cash Equivalents; (xi) Floor Plan Guarantees
<PAGE>
16
permitted by the terms of clauses (b)(x) and (xi), respectively, of the
covenants described under Section 4.13 and Section 4.18; and (xi) other
Investments that do not exceed in the aggregate $10 million at any one time
outstanding.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases
to which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits or cash or United States government bonds
to secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case Incurred in the ordinary course of business; (b) Liens imposed by law,
including carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate proceedings; or
other Liens arising out of judgments or awards against such Person with respect
to which such Person shall then be proceeding with an appeal or other
proceedings for review; (c) Liens for taxes, assessments or other governmental
charges not yet subject to penalties for non-payment or which are being
contested in good faith by appropriate proceedings provided appropriate reserves
have been taken on the books of the Company; (d) Liens to secure the performance
of statutory obligations or in favor of issuers of surety bonds, performance
bonds, appeal bonds or letters of credit or other obligations of a like nature
issued pursuant to the request of and for the account of such Person, in each
case in the ordinary course of its business; provided, however, that such
letters of credit do not constitute Indebtedness; (e) Liens securing a Hedging
Obligation so long as the related Indebtedness is, and is permitted to be under
the Indenture, secured by a Lien on the same property securing the Hedging
Obligation; (f) Liens for the purpose of securing the payment (or the
refinancing of the payment) of all or a part of any Purchase Money Indebtedness
or Capital Lease Obligations relating to assets or property acquired,
constructed or leased in the ordinary course of business provided that (x) the
aggregate principal amount of Indebtedness secured by such Liens shall not
exceed the cost of the assets or property so acquired or constructed and (y)
such Liens shall not encumber any other assets or property of the Company or any
Restricted Subsidiary other than such Assets or property and assets affixed or
appurtenant thereto; (g) Liens arising from precautionary Uniform Commercial
Code financing statement filings regarding operating leases entered into by the
Company and its Subsidiaries in the ordinary course of business; (h) Liens in
favor of the Company and/or any of its Restricted Subsidiaries, other than such
a Lien with respect to intercompany indebtedness if the Company or a Subsidiary
Guarantor is not the beneficiary of such a Lien; (i) Liens securing Indebtedness
of a Person existing at the time that such Person is acquired by, merged into or
consolidated with the Company or any Restricted Subsidiary; provided, however,
that such Liens were not incurred in connection with, or in contemplation of,
such acquisition, merger or consolidation, and do not extend to any property or
assets other than those of such Person; (j) Liens on property or assets existing
at the time of acquisition thereof by the Company or any Restricted Subsidiary;
provided, however, that such Liens were not incurred in connection with, or in
contemplation of, such acquisition, and do not extend to any other property or
assets; (k) Liens existing on the date of the Indenture; (l) Liens arising from
<PAGE>
17
the rendering of a final judgement or order against the Company or any
Restricted Subsidiary that does not give rise to an Event of Default; (m)
encumbrances consisting of zoning restrictions, surety exceptions, utility
easements, licenses, rights of way, easements of ingress or egress over property
of the Company or any Restricted Subsidiary, rights or restrictions of record on
the use of real property, minor defects in title, landlords' and lessors' liens
under leases on property located on the rented premises, in each case not
interfering in any material respect with the ordinary conduct of the business of
the Company and the Restricted Subsidiaries; (n) Liens securing Senior
Indebtedness; (o) Liens with respect to Floor Plan Guarantees permitted by the
terms of clauses (b)(x) and (xi), respectively, of the covenants described under
Section 4.13 and Section 4.18; and (p) any extension, renewal, refinancing,
refunding or replacement of any Permitted Lien, provided that such new Lien is
limited to the property or assets that secured (or under the arrangement under
which the original Permitted Lien, could secure) the obligations to which such
Liens relate.
"Person" means any individual, corporation, limited liability company,
limited or general partnership, joint venture, association, joint-stock 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 Person, means
Capital Stock of any class or classes (however designated) which 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 Person, over shares
of Capital Stock of any other class of such Person.
"principal" of any Indebtedness (including the Notes) means the principal
amount of such Indebtedness plus the premium, if any, on such Indebtedness.
"Private Exchange Notes" has the meaning provided in the preamble to this
Indenture
"pro forma" means, with respect to any calculation made or required to be
made pursuant to the terms of this Indenture, a calculation in accordance with
Article 11 of Regulation S-X under the Securities Act, as determined by the
Board of Directors of the Company.
"Public Equity Offering" means an underwritten primary or combined primary
and secondary public offering of common stock (other than Disqualified Stock) of
the Company pursuant to an effective registration statement under the Securities
Act which public equity offering results in gross proceeds to the Company of not
less than $50 million.
"Purchase Date" has the meaning provided in Section 4.17.
"Purchase Money Indebtedness" means any Indebtedness of a Person to any
seller or other Person incurred to finance the acquisition (including in the
case of a Capital Lease Obligation, the lease) of any after acquired real or
personal tangible property or assets related to the Business of the Company or
<PAGE>
18
the Restricted Subsidiaries and which is incurred substantially concurrently
with such acquisition and is secured only by the assets so financed.
"Record Date" means each Record Date specified in the Notes, whether or not
a Legal Holiday.
"Redemption Date," when used with respect to any Note to be redeemed, means
the date fixed for such redemption pursuant to this Indenture and the Notes.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price fixed for such redemption pursuant to this Indenture and the
Notes.
"Refinance" means, in respect of any Indebtedness, to refinance, extend,
renew, refund, repay, prepay, redeem, defease or retire, or to issue other
Indebtedness in exchange or replacement for, such indebtedness. "Refinanced" and
"Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with the Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that (i) such
Refinancing Indebtedness has a Stated Maturity no earlier than the earlier of
(x) the Stated Maturity of the Indebtedness being Refinanced and (y) the Stated
Maturity of the Notes, (ii) such 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 has an aggregate principal amount (or if Incurred with
original issue discount, an aggregate issue price) that is equal to or less that
the aggregate principal amount (or if Incurred with original issue discount, the
aggregate accreted value) then outstanding or committed (plus unpaid accrued
interest) under the Indebtedness being Refinanced, plus actual fees and expenses
Incurred in connection with the Refinancing; provided, further, however, that
(x) Refinancing Indebtedness shall not include (1) Indebtedness of a Subsidiary
that is not a Wholly Owned Subsidiary or a Subsidiary Guarantor that Refinances
Indebtedness of the Company or (2) Indebtedness of the Company or a Restricted
Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary, (y) if
the Indebtedness being Refinanced is not Senior Indebtedness, then such
Refinancing Indebtedness shall rank no more senior than, and shall be at least
as subordinated in right of payment, to the Notes as the Indebtedness being
Refinanced and (z) Refinancing Indebtedness shall be secured only by assets of a
similar type and in a similar amount to those that secured the Indebtedness so
refinanced.
"Registrar" has the meaning provided in Section 2.03.
"Registration Rights Agreement" means the Registration Rights Agreement
dated March 31, 1998 among the Company, the Subsidiary Guarantors and the
Initial Purchasers for the benefit of themselves and the Holders, as the same
may be amended or modified from time to time in accordance with the terms
thereof.
<PAGE>
19
"Regulation S" means Regulation S under the Securities Act.
"Related Business" means any business in the manufacture or sale of capital
goods or parts or services, or otherwise reasonably related, ancillary or
complementary to the businesses of the Company and the Restricted Subsidiaries
on the Issue Date.
"Representative" means the indenture trustee or other trustee, agent or
representative in respect of any Designated Senior Indebtedness; provided that
if, and for so long as, any Designated Senior Indebtedness lacks such a
representative, then the Representative for such Designated Senior Indebtedness
shall at all times be the holders of a majority in outstanding principal amount
of such Designated Senior Indebtedness in respect of any Designated Senior
Indebtedness.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Payment" has the meaning provided in Section 4.10.
"Restricted Subsidiary" means any Subsidiary of the Company that is not an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of a Person secured by a
Lien.
"Securities Act" means, the Securities Act of 1933, as amended, or any
successor statute or statutes thereto.
"Senior Credit Facility Representative" means, at any time, the then-acting
administrative agent or agents under the Credit Facility, which shall initially
be Credit Suisse First Boston.
"Senior Indebtedness" means with respect to the Company or any Subsidiary
Guarantor (x) Bank Indebtedness and (y) any other Indebtedness that, by the
terms of the instrument creating or evidencing such Indebtedness, is expressly
made senior in right of payment to the Notes or the applicable Guarantee, other
than (1) any obligation of such Person to any subsidiary of such Person or to
any officer, director or employee of such Person or any such subsidiary, (2) any
liability of such Person for federal, state, local or other taxes owed or owing
by such Person, (3) any accounts payable or other liability of such Person to
trade creditors arising in the ordinary course of business (including Guarantees
thereof or instruments evidencing such liabilities), (4) any Indebtedness,
<PAGE>
20
Guarantee or obligation of such Person which is, expressly by its terms,
subordinate or junior in any respect to any other Indebtedness, Guarantee or
obligation of such Person, (5) that portion of any Indebtedness of such Person
which at the time of issuance is issued in violation of the Indenture, (6)
Indebtedness of such Person represented by Disqualified Stock or (7) Capital
Lease Obligations.
"Senior Subordinated Indebtedness" means the Notes and any other
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank pari passu with the Notes in right of payment and is not subordinated by
its terms in right of payment to any Indebtedness or other obligation of the
Company which is not Senior Indebtedness of the 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.
"Stated Maturity" means, with respect to any security, the final date
specified in such security as the fixed date on which all outstanding 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 unless such contingency has occurred).
"Subordinated Obligation" means any Indebtedness of the Company or any
Subsidiary Guarantor (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes or the
relevant Subsidiary Guarantee, as applicable, pursuant to a written agreement to
that effect.
"Subsidiary" means (a) any corporation, association, partnership, limited
liability company or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or other 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) the Company,
(ii) the Company and one or more Subsidiaries or (iii) one or more Subsidiaries
or (b) any limited partnership of which the Company or any Subsidiary is a
general partner, or (c) any other Person (other than a corporation or limited
partnership) in which the Company, or one or more other Subsidiaries or the
Company and one or more other Subsidiaries, directly or indirectly, has more
than 50% of the outstanding partnership or similar interests or has the power,
by contract or otherwise, to direct or cause the direction of the policies,
management and affairs thereof. Unless the context other wise requires,
Subsidiary means each direct and indirect Subsidiary of the Company.
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor of the
Company's Obligations with respect to the Notes.
<PAGE>
21
"Subsidiary Guarantor" means any Subsidiary that Guarantees the Company's
Obligations with respect to the Notes.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C. ss.ss.
77aaa-77bbbb), as in effect on the date of this Indenture.
"Trust Officer" means any authorized officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
authorized officer assigned to the department, division or group performing the
corporation trust work of such successor and assigned to administer this
Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it in accordance with the provisions of this Indenture and thereafter
means such successor.
"Unrestricted Subsidiary" means any Subsidiary of the Company (other than a
Subsidiary Guarantor) designated as such pursuant to and in compliance with
Section 4.21." Any such designation may be revoked by a resolution of the Board
of Directors of the Company delivered to the Trustee, subject to the provisions
of such covenant.
"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 at the issuer's option.
"U.S. Legal Tender" means such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency).
"Wholly Owned Subsidiary" means (i) a Restricted Subsidiary all the Capital
Stock of which (other than directors' qualifying shares and shares held by other
Persons to the extent such Shares are required by applicable law to be held by a
Person other than the Company or a Restricted Subsidiary) is owned by the
Company or one or more Wholly Owned Subsidiaries and (ii) each of Terex Cranes,
Inc., P.P.M. Cranes, Inc., P.P.M. S.A., and any future wholly owned subsidiaries
of any of the foregoing, in each case so long as the Company or one or more
Wholly Owned Subsidiaries maintains a percentage ownership interest in such
entity equal to or greater than such ownership interest (on a fully diluted
<PAGE>
22
basis) on the later of (a) the Issue Date or (b) the date such entity is
incorporated or acquired by the Company or one or more Wholly Owned
Subsidiaries.
SECTION 1.2. Incorporation by Reference of TIA
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in, and made a part of, this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder or a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.3. 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 as in effect on the date hereof;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision; and
<PAGE>
23
(6) reference to Sections or Articles means reference to such Section or
Article in this Indenture, unless stated otherwise.
SECTION 1.4. One Class of Securities
The Initial Notes, the Private Exchange Notes and the Exchange Notes shall
vote and consent together on all matters as one class and none of the Initial
Notes, the Private Exchange Notes or the Exchange Notes shall have the right to
vote or consent as a separate class on any matter.
ARTICLE TWO
THE NOTES
SECTION 1.5. Form and Dating
(1) Provisions relating to the Initial Notes, the Private Exchange Notes
and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix
attached hereto (the "Appendix"), which is hereby incorporated in and expressly
made a part of this Indenture. The Initial Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A hereto. The
Exchange Notes, the Private Exchange Notes and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit B hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or depository rule or
usage. The Company shall approve the forms of the Notes and any notation, legend
or endorsement on them. Each Note shall be dated the date of its issuance and
shall show the date of its authentication.
The Initial Notes are being offered and sold by the Company pursuant to a
Purchase Agreement, dated March 24, 1998 between the Company, the Subsidiary
Guarantors and the Initial Purchasers named therein.
(2) The terms and provisions contained in the Appendix and in the forms of
the Notes, annexed hereto as Exhibits A and B, shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent applicable, the
Company and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
<PAGE>
24
SECTION 1.6. Execution and Authentication
Two Officers, or an Officer and a Secretary or Assistant Secretary, shall
sign, or one Officer shall sign and one Officer or a Secretary or Assistant
Secretary (each of whom shall, in each case, have been duly authorized by all
requisite corporate actions) shall attest to, the Notes for the Company by
manual or facsimile signature. The Company's seal shall also be reproduced on
the Notes.
If an Officer or Secretary or Assistant Secretary whose signature is on a
Note was an Officer or Assistant Secretary at the time of such execution but no
longer holds that office or position at the time the Trustee authenticates the
Note, the Note shall nevertheless be valid.
The Trustee shall authenticate (i) Initial Notes for original issue in the
aggregate principal amount not to exceed $150,000,000 and (ii) Exchange Notes
and Private Exchange Notes, as applicable, from time to time for issue only in
exchange for a like principal amount of Initial Notes, in each case upon a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of Notes to be authenticated,
whether the Notes are to be Initial Notes, Exchange Notes or Private Exchange
Notes and whether the Notes are to be issued as certificated Securities or
Global Securities, or such other information as the Trustee may reasonably
request. The aggregate principal amount of Notes outstanding at any time may not
exceed $150,000,000, except as provided in Sections 2.07 and 2.08 hereof.
Capitalized terms used in this paragraph that are not otherwise defined in this
Indenture shall have the meanings ascribed to them in the Appendix.
A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without coupons,
in denominations of $1,000 and any integral multiple thereof.
<PAGE>
25
SECTION 1.7. Registrar and Paying Agent
The Company shall maintain or designate an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York
and which may be the office of the Trustee) where (a) Notes may be presented or
surrendered for registration of transfer or for exchange ("Registrar"), (b)
Notes may be presented or surrendered for payment ("Paying Agent") and (c)
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Registrar shall keep a register of the Notes and of
their transfer and exchange. The Company 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 or any of its Subsidiaries may act as
Paying Agent or Registrar, except that for purposes of Articles Three and Eight
and Sections 4.16 and 4.17, neither the Company nor any of its Subsidiaries or
Affiliates shall act as Paying Agent. The Company may change any Paying Agent or
Registrar without notice to any Holder.
The Company shall enter into an appropriate agency agreement with any Agent
not a party to this Indenture, which agreement shall incorporate the provisions
of the TIA and implement the provisions of this Indenture that relate to such
Agent. The Company shall notify the Trustee of the name and address of any such
Agent. If the Company fails to maintain a Registrar or Paying Agent, or fails to
give the foregoing notice, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar, Paying Agent and
agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. The
Paying Agent or Registrar may resign upon 30 days notice to the Company.
SECTION 1.8. Paying Agent To Hold Assets in Trust
The Company shall require each Paying Agent other than the Trustee to agree
in writing that each Paying Agent shall hold in trust for the benefit of the
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may, and
upon direction of a majority of the Holders shall, at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company or any other obligor on the
Notes to the Paying Agent, the Paying Agent shall have no further liability for
such assets.
<PAGE>
26
SECTION 1.9. Noteholder Lists
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders, and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee before each Record Date and at such other times as the Trustee
may request in writing a list as of such date and in such form as the Trustee
may reasonably require of the names and addresses of the Holders, which list may
be conclusively relied upon by the Trustee and the Company shall otherwise
comply with TIA ss. 312(a).
SECTION 1.10. [Intentionally Omitted]
SECTION 1.11. Replacement Notes
If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, subject
to the terms of the next succeeding sentence, the Company shall issue and the
Trustee shall authenticate a replacement Note if the Trustee's reasonable
requirements for replacement Notes are met. If required by the Trustee or the
Company, such Holder must provide an affidavit of lost certificate and an
indemnity bond or other indemnity, sufficient in the judgment of both the
Company and the Trustee, to protect the Company, the Trustee, any Agent or any
Authenticating Agent from any loss which any of them may suffer if a Note is
replaced. The Company and the Trustee may charge such Holder for their
out-of-pocket expenses in replacing a Note, including reasonable fees and
expenses of counsel, and for any tax that may be imposed in replacing such
Notes. Every replacement Note shall constitute an additional obligation of the
Company.
SECTION 1.12. Outstanding Notes
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.09, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.07 (other than a mutilated Note
surrendered for replacement), it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Note is held by a bona fide
purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note
and replacement thereof pursuant to Section 2.07.
Except as otherwise provided in Article 8 of this Indenture,
if on a Redemption Date or the Maturity Date the Paying Agent holds U.S. Legal
<PAGE>
27
Tender or U.S. Government Obligations sufficient to pay all of the principal and
interest due on the Notes payable on that date and is not prohibited from paying
such money to the Holders thereof pursuant to the terms of this Indenture, then
on and after that date such Notes cease to be outstanding and interest on them
ceases to accrue.
SECTION 1.13. Treasury Notes
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver, consent or notice, Notes owned by
the Company or any of its Affiliates shall be considered as though they are not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver, consent or notice,
only Notes which a Trust Officer of the Trustee actually knows are so owned
shall be so considered.
SECTION 1.14. Temporary Notes
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon receipt of a written order
of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate upon receipt
of a written order of the Company pursuant to Section 2.02 definitive Notes in
exchange for, and upon surrender of, temporary Notes. Until so exchanged, the
temporary Notes shall in all respects be entitled to the same benefits under
this Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 1.15. Cancellation
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and the Paying Agent shall forward to the Trustee any Notes
surrendered to them for transfer, exchange or payment. The Trustee, or at the
direction of the Trustee, the Registrar or the Paying Agent, and no one else,
shall cancel and, at the written direction of the Company, shall dispose of all
Notes surrendered for transfer, exchange, payment or cancellation. Subject to
Section 2.07, the Company may not issue new Notes to replace Notes that it has
paid or delivered to the Trustee for cancellation. If the Company shall acquire
any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Notes unless and until the
same are surrendered to the Trustee for cancellation pursuant to this Section
2.11.
<PAGE>
28
SECTION 1.16. Defaulted Interest
If the Company defaults in a payment of interest on the Notes (without
regard to any grace period therefor), it shall pay the defaulted interest, plus
(to the extent lawful) any interest payable on the defaulted interest to the
Persons who are Holders on a subsequent special record date, which date shall be
the fifteenth day preceding the date fixed by the Company for the payment of
defaulted interest or the next succeeding Business Day if such date is not a
Business Day. At least 15 days before the subsequent special record date, the
Company shall mail to each Holder, as of a recent date selected by the Company,
with a copy to the Trustee, a notice that states the subsequent special record
date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
SECTION 1.17. CUSIP Number
The Company in issuing the Notes may use "CUSIP" numbers, and if so, the
Trustee shall use such CUSIP numbers in notices of redemption or exchange as a
convenience to Holders; provided that no representation is hereby deemed to be
made by the Trustee as to the correctness or accuracy of such CUSIP numbers
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes. The Company shall
promptly notify the Trustee of any change in a CUSIP number.
SECTION 1.18. Deposit of Moneys
Prior to 9:00 a.m. New York City time on each Interest Payment Date and on
the Maturity Date, the Company shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date or Maturity Date, as the case may be, in a timely
manner which permits the Paying Agent to remit payment to the Holders on such
Interest Payment Date or Maturity Date, as the case may be.
<PAGE>
29
ARTICLE THREE
REDEMPTION
SECTION 1.19. Notices to Trustee
If the Company elects to redeem Notes pursuant to Section 3.07 of this
Indenture and Paragraph 6 of the Notes, it shall notify the Trustee and the
Paying Agent in writing of the Redemption Date and the principal amount of the
Notes to be redeemed.
The Company shall give each notice provided for in this Section 3.01 at
least 45 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.
SECTION 1.20. Selection of Notes To Be Redeemed
If fewer than all of the Notes are to be redeemed, selection of the Notes
to be redeemed will be made by the Trustee 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 then listed on a national securities exchange,
on a pro rata basis, by lot or in such other fair and reasonable manner chosen
at the discretion of the Trustee; provided, however, that if a partial
redemption is made with the proceeds of a Public Equity Offering, selection of
the Notes or portion thereof for redemption shall be made by the Trustee only on
a pro rata basis, unless such method is otherwise prohibited. The Company shall
promptly notify the Trustee and the Paying Agent in writing of the date of
listing and the name of the securities exchange if and when the Notes are listed
on a principal national securities exchange. The Trustee shall make the
selection from the Notes outstanding and not previously called for redemption
and shall promptly notify the Company in writing of the Notes selected for
redemption and, in the case of any Note selected for partial redemption, the
principal amount thereof to be redeemed. Notes in denominations of $1,000 may be
redeemed only in whole. The Trustee may select for redemption portions (equal to
$1,000 or any integral multiple thereof) of the principal of Notes that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Notes called for redemption also apply to portions of Notes called for
redemption.
<PAGE>
30
SECTION 1.21. Notice of Redemption
At least 30 days but not more than 60 days before a Redemption Date, the
Company shall mail or cause to be mailed a notice of redemption by first class
mail, postage prepaid, to each Holder whose Notes are to be redeemed, with a
copy to the Trustee and any Paying Agent. At the Company's written request no
less than 35 days prior to the Redemption Date (or such shorter period as may be
acceptable to the Trustee), the Trustee shall give the notice of redemption in
the Company's name and at the Company's expense.
Each notice for redemption shall identify the Notes to be redeemed and
shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of accrued interest, if any, to be
paid;
(3) the name and address of the Paying Agent;
(4) the subparagraph of the Notes pursuant to which such redemption is
being made;
(5) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price plus accrued interest, if any;
(6) that, unless the Company defaults in making the redemption payment,
interest on Notes called for redemption ceases to accrue on and after the
Redemption Date, and the only remaining right of the Holders of such Notes is to
receive payment of the Redemption Price plus accrued interest, if any, upon
surrender to the Paying Agent of the Notes redeemed;
(7) if any Note is being redeemed in part, the portion of the principal
amount of such Note to be redeemed and that, after the Redemption Date, and upon
surrender of such Note, a new Note or Notes in the aggregate principal amount
equal to the unredeemed portion thereof will be issued; and
(8) if fewer than all the Notes are to be redeemed, the aggregate principal
amount of Notes to be redeemed and the aggregate principal amount of Notes to be
outstanding after such partial redemption and, if the redemption is not made pro
rata, the identification of the particular Notes (or portion thereof) to be
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 Notes.
<PAGE>
31
SECTION 1.22. Effect of Notice of Redemption
Once notice of redemption is mailed in accordance with Section 3.03, Notes
called for redemption become due and payable on the Redemption Date and at the
Redemption Price plus accrued interest, if any. Upon surrender to the Trustee or
Paying Agent, such Notes called for redemption shall be paid at the Redemption
Price and the amount of accrued interest payable thereon, provided that if a
Note is redeemed on or after a Record Date for an interest payment but on or
prior to the related Interest Payment Date, then any accrued and unpaid interest
shall be paid to the Holder of record at the close of business on such 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.
Except in connection with a defeasance pursuant to Section 8.02 of this
Indenture, at any time prior to the mailing of a notice of redemption to the
Holders pursuant to Section 3.03, the Company may withdraw, revoke or rescind
any notice of redemption delivered to the Trustee without any continuing
obligation to redeem the Notes.
SECTION 1.23. Deposit of Redemption Price
On or before 9:00 a.m. New York City time on the Redemption Date, the
Company shall deposit with the Paying Agent U.S. Legal Tender sufficient to pay
the Redemption Price plus accrued interest, if any, of all Notes to be redeemed
on that date (other than Notes or portions of Notes called for redemption which
have been delivered by the Company to the Trustee for cancellation). The Paying
Agent shall promptly return to the Company any U.S. Legal Tender so deposited
which is not required for that purpose, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.
SECTION 1.24. Notes Redeemed in Part
Upon surrender of a Note that is to be redeemed in part, the Company shall
execute and the Trustee shall authenticate for the Holder a new Note or Notes
equal in principal amount to the unredeemed portion of the Note surrendered.
<PAGE>
32
SECTION 1.25. Optional Redemption
(1) Except as set forth in the subsection (b) below, the Notes will not be
redeemable at the option of the Company prior to April 1, 2003. Thereafter, the
Notes will be redeemable, at the Company's option, in whole or in part, at any
time or from time to time, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest 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), if redeemed during
the 12-month period commencing on April 1 of the years set forth below:
Redemption
Period Price
2003 ............................................... 104.438%
2004 ............................................... 102.958%
2005 ............................................... 101.479%
2006 and thereafter ................................ 100.000%
(2) In addition, at any time and from time to time prior to April 1, 2001,
the Company may redeem in the aggregate up to $50 million of the original
principal amount of the Notes with the proceeds of one or more Public Equity
Offerings, at a redemption price (expressed as a percentage of principal amount)
of 108.875% plus accrued interest 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 65% of the
aggregate principal amount of the Notes originally outstanding must remain
outstanding after each such redemption.
In order to effect the foregoing redemption with the proceeds of any Public
Equity Offering, the Company shall make such redemption not more than 120 days
after the consummation of any such Public Equity Offering.
<PAGE>
33
ARTICLE FOUR
COVENANTS
SECTION 1.26. Payment of Notes
The Company shall pay or cause to be paid the principal of and interest on
the Notes on the dates and in the manner provided in the Notes and in this
Indenture. An installment of principal of or interest on the Notes shall be
considered paid on the date it is due if the Trustee or Paying Agent (other than
the Company or an Affiliate of the Company) holds on that date U.S. Legal Tender
designated for and sufficient to pay the installment in full and is not
prohibited from paying such money to the Holders pursuant to the terms of this
Indenture.
Notwithstanding anything to the contrary contained in this Indenture, the
Company may, to the extent it is required to do so by law, deduct or withhold
income or other similar taxes imposed by the United States of America from
principal or interest payments hereunder.
SECTION 1.27. Maintenance of Office or Agency
The Company shall maintain the office or agency required under Section
2.03. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02.
SECTION 1.28. Corporate Existence
Except as otherwise permitted by Article Five and Section
4.16, the Company shall do or cause to be done, at its own cost and expense, all
things necessary to preserve and keep in full force and effect its corporate
existence and the corporate existence of each of its Restricted Subsidiaries in
accordance with the respective organizational documents of each of them (as the
same may be amended from time to time) and the material rights (charter and
statutory) and franchises of the Company and each such Restricted Subsidiary;
provided, however, that neither the Company nor any Restricted Subsidiary shall
<PAGE>
34
be required to preserve any right or franchise, or the corporate, partnership or
other existence of any Restricted Subsidiary, if the Board of Directors of the
Company shall reasonably 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.
SECTION 1.29. Payment of Taxes and Other Claims
SECTION 1.1.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any of its Subsidiaries or
properties of it or any of its Subsidiaries and (ii) all lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any of its Subsidiaries; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted for which reserves, to the extent required
under and in accordance with GAAP, have been taken.
SECTION 1.30. Maintenance of Properties and Insurance
(1) The Company shall, and shall cause each of its Restricted Subsidiaries
to, maintain its material properties in good working order and condition
(subject to ordinary wear and tear) and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto and actively
conduct and carry on its business; provided, however, that nothing in this
Section 4.05 shall prevent the Company or any of its Restricted Subsidiaries
from discontinuing the operation and maintenance of any of its properties, if
such discontinuance is, in the reasonable good faith judgment of the Company or
the Restricted Subsidiary, as the case may be, desirable in the conduct of the
business of the Company and its Restricted Subsidiaries, taken as a whole.
(2) The Company shall provide or cause to be provided, for itself and each
of its Restricted Subsidiaries, insurance (including reasonably appropriate
self-insurance consistent with past practice) against loss or damage of the
kinds that, in the good faith judgment of the Board of Directors of the Company,
are adequate and appropriate for the conduct of the business of the Company and
such Restricted Subsidiaries in a prudent manner, with reputable insurers or
with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as shall be customary, in the reasonable good faith judgment of the
Board of Directors of the Company, for companies similarly situated in the
industry.
<PAGE>
35
SECTION 1.31. Compliance Certificate
(1) The Company shall deliver to the Trustee, within 120 days after the end
of the Company's fiscal year, an Officers' Certificate 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 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 such Officer's
knowledge, based on such review, the Company during such preceding fiscal year
has kept, observed, performed and fulfilled each and every such covenant
contained in the Indenture and no Default or Event of Default occurred during
such year and at the date of such certificate there is no Default or Event of
Default that has occurred and is continuing or, if such signers do know of such
Default or Event of Default, the certificate shall describe the Default or Event
of Default and its status with particularity. The Officers' Certificate shall
also notify the Trustee should the Company elect to change the manner in which
it fixes its fiscal year end.
(2) So long as not contrary to the then-current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.08 shall be accompanied by a written
report of the Company's independent accountants (who shall be a firm of
established national reputation) that in conducting their audit of such
financial statements nothing has come to their attention that would lead them to
believe that the Company has violated any provisions of Article Four or Five of
this Indenture 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.
(a (i) If any Default or Event of Default has occurred and is continuing or
(ii) if any Holder seeks to exercise any remedy hereunder with respect to a
claimed Default under this Indenture or the Notes, the Company shall deliver to
the Trustee, at its address set forth in Section 13.02 hereof, by registered or
certified mail or by telegram, telex or facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.
SECTION 1.32. Compliance with Laws
The Company shall comply, and shall cause each of its Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
<PAGE>
36
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as are not in the aggregate
reasonably likely to have a material adverse effect on the financial condition
or results of operations of the Company and its Restricted Subsidiaries, taken
as a whole.
SECTION 1.33. SEC Reports
(1) So long as the Notes are outstanding, the Company (at its own expense)
shall file with the SEC and shall provide to the Trustee and the Holders within
15 days after it files them with the SEC copies of the quarterly and annual
reports and of the information, documents, and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) filed pursuant to Section 13 or 15(d) of the Exchange Act (without
regard to whether the Company is subject to the requirements of such Section 13
or 15(d) of the Exchange Act); provided that (i) the Company shall not be in
default of the provisions of this Section 4.08 by reason of the failure to file
reports with the SEC (which reports are in the reasonable opinion of counsel to
the Company responsive in all material respects to the applicable requirements
of the Exchange Act) solely by reason of the refusal of the SEC to accept the
same for filing and (ii) prior to the consummation of the Exchange Offer and the
issuance of the Exchange Notes, the Company (at its own expense) will mail to
the Trustee and Holders substantially the same information that would have been
required by such Sections within 15 days of when any such document would
otherwise have been required to be filed with the SEC. Upon qualification of
this Indenture under the TIA, the Company shall also comply with the provisions
of the TIA ss. 314(a).
(2) The Company shall provide to any Holder any information reasonably
requested by such Holder concerning the Company (including financial statements)
necessary in order to permit such Holder to sell or transfer Notes in compliance
with Rule 144A under the Securities Act.
SECTION 1.34. Waiver of Stay, Extension or Usury Laws
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
<PAGE>
37
SECTION 1.35. Limitation on Restricted Payments
(1) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, (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) or to the
direct or indirect holders of its Capital Stock in their capacities as such
(except dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase its
Capital Stock (other than Disqualified Stock) and except dividends or
distributions payable to the Company or a Restricted Subsidiary (and, if the
Restricted Subsidiary making such dividends or distributions has any
stockholders other than the Company or another Restricted Subsidiary, to such
stockholders on no more than a pro rata basis, measured by value)), (ii)
purchase, redeem or otherwise acquire or retire for value any Capital Stock of
the Company, any Restricted Subsidiary or any other Affiliate of the Company,
(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 or (iv) make any Restricted
Investment (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); or (2) the Company would not be
permitted to issue an additional $1.00 of Indebtedness pursuant to clause (a)
under Section 4.13 after giving pro forma effect to such Restricted Payment; or
(3) the aggregate amount of such Restricted Payment and all other Restricted
Payments since the date on which the Notes were originally issued would exceed
the sum of: (A) 50% of the Consolidated Net Income accrued during the period
(treated as one accounting period) from the beginning of the first full fiscal
quarter commencing after the date on which the Notes were originally issued to
the end of the most recent fiscal quarter for which financial statements are
available (or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit) and (B) the aggregate Net Cash Proceeds received by the
Company from (x) the issue or sale of its Capital Stock (other than Disqualified
Stock) subsequent to the Issue Date (other than an issuance or sale to a
Subsidiary or an employee stock ownership plan or similar trust in the benefit
of employees) and (y) the issue or sale (other than an issuance or sale to a
Subsidiary or an employee stock ownership plan or similar trust in the benefit
of employees) after the Issue Date of Disqualified Stock or debt securities that
have been converted or exchanged in accordance with their terms for Capital
Stock of the Company (other than Disqualified Stock), in each case to the extent
such proceeds are not used to redeem, repurchase, retire or otherwise acquire
Capital Stock or any Indebtedness of the Company or any Restricted Subsidiary or
to make any Investment pursuant to clause (viii) of the definition of "Permitted
Investment."
(2) The provisions of clauses (2) and (3) of Section (a) shall not
prohibit: (1) any purchase or redemption of Capital Stock or Subordinated
Obligations of the Company made by exchange for, or out of the proceeds of the
<PAGE>
38
substantially concurrent sale or issuance 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); provided, however, that the Net
Cash Proceeds from such sale shall be excluded from clause (3)(B) of Section (a)
above; (2) dividends paid within 60 days after the date of declaration if at
such date of declaration such dividend would have complied with this provision;
provided, however, that such dividend shall be deducted in the calculation of
the amount of Restricted Payments available to be made referred to in clause (3)
of Section (a) above; (3) the repurchase of shares of, or options to purchase
shares of, Capital Stock of the Company or any of its Subsidiaries from
employees, former employees, directors or former directors of the Company or any
of its Subsidiaries (or permitted transferees of such employees, former
employees, directors or former directors), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments thereto)
approved by the Board of Directors under which such individuals purchase or sell
or are granted the option to purchase or sell, shares of such common stock;
provided, however, that the aggregate amount of any repurchases pursuant to this
clause (3) and any purchases pursuant to clause (4) below shall not exceed
$500,000 per year or $3.5 million in the aggregate on or after the Issue Date;
(4) provided that no Default or Event of Default shall have occurred or be
continuing at the time of such payment or after giving effect thereto, the
purchase by the Company of shares of its common stock (for not more than fair
market value) in connection with the delivery of such stock to grantees under
any stock option plan (upon the exercise by such grantees of their stock
options) or any other deferred compensation plan of the Company approved by the
Board of Directors; provided, however, that the aggregate amount of any
purchases pursuant to this clause (4) and any repurchases pursuant to clause (3)
above shall not exceed $500,000 per year or $3.5 million in the aggregate on or
after the Issue Date; (5) the redemption, purchase, retirement or other payoff
of any Subordinated Obligations with the proceeds of any Refinancing
Indebtedness permitted to be incurred pursuant to the terms of clauses (b)(v)
and (v), respectively, of the covenants described under Section 4.13 and Section
4.18; and (6) provided that no Default or Event of Default shall have occurred
or be continuing at the time of such payment or after giving effect thereto,
other Restricted Payments in an aggregate amount not to exceed $10 million;
provided, however, that such payment shall be deducted in the calculation of the
amount of Restricted Payments available to be made referred to in clause (3) of
Section (a) above.
SECTION 1.36. Limitation on Restrictions on Distributions from Restricted
Subsidiaries
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or permit to exist or become effective any
encumbrance or restriction on the ability of any Restricted Subsidiary to (i)
pay dividends or make any other distributions on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits
to the Company or a Restricted Subsidiary or pay any Indebtedness or other
<PAGE>
39
obligation owed to the Company or a Restricted Subsidiary, (ii) make any loans
or advances to the Company or any other Restricted Subsidiary or (iii) transfer
any of its property or assets to the Company or any other Restricted Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (a)
the Credit Facility as in effect on the Issue Date, and any amendments,
restatements, renewals, replacements or refinancings thereof; provided, however,
that such amendments, restatements, renewals, replacements or refinancings are
no more restrictive with respect to such dividend and other payment restrictions
than those contained in the Credit Facility (or, if more restrictive, than those
contained in the Indenture) immediately prior to any such amendment,
restatement, renewal, replacement or refinancing, (b) applicable law, (c) any
instrument governing Indebtedness or Capital Stock of an Acquired Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition); provided,
however, that (1) such restriction is not applicable to any Person, or the
properties or assets of any Person, other than the Acquired Person, and (2) the
consolidated net income of an Acquired Person for any period prior to such
acquisition shall not be taken into account in determining whether such
acquisition was permitted by the terms of the Indenture, (d) by reason of
customary non-assignment provisions in leases or other agreements entered into
the ordinary course of business and consistent with past practices, (e) Purchase
Money Indebtedness for property acquired in the ordinary course of business that
only impose restrictions on the property so acquired, (f) an agreement for the
sale or disposition of the Capital Stock or assets of such Restricted
Subsidiary; provided, however, that such restriction is only applicable to such
Restricted Subsidiary or assets, as applicable, and such sale or disposition
otherwise is permitted under Section 4.17 below; provided, further, however,
that such restriction or encumbrance shall be effective only for a period from
the execution and delivery of such agreement through a termination date not
later than 270 days after such execution and delivery, or (g) Refinancing
Indebtedness permitted under the Indenture; provided, however, that the
restrictions contained in the agreements governing such Refinancing Indebtedness
are no more restrictive in the aggregate than those contained in the agreements
governing the Indebtedness being refinanced immediately prior to such
refinancing. Notwithstanding the foregoing, neither (a) customary provisions
restricting subletting or assignment of any lease entered into in the ordinary
course of business, consistent with past practice, nor (b) Liens permitted under
the Indenture, shall in and of themselves be considered a restriction on the
ability of the applicable Restricted Subsidiary to transfer such agreements or
assets, as the case may be.
SECTION 1.37. Limitation on Affiliate Transactions
(1) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, conduct any business or enter into any transaction
or series of similar transactions (including the purchase, sale, lease or
exchange of any asset or property or the rendering of any service) with any
Affiliate of the Company (other than any employee stock ownership plan for the
benefit of the Company's or a Restricted Subsidiary's employees) unless the
terms of such business, transaction or series of transactions are (i) set forth
<PAGE>
40
in writing, (ii) as favorable to the Company or such Restricted Subsidiary as
terms that would be obtainable at the time for a comparable transaction or
series of similar transactions in arms' length dealings with an unrelated third
Person and (iii) a majority of the disinterested members of the Board of
Directors have, by resolution, determined in good faith that such business or
transaction or series of transactions meets the criteria set forth in (ii)
above; provided, however, that if such transaction involves an amount in excess
of $10 million, the Company shall also obtain from a nationally recognized
independent investment banking firm, accounting firm or appraisal firm with
experience in evaluating the terms and conditions of such type of business or
transactions an opinion that such transaction is fair from a financial point of
view to the Company or its Restricted Subsidiary, as the case may be; provided,
further, however, that the provisions of both clause (iii) above and the
preceding proviso shall not apply with respect to any such business, transaction
or series of related transactions between the Company and any Restricted
Subsidiary, which business, transaction or series of transactions is entered
into in the ordinary course of business.
(2) The provisions of the foregoing paragraph (a) shall not prohibit (i)
any Restricted Payment permitted to be made pursuant to the covenant described
under Section 4.10, or any payment or transaction specifically excepted from the
definition of Restricted Payment, (ii) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, stock options and stock ownership plans
entered into in the ordinary course of business and approved by a majority of
the entire Board of Directors or by a majority of the disinterested members of
the Board of Directors or a majority of the entire board of directors or a
majority of the disinterested members of the board of directors of the relevant
Restricted Subsidiary, (iii) the grant of stock options or similar rights to
employees and directors pursuant to plans approved by a majority of the entire
Board of Directors or by a majority of the disinterested members of the Board of
Directors or a majority of the entire board of directors or a majority of the
disinterested members of the board of directors of the relevant Restricted
Subsidiary, (iv) loans or advances to officers, directors or employees in the
ordinary course of business, (v) the payment of reasonable fees to directors of
the Company and its Restricted Subsidiaries who are not employees of the Company
or its Restricted Subsidiaries, (vi) any Affiliate transaction between the
Company and a Subsidiary Guarantor, between Subsidiary Guarantors, or between
Restricted Subsidiaries which are both not Subsidiary Guarantors, (vii)
indemnification or insurance provided to officers or directors of the Company or
any Subsidiary approved in good faith by the Board of Directors; (viii) payment
of compensation and benefits to directors, officers and employees of the Company
and its Subsidiaries approved in good faith by the Board of Directors; and (ix)
the purchase of or the payment of Indebtedness of or monies owed by the Company
or any of its Restricted Subsidiaries for goods or materials purchased, or
services received, in the ordinary course of business.
SECTION 1.38. Limitation on Indebtedness
(1) The Company shall not Incur, directly or indirectly, any Indebtedness
(including Acquired Indebtedness) unless, on the date of such Incurrence, and
<PAGE>
41
after giving pro forma effect thereto, (i) no Default or Event of Default shall
have occurred and be continuing or would occur and (ii) the Consolidated Cash
Flow Coverage Ratio at the date of such issuance exceeds 2.0 to 1.0.
(2) Notwithstanding clause (a), the Company may Incur the following
Indebtedness: (i) Indebtedness Incurred pursuant to the Credit Facility,
together with all Indebtedness then outstanding and Incurred pursuant to clause
(i) of Section 4.18 below, not to exceed in outstanding principal amount the
greater of (1) $500 million at any time outstanding and (2) the sum of (x) 80%
of the consolidated book value of the net accounts receivable of the Company and
(y) 50% of the consolidated book value of the inventory of the Company, in each
case determined in accordance with GAAP; (ii) Indebtedness owed to and held by a
Restricted Subsidiary; provided, however, that any subsequent issuance or
transfer of any Capital Stock that results in such Subsidiary ceasing to be a
Restricted Subsidiary, or any transfer of such Indebtedness (other than to a
Restricted Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness by the Company; (iii) the Notes; (iv)
Indebtedness (other than Indebtedness described in clause (i), (ii), or (iii)
above) outstanding on the Issue Date; (v) any Refinancing Indebtedness in
respect of Indebtedness Incurred pursuant to paragraph (a) or pursuant to clause
(iii), (iv) or (viii) or this clause (v) or pursuant to clause (v) of the
covenant described under Section 4.18 below; (vi) obligations of the Company
pursuant to (A) Interest Rate Protection Agreements in respect of Indebtedness
of the Company that is permitted by the terms of the Indenture to be outstanding
to the extent the notional principal amount of such obligation does not exceed
the aggregate principal amount of the Indebtedness to which such Interest Rate
Protection Agreements relate, (B) Currency Agreement Obligations in respect of
foreign exchange exposures Incurred by the Company in the ordinary course of its
business and (C) commodity agreements of the Company to the extent entered into
in the ordinary course of business to protect the Company from fluctuations in
the prices of raw materials used in its business; (vii) Indebtedness of the
Company consisting of obligations in respect of purchase price adjustments in
connection with the acquisition or disposition of assets by the Company or any
Restricted Subsidiary permitted under the Indenture; (viii) Capital Lease
Obligations, Purchase Money Indebtedness and Acquired Indebtedness (to the
extent not Incurred in connection with, or in anticipation or contemplation of,
the relevant transaction) in an aggregate principal amount, together with the
principal amount of Indebtedness Incurred pursuant to clause (ix) of Section
4.18, not exceeding $15 million at any one given time outstanding; (ix)
performance bonds, surety bonds, insurance obligations or bonds and other
similar bonds or obligations incurred by the Company in the ordinary course of
business consistent with past practice; (x) Floor Plan Guarantees; (xi)
Indebtedness Incurred pursuant to the terms of the outstanding Common Stock
Appreciation Rights, as such terms are in effect on the Issue Date; and (xii)
Indebtedness in an aggregate principal amount which, together with all other
Indebtedness of the Company then outstanding (other than Indebtedness permitted
by clauses (i) through (xi) of this Section or clause (a)) does not exceed $5
million (less the amount of any Subsidiary Indebtedness and Preferred Stock then
outstanding and Incurred pursuant to clause (xii) of Section 4.18).
<PAGE>
42
(3) Except to the extent that such Indebtedness is permitted to be incurred
pursuant to Sections (a) and (b) above and the provisions of Section 4.18, the
Company shall not, and shall not permit any Restricted Subsidiary to, Incur any
Indebtedness if the proceeds thereof are used, directly or indirectly, to repay,
prepay, redeem, defease, retire, refund or refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Notes or the
relevant Subsidiary Guarantee, as applicable, to at least the same extent as
such Subordinated Obligations.
(4) For purposes of determining compliance with the covenants set forth in
this Section 4.13 and Section 4.18, in the event that an item of Indebtedness
meets the criteria of more than one of the types of Indebtedness described
above, the Company, in its sole discretion, will classify such item of
Indebtedness and only be required to include the amount and type of such
Indebtedness in one of the above clauses.
(5) For purposes of determining amounts of Indebtedness under the covenants
set forth in this Section 4.13 and Section 4.18, Indebtedness resulting from
security interests granted with respect to Indebtedness otherwise included in
the determination of Indebtedness, and Guarantees (and security interests with
respect thereof) of, or obligations with respect to letters of credit
supporting, Indebtedness otherwise included in the determination of Indebtedness
shall not be included in the determination of Indebtedness.
(6) Indebtedness of any Person which is outstanding at the time such Person
becomes a Restricted Subsidiary of the Company (including upon designation of
any subsidiary or other person as a Restricted Subsidiary) or is merged with or
into or consolidated with the Company or a Restricted Subsidiary of the Company
shall be deemed to have been Incurred at the time such Person becomes such a
Restricted Subsidiary of the Company or merged with or into or consolidated with
the Company or a Restricted Subsidiary of the Company, as applicable.
SECTION 1.39. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries
The Company shall not sell or otherwise dispose of any Capital Stock of a
Restricted Subsidiary, and shall not permit any Restricted Subsidiary, directly
or indirectly, to issue or sell or otherwise dispose of any of its Capital Stock
except (i) to the Company or a Wholly Owned Subsidiary, (ii) if, immediately
after giving effect to such issuance, sale or other disposition, neither the
Company nor any of its Subsidiaries own any Capital Stock of such Restricted
Subsidiary, (iii) Preferred Stock of a Subsidiary Guarantor, or (iv) directors'
qualifying shares.
<PAGE>
43
SECTION 1.40. Limitation on Other Senior Subordinated Debt
The Company will not, and will not permit any Restricted Subsidiary to,
create, Incur, assume, guarantee or in any other manner become liable with
respect to any Indebtedness that is subordinate in right of payment to any
Senior Indebtedness of the Company or any such Restricted Subsidiary, unless
such Indebtedness (i) has a maturity date subsequent to the Stated Maturity of
the Notes and an Average Life longer than that of the Notes and (ii) is also
pari passu with, or subordinate in right of payment to, the Notes or the
relevant Subsidiary Guarantee, as the case may be.
SECTION 1.41. Change of Control
(1) Upon a Change of Control, each Holder shall have the right to require
that the Company repurchase all or any part of such Holder's Notes 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), in accordance with the terms contemplated in Section 4.16(b). If
at the time of such Change of Control the terms of the Senior Indebtedness of
the Company restrict or prohibit the repurchase of Notes pursuant to this
Section, then prior to the mailing of the notice to Holders provided for in
Section 4.16(b) below but in any event within 90 days following any Change of
Control, the Company shall obtain the requisite consent under the agreements
governing such Senior Indebtedness of the Company to permit the repurchase of
the Notes as provided for in Section 4.16(b).
(2) Within 15 Business Days following any Change of Control, the Company
shall mail a notice to the Trustee and each Holder stating:
(1) that a Change of Control has occurred and that such Holder has the
right to require the Company to purchase such Holder's Notes 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 the relevant record date to receive interest on the relevant interest
payment date);
(2) the circumstances and relevant facts regarding such Change of Control
(including information with respect to pro forma historical income, cash flow
and capitalization, each after giving effect to such Change of Control); (1)
(3) the repurchase date (which shall be no earlier than 30 days nor later
than 60 days from the date such notice is mailed); and
<PAGE>
44
(4) the instructions determined by the Company, consistent with this
Section, that a Holder must follow in order to have its Notes purchased.
(3) Holders electing to have a Note purchased will be required to surrender
the Note, with an appropriate form (as provided for in Exhibit A or B, as
appropriate) duly completed, to the Company at the address specified in the
notice not later than 3 p.m. New York City time two Business Days prior to the
purchase date. Holders will be entitled to withdraw their election if the
Trustee or the Company receives not later than 3 p.m. New York City time two
Business Day prior to the purchase date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note
purchased.
(4) On the purchase date, all Notes purchased by the Company under this
Section shall be delivered to the Trustee for cancellation, and the Company
shall pay or cause to be paid the purchase price plus accrued and unpaid
interest, if any, to the Holders entitled thereto.
(5) At the time the Company delivers Notes to the Trustee which are to be
accepted for purchase, the Company shall also deliver an Officers' Certificate
stating that such Notes are to be accepted by the Company pursuant to and in
accordance with the terms of this Section. A Note shall be deemed to have been
accepted for purchase at the time the Trustee, directly or through an agent,
mails or delivers payment therefor to the surrendering Holder.
(6) The Company shall comply in all material respects, 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 Notes
pursuant to this Section. To the extent that the provisions of any securities
laws or regulations conflict with provisions of this Section, the Company shall
comply with the applicable securities laws and regulations and shall not be
deemed to have breached its obligations under this Section by virtue thereof.
SECTION 1.42. Limitation on Sales of Assets and Subsidiary Stock
(1) The Company shall not, and shall not permit any Restricted Subsidiary
to, make any Asset Disposition unless (i) the Company or such Restricted
Subsidiary receives consideration at the time of such Asset Disposition at least
equal to the fair market value, as determined in good faith by the Board of
Directors (including as to the value of all non-cash consideration), of the
shares and assets subject to such Asset Disposition and at least 75% of the
consideration thereof received by the Company or such Restricted Subsidiary, as
the case may be, is in the form of cash or Cash Equivalents, and (ii) 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) (A) first,
(x) to the extent the Company elects (or is required by the terms of any Senior
<PAGE>
45
Indebtedness), to prepay, repay or purchase Senior Indebtedness of the Company)
within 360 days of such Asset Disposition, (y) at the Company's election to the
investment by the Company or any Wholly Owned Subsidiary or such Restricted
Subsidiary in long-term assets to replace the assets that were the subject of
such Asset Disposition or a long-term asset that (as determined in good faith by
the Board of Directors) is directly related to the business of the Company and
the Restricted Subsidiaries existing on the Issue Date, in each case within 360
days from the date of such Asset Disposition, or (z) a combination of the
foregoing purposes within such 360-day period; (B) second, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A), to make a pro rata offer to purchase Notes at par (and, to the extent
required by the instrument governing such Indebtedness, any other Senior
Subordinated Indebtedness designated by the Company, at a price no greater than
par) plus accrued and unpaid interest, and (C) third, to the extent of the
balance of such Net Available Cash after application in accordance with clauses
(A) and (B),for general corporate purposes otherwise not prohibited under the
Indenture; provided, however, that in connection with any prepayment, repayment
or purchase of Indebtedness pursuant to clause (A) or (B) above, the Company or
such Subsidiary shall retire such Indebtedness and 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 Section, the Company and its Restricted Subsidiaries shall
not be required to apply any Net Available Cash in accordance with this Section
except to the extent that the aggregate Net Available Cash from all Asset
Dispositions which are not applied in accordance with this Section exceeds $10
million. Pending application of Net Available Cash pursuant to this Section,
such Net Available Cash shall be used to temporarily reduce Senior Indebtedness
or invested in Cash Equivalents.
For the purposes of this covenant, the following is deemed to
be cash or Cash Equivalents: the express assumption of Indebtedness (other than
any Indebtedness that is by its terms subordinated to the Notes) of the Company
or any Restricted Subsidiary, but only to the extent that such assumption is
effected on a basis under which there is no further recourse to the Company or
any of the Restricted Subsidiaries with respect to such liabilities.
(2) In the event of an Asset Disposition that requires the
purchase of Notes (and other Senior Subordinated Indebtedness of the Company)
pursuant to Section 4.17(a)(ii)(B), the Company shall be required to purchase
Notes tendered pursuant to an offer by the Company for the Notes (and, to the
extent required, other Senior Subordinated Indebtedness of the Company) (the
"Offer") at a purchase price of 100% of their principal amount (without premium)
plus accrued but unpaid interest (or, in respect of such other Senior
Subordinated Indebtedness of the Company, such lesser price, if any, as may be
provided for by the terms of such Senior Subordinated Indebtedness of the
Company) in accordance with the procedures (including prorating in the event of
oversubscription) set forth in Section 4.17(c). If the aggregate purchase price
of Notes (and, to the extent required, any other Senior Subordinated
Indebtedness of the Company) tendered pursuant to the Offer is less than the Net
Available Cash allotted to the purchase thereof, the Company shall be required
to apply the remaining Net Available Cash in accordance with Section
4.17(a)(ii)(C). The Offer shall remain open for a period of 20 Business Days.
<PAGE>
46
The Company shall not be required to make an Offer to purchase Notes (and other
Senior Subordinated Indebtedness of the Company) pursuant to this Section 4.17
if the Net Available Cash available therefor is less than $10 million (which
lesser amount shall be carried forward for purposes of determining whether such
an Offer is required with respect to the Net Available Cash from any subsequent
Asset Disposition).
(b) (1) Promptly, and in any event within 30 days after the Company becomes
obligated to make an Offer, the Company shall be obligated to deliver to the
Trustee and send, by first-class mail to each Holder, a written notice stating
that the Holder may elect to have his Notes purchased by the Company either in
whole or in part (subject to prorating as hereinafter described in the event the
Offer is oversubscribed) in integral multiples of $1,000 of principal amount, at
the applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date") and shall contain such information which the Company in good faith
believes will enable such Holders to make an informed decision.
(1) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided above, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of Section 4.17(a). Upon the expiration
of the period for which the Offer remains open (the "Offer Period"), the Company
shall deliver to the Trustee for cancellation the Notes or portions thereof
which have been properly tendered to and are to be accepted by the Company. The
Trustee shall, on the Purchase Date, mail or deliver payment to each tendering
Holder in the amount of the purchase price. In the event that the aggregate
purchase price of the Notes delivered by the Company to the Trustee is less than
the Offer Amount, the Trustee shall deliver the excess to the Company
immediately after the expiration of the Offer Period for application in
accordance with this Section.
(2) Holders electing to have a Note purchased shall be required to
surrender the Note, with an appropriate form duly completed, to the Company at
the address specified in the notice not later than 3:00 p.m., New York City
time, two 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
3:00 p.m., New York City time, two Business Days prior to the Purchase Date, a
telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the
Holder and a statement that such Holder is withdrawing his election to have such
Note purchased. If at the expiration of the Offer Period 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 taking into account
any other tendered Senior Subordinated Indebtedness which is the subject of such
<PAGE>
47
offer (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). Holders whose Notes are purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered.
(3) At the time the Company delivers Notes to the Trustee which are to be
accepted for purchase, the Company shall also deliver an Officers' Certificate
stating that such Notes are to be accepted by the Company pursuant to and in
accordance with the terms of this Section. A Note shall be deemed to have been
accepted for purchase at the time the Trustee, directly or through an agent,
mails or delivers payment therefor to the surrendering Holder.
(3) 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 Notes pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
SECTION 1.43. Limitation on Indebtedness and Preferred Stock of Restricted
Subsidiaries
The Company shall not permit any Restricted Subsidiary to Incur, directly
or indirectly, any Indebtedness or Preferred Stock (except that a Subsidiary
Guarantor shall be permitted to issue Preferred Stock) except: (i) Indebtedness
Incurred pursuant to the Credit Facility, together with the aggregate amount of
all Indebtedness then outstanding and issued pursuant to clause (b)(i) of
Section 4.13 above, not to exceed in outstanding principal amount the greater of
(1) $500 million at any time outstanding and (2) the sum of (x) 80% of the
consolidated book value of the net accounts receivable of the Company and (y)
50% of the consolidated book value of the inventory of the Company, in each case
determined in accordance with GAAP; (ii) Indebtedness or Preferred Stock issued
to and held by the Company or a Restricted Subsidiary; provided, however, that
(A) any subsequent issuance or transfer of any Capital Stock that results in any
such Subsidiary ceasing to be a Restricted Subsidiary or (B) any subsequent
transfer of such Indebtedness or Preferred Stock (other than to the Company or a
Restricted Subsidiary) shall be deemed, in each case, to constitute the
Incurrence of such Indebtedness or Preferred Stock by the issuer thereof; (iii)
Acquired Indebtedness (to the extent not Incurred in connection with, or in
anticipation or contemplation of, the relevant transaction) of such Restricted
Subsidiary; provided that after giving effect to the Incurrence of such Acquired
Indebtedness, the Company could incur $1.00 of Indebtedness pursuant to clause
(a) under Section 4.13; (iv) Indebtedness or Preferred Stock (other than any
<PAGE>
48
described in clause (i), (ii) or (iii)) outstanding on the Issue Date; (v)
Refinancing Indebtedness Incurred in respect of Indebtedness or Preferred Stock
referred to in clause (iii), (iv) or (x) or this clause (v); provided, however,
that to the extent such Refinancing Indebtedness Refinances Acquired
Indebtedness or Preferred Stock of a Restricted Subsidiary that is not a Wholly
Owned Subsidiary, such Refinancing Indebtedness shall be Incurred only by such
Restricted Subsidiary; (vi) Obligations of a Restricted Subsidiary pursuant to
(A) Interest Rate Protection Agreements in respect of Indebtedness of the
Restricted Subsidiary that is permitted by the terms of the Indenture to be
outstanding to the extent the notional principal amount of such obligation does
not exceed the aggregate principal amount of the Indebtedness to which such
Interest Rate Protection Agreements relate, (B) Currency Agreement Obligations
in respect of foreign exchange exposures Incurred by the Restricted Subsidiary
in the ordinary course of its business and (C) commodity agreements of the
Restricted Subsidiary to the extent entered into in the ordinary course of
business to protect the Restricted Subsidiary from fluctuations in the prices of
raw materials used in its business; (vii) Indebtedness consisting of the
Subsidiary Guarantees; (viii) Indebtedness of any Restricted Subsidiary
consisting of Obligations in respect of purchase price adjustments in connection
with the acquisition or disposition of assets by any Restricted Subsidiary
permitted under the Indenture; (ix) Capital Lease Obligations, Purchase Money
Indebtedness and Acquired Indebtedness (to the extent not Incurred in connection
with, or in anticipation or contemplation of, the relevant transaction) in an
aggregate principal amount not exceeding, together with the principal amount of
Indebtedness Incurred pursuant to clause (viii) of Section 4.13, $15 million at
any one given time outstanding; (x) performance bonds, surety bonds, insurance
obligations or bonds and other similar bonds or obligations incurred by a
Restricted Subsidiary in the ordinary course of business consistent with past
practice; (xi) Floor Plan Guarantees; and (xii) Indebtedness and Preferred Stock
in an aggregate principal amount which, together with any other Indebtedness or
Preferred Stock of Restricted Subsidiaries then outstanding (other than
Indebtedness or Preferred Stock permitted by clauses (i) through (xi) of this
Section) does not exceed $5 million (less the amount of any Indebtedness then
outstanding and Incurred pursuant to clause (b)(xii) of Section 4.13).
SECTION 1.44. Limitation on Liens Securing Subordinated Indebtedness
The Company will not, and will not permit any Restricted Subsidiary to,
create, Incur, assume or suffer to exist any Liens of any kind (other than
Permitted Liens) upon any of their respective assets or properties now owned or
acquired after the date of the Indenture or any income or profits therefrom
securing (i) any Indebtedness of the Company or a Restricted Subsidiary which is
expressly by its terms subordinate or junior in right of payment to any other
<PAGE>
49
Indebtedness of the Company or such Restricted Subsidiary, as the case may be,
unless the Notes or the relevant Subsidiary Guarantee, as the case may be, are
equally and ratably secured for so long as such Indebtedness is so secured;
provided that, if such Indebtedness which is expressly by its terms subordinate
or junior in right of payment to any other Indebtedness of the Company or a
Restricted Subsidiary is expressly subordinate or junior to the Notes or the
relevant Subsidiary Guarantee, as the case may be, then the Lien securing such
subordinated or junior Indebtedness shall be subordinate and junior to the Lien
securing the Notes or the relevant Subsidiary Guarantee, as the case may be,
with the same relative priority as such subordinated or junior Indebtedness
shall have with respect to the Notes or the relevant Subsidiary Guarantee, as
the case may be or (ii) any assumption, guarantee or other liability of the
Company or any Restricted Subsidiary in respect of any Indebtedness of the
Company or a Restricted Subsidiary which is expressly by its terms subordinate
or junior in right of payment to any other Indebtedness of the Company or such
Restricted Subsidiary, unless the Notes or the relevant Subsidiary Guarantee, as
the case may be, are equally and ratably secured for so long as such assumption,
guaranty or other liability is so secured; provided that, if such subordinated
Indebtedness which is expressly by its terms subordinate or junior in right of
payment to any other Indebtedness of the Company or a Restricted Subsidiary is
expressly by its terms subordinate or junior to the Notes or the relevant
Subsidiary Guarantee, as the case may be, then the Lien securing the assumption,
guarantee or other liability of such Subsidiary shall be subordinate and junior
to the Lien securing the Notes or the relevant Subsidiary Guarantee, as the case
may be, with the same relative priority as such subordinated or junior
Indebtedness shall have with respect to the Notes or the relevant Subsidiary
Guarantee, as the case may be.
SECTION 1.45. Future Subsidiary Guarantors
The Company and each Subsidiary Guarantor shall cause each Restricted
Subsidiary of the Company organized or existing under the laws of the United
States, any state thereof or the District of Columbia of the Company which,
after the date of this Indenture (if not then a Subsidiary Guarantor), becomes a
Restricted Subsidiary to execute and deliver an indenture supplemental to the
Indenture and thereby become a Subsidiary Guarantor which shall be bound by the
Subsidiary Guarantee of the Notes in the form set forth in this Indenture
(without such future Subsidiary Guarantor being required to execute and deliver
the Subsidiary Guarantee endorsed on the Notes); provided, however, that no
Subsidiary meeting the requirements of this sentence which is an Inactive
Subsidiary shall be required to become a Subsidiary Guarantor hereunder unless
and until such date as such Subsidiary no longer is an Inactive Subsidiary (at
which date such Subsidiary shall, if required by the terms of this sentence,
become a Subsidiary Guarantor). In addition, the Company will not permit any
Restricted Subsidiary that is not a Subsidiary Guarantor to Guarantee any other
Indebtedness of the Company or any Subsidiary Guarantor unless such Restricted
Subsidiary simultaneously executes a supplemental indenture to the Indenture
providing for the Guarantee of the payment of the Notes by such Restricted
Subsidiary, which Guarantee of the payment of the Notes shall be subordinated to
the Guarantee of such other Indebtedness to the same extent as the Notes or the
Subsidiary Guarantees, as applicable, are subordinated to such other
Indebtedness; provided, however, that such Restricted Subsidiary shall not be
required to so Guarantee the payment of the Notes to the extent that such other
Indebtedness does not exceed $1 million individually or, together with any other
<PAGE>
50
Indebtedness of the Company or any Subsidiary Guarantor Guaranteed by such
Restricted Subsidiary, $3 million in the aggregate. Such Restricted Subsidiary
shall be deemed released from its obligations under the Guarantee of the payment
of the Notes at any such time that such Restricted Subsidiary is released from
all of its obligations under its Guarantee of such other Indebtedness unless
such release results from the payment under such Guarantee of other
Indebtedness.
SECTION 1.46. Limitation on Designations of Unrestricted Subsidiaries
(1) The Company may designate any Subsidiary of the Company (other than a
Subsidiary Guarantor) as an "Unrestricted Subsidiary" (a "Designation") only if:
(1) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(2) either (x) the Company's Investment in such Subsidiary does not exceed
$1,000 or (y) the Company would be permitted under the Indenture to make an
Investment at the time of Designation (assuming the effectiveness of such
Designation) in an amount (the "Designation Amount") equal to the fair market
value of the Company's Investment in such Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
described under Section 4.10 for all purposes of the Indenture in the
Designation Amount. The Indenture will further provide that the Company shall
not, and shall not permit any Restricted Subsidiary to, at any time (a) provide
credit support for, or a guarantee of, any Indebtedness of any Unrestricted
Subsidiary (including any undertaking, agreement or instrument evidencing such
Indebtedness), (b) be directly or indirectly liable for any Indebtedness of any
Unrestricted Subsidiary, or (c) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity upon the occurrence
of a default with respect to any Indebtedness of any Unrestricted Subsidiary
(including any right to take enforcement action against such Unrestricted
Subsidiary), except to the extent permitted under the covenant described under
Section 4.10.
The Company may revoke any Designation of a Subsidiary as an Unrestricted
Subsidiary (a "Revocation") if:
(3) no Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and
<PAGE>
51
(4) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding
immediately following such Revocation would, if Incurred at such time, have been
permitted to be Incurred for all purposes of this Indenture and for all purposes
of this Indenture shall be deemed to have been Incurred at such time.
(2) All Designations and Revocations must be evidenced by an Officers'
Certificate delivered to the Trustee attaching a certified copy of the
resolutions of the Board of Directors giving effect to such Designation or
Revocation, as applicable, and certifying compliance with the foregoing
provisions.
(3) Notwithstanding the foregoing, no Subsidiary that is a Subsidiary
Guarantor as of the Issue Date shall be permitted to become an Unrestricted
Subsidiary.
SECTION 1.47. Limitation on Lines of Business
Neither the Company nor any of its Subsidiaries or
Unrestricted Subsidiaries shall directly or indirectly engage to any substantial
extent in any line or lines of business activity other than that which, in the
reasonable good faith judgement of the Board of Directors, is a Related
Business.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 1.48. Merger, Consolidation and Sale of Assets of the Company
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets (computed on a consolidated basis) to,
any Person or group of affiliated Persons, unless: (i) the resulting, surviving
or transferee Person shall be the Company or, if not the Company, shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia (the "Successor
Company"), and such Successor Company shall expressly assume, by an indenture
supplemental to this Indenture, executed and delivered to the Trustee, all the
obligations of the Company under the Notes and this Indenture (and the
Subsidiary Guarantees shall be confirmed as applying to such Person's
<PAGE>
52
obligations); (ii) at the time of and immediately after giving effect to such
transaction or transactions on a pro forma basis (and treating any Indebtedness
which becomes an obligation of the resulting, surviving or transferee Person or
any Subsidiary as a result of such transaction as having been Incurred by such
Person or such Subsidiary at the time of such transaction), no Default or Event
of Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction, the resulting, surviving or transferee Person would
be able to Incur at least $1.00 of Indebtedness pursuant to Section (a) of
Section 4.13; and (iv) the Company shall have delivered to the Trustee an
Officers' Certificate and if a supplemental indenture is required, an Opinion of
Counsel, each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with the Indenture.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of all or substantially all of the properties and assets of one or
more Subsidiaries, the Company's interest in which constitutes all or
substantially all of the properties and assets of the Company shall be deemed to
be the transfer of all or substantially all of the properties and assets of the
Company.
Notwithstanding the foregoing, the Company may merge with or into, or
convey, transfer or lease all or substantially all of its assets to, any
Subsidiary Guarantor, and a Subsidiary Guarantor may merge with or into, or
convey, transfer or lease all or substantially all of its assets to, any other
Subsidiary Guarantor or the Company.
SECTION 1.49. Successor Corporation Substituted for the Company
Upon any consolidation, combination or merger or any transfer
of all or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing corporation, the Successor
Company formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture and the Notes with the same effect as if such surviving entity
had been named as such, and the predecessor company, in the case of a
conveyance, transfer or lease, shall be released from the obligation to pay the
principal of and interest on the Notes.
<PAGE>
53
SECTION 1.50. Merger, Consolidation and Sale of Assets of Any Subsidiary
Guarantor
The Company will not permit any Subsidiary Guarantor to consolidate with or
merge with or into, or convey, transfer or lease, in one transaction or a series
of transactions, all or substantially all of its assets to, any Person unless:
(i) the resulting, surviving or transferee Person shall be the Company or a
Subsidiary Guarantor or, if not the Company or such a Subsidiary Guarantor,
shall be a corporation organized and existing under the laws of the jurisdiction
under which such Subsidiary was organized or under the laws of the United States
of America, or any State thereof or the District of Columbia, and such Person
shall expressly assume, by executing a Subsidiary Guarantee, all the obligations
of such Subsidiary, if any, under its Subsidiary Guarantee; (ii) immediately
after giving effect to such transaction or transactions on a pro forma basis
(and treating any Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such transaction as having been
issued by such Person at the time of such transaction), no Default or Event of
Default shall have occurred and be continuing; (iii) immediately after giving
effect to such transaction, the Company would be able to Incur at least $1.00 of
Indebtedness pursuant to Section 4.13(a); and (iv) the Company delivers to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such Subsidiary Guarantee, if any,
complies with the Indenture. The provisions of clauses (i), (ii) and (iii) above
shall not apply to any one or more transactions which constitute an (a) Asset
Disposition subject to the applicable provisions of the covenant described under
Section 4.17 above or (b) the grant of any Lien on the assets of a Restricted
Subsidiary to secure outstanding Bank Indebtedness, which Lien is permitted by
the terms of the Indenture, or any conveyance or transfer of such assets
resulting from an exercise of remedies in respect of any such Lien.
SECTION 1.51. Successor Corporation Substituted for Subsidiary Guarantor
Upon any consolidation, combination or merger or any transfer of all or
substantially all of the assets of any Subsidiary Guarantor in accordance with
the foregoing, in which such Subsidiary Guarantor is not the continuing
corporation, the successor Person formed by such consolidation or into which
such Subsidiary Guarantor is merged or to which such conveyance, lease or
transfer is made shall succeed to, and be substituted for, and may exercise
every right and power of, such Subsidiary Guarantor under this Indenture with
the same effect as if such surviving entity had been named as such, and the
predecessor company, in the case of a conveyance, transfer or lease, shall be
released from the obligation to pay the principal of and interest on the Notes.
<PAGE>
54
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 1.52. Events of Default
An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest on any Notes when the
same becomes due and payable (whether or not such payment shall be prohibited by
Article Ten of this Indenture) and the Default continues for a period of 30
days; or
(2) the Company defaults in the payment of the principal on any Notes when
such principal becomes due and payable (whether or not such payment shall be
prohibited by Article Ten), at maturity, upon optional redemption, upon required
repurchase, upon declaration or otherwise (including the failure to make a
payment to purchase Notes tendered pursuant to a Change of Control under Section
4.16 or an Offer under Section 4.17); or
(3) the failure by the Company to comply with its obligations under Section
5.01 above; or
(4) the failure by the Company to comply for 30 days after notice with any
of its obligations under Sections 4.08, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16
(other than a failure to purchase the Notes), 4.17 (other than a failure to
purchase the Notes), 4.18, 4.19, 4.20 and 4.21; or
(5) the Company defaults in the observance or performance of any other
covenant, obligation, warranty or agreement contained in this Indenture and
which default continues for a period of 60 days after notice; or
(6) Indebtedness of the Company or any Significant Subsidiary is not paid
within any applicable grace period after final maturity or is accelerated by the
holders thereof because of a default and the total amount of Indebtedness unpaid
or accelerated together with the principal amount of any other such Indebtedness
which is unpaid or which has been accelerated, exceeds $10.0 million at any
time; or
(7) the Company or any Significant Subsidiary of the Company (A) commences
a voluntary case or proceeding under any Bankruptcy Law with respect to itself,
(B) consents to the entry of a judgment, decree or order for relief against it
<PAGE>
55
in an involuntary case or proceeding under any Bankruptcy Law, (C) consents to
the appointment of a Custodian of it or for substantially all of its property,
(D) consents to or acquiesces in the institution of a bankruptcy or an
insolvency proceeding against it, (E) makes a general assignment for the benefit
of its creditors, or (F) takes any corporate action to authorize or effect any
of the foregoing; or
(8) a court of competent jurisdiction enters a judgment, decree or order
for relief in respect of the Company or any Significant Subsidiary of the
Company in an involuntary case or proceeding under any Bankruptcy Law, which
shall (A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company or any such
Significant Subsidiary, (B) appoint a Custodian of the Company or any such
Significant Subsidiary or for substantially all of its property or (C) order the
winding-up or liquidation of its affairs; and such judgment, decree or order
shall remain unstayed and in effect for a period of 60 consecutive days; or
(9) any judgment or decree for the payment of money the portion of which is
not covered by insurance is in an aggregate amount in excess of $10.0 million
shall have been rendered against the Company or any of its Significant
Subsidiaries and is not discharged and either (A) an enforcement proceeding has
been commenced by any creditor upon such judgment or decree or (B) there is a
period of 60 days following such judgment during which such judgment or decree
is not discharged, waived or the execution thereof stayed (including pending
appeal); or
(10) any Subsidiary Guarantee by a Significant Subsidiary ceases to be in
full force and effect or becomes unenforceable or invalid or is declared null
and void (other than in accordance with the terms of the Subsidiary Guarantee or
this Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under its Subsidiary Guarantee.
However, a default under clause (4), (5) or (9) will not constitute an
Event of Default until the Trustee or the Holders of 25% in principal amount of
the outstanding Notes notify the Company of the default and the Company does not
cure such default within the time specified after receipt of such notice.
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) or (10) 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), its status and what action the Company is taking or
proposes to take with respect thereto.
<PAGE>
56
SECTION 1.53. Acceleration
SECTION 1.1.
(1) If an Event of Default (other than an Event of Default specified in
Section 6.01(7) or (8) with respect to the Company) occurs and is continuing,
and has not been waived pursuant to Section 6.04, then the Trustee, by written
notice to the Company, or the Holders of at least 25% in principal amount of
outstanding Notes may declare the principal of and accrued but unpaid interest
on all the Notes to be due and payable by notice in writing to the Company and
the Trustee specifying the respective Event of Default and that it is a "notice
of acceleration". Upon any such declaration, such amount shall be immediately
due and payable provided, however, that for so long as the Credit Facility
remains in effect, such declaration shall not become effective until the earlier
of (i) five Business Days following delivery of notice to the Senior Credit
Facility Representative of the intention to accelerate the Notes or (ii) the
acceleration of any Indebtedness under the Credit Facility.
(2) If an Event of Default specified in Section 6.01(7) or (8) relating to
the Company occurs and is continuing with respect to the Company, the principal
of and interest on all the Notes will ipso facto become and be immediately due
and payable without any declaration or other act on the part of the Trustee or
any Holders.
(3) The Holders of a majority in principal amount of the Notes may, on
behalf of the Holders of all of the Notes, rescind and cancel an acceleration
and its consequences (i) if the rescission would not conflict with any judgment
or decree, (ii) if all existing Events of Default have been cured or waived
except nonpayment of principal or interest that has become due solely because of
the acceleration, (iii) if the Company has paid the Trustee its reasonable
compensation and reimbursed the Trustee for its expenses, disbursements and
advances and (iv) in the event of the cure or waiver of an Event of Default of
the type described in Section 6.01(7) or 6.01(8), the Trustee shall have
received an Officers' Certificate and an Opinion of Counsel that such Event of
Default has been cured or waived. No such rescission shall affect any subsequent
Default or impair any right consequent thereto.
SECTION 1.54. Other Remedies
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy by proceeding at law or in equity to collect the payment of
principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
<PAGE>
57
SECTION 1.55. Waiver of Past Defaults
SECTION 1.1.
Subject to Sections 2.09, 6.07 and 9.02, the Holders of a majority in
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, except a Default in the payment of principal of or
interest on any Note as specified in clauses (1) and (2) of Section 6.01. When a
Default or Event of Default is waived, it is cured and ceases to exist for every
purpose of this Indenture.
SECTION 1.56. Control by Majority
Subject to Section 2.09, the Holders of a majority in principal amount of
the then outstanding Notes may direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on it, including, without limitation, any remedies provided
for in Section 6.03. Subject to Section 7.01, however, the Trustee may refuse to
follow any direction that the Trustee reasonably believes conflicts with any law
or this Indenture, that the Trustee reasonably determines may be unduly
prejudicial to the rights of another Holder, or that may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction; and
provided further, that this provision shall not affect the rights of the Trustee
set forth in Section 7.01(d).
SECTION 1.57. Limitation on Suits
Subject to Article Seven, if an Event of Default occurs and is continuing,
the Trustee will be under no obligation to exercise any of the rights or powers
under this Indenture at the request or direction of any of the Holders unless
such Holders have offered to the Trustee indemnity or security against any loss,
liability or expense reasonably satisfactory to the Trustee. Except to enforce
the right to receive payment of principal, premium (if any) or interest when
due, no Holder of a Note may pursue any remedy with respect to this Indenture or
the Notes unless (i) such Holder has previously given the Trustee notice that an
Event of Default is continuing, (ii) Holders of at least 25% in principal amount
of the outstanding Notes have requested the Trustee to pursue the remedy, (iii)
such Holders have offered the Trustee security or indemnity against any loss,
liability or expense reasonably satisfactory to the Trustee, (iv) the Trustee
has not complied with such request within 60 days after the receipt thereof and
the offer of security or indemnity and (v) the Holders of a majority in
principal amount of the outstanding Notes have not given the Trustee a direction
inconsistent with such request within such 60-day period.
<PAGE>
58
SECTION 1.58. Rights of Holders To Receive Payment
Notwithstanding any other provision of this Indenture, the right of any
Holder to receive payment of principal of and interest on a Note, on or after
the respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 1.59. Collection Suit by Trustee
If an Event of Default in payment of principal or interest specified in
clause (1) or (2) of Section 6.01 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal and
accrued interest remaining unpaid, together with interest on overdue principal
and, to the extent that payment of such interest is lawful, interest on overdue
installments of interest at the rate set forth in Section 4.01 and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents, consultants and counsel.
SECTION 1.60. Trustee May File Proofs of Claim
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, if
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, taxes, disbursements and advances of the Trustee, its
agents, consultants and counsel, and any other amounts due the Trustee under
Section 7.07. The Company's payment obligations under this Section 6.09 shall be
secured in accordance with the provisions of Section 7.07 hereunder. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder thereof, or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding.
<PAGE>
59
SECTION 1.61. Priorities
If the Trustee collects any money or property pursuant to this Article Six,
it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: if the Holders are forced to proceed against the Company directly
without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for principal and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and interest, respectively;
and
Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.
The Trustee, upon prior notice to the Company, may fix a record date and
payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 1.62. Undertaking for Costs
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section 6.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07, or a suit by a Holder or Holders of more than 10% in principal amount of
the outstanding Notes.
ARTICLE SEVEN
TRUSTEE
SECTION 1.63. Duties of Trustee
(1) 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 thereof as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.
<PAGE>
60
(2) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties as are specifically set
forth in this Indenture and no covenants or obligations shall be implied in this
Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not they conform
to the requirements of this Indenture.
(3) Notwithstanding anything to the contrary herein contained, the Trustee
may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01.
(2) The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it takes or
omits to take in good faith in accordance with a direction received by it
pursuant to Section 6.02, 6.04 or 6.05.
(4) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of any of its rights or powers
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not assured to it.
(5) Whether or not herein expressly provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), (c) and (d) of this Section 7.01.
(6) The Trustee shall not be liable for interest on any money or assets
received by it except as the Trustee may agree in writing with the Company.
Assets held in trust by the Trustee need not be segregated from other assets
except to the extent required by law.
<PAGE>
61
SECTION 1.64. Rights of Trustee
Subject to Section 7.01:
(1) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper Person. The Trustee need not investigate any
fact or matter stated in the document.
(2) Before the Trustee acts or refrains from acting, it may consult with
counsel and may require an Officers' Certificate, an Opinion of Counsel or both,
which shall conform to Sections 13.04 and 13.05. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(3) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or indirectly or by or through
agents or attorneys and the Trustee shall not be responsible for the misconduct
or negligence of any agent or attorney appointed with due care.
(4) The Trustee shall not be liable for any action that it takes or omits
to take in good faith which it reasonably believes to be authorized or within
its rights or powers; provided, however that the Trustee's conduct does not
constitute wilful misconduct, negligence or bad faith.
(5) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, notice, request, direction, consent, order, bond, debenture, or other
paper or document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further inquiry or investigation, it
shall be entitled, upon reasonable notice to the Company, to examine the books,
records, and premises of the Company, personally or by agent or attorney and to
consult with the officers and representatives of the Company, including the
Company's accountants and attorneys.
(6) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Holders pursuant to the provisions of this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity satisfactory to
the Trustee against the costs, expenses and liabilities which may be incurred by
it in compliance with such request, order or direction.
(7) The Trustee shall not be required to give any bond or surety in respect
of the performance of its powers and duties hereunder.
<PAGE>
62
(8) The Trustee may determine (i) the execution by any Holder of any
instrument in writing, (ii) the date of such execution or (iii) the authority of
any Person executing the same, in any manner the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(9) The Trustee may consult with counsel, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the Notes
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.
SECTION 1.65. 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, any Subsidiary of the
Company, or their respective Affiliates with the same rights it would have if it
were not Trustee. However, if the Trustee acquires any conflicting interest
within the meaning of Section 3.10(b) of the TIA, 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. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 1.66. Trustee's Disclaimer
The Offering Memorandum and the recitals contained herein and in the Notes
shall be taken as statements of the Company and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or adequacy of this Indenture or the Notes, and it shall not be
accountable for the Company's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Company in this Indenture or the
Notes other than the Trustee's certificate of authentication.
SECTION 1.67. Notice of Default
If a Default occurs and is continuing and if it is known to the Trustee,
the Trustee shall mail to each Holder notice of the Default within 90 days after
such Default occurs. Except in the case of a Default in payment of principal of,
or interest on, any Note, including an accelerated payment and the failure to
make payment on the purchase date pursuant to a Change in Control under Section
4.16 or on the Purchase Date pursuant to an Offer under Section 4.17 and, except
in the case of a failure to comply with Article Five hereof, the Trustee may
withhold the notice if and so long as its board of directors, the executive
<PAGE>
63
committee of its board of directors or a committee of its Trust Officers in good
faith reasonably determines that withholding the notice is in the best interest
of the Holders. In addition, the Company shall deliver to the Trustee, within
120 days after the end of each fiscal year, a certificate regarding knowledge of
the Company's compliance with all covenants and conditions under this Indenture.
The Company also shall deliver to the Trustee pursuant to Section 6.01, within
30 days after the occurrence thereof, written notice of any event which would
constitute certain Defaults, their status and what action the Company is taking
or proposes to take in respect thereof.
SECTION 1.68. Reports by Trustee to Holders
Within 60 days after each May 15, beginning with the May 15 following the
date of this Indenture, the Trustee shall, to the extent that any of the events
described in TIA ss. 313(a) occurred within the previous twelve months, but not
otherwise, mail to each Holder a brief report dated as of such date that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss.ss.
313(b) and (c).
The Company shall promptly notify the Trustee if the Notes become listed
on, or delisted from, any stock exchange and the Trustee shall comply with TIA
ss. 313(d).
SECTION 1.69. Compensation and Indemnity
The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable fees and expenses,
including out-of-pocket expenses incurred or made by it in connection with the
performance of its duties under this Indenture. Such expenses shall include the
reasonable fees and expenses of the Trustee's agents, consultants, experts and
counsel, except such disbursements, advances and expenses as may be attributable
to its negligence and bad faith.
The Company shall indemnify the Trustee and its agents,
employees, stockholders and directors and officers for, and hold them harmless
against, any loss, liability or expense incurred by them, arising out of or in
connection with the administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Company need not reimburse any expense or indemnify
against any loss, liability or expense Incurred by the Trustee through the
Trustee's own willful misconduct, negligence or bad faith. The Trustee shall
notify the Company promptly of any claim asserted against the Trustee for which
it may seek indemnity. At the Trustee's sole discretion, the Company shall
defend the claim and the Trustee shall cooperate and may participate in the
defense; provided that any settlement of a claim shall be approved in writing by
<PAGE>
64
the Trustee. Alternatively, the Trustee may at its option have separate counsel
of its own choosing and the Company shall pay the reasonable fees and expenses
of such counsel; provided that the Company will not be required to pay such fees
and expenses if it assumes the Trustee's defense and there is no conflict of
interest between the Company and the Trustee in connection with such defense as
reasonably determined by the Trustee. The Company need not pay for any
settlement made without its written consent. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes. The Trustee's
right to receive payment of any amounts due under this Section 7.07 shall not be
subordinate to any other liability or indebtedness of the Company (even though
the Notes may be subordinate to such other liability or indebtedness).
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(7) or (8) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law; provided, however, that this shall not
affect the Trustee's rights as set forth in the preceding paragraph or Section
6.10.
SECTION 1.70. Replacement of Trustee
The Trustee may resign at any time by so notifying the Company in writing
at least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
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.
<PAGE>
65
If the Trustee resigns or is removed as Trustee or if a vacancy exists in
the office of Trustee for any reason, the Company shall notify each Holder of
such event and shall promptly appoint a successor Trustee. Within one year after
the successor Trustee takes office, the Holders of a majority in principal
amount of the Notes may appoint a successor Trustee to replace the successor
Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Immediately after that, the retiring
Trustee shall transfer all property held by it as Trustee to the successor
Trustee, subject to the lien provided in Section 7.07, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section 7.08,
the Company's obligations under Section 7.07 shall continue for the benefit of
the retiring Trustee.
SECTION 1.71. Successor Trustee by Merger, Etc
If the Trustee consolidates with, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the resulting, surviving or transferee corporation without any further act
shall, if such resulting, surviving or transferee corporation is otherwise
eligible hereunder, be the successor Trustee; provided that such corporation
shall be otherwise qualified and eligible under this Article Seven.
If at the time such successor or successors by merger, conversion,
consolidation or transfer of assets to the Trustee shall succeed to the trust
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any successor to the Trustee may adopt a certificate of
authentication of any predecessor Trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Trustee may authenticate such Notes 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 Notes or in this Indenture provided that the certificate
of the Trustee shall have.
<PAGE>
66
SECTION 1.72. Eligibility; Disqualification
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss.ss. 310(a)(1), (2) and (5). The Trustee (or, in the case of a
corporation included in a bank holding company system, the related bank holding
company) shall have a combined capital and surplus of at least $50 million as
set forth in its most recent published annual report of condition. In addition,
if the Trustee is a corporation included in a bank holding company system, the
Trustee, independently of such bank holding company, shall meet the capital
requirements of TIA ss. 310(a)(2). The Trustee shall comply with TIA ss. 310(b);
provided, however, that there shall be excluded from the operation of TIA ss.
310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met. The provisions of TIA ss. 310 shall apply to the Company, as
obligor of the Notes.
SECTION 1.73. Preferential Collection of Claims Against Company
The Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
<PAGE>
67
ARTICLE EIGHT
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 1.74. Discharge of Liability on Notes; Defeasance
(1) When (i) the Company delivers to the Trustee all outstanding Notes
(other than Notes replaced pursuant to Section 2.07) for cancellation or (ii)
all outstanding Notes have become due and payable at maturity or will be due and
payable within 60 days as a result of the mailing of a notice of redemption
pursuant to Article 3 hereof, in each case, and the Company irrevocably deposits
with the Trustee funds sufficient to pay at maturity or upon redemption all
outstanding Notes, including interest thereon to maturity or such redemption
date (other than Notes replaced pursuant to Section 2.07), and if in either case
the Company pays all other sums payable hereunder by the Company, then this
Indenture shall, subject to Section 8.01(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 Officers' Certificate and an Opinion of Counsel
as to the satisfaction of all conditions to such satisfaction and discharge of
this Indenture and at the cost and expense of the Company.
(2) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all its obligations under the Notes and this Indenture ("legal
defeasance option") or (ii) its obligations under Sections 4.10 through 4.22 and
the operation of Section 6.01(4) and the limitations contained in clause (iii)
of the first paragraph of each Section 5.01 and Section 5.03 ("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 Notes
may not be accelerated because of an Event of Default. If the Company exercises
its covenant defeasance option, payment of the Notes may not be accelerated
because of an Event of Default specified in Section 6.01(4) or because of the
failure of the Company to comply with clause (iii) of the first paragraph of
each Section 5.01 and Section 5.03. If the Company exercises its legal
defeasance option or its covenant defeasance option, each Subsidiary Guarantor,
if any, shall be released from all its obligations under its Subsidiary
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, the Company's obligations in
Sections 2.03, 2.04, 2.05, 2.07, 2.08, 7.07, 7.08, 8.05, 8.06 and the Appendix
shall survive until the Notes have been paid in full. Thereafter, the Company's
obligations in Sections 7.07, 8.05 and 8.06 shall survive.
SECTION 1.75. Conditions to Defeasance
The Company may exercise its legal defeasance option or its covenant
defeasance option only if:
<PAGE>
68
(1) the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations for the payment of principal of, interest and
premium, if any, on the Notes to maturity or redemption (including, in the case
of payment of principal, interest and premium, if any, to redemption, under
arrangements reasonably satisfactory to the Trustee providing for redemption
pursuant to irrevocable instructions delivered to the Trustee prior to 60 days
before a Redemption Date), as the case may be;
(2) the Company delivers to the Trustee a certificate from a nationally
recognized firm of independent public accountants or a nationally recognized
investment banking firm 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, premium,
if any, and interest when due on all outstanding Notes to maturity or
redemption, as the case may be;
(3) (x) no Default or Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit and (y) no Event of
Default under Section 6.01(7) or (8) shall occur at any time in the period
ending on the 123rd day after the date of such deposit (it being understood that
the condition set forth in the preceding clause (y) is a condition subsequent
which shall not be deemed satisfied until the expiration of such 123-day period,
but in the case of the covenant defeasance, the covenants which are defeased
under Section 8.01(b) will cease to be in effect unless an Event of Default
under Section 6.01(7) or (8) occurs during such period);
(4) the Company delivers 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 the
deposit is not prohibited under any Designated Senior Indebtedness;
(5) neither the deposit nor the defeasance shall result in a default or
event of default under any other material agreement to which the Company is a
party or by which the Company is bound and neither the deposit nor the
defeasance shall be prohibited by Article 10;
(6) 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;
(7) in the case of the legal defeasance option, the Company shall have
<PAGE>
69
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 Noteholders 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;
(8) 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
Noteholders 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
(9) the Company delivers to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Notes as contemplated by this Article 8 have been complied
with.
Before or after a deposit, the Company may make arrangements satisfactory
to the Trustee for the redemption of Notes at a future date in accordance with
Article Three.
SECTION 1.76. Application of Trust Money
The Trustee shall hold in trust money or U.S. Government Obligations
deposited with it pursuant to this Article Eight. 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 Notes. Money and securities so held in trust are not subject to
Article 10.
SECTION 1.77. Repayment to Company
The Trustee and the Paying Agent shall promptly turn over to the Company,
upon delivery of an Officers' Certificate stating that such payment does not
violate the terms of this Indenture, any excess money or securities held by them
at any time, subject to Section 7.07.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon its written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Noteholders entitled to the money must look to the
Company for payment as general creditors.
<PAGE>
70
SECTION 1.78. 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.
SECTION 1.79. Reinstatement
If the funds deposited with the Trustee to effect legal defeasance or
covenant defeasance are insufficient to pay the principal of, premium, if any,
and interest on the Notes when due, then the obligations of the Company under
the Indenture will be revived and no such defeasance will be deemed to have
occurred.
If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender or
U.S. Government Obligations in accordance with this Article Eight by reason of
any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's obligations under this Indenture and the Notes shall
be revived and reinstated as though no deposit had occurred pursuant to this
Article Eight until such time as the Trustee or Paying Agent is permitted to
apply all such U.S. Legal Tender or U.S. Government Obligations in accordance
with this Article 8; provided, however, that, if the Company has made any
payment of interest on or principal of any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the U.S. Legal Tender or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 1.80. Without Consent of Holders
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(1) to cure any ambiguity, omission, defect or inconsistency; provided that
such amendment or supplement does not, in the reasonable opinion of the Trustee,
adversely affect the rights of any Holder in any material respect;
<PAGE>
71
(2) to comply with Article Five;
(3) to provide for uncertificated Notes in addition to or in place of
certificated Notes (provided that the uncertificated Notes are issued in
registered form for purposes of Section 163(f) of the Code, or in a manner such
that the uncertificated Notes are described in Section 163(f)(2)(B) of the
Code);
(4) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefit or rights
to the Holders or that does not adversely affect the rights of any Holder; or to
surrender any right or power conferred upon the Company;
(6) to add Guarantees with respect to the Notes;
(7) to secure the Notes; or
(8) to make any other change that does not, in the reasonable opinion of
the Trustee, adversely affect in any material respect the rights of any Holders
hereunder;
provided that the Company has delivered to the Trustee an Opinion of Counsel
stating that such amendment or supplement complies with the provisions of this
Section 9.01.
After an amendment, supplement or waiver under this Section 9.01 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 1.81. With Consent of Holders
Subject to Section 6.07, the Company, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of at least a majority in aggregate principal amount of the then
outstanding Notes, may amend or supplement this Indenture or the Notes, without
notice to any other Holders. Subject to Section 6.07, the Holder or Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
may waive compliance by the Company with any provision of this Indenture or the
Notes without notice to any other Holder. No amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, shall, without the consent of each
Holder of each Note affected thereby:
<PAGE>
72
(1) reduce the amount of Notes whose Holders must consent to an amendment
or waiver;
(2) reduce the rate of or extend the time for payment of interest on any
Notes;
(3) reduce the principal of or change or have the effect of changing the
Stated Maturity of any Note, or change the date on which any Notes may be
subject to repurchase, or reduce the premium payable upon the redemption of any
Note or change the time at which any Note may be redeemed in accordance with
Article 3, or alter the provisions (including definitions) set forth in Section
4.16 in a manner adverse to the Holders;
(4) make any Notes payable in money or payable in a place other than that
stated in the Notes;
(5) make any change in Section 6.04 or Section 6.07 or the second sentence
of this Section;
(6) amend, modify, change or waive any provision of this Section 9.02;
(7) modify Articles Ten or Twelve or the definitions used in Articles Ten
or Twelve to adversely affect the Holders of the Notes; or
(8) make any change in any Subsidiary Guarantee that would adversely affect
the Holders.
It shall not be necessary for the consent of the Holders under this Section
to approve the particular form of any proposed amendment, supplement or waiver,
but it shall be sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders affected thereby a notice
briefly describing the amendment, supplement or waiver. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such amendment, supplement or waiver.
SECTION 1.82. Effect on Senior Indebtedness
No amendment of this Indenture shall adversely affect the rights of any
holder of Senior Indebtedness of the Company or any Restricted Subsidiary under
Article Ten or Twelve of this Indenture, without the consent of such holder (or
its Representative).
<PAGE>
73
SECTION 1.83. Compliance with TIA
If at the time of an amendment to the Indenture or the Notes, this
Indenture shall be qualified under the TIA, every amendment, waiver or
supplement of this Indenture or the Notes shall comply with the TIA as then in
effect.
SECTION 1.84. Revocation and Effect of Consents
Until an amendment, waiver or supplement becomes effective, a consent to it
by a Holder is a continuing consent by the Holder and every subsequent Holder of
a Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. Subject
to the following paragraph, any such Holder or subsequent Holder may revoke the
consent as to such Holder's Note or portion of such Note by notice to the
Trustee or the Company received before the date the amendment, supplement or
waiver becomes effective.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders furnished to the Trustee prior to such solicitation pursuant to Section
2.05 above or (ii) such other date as the Company may designate. If a record
date is fixed, then notwithstanding the last sentence of the immediately
preceding paragraph, those Persons who were Holders at such record date (or
their duly designated proxies), and only those Persons, shall be entitled to
revoke any consent previously given, whether or not such Persons continue to be
Holders after such record date. No such consent shall be valid or effective for
more than 180 days after such record date.
After an amendment, supplement or waiver becomes effective, it shall bind
every Holder, unless it makes a change described in any of clauses (1) through
(8) of Section 9.02, in which case, the amendment, supplement or waiver shall
bind only each Holder of a Note who has consented to it and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note; provided that, without the consent of a Holder, any
such waiver shall not impair or affect the right of such Holder to receive
payment of principal of and interest on a Note, on or after the respective due
dates expressed in such Note, or to bring suit for the enforcement of any such
payment on or after such respective dates.
<PAGE>
74
SECTION 1.85. Notation on or Exchange of Notes
If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Any such notation
or exchange shall be made at the sole cost and expense of the Company. Failure
to make the appropriate notation or to issue a new Note shall not affect the
validity of such amendment, supplement or waiver.
SECTION 1.86. Trustee To Sign Amendments, Etc
The Trustee shall execute any amendment, supplement or waiver authorized
pursuant to this Article Nine; provided that the Trustee may, but shall not be
obligated to, execute any such amendment, supplement or waiver which affects the
Trustee's own rights, duties or immunities under this Indenture. The Trustee
shall be entitled to receive, and shall be fully protected in relying upon, an
Opinion of Counsel and an Officers' Certificate each stating that the execution
of any amendment, supplement or waiver authorized pursuant to this Article Nine
is authorized or permitted by this Indenture. Such Opinion of Counsel shall not
be an expense of the Trustee.
SECTION 0.1. 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 Notes, unless such consideration is offered to be paid to all Holders
that so consent, waive or agree to amend in the time frame set forth in
solicitation documents relating to such consent, waiver or agreement.
<PAGE>
75
ARTICLE TEN
SUBORDINATION
SECTION 1.87. Notes Subordinated to Senior Indebtedness
The Company covenants and agrees, and each Holder of the Notes, by its
acceptance thereof, likewise covenants and agrees, that all Notes shall be
issued subject to the provisions of this Article Ten; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that the payment of all Obligations on the Notes by
the Company shall, to the extent and in the manner herein set forth, be
subordinated and junior in right of payment to the prior payment in full in cash
of all Senior Indebtedness of the Company; that the subordination is for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of the Company, and that each holder of Senior Indebtedness of the
Company whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired Senior Indebtedness of the Company
in reliance upon the covenants and provisions contained in this Indenture and
the Notes. Only Indebtedness of the Company that is Senior Indebtedness of the
Company will rank senior to the Notes in accordance with the provisions of the
Indenture. The Notes will in all respects rank pari passu with all other Senior
Subordinated Indebtedness of the Company. Unsecured Indebtedness is not deemed
to be subordinated or junior to secured Indebtedness merely because it is
unsecured. The terms of the subordination provisions described in this Article
Ten shall not apply to payments from money or the proceeds of U.S. Government
Obligations in trust by the Trustee for the payment of principal and interest on
the Notes pursuant to the provisions described in Article Eight unless such
payments were in violation of Designated Senior Indebtedness.
SECTION 1.88. No Payment on Notes in Certain Circumstances
(1) The Company may not, and no other Person on behalf of the Company may
pay principal of, premium (if any) or interest on the Notes or make any other
payments with respect to the Notes or make any deposit pursuant to the
provisions described under Article Eight above and may not repurchase, redeem or
otherwise retire any Notes (collectively, "pay the Notes") if (i) any amount of
principal, interest or other payments due under any Designated Senior
Indebtedness of the Company has not been paid when due beyond any applicable
grace period whether at maturity, upon redemption, by declaration or otherwise
<PAGE>
76
or (ii) any other default on Designated Senior Indebtedness of the Company
occurs and the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, the default has been cured or
waived in writing and any such acceleration has been rescinded or such
Designated Senior Indebtedness has been paid in full, after which the Company
shall resume making any and all required payments in respect of the Notes,
including any missed payments. However, the Company may pay the Notes 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 of the Company with respect to which either of the events set forth
in clause (i) or (ii) of the immediately preceding sentence has occurred and is
continuing, after which the Company shall resume making any and all required
payments in respect of the Notes, including any missed payments. During the
continuance of any default (other than a default described in clause (i) or (ii)
of the second preceding sentence) with respect to any Designated Senior
Indebtedness of the Company pursuant to which the maturity thereof may be
accelerated either immediately without further notice (except such notice as may
be required to effect such acceleration) or upon the expiration of any
applicable grace periods, the Company may not pay the Notes 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 the holders of such Designated Senior Indebtedness of
the Company specifying an election to effect a Payment Blockage Period and
ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (A) by written notice to the Trustee and the Company from the Person
or Persons who gave such Blockage Notice (solely as evidenced by written notice
to the Trustee by the Representative of such Designated Senior Indebtedness
which notice shall be promptly delivered), (B) because the default giving rise
to such Blockage Notice is no longer continuing or (C) because such Designated
Senior Indebtedness of the Company has been repaid in full). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this paragraph), unless the
holders of such Designated Senior Indebtedness of the Company or the
Representative of such holders has accelerated the maturity of such Designated
Senior Indebtedness of the Company, the Company may resume payments on the Notes
after the end of such Payment Blockage Period, including any missed payments.
The Notes shall not be subject to more than one Payment Blockage Period in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Designated Senior Indebtedness of the Company during such period. No default
which exists or was continuing on the date of commencement of any Blockage
Period with respect to the Designated Senior Indebtedness of the Company shall
be, or be made, the basis for the commencement of a second Blockage Period by
the Representative of such Designated Senior Indebtedness of the Company whether
or not within a period of 360 consecutive days unless such default shall have
been cured or waived in writing for a period of not less than 90 consecutive
days. (It being acknowledged that any subsequent action, or any breach of any
financial covenants for a period commencing after the date of commencement of
such Blockage Period that, in either case, would give rise to a default pursuant
to any provisions under which a default previously existed or was continuing
shall constitute a new default for this purpose).
<PAGE>
77
(2) If, notwithstanding the foregoing, any payment shall be received by the
Trustee or any Holder when such payment is prohibited by Section 10.02(a), such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Senior Indebtedness of the Company (pro rata
to such holders on the basis of the respective amount of such Senior
Indebtedness of the Company held by such holders) or their respective
Representatives, as their respective interests may appear. The Trustee shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Indebtedness of the Company, if any, received from the holders of Senior
Indebtedness of the Company (or their Representatives) or, if such information
is not received from such holders or their Representatives, from the Company and
only amounts included in the information provided to the Trustee shall be paid
to the holders of Senior Indebtedness of the Company.
The provisions of this Section shall not apply to any payment with respect
to which Section 10.03 would be applicable.
Nothing contained in this Article Ten shall limit the right of the Trustee
or the Holders of Notes to take any action to accelerate the maturity of the
Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder;
provided that all Senior Indebtedness of the Company thereafter due or declared
to be due shall first be paid in full in cash before the Holders are entitled to
receive any payment of any kind or character with respect to Obligations on the
Notes.
SECTION 1.89. Payment Over of Proceeds upon Dissolution, Etc
(1) Upon any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to creditors upon any
total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of the Company
or in a bankruptcy, reorganization, insolvency, receivership or other similar
proceeding relating to the Company or its property, whether voluntary or
involuntary, all Obligations due or to become due upon all Senior Indebtedness
of the Company shall first be paid in full in cash, or such payment duly
provided for to the satisfaction of the holders of Senior Indebtedness of the
Company, before any payment or distribution of any kind or character is made on
account of any Obligations on the Notes, or for the acquisition of any of the
Notes for cash or property or otherwise. Upon any total or partial liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of creditors
or marshaling of assets of the Company or in a bankruptcy, reorganization,
insolvency, receivership or other similar proceeding, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Notes or the Trustee under
this Indenture would be entitled, except for the provisions hereof, shall be
<PAGE>
78
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Holders or by the Trustee under this Indenture if received by them, directly to
the holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness of the Company held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
for application to the payment of Senior Indebtedness of the Company remaining
unpaid until all such Senior Indebtedness of the Company has been paid in full
in cash after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of Senior Indebtedness of the Company.
(2) To the extent any payment of Senior Indebtedness of the Company
(whether by or on behalf of the Company, as proceeds of security or enforcement
of any right of setoff or otherwise) is declared to be fraudulent or
preferential, set aside or required to be paid to any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person under any
bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the Senior
Indebtedness of the Company or part thereof originally intended to be satisfied
shall be deemed to be reinstated and outstanding as if such payment had not
occurred.
(3) If, notwithstanding the foregoing, any payment or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, shall be received by any Holder or the Trustee when such payment or
distribution is prohibited by this Section 10.03, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness of the Company (pro rata to such holders
on the basis of the respective amount of Senior Indebtedness of the Company held
by such holders) or their respective Representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
of the Company may have been issued, as their respective interests may appear,
for application to the payment of Senior Indebtedness of the Company remaining
unpaid until all such Senior Indebtedness of the Company has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness of the
Company.
(4) The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of all or substantially all of its
assets, to another corporation upon the terms and conditions provided in Article
Five hereof and as long as permitted under the terms of the Senior Indebtedness
of the Company shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section if such other corporation shall,
as a part of such consolidation, merger, conveyance or transfer, assume the
Company's obligations hereunder in accordance with Article Five hereof.
<PAGE>
79
SECTION 1.90. Payments May Be Paid Prior to Dissolution
Nothing contained in this Article Ten or elsewhere in this Indenture shall
prevent (i) the Company, except under the conditions described in Sections 10.02
and 10.03, from making payments at any time for the purpose of making payments
of principal of and interest on the Notes, or from depositing with the Trustee
any moneys for such payments, or (ii) in the absence of actual knowledge by the
Trustee that a given payment would be prohibited by Section 10.02 or 10.03, the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of, and interest on, the Notes to the Holders
entitled thereto unless at least two Business Days prior to the date upon which
such payment would otherwise become due and payable a Trust Officer shall have
actually received the written notice provided for in the third sentence of
Section 10.02(a) or in Section 10.07 (provided that, notwithstanding the
foregoing, such application shall otherwise be subject to the provisions of the
first sentence of Section 10.02(a), 10.02(b) and Section 10.03). The Company
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of the Company.
SECTION 1.91. Subrogation
Subject to the payment in full in cash of all Senior Indebtedness of the
Company, the Holders of the Notes shall be subrogated to the rights of the
holders of Senior Indebtedness of the Company to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness of the Company until the Notes shall be paid in full; and,
for the purposes of such subrogation, no such payments or distributions to the
holders of the Senior Indebtedness of the Company by or on behalf of the Company
or by or on behalf of the Holders by virtue of this Article Ten which otherwise
would have been made to the Holders shall, as between the Company and the
Holders of the Notes, be deemed to be a payment by the Company to or on account
of the Senior Indebtedness of the Company, it being understood that the
provisions of this Article Ten are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes, on the one hand, and
the holders of the Senior Indebtedness of the Company, on the other hand. If any
payment or distribution to which the Holders would otherwise have been entitled
but for the application of the provisions of this Article Ten, shall have been
applied, pursuant to the provisions of this Article Ten, to the payment of
amounts payable under Senior Indebtedness of the Company, then the Holders shall
be entitled to receive from the holders of such Senior Indebtedness any payments
or distributions received by such holders of Senior Indebtedness in excess of
the amount sufficient to pay all amounts payable under or in respect of such
Senior Indebtedness in full in cash.
<PAGE>
80
SECTION 1.92. Obligations of the Company Unconditional
Nothing contained in this Article Ten or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness of the Company, and the Holders,
the obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of and any interest on the Notes as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the Holders and creditors of the Company
other than the holders of the Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
SECTION 1.93. Notice to Trustee
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article Ten.
Regardless of anything to the contrary contained in this Article Ten or
elsewhere in this Indenture, the Trustee shall not be charged with knowledge of
the existence of any default or event of default with respect to any Senior
Indebtedness of the Company or of any other facts which would prohibit the
making of any payment to or by the Trustee unless and until the Trustee shall
have received notice in writing from the Company, or from a holder of Senior
Indebtedness of the Company or a Representative therefor and, prior to the
receipt of any such written notice, the Trustee shall be entitled to assume (in
the absence of actual knowledge to the contrary) that no such facts exist.
If the Trustee determines in good faith that any evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of the
Company to participate in any payment or distribution pursuant to this Article
Ten, the Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amounts of Senior Indebtedness of the
Company held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Ten, and if such evidence is not
furnished the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 1.94. Reliance on Judicial Order or Certificate of Liquidating
Agent
Upon any payment or distribution of assets of the Company referred to in
this Article Ten, the Trustee, subject to the provisions of Article Seven
hereof, and the Holders of the Notes shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization
<PAGE>
81
or similar case or proceeding is pending so long as such order gives effect to
the provisions of this Article 10, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit
of creditors, agent or other person making such payment or distribution,
delivered to the Trustee or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness of the Company and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Ten.
SECTION 1.95. Trustee's Relation to Senior Indebtedness
The Trustee and any agent of the Company or the Trustee shall be entitled
to all the rights set forth in this Article Ten with respect to any Senior
Indebtedness of the Company which may at any time be held by it in its
individual or any other capacity to the same extent as any other holder of
Senior Indebtedness of the Company and nothing in this Indenture shall deprive
the Trustee or any such agent of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Ten, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness of
the Company shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness of the Company.
Whenever a distribution is to be made or a notice given to holders or
owners of Senior Indebtedness of the Company, the distribution may be made and
the notice may be given to their Representative, if any.
SECTION 1.96. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness
No right of any present or future holders of any Senior Indebtedness of the
Company to enforce subordination as provided herein shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act, in good faith, by any such holder, or
by any noncompliance by the Company with the terms of this Indenture, regardless
of any knowledge thereof which any such holder may have or otherwise be charged
with.
<PAGE>
82
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee, without incurring
responsibility to the Trustee or the Holders of the Notes and without impairing
or releasing the subordination provided in this Article Ten or the obligations
hereunder of the Holders of the Notes to the holders of the Senior Indebtedness
of the Company, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness of the Company, or otherwise amend or supplement in any
manner Senior Indebtedness of the Company, or any instrument evidencing the same
or any agreement under which Senior Indebtedness of the Company is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing Senior Indebtedness of the Company; (iii)
release any Person liable in any manner for the payment or collection of Senior
Indebtedness of the Company; and (iv) exercise or refrain from exercising any
rights against the Company and any other Person.
SECTION 1.97. Noteholders Authorize Trustee To Effectuate Subordination of
Notes
Each Holder of Notes by its acceptance of them authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of Senior Indebtedness of the
Company and the Holders of Notes, the subordination provided in this Article
Ten, and appoints the Trustee its attorney-in-fact for such purposes, including,
in the event of any dissolution, winding-up, liquidation or reorganization of
the Company (whether in bankruptcy, insolvency, receivership, reorganization or
similar proceedings or upon an assignment for the benefit of creditors or
otherwise) tending towards liquidation of the business and assets of the
Company, the filing of a claim for the unpaid balance of its Notes and accrued
interest in the form required in those proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness of the
Company or their Representative are or is hereby authorized to have the right to
file and are or is hereby authorized to file an appropriate claim for and on
behalf of the Holders of said Notes. Nothing herein contained shall be deemed to
authorize the Trustee or the holders of Senior Indebtedness of the Company or
their Representative to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee or the holders of Senior Indebtedness of the Company or their
Representative to vote in respect of the claim of any Holder in any such
proceeding.
<PAGE>
83
SECTION 1.98. This Article Ten Not To Prevent Events of Default
The failure to make a payment on account of principal of or interest on the
Notes by reason of any provision of this Article Ten will not be construed as
preventing the occurrence of an Event of Default.
Nothing contained in this Article Ten shall limit the right of the Trustee
or the Holders to take any action or accelerate the maturity of the Notes
pursuant to Article Six or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this Article Ten of the
holders from time to time, of Senior Indebtedness of the Company.
SECTION 1.99. Trustee's Compensation Not Prejudiced
Nothing in this Article Ten will apply to amounts due to the Trustee
pursuant to other sections in this Indenture
SECTION 1.100. Acceleration of Payment of Notes
If payment of the Notes is accelerated because of an Event of Default, the
Company or the Trustee shall promptly notify the holders of Designated Senior
Indebtedness of the Company or the Representative of such holders of the
acceleration (in the case of the Trustee, only to the extent of its actual
knowledge of such holders or the Representative of such holders).
<PAGE>
84
ARTICLE ELEVEN
GUARANTEES
SECTION 1.101. Unconditional Guarantee
Each of the Subsidiary Guarantors hereby unconditionally jointly and
severally guarantees (such guarantee to be referred to herein as the "Subsidiary
Guarantee") to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, that: (i) the principal of
and interest on the Notes will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise and
interest on the overdue principal, if any, and interest on any interest, to the
extent lawful, of the Notes and all other obligations of the Company to the
Holders or the Trustee under the Indenture or the Notes will be promptly paid in
full or performed, all in accordance with the terms hereof and thereof; and (ii)
in case of any extension of time of payment or renewal of any Notes or of any
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, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise.
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor on one hand, and the Holders and the Trustee on the other hand, (x)
the maturity of the obligations guaranteed hereby may be accelerated as provided
in Article Six for the purposes of the Subsidiary Guaranty, notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect of
the obligations guaranteed hereby, and (y) in the event of any acceleration of
such obligations as provided in Article Six, such obligations (whether or not
due and payable) shall forthwith become due and payable by such Subsidiary
Guarantor for the purposes of the Subsidiary Guaranty.
Each of the Subsidiary Guarantors 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 provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each of the Subsidiary Guarantors hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that the Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes, this Indenture and in the
Subsidiary Guarantee. If any Noteholder or the Trustee is required by any court
or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or such
Subsidiary Guarantor to the Trustee or such Noteholder, the Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each of the Subsidiary Guarantors hereby agrees that, in the
event of default in the payment of principal (or premium, if any) or interest on
such Notes, whether at their Stated Maturity, by acceleration, called for
redemption, purchase or otherwise, legal proceedings may be instituted by the
Trustee on behalf of, or by, the Holder of such Notes, subject to the terms and
conditions set forth in this Indenture, directly against each of the Subsidiary
Guarantors to enforce the Subsidiary Guarantee without first proceeding against
<PAGE>
85
the Company. Each Subsidiary Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any Holders are
prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce any other right or remedy with respect to the Notes, the Subsidiary
Guarantors agree to pay to the Trustee for the account of the Holders, upon
demand therefor, the amount that would otherwise have been due and payable had
such rights and remedies been permitted to be exercised by the Trustee or any of
the Holders.
SECTION 1.102. Subordination of Subsidiary Guarantee
The obligations of each Subsidiary Guarantor to the Holders of the Notes
and to the Trustee pursuant to the Subsidiary Guarantee and this Indenture are
expressly subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness of such Subsidiary Guarantor, to the extent and
in the manner provided in Article Twelve.
SECTION 1.103. Severability
In case any provision of the Subsidiary Guarantee shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.104. Release of Subsidiary Guarantor from the Subsidiary
Guarantee
Upon the sale or disposition (whether by merger, stock purchase, asset sale
or otherwise) of a Subsidiary Guarantor (or all or substantially all of its
assets) to an entity which is not the Company or a Subsidiary or Affiliate of
the Company and which sale or disposition is otherwise in compliance with the
terms of this Indenture or pursuant to a foreclosure on the capital stock of
such Subsidiary Guarantor in accordance with the Credit Facility, such
Subsidiary Guarantor shall be deemed released from all obligations under this
Article Eleven without any further action required on the part of the Trustee or
any Holder.
The Trustee shall deliver an appropriate instrument evidencing such release
upon receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.04.
<PAGE>
86
SECTION 1.105. Limitation on Amount Guaranteed; Contribution by Subsidiary
Guarantors on Amount Guaranteed
(1) Anything contained in this Indenture or the Subsidiary Guaranty to the
contrary notwithstanding, if any Fraudulent Transfer Law (as hereinafter
defined) is determined by a court of competent jurisdiction to be applicable to
the obligations of any Subsidiary Guarantor under the Subsidiary Guarantee, such
obligations of such Subsidiary Guarantor under the Subsidiary Guarantee shall be
limited to a maximum aggregate amount equal to the largest amount that would not
render its obligations under the Subsidiary Guarantee subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of the United
States Code or any applicable provisions of comparable state law (collectively,
the "Fraudulent Transfer Laws"), in each case after giving effect to all other
liabilities of such Subsidiary Guarantor, contingent or otherwise, that are
relevant under the Fraudulent Transfer Laws (specifically excluding, however,
any liabilities of such Subsidiary Guarantor (x) in respect of intercompany
Indebtedness to Company or other Affiliates of Company to the extent that such
Indebtedness would be discharged in an amount equal to the amount paid by such
Subsidiary Guarantor under the Subsidiary Guaranty and (y) under any Guarantee
of Subordinated Indebtedness which Guarantee contains a limitation as to maximum
amount similar to that set forth in this subsection 11.05(a), pursuant to which
the liability of such Subsidiary Guarantor under the Subsidiary Guarantee is
included in the liabilities taken into account in determining such maximum
amount) and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation, reimbursement, indemnification or contribution of such Subsidiary
Guarantor pursuant to applicable law or pursuant to the terms of any agreement
(including without limitation any such right of contribution under subsection
11.05(b)).
(2) The Subsidiary Guarantors together desire to allocate among themselves
in a fair and equitable manner, their obligations arising under the Subsidiary
Guarantee. Accordingly, if any payment or distribution is made on any date by
any Subsidiary Guarantor under the Subsidiary Guarantee (a "Funding Subsidiary
Guarantor") that exceeds its Fair Share (as defined below) as of such date, that
Funding Subsidiary Guarantor shall be entitled to a contribution from each of
the other Subsidiary Guarantors in the amount of such other Subsidiary
Guarantor's Fair Share Shortfall (as defined below) as of such date, with the
result that all such contributions will cause each Subsidiary Guarantor's
Aggregate Payments (as defined below) to equal its Fair Share as of such date.
"Fair Share" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Subsidiary Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Subsidiary
Guarantors, multiplied by (ii) the aggregate amount paid or distributed on or
before such date by all Funding Subsidiary Guarantors under the Subsidiary
Guarantee in respect of the obligations guarantied. "Fair Share Shortfall"
means, with respect to a Subsidiary Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Subsidiary Guarantor over the
Aggregate Payments of such Subsidiary Guarantor. "Adjusted Maximum Amount"
<PAGE>
87
means, with respect to a Subsidiary Guarantor as of any date of determination,
the maximum aggregate amount of the obligations of such Subsidiary Guarantor
under the Subsidiary Guarantee, determined as of such date in accordance with
subsection 11.05(a); provided that, solely for purposes of calculating the
Adjusted Maximum Amount with respect to any Subsidiary Guarantor for purposes of
this subsection 11.05(b), any assets or liabilities of such Subsidiary Guarantor
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Subsidiary Guarantor. "Aggregate
Payments" means, with respect to a Subsidiary Guarantor as of any date of
determination, an amount equal to (i) the aggregate amount of all payments and
distributions made on or before such date by such Subsidiary Guarantor in
respect of the Subsidiary Guarantee (including, without limitation, in respect
of this subsection 11.05(b) minus (ii) the aggregate amount of all payments
received on or before such date by such Subsidiary Guarantor from the other
Subsidiary Guarantors as contributions under this subsection 11.05(b)). The
amounts payable as contributions hereunder shall be determined as of the date on
which the related payment or distribution is made by the applicable Funding
Subsidiary Guarantor. The allocation among Subsidiary Guarantors of their
obligations as set forth in this subsection 11.05(b) shall not be construed in
any way to limit the liability of any Subsidiary Guarantor under this Indenture
or under the Subsidiary Guaranty.
SECTION 1.106. Waiver of Subrogation
Until payment in full is made of the Notes and all other obligations of the
Company to the Holders or the Trustee hereunder and under the Notes, each
Subsidiary Guarantor hereby irrevocably waives any claim or other rights which
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of such Subsidiary Guarantor's
obligations under the Subsidiary Guarantee and this Indenture, including without
limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from the Company, directly or
indirectly, in cash or other property or by set-off or any other manner, payment
or security on account of such claim or other rights. If any amount shall be
paid to any Subsidiary Guarantor in violation of the preceding sentence and the
Notes shall not have been paid in full, such amount shall have been deemed to
have been paid to such Subsidiary Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Subsidiary Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by this
Indenture and that the waiver set forth in this Section 11.06 is knowingly made
in contemplation of such benefits.
<PAGE>
88
SECTION 1.107. Execution of Subsidiary Guarantee
To evidence its guarantee to the Noteholders set forth in this Article
Eleven, each Subsidiary Guarantor hereby agrees to execute the Subsidiary
Guarantee in substantially the form included in Exhibits A and Exhibit B, which
shall be endorsed on such Note ordered to be authenticated and delivered by the
Trustee. Each Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee
set forth in this Article Eleven shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of the Subsidiary
Guarantee. The Subsidiary Guarantee shall be signed on behalf of each Subsidiary
Guarantor by one Officer of such Subsidiary Guarantor (each of whom shall, in
each case, have been duly authorized by all requisite corporate actions) prior
to the authentication of the Note on which it is endorsed, and the delivery of
such Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of the Subsidiary Guarantee on behalf of such Subsidiary
Guarantor. Such signatures upon the Subsidiary Guarantee may be by manual or
facsimile signature of such officers and may be imprinted or otherwise
reproduced on the Subsidiary Guarantee, and in case any such Officer who shall
have signed the Subsidiary Guarantee shall cease to be such officer before the
Note on which the Subsidiary Guarantee is endorsed shall have been authenticated
and delivered by the Trustee or disposed of by the Company, such Note
nevertheless may be authenticated and delivered or disposed of as though the
person who signed the Subsidiary Guarantee had not ceased to be such Officer of
such Subsidiary Guarantor.
SECTION 1.108. Waiver of Stay, Extension or Usury Laws
Each Subsidiary Guarantor jointly and severally covenants (to the extent
that it may lawfully do so) that it will not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law that would prohibit or forgive such
Subsidiary Guarantor from performing the Subsidiary Guarantee as contemplated
herein, wherever enacted, now or at any time hereafter in force, or which may
affect the covenants or the performance of this Indenture; and (to the extent
that it may lawfully do so) each Subsidiary Guarantor hereby expressly waives
all benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 1.109. Effectiveness of Subsidiary Guarantee
The Subsidiary Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
<PAGE>
89
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such a payment
or performance had not been made. If any payments, or any part thereof, is
rescinded, reduced, restored or returned, the Notes shall, to the fullest extent
permitted by law, be reinstituted and deemed reduced only by such amount paid
and not so rescinded, reduced, restored or returned.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 1.110. Subsidiary Guarantee Obligations Subordinated to Senior
Indebtedness of Subsidiary Guarantors
Each Subsidiary Guarantor covenants and agrees, and each Holder of the
Notes, by its acceptance thereof, likewise covenants and agrees, that any
payment of obligations by each Subsidiary Guarantor in respect of the Subsidiary
Guarantee (its "Subsidiary Guarantee Obligations") shall be made subject to the
provisions of this Article Twelve, and each Person holding any Note, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees that the payment of all such Subsidiary Guarantor's Subsidiary
Guarantee Obligations shall, to the extent and in the manner herein set forth,
be subordinated and junior in right of payment to the prior payment in full in
cash of all Obligations in respect of such Subsidiary Guarantor's Senior
Indebtedness, including principal, premium (if any) or interest (including
post-petition interest) thereon, that the subordination is for the benefit of,
and shall be enforceable directly by, the holders of such Subsidiary Guarantor's
Senior Indebtedness, and that each holder of any Subsidiary Guarantor's Senior
Indebtedness whether now outstanding or hereafter created, incurred, assumed or
guaranteed shall be deemed to have acquired such Subsidiary Guarantor's Senior
Indebtedness in reliance upon the covenants and provisions contained in this
Indenture and the Notes. Only Indebtedness of a Subsidiary Guarantor that is
Senior Indebtedness of such Subsidiary Guarantor will rank senior to the
Subsidiary Guarantee of such Subsidiary Guarantor in accordance with the
provisions of the Indenture. A Subsidiary Guarantee will in all respects rank
<PAGE>
90
pari passu with all other Senior Subordinated Indebtedness of the Subsidiary
Guarantor to which it relates. Unsecured Indebtedness is not deemed to be
subordinated or junior to secured Indebtedness merely because it is unsecured.
SECTION 1.111. No Payment on Notes in Certain Circumstances.
(1) No Subsidiary Guarantor may, and no other Person on behalf of such
Subsidiary Guarantor may, make any payment with respect to the Subsidiary
Guarantee or make any deposit pursuant to Article Eight above (collectively,
"pay the Subsidiary Guarantee") if (i) any amount of principal, interest or
other payments due under any Designated Senior Indebtedness of such Subsidiary
Guarantor or the Company has not been paid when due beyond any applicable grace
period whether at maturity, upon redemption, by declaration or otherwise or (ii)
any other default on Designated Senior Indebtedness of such Subsidiary Guarantor
or the Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, the default has
been cured or waived in writing and any such acceleration has been rescinded or
such Designated Senior Indebtedness has been paid in full, after which such
Subsidiary Guarantor shall resume making any and all required payments in
respect of the Subsidiary Guaranty, including any missed payments. However, a
Subsidiary Guarantor may pay the Subsidiary Guarantee without regard to the
foregoing if such Subsidiary Guarantor and the Trustee receive written notice
approving such payment from the Representative of the Designated Senior
Indebtedness guaranteed by such Subsidiary Guarantor with respect to which
either of the events set forth in clause (i) or (ii) of the immediately
preceding sentence has occurred and is continuing, after which such Subsidiary
Guarantor shall resume making any and all required payments in respect of the
Subsidiary Guaranty, including any missed payments. During the continuance of
any default (other than a default described in clause (i) or (ii) of the second
preceding sentence) with respect to any Designated Senior Indebtedness of a
Subsidiary Guarantor or the Company pursuant to which the maturity thereof may
be accelerated either immediately without further notice (except such notice as
may be required to effect such acceleration) or upon the expiration of any
applicable grace periods, such Subsidiary Guarantor may not pay the Subsidiary
Guarantee for a period (a "Payment Blockage Period") commencing upon the receipt
by the Trustee (with a copy to such Subsidiary Guarantor) of written notice (a
"Blockage Notice") of such default from the Representative of the holders of
such Designated Senior Indebtedness of such Subsidiary Guarantor or the Company
specifying an election to effect a Payment Blockage Period and ending 179 days
thereafter (or earlier if such Payment Blockage Period is terminated (A) by
written notice to the Trustee and such Subsidiary Guarantor from the Person or
Persons who gave such Blockage Notice (solely as evidenced by written notice to
the Trustee by the Representative of such Designated Senior Indebtedness which
notice shall be promptly delivered), (B) because the default giving rise to such
Blockage Notice is no longer continuing or (C) because such Designated Senior
Indebtedness of such Subsidiary Guarantor and the related Designated Senior
Indebtedness of the Company has been repaid in full). Notwithstanding the
<PAGE>
91
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this paragraph), unless the
holders of such Designated Senior Indebtedness of such Subsidiary Guarantor or
the Company or the Representative of such holders has accelerated the maturity
of such Designated Senior Indebtedness of such Subsidiary Guarantor or the
Company, such Subsidiary Guarantor may resume payments on the Subsidiary
Guarantee after the end of such Payment Blockage Period including any missed
payments. The Subsidiary Guarantee shall not be subject to more than one Payment
Blockage Period in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness guaranteed by such
Subsidiary Guarantor during such period. No default which exists or was
continuing on the date of commencement of any Blockage Period with respect to
the Designated Senior Indebtedness of a Subsidiary Guarantor or the Company
under this Section 12.02 shall be, or shall be made, the basis for the
commencement of a second Blockage Period by the Representative of such
Designated Senior Indebtedness of such Subsidiary Guarantor whether or not
within a period of 360 consecutive days unless such default shall have been
cured or waived in writing for a period of not less than 90 consecutive days (it
being acknowledged that any subsequent action, or any breach of any financial
covenants for a period commencing after the date of commencement of such
Blockage Period that, in either case, would give rise to a default pursuant to
any provisions under which a default previously existed or was continuing shall
constitute a new default for this purpose).
(2) If, notwithstanding the foregoing, any payment shall be received by the
Trustee or any Holder when such payment is prohibited by Section 12.02(a), such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of such Subsidiary Guarantor's Senior Indebtedness
(pro rata to such holders on the basis of the respective amount of such
Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, as their respective interests may appear. The
Trustee shall be entitled to rely on information regarding amounts then due and
owing on such Subsidiary Guarantor's Senior Indebtedness, if any, received from
the holders of such Subsidiary Guarantor's Senior Indebtedness (or their
Representatives) or, if such information is not received from such holders or
their Representatives, from such Subsidiary Guarantor and only amounts included
in the information provided to the Trustee shall be paid to the holders of such
Subsidiary Guarantor's Senior Indebtedness.
The provisions of this Section shall not apply to any payment with respect
to which Section 12.03 would be applicable.
Nothing contained in this Article Twelve shall limit the right of the
Trustee or the Holders of Notes to take any action to accelerate the maturity of
the Notes pursuant to Section 6.02 or to pursue any rights or remedies
hereunder; provided that all Senior Indebtedness of the Company thereafter due
or declared to be due shall first be paid in full in cash or before the Holders
are entitled to receive any payment of any kind or character with respect to
Obligations on the Notes.
<PAGE>
92
SECTION 1.112. Payment Over of Proceeds upon Dissolution, Etc
(1) Upon any payment or distribution of assets of any Subsidiary Guarantor
of any kind or character, whether in cash, property or securities, to creditors
upon any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets of such
Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to such Subsidiary Guarantor
or its property, whether voluntary or involuntary, all Obligations due or to
become due upon all of such Subsidiary Guarantor's Senior Indebtedness shall
first be paid in full in cash, or such payment duly provided for to the
satisfaction of the holders of such Subsidiary Guarantor's Senior Indebtedness,
before any payment or distribution of any kind or character is made on account
of any Obligations with respect to the Subsidiary Guarantee of such Subsidiary
Guarantor, or for the acquisition of such Subsidiary Guarantee for cash or
property or otherwise. Upon any such total or partial liquidation, dissolution,
winding-up, reorganization, assignment for the benefit of creditors or
marshaling of assets of such Subsidiary Guarantor or in a bankruptcy,
reorganization, insolvency, receivership or other similar proceeding, any
payment or distribution of assets of such Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Notes or the Trustee under this Indenture would be entitled, except for the
provisions hereof, shall be paid by such Subsidiary Guarantor or by any
receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them, directly to the holders of such Subsidiary
Guarantor's Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Subsidiary Guarantor's Senior Indebtedness held by
such holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Subsidiary Guarantor's Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of such Subsidiary Guarantor's Senior Indebtedness
remaining unpaid until all such Subsidiary Guarantor's Senior Indebtedness has
been paid in full in cash after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Subsidiary
Guarantor's Senior Indebtedness.
(1)
(2) To the extent any payment of any Subsidiary Guarantor's Senior
Indebtedness (whether by or on behalf of such Subsidiary Guarantor, as proceeds
of security or enforcement of any right of setoff or otherwise) is declared to
be fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person under
any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, such
Subsidiary Guarantor's Senior Indebtedness or part thereof originally intended
to be satisfied shall be deemed to be reinstated and outstanding as if such
payment had not occurred.
<PAGE>
93
(3) If, notwithstanding the foregoing, any payment or distribution of
assets of any Subsidiary Guarantor of any kind or character, whether in cash,
property or securities, shall be received by any Holder or the Trustee when such
payment or distribution is prohibited by this Section 12.03, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of such Subsidiary Guarantor's Senior Indebtedness
(pro rata to such holders on the basis of the respective amount of such
Subsidiary Guarantor's Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Subsidiary Guarantor's Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of such Subsidiary Guarantor's Senior Indebtedness remaining unpaid
until all such Subsidiary Guarantor's Senior Indebtedness has been paid in full
in cash, after giving effect to any concurrent payment, distribution or
provision therefor to or for the holders of such Subsidiary Guarantor's Senior
Indebtedness.
(4) The consolidation of any Subsidiary Guarantor with, or the merger of
any Subsidiary Guarantor with or into, another corporation or the liquidation or
dissolution of any Subsidiary Guarantor following the conveyance or transfer of
all or substantially all of its assets, to another corporation upon the terms
and conditions provided in Article Five hereof and as long as permitted under
the terms of such Subsidiary Guarantor's Senior Indebtedness shall not be deemed
a dissolution, winding-up, liquidation or reorganization for the purposes of
this Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, assume such Subsidiary Guarantor's obligations
hereunder in accordance with Article Five hereof.
SECTION 1.113. Payments May Be Paid Prior to Dissolution
Nothing contained in this Article Twelve or elsewhere in this Indenture
shall prevent (i) any Subsidiary Guarantor, except under the conditions
described in Sections 12.02 and 12.03, from making payments at any time for the
purpose of making payments in respect of this Subsidiary Guarantee, or from
depositing with the Trustee any moneys for such payments, or (ii) in the absence
of actual knowledge by the Trustee that a given payment would be prohibited by
Section 12.02 or 12.03, the application by the Trustee of any moneys deposited
with it for the purpose of making such payments to the Holders entitled thereto
unless at least two Business Days prior to the date upon which such payment
would otherwise become due and payable a Trust Officer shall have actually
received the written notice provided for in the third sentence of Section
12.02(a) or in Section 12.07 (provided that, notwithstanding the foregoing, such
application shall otherwise be subject to the provisions of the first sentence
of Section 12.02(a), 12.02(b) and Section 12.03). Each Subsidiary Guarantor
shall give prompt written notice to the Trustee of any dissolution, winding-up,
liquidation or reorganization of such Subsidiary Guarantor.
<PAGE>
94
SECTION 1.114. Subrogation
Subject to the payment in full in cash of all Subsidiary Guarantor Senior
Indebtedness, the Holders of the Obligations of any Subsidiary Guarantor shall
be subrogated to the rights of the holders of such Subsidiary Guarantor's Senior
Indebtedness to receive payments or distributions of cash, property or
securities of such Subsidiary Guarantor applicable to such Subsidiary
Guarantor's Senior Indebtedness until the Obligations of such Subsidiary
Guarantor under the Subsidiary Guarantee shall be paid in full; and, for the
purposes of such subrogation, no such payments or distributions to the holders
of such Subsidiary Guarantor's Senior Indebtedness by or on behalf of such
Subsidiary Guarantor or by or on behalf of the Holders by virtue of this Article
Twelve which otherwise would have been made to the Holders shall, as between
such Subsidiary Guarantor and the Holders of such Subsidiary Guarantor's
Obligations, be deemed to be a payment by such Subsidiary Guarantor to or on
account of such Subsidiary Guarantor's Senior Indebtedness, it being understood
that the provisions of this Article Twelve are and are intended solely for the
purpose of defining the relative rights of the Holders of such Subsidiary
Guarantor's Obligations, on the one hand, and the holders of such Subsidiary
Guarantor's Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders would otherwise have
been entitled but for the application of the provisions of this Article Twelve
shall have been applied, pursuant to the provisions of this Article Twelve, to
the payment of amounts payable under Senior Indebtedness of any Subsidiary
Guarantor, then the Holders shall be entitled to receive from the holders of
such Senior Indebtedness any payments or distributions received by such holders
of Senior Indebtedness in excess of the amount sufficient to pay all amounts
payable under or in respect of such Senior Indebtedness in full in cash.
SECTION 1.115. Obligations of Subsidiary Guarantor Unconditional
Nothing contained in this Article Twelve or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Subsidiary Guarantors,
their respective creditors other than the holders of such Subsidiary Guarantor's
Senior Indebtedness, and the Holders, the obligation of such Subsidiary
Guarantor, which is absolute and unconditional, to pay to the Holders the
Subsidiary Guarantee Obligations as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders and creditors of such Subsidiary Guarantor other
than the holders of such Subsidiary Guarantor's Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Note or the Trustee on its
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, in respect of cash,
property or securities of such Subsidiary Guarantor received upon the exercise
of any such remedy.
<PAGE>
95
SECTION 1.116. Notice to Trustee
Each Subsidiary Guarantor shall give prompt written notice to the Trustee
of any fact known to such Subsidiary Guarantor which would prohibit the making
of any payment to or by the Trustee in respect of the Subsidiary Guarantee or
the Notes pursuant to the provisions of this Article Twelve. Regardless of
anything to the contrary contained in this Article Twelve or elsewhere in this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any default or event of default with respect to any Subsidiary Guarantor's
Senior Indebtedness or of any other facts which would prohibit the making of any
payment to or by the Trustee unless and until the Trustee shall have received
notice in writing from such Subsidiary Guarantor or from a holder of such
Subsidiary Guarantor's Senior Indebtedness or a Representative therefor, and,
prior to the receipt of any such written notice, the Trustee shall be entitled
to assume (in the absence of actual knowledge to the contrary) that no such
facts exist.
If the Trustee determines in good faith that any evidence is required with
respect to the right of any Person as a holder of such Subsidiary Guarantor's
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Twelve, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amounts of such Subsidiary
Guarantor's Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, and if
such evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 1.117. Reliance on Judicial Order or Certificate of Liquidating
Agent
Upon any payment or distribution of assets of any Subsidiary Guarantor
referred to in this Article Twelve, the Trustee, subject to the provisions of
Article Seven hereof, and the Holders of the Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending so long as such order
gives effect to the provisions of this Article Twelve, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, receiver, assignee for
the benefit of creditors, agent or other person making such payment or
distribution, delivered to the Trustee or the Holders of the Notes, for the
purpose of ascertaining the persons entitled to participate in such payment or
distribution, the holders of each Subsidiary Guarantor's Senior Indebtedness and
other Indebtedness of any Subsidiary Guarantor, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article Twelve.
<PAGE>
96
SECTION 1.118. Trustee's Relation to Subsidiary Guarantor's Senior
Indebtedness
The Trustee, any agent of the Trustee and any agent of any Subsidiary
Guarantor shall be entitled to all the rights set forth in this Article Twelve
with respect to the respective Subsidiary Guarantor's Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of the respective Subsidiary Guarantor's Senior
Indebtedness and nothing in this Indenture shall deprive the Trustee or any such
agent of any of its rights as such holder.
With respect to the holders of the respective Subsidiary Guarantor's Senior
Indebtedness, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article Twelve,
and no implied covenants or obligations with respect to the holders of the
respective Subsidiary Guarantor's 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 any Subsidiary Guarantor's Senior Indebtedness.
Whenever a distribution is to be made or a notice given to holders or
owners of any Subsidiary Guarantor's Senior Indebtedness, the distribution may
be made and the notice may be given to their Representative, if any.
SECTION 1.119. Subordination Rights Not Impaired by Acts or Omissions of
Subsidiary Guarantors or Holders of Subsidiary Guarantors' Senior
Indebtedness
No right of any present or future holders of any Subsidiary Guarantor's
Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of such Subsidiary Guarantor or by any act or failure to act, in good
faith, by any such holder, or by any noncompliance by such Subsidiary Guarantor
with the terms of this Indenture, regardless of any knowledge thereof which any
such holder may have or otherwise be charged with.
<PAGE>
97
Without in any way limiting the generality of the foregoing paragraph, the
holders of any Subsidiary Guarantor's Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Trustee, without
incurring responsibility to the Trustee or the Holders of the Notes and without
impairing or releasing the subordination provided in this Article Twelve or the
obligations hereunder of the Holders of the Notes to the holders of such
Subsidiary Guarantor's Senior Indebtedness, do any one or more of the following:
(i) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, such Subsidiary Guarantor's Senior Indebtedness, or
otherwise amend or supplement in any manner such Subsidiary Guarantor's Senior
Indebtedness, or any instrument evidencing the same or any agreement under which
such Subsidiary Guarantor's Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Subsidiary Guarantor's Senior Indebtedness; (iii)
release any Person liable in any manner for the payment or collection of such
Subsidiary Guarantor's Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against such Subsidiary Guarantor and any other Person.
SECTION 1.120. Noteholders Authorize Trustee To Effectuate Subordination of
Notes
Each Holder of Notes by its acceptance of them authorizes and expressly
directs the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate, as between the holders of each Subsidiary Guarantor's
Senior Indebtedness and the Holders of Notes, the subordination provided in this
Article Twelve, and appoints the Trustee its attorney-in-fact for such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of such Subsidiary Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Subsidiary Guarantor, the filing of a claim for the
unpaid balance of its Notes and accrued interest in the form required in those
proceedings.
If the Trustee does not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of each Subsidiary Guarantor's
Senior Indebtedness or their Representative are or is hereby authorized to have
the right to file and are or is hereby authorized to file an appropriate claim
for and on behalf of the Holders of said Notes. Nothing herein contained shall
be deemed to authorize the Trustee or the holders of any Subsidiary Guarantor's
Senior Indebtedness or their respective Representatives to authorize or consent
to or accept or adopt on behalf of any Holder any plan of reorganization,
arrangement, adjustment or composition affecting the Notes or the rights of any
Holder thereof, or to authorize the Trustee or the holders of any Subsidiary
Guarantor's Senior Indebtedness or their Representatives to vote in respect of
the claim of any Holder in any such proceeding.
<PAGE>
98
SECTION 1.121. This Article Twelve Not To Prevent Events of Default
The failure to make a payment on account of Obligations of any Subsidiary
Guarantor by reason of any provision of this Article Twelve will not be
construed as preventing the occurrence of an Event of Default. Nothing contained
in this Article Twelve shall limit the right of the Trustee or the Holders to
take any action or accelerate the maturity of the Notes pursuant to Article Six
or to pursue any rights or remedies hereunder or under applicable law, subject
to the rights, if any, under this Article Twelve of the holders from time to
time, of Senior Indebtedness of any Subsidiary Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 1.122. TIA Controls
If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 1.123. Notices
Any notices or other communications required or permitted hereunder shall
be in writing, and shall be sufficiently given if made by hand delivery, by
commercial courier service, by telex, by telecopier or registered or certified
mail, postage prepaid, return receipt requested, addressed as follows:
if to the Company or any Subsidiary Guarantor:
Terex Corporation
500 Post Road East
Westport, CT 06880
Facsimile No.: (203) 227-1647
Telephone: (203) 222-7170
Attn: Eric I Cohen
<PAGE>
99
with a copy to:
Robinson, Silverman, Pearce Aronsohn
& Berman LLP
1290 Avenue of the Americas
New York, NY 10104
Facsimile No.: (212) 541-1360
Telephone: (212) 541-2000
Attn: Stuart A. Gordon, Esq.
<PAGE>
if to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Facsimile No.: (212) 852-1625
Telephone No.: (212) 852-1000
Attn: Corporate Trust Department
if to the Senior Credit Facility Representative:
Credit Suisse First Boston
Eleven Madison Avenue - 20th Floor
New York, NY 10010
Facsimile No.: (212) 325-8304
Telephone No.: (212) 325-2000
Attn: Syndication/Agency Department
Each of the Company, the Subsidiary Guarantors, the Trustee, and the Senior
Credit Facility Representative by written notice to each other such Person may
designate additional or different addresses for notices to such Person. Any
notice or communication to the Company, the Subsidiary Guarantors, the Trustee
and the Senior Credit Facility Representative shall be deemed to have been given
or made as of the date so delivered if personally delivered; when receipt is
confirmed if delivered by commercial courier service; when receipt is
acknowledged, if faxed; and five (5) calendar days after mailing if sent by
registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to him by
first class mail or other equivalent means at his address as it appears on the
registration books of the Registrar and shall be sufficiently given to him if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it
shall not affect its sufficiency with respect to other Holders. If a notice or
<PAGE>
100
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 1.124. Communications by Holders with Other Holders
Holders may communicate pursuant to the TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Subsidiary Guarantors, the Trustee, the Registrar and any other Person shall
have the protection of the TIA ss. 312(c).
SECTION 1.125. 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 Officers' Certificate, in form and substance satisfactory to the
Trustee, stating that, in the opinion of the signers, all conditions precedent
to be performed by the Company, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such counsel, all
such conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with.
SECTION 1.126. Statements Required in Certificate or Opinion
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.06, shall include:
(1) a statement that the Person making such certificate or opinion has read
such covenant or condition and the definitions relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
<PAGE>
101
(3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is reasonably necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of each such Person,
such condition or covenant has been complied with;
provided, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or a certificate of an appropriate public
official.
SECTION 1.127. Rules by Trustee, Paying Agent, Registrar
The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.
SECTION 1.128. Legal Holidays
A "Legal Holiday" used with respect to a particular place of payment is a
Saturday, a Sunday or a day on which banking institutions in New York, New York
or at such place of payment are not required to be open. If a payment date is a
Legal Holiday at such place, payment may be made at such place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 1.129. Governing Law
THIS INDENTURE AND THE NOTES (AND THE SUBSIDIARY GUARANTEES RELATING
THERETO) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. EACH OF THE
PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE.
<PAGE>
102
SECTION 1.130. No Adverse Interpretation of Other Agreements
This Indenture may not be used to interpret another indenture, loan or debt
agreement of the Company or any of its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 1.131. No Recourse Against Others
No past, present or future director, officer, employee, stockholder or
incorporator, as such, of the Company, any Subsidiary Guarantor or of the
Trustee shall have any liability for any obligations of the Company under the
Notes or this Indenture or for any claim based on, in respect of or by reason of
such obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of the Notes.
SECTION 1.132. Successors
All agreements of the Company and the Subsidiary Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
SECTION 1.133. Duplicate Originals
All parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together shall represent the same
agreement.
SECTION 1.134. Severability
In case any one or more of the provisions in this Indenture or in the Notes
shall be held invalid, illegal or unenforceable, in any respect for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions shall not in any way be affected or
impaired thereby, it being intended that all of the provisions hereof shall be
enforceable to the full extent permitted by law.
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 of provisions hereof.
<PAGE>
103
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the date first written above.
Issuer:
TEREX CORPORATION
By:------------------------------
Name:
Title:
Subsidiary Guarantors:
KOEHRING CRANES, INC.
By:-----------------------------
Name:
Title:
M&M ENTERPRISES OF BARAGA, INC.
By:-----------------------------
Name:
Title:
PAYHAULER CORP.
By:-----------------------------
Name:
Title:
<PAGE>
104
PPM CRANES, INC.
By:-----------------------------
Name:
Title:
TEREX AERIALS, INC.
By:-----------------------------
Name:
Title:
TEREX BARAGA PRODUCTS, INC.
By:----------------------------
Name:
Title:
TEREX CRANES, INC.
By:----------------------------
Name:
Title:
TEREX MINING EQUIPMENT, INC.
By:----------------------------
Name:
Title:
<PAGE>
105
TEREX-RO CORPORATION
By:-----------------------------
Name:
Title:
TEREX-TELELECT, INC.
By:-----------------------------
Name:
Title:
<PAGE>
106
Trustee:
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:--------------------------------
Name:
Title:
<PAGE>
I
RULE 144A/REGULATION S APPENDIX
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT
TO RULE 144A AND TO CERTAIN PERSONS IN OFFSHORE
TRANSACTIONS IN RELIANCE ON REGULATION S
PROVISIONS RELATING TO INITIAL NOTES,
PRIVATE EXCHANGE NOTES
AND EXCHANGE NOTES
1. Definitions.
1.1 Definitions.
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Depositary" means The Depository Trust Company, its nominees and their
respective successors and assigns.
"Exchange Notes" means the 8-7/8% Senior Subordinated Exchange Notes Due
2008 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Rights Agreement.
"Initial Purchasers" means Credit Suisse First Boston Corporation, CIBC
Oppenheimer Corp., Salomon Brothers Inc, BancBoston Securities, Inc. and Morgan
Stanley & Co. Incorporated.
"Initial Notes" means the 8-7/8%Senior Subordinated Notes Due 2008, issued
under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Notes held by the Initial
Purchaser as part of its initial distribution, a like aggregate principal amount
of Private Exchange Notes.
"Private Exchange Notes" means the 8-7/8% Senior Subordinated Private
Exchange Notes Due 2008, if any, to be issued pursuant to this Indenture to the
Initial Purchasers in a Private Exchange.
"Purchase Agreement" means the Purchase Agreement dated March 24, 1998,
among the Company, the Subsidiary Guarantors and the Initial Purchasers.
<PAGE>
II
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Notes, to issue and
deliver to such Holders, in exchange for the Initial Notes, a like aggregate
principal amount of Exchange Notes registered under the Securities Act.
"Registration Rights Agreement" means the Registration Rights Agreement
dated March 31, 1998 among the Company, the Subsidiary Guarantors and the
Initial Purchasers.
"Securities" means the Initial Notes, the Exchange Notes and the Private
Exchange Notes, treated as a single class.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the shelf registration statement
issued by the Company, in connection with the offer and sale of Initial Notes or
Private Exchange Notes, pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Securities that bear or are required
to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions
Term Defined in Section:
"Agent Members".......................................... 2.1(b)
"Global Security"........................................ 2.1(a)
"Regulation S"........................................... 2.1(a)
"Rule 144A".............................................. 2.1(a)
2. The Securities.
2.1 Form and Dating.
<PAGE>
III
The Initial Notes are being offered and sold by the Company pursuant to the
Purchase Agreement.
(a) Global Securities. Initial Notes offered and sold to a QIB in reliance
on Rule 144A under the Securities Act ("Rule 144A") or in reliance on Regulation
S under the Securities Act ("Regulation S"), in each case as provided in the
Purchase Agreement, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Global Security"), which shall be
deposited on behalf of the purchasers of the Initial Notes represented thereby
with the Trustee as custodian for the Depositary (or with such other custodian
as the Depositary may direct), and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global
Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b), authenticate and deliver initially one or more Global Securities
that (a) shall be registered in the name of the Depositary for such Global
Security or Global Securities or the nominee of such Depositary and (b) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions or held by the Trustee as custodian for the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any Global Security held on their
behalf by the Depositary or by the Trustee as the custodian of the Depositary or
under such Global Security, and the Depositary may be treated by the Company,
the Trustee and any agent of the Company or the Trustee as the absolute owner of
such Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1 or
Section 2.3 or 2.4 of this Appendix, owners of beneficial interests in Global
Securities will not be entitled to receive physical delivery of certificated
Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) Initial
Notes for original issue in an aggregate principal amount of $150.0 million and
(2) Exchange Notes or Private Exchange Notes for issue only in a Registered
Exchange Offer or a Private Exchange, respectively, pursuant to the Registration
<PAGE>
IV
Rights Agreement, for a like principal amount of Initial Notes, 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. Such
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 Notes, Exchange Notes or Private
Exchange Notes. The aggregate principal amount of Securities outstanding at any
time may not exceed $150.0 million except as provided in Section 2.7 of this
Indenture.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in
accordance with this Indenture (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the
Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver to the Registrar a written order given in
accordance with the Depositary's procedures containing information
regarding the participant account of the Depositary to be credited
with a beneficial interest in the Global Security. The Registrar
shall, in accordance with such instructions instruct the Depositary to
credit to the account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the account of
the Person making the transfer the beneficial interest in the Global
Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix
(other than the provisions set forth in Section 2.4 of this Appendix),
a Global Security may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by
the Depositary or any such nominee to a successor Depositary or a
nominee of such successor Depositary.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of
this Appendix or Section 2.10 of this Indenture, prior to the
consummation of a Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such Securities, such
Securities may be exchanged only in accordance with such procedures as
are substantially consistent with the provisions of this Section 2.3
(including the certification requirements set forth on the reverse of
the Initial Notes intended to ensure that such transfers comply with
Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
<PAGE>
V
(b) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Security certificate evidencing the Global
Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
"THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER
THAT (A) THIS NOTE MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (i) INSIDE THE UNITED STATES TO A PERSON WHOM
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, (ii)
OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (iii) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED
BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH OF CASES (i) THROUGH (iv) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES,
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE
RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Security (including any Transfer Restricted Security represented by a
Global Security) pursuant to Rule 144 under the Securities Act, the
Registrar shall permit the Holder thereof to exchange such Transfer
Restricted Security for a certificated Security that does not bear the
legend set forth above and rescind any restriction on the transfer of
such Transfer Restricted Security, if the Holder certifies in writing
to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on
the reverse of the Security).
<PAGE>
VI
(iii) After a transfer of any Initial Notes or Private
Exchange Notes during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial Notes or Private
Exchange Notes, as the case may be, all requirements pertaining to
legends on such Initial Notes or such Private Exchange Notes will cease
to apply, but the requirements requiring such Initial Notes or such
Private Exchange Notes issued to certain Holders be issued in global
form will continue to apply, and Initial Notes or Private Exchange
Notes in global form without legends will be available to the
transferee of the Holder of such Initial Notes or Private Exchange
Notes upon exchange of such transferring Holder's Initial Notes or
Private Exchange Notes or directions to transfer such Holder's interest
in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Notes pursuant to which Holders of such Initial
Notes are offered Exchange Notes in exchange for their Initial Notes,
all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will continue to
apply and Initial Notes in global form with the restricted securities
legend set forth in Exhibit 1 hereto will be available to Holders of
such Initial Notes that do not exchange their Initial Notes, and
Exchange Notes in global form without the restricted securities legend
set forth in Exhibit 1 hereto will be available to Holders that
exchange such Initial Notes in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect
to the Initial Notes pursuant to which Holders of such Initial Notes
are offered Private Exchange Notes in exchange for their Initial Notes,
all requirements pertaining to such Initial Notes that Initial Notes
issued to certain Holders be issued in global form will still apply,
and Private Exchange Notes in global form with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders that exchange such Initial Notes in such Private Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global
Security shall be returned to the Depositary for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated
Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is
then the Securities Custodian for such Global Security) with respect to
such Global Security, by the Trustee or the Securities Custodian, to
reflect such reduction.
<PAGE>
VII
(d) Obligations with Respect to Transfers and Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate certificated
Securities and Global Securities at the Registrar's or any
co-registrar's request.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connection therewith (other than any
such transfer taxes, assessments or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 4.16, 4.17
and Section 9.06 of this Indenture).
(iii) The Registrar or any co-registrar shall not be required
to register the transfer of or exchange of (a) any certificated
Security selected for redemption in whole or in part pursuant to
Article III of this Indenture, except the unredeemed portion of any
certificated Security being redeemed in part, or (b) any Security for a
period beginning 15 Business Days before the mailing of a notice of an
offer to repurchase or redeem Securities or 15 Business Days before an
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, 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 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.
(e) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to
any beneficial owner of a Global Security, a member of, or a
participant in the Depositary or other Person with respect to the
accuracy of the records of the Depositary 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 Depositary) of
any notice (including any notice of redemption) or the payment of any
amount, under or with respect to such Securities. All notices and
communications to be given to the Holders and all payments to be made
<PAGE>
VIII
to Holders under the Securities shall be given or made only to or upon
the order of the registered Holders (which shall be the Depositary 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
Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depositary 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 Indenture or under applicable law with respect to
any transfer of any interest in any Security (including any transfers
between or among Depositary 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.
2.4 Certificated Securities,
(a) A Global Security deposited with the Depositary or with
the Trustee as custodian for the Depositary pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depositary
to the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount of certificated Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Note delivered in exchange for an interest in the
Global Security shall, except as otherwise provided by Section 2.3(b), bear the
restricted securities legend set forth in Exhibit 1 hereto.
<PAGE>
IX
(c) Subject to the provisions of Section 2.4(b), 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.
(d) In the event of the occurrence of either of the events
specified in Section 2.4(a) above, the Company will promptly make available to
the Trustee a reasonable supply of certificated Securities in definitive, fully
registered form without interest coupons.
<PAGE>
X
EXHIBIT 1
TO RULE 144A/REGULATION S
APPENDIX
[Global Securities Legend]
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 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 THIS INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT
FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF
THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
<PAGE>
XI
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) THIS NOTE
MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i) INSIDE THE
UNITED STATES TO A PERSON WHOM 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, (ii) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(iii) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (iv) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (i) THROUGH
(iv) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
<PAGE>
XII
[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:
Date of Exchange Amount of decrease Amount of increase
in Principal Amount in Principal Amount
of this Global of this Global
Security Security
Principal Amount of this Signature of
Global Security authorized officer
following such decrease of Trustee or Securities
or increase Securities Custodian
<PAGE>
A-1
EXHIBIT A
FORM OF INITIAL NOTE
CUSIP No.:880779 AG 8
TEREX CORPORATION
8-7/8% SENIOR SUBORDINATED NOTE DUE 2008
No.
TEREX CORPORATION, a Delaware corporation (the "Company,"
which term includes any successor entity), for value received promises to pay to
_______ or registered assigns, the principal sum of _________ Dollars, on April
1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
TEREX CORPORATION
By:
Name:
Title:
By:
Name:
Dated: ____________ Title:
<PAGE>
A-2
Certificate of Authentication
This is one of the 8-7/8% Senior Subordinated Notes due 2008
referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
Dated: ____________ By:
Authorized Signatory
<PAGE>
A-3
(REVERSE OF SECURITY)
8-7/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TEREX CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above; provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional interest
will accrue on this Note at a rate of 0.50% per annum, from and including the
date on which any such Registration Default shall occur to but excluding the
date on which all Registration Defaults have been cured. Interest on the Notes
will accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from March 31, 1998. The Company will pay interest
semi-annually in arrears on each Interest Payment Date, commencing October 1,
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 Notes plus 1% per annum and on overdue installments of
interest (without regard to any applicable grace periods) at such higher rate to
the extent lawful.
2. Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender Notes to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
Company of New York, a New York banking corporation (the "Trustee"), will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
4. Indenture and Subsidiary Guarantee. The Company issued the
Notes under an Indenture, dated as of March 31, 1998 (the "Indenture"), among
the Company, the Subsidiary Guarantors named therein and the Trustee. This Note
is one of a duly authorized issue of Initial Notes of the Company designated as
its 8-7/8% Senior Subordinated Notes due 2008 (the "Initial Notes"). The Notes
are limited in aggregate principal amount to $150,000,000. The Notes include the
Initial Notes, and the Private Exchange Notes and the Exchange Notes issued in
exchange for the Initial Notes pursuant to the Indenture. The Initial Notes, the
Private Exchange Notes and the Exchange Notes are treated as a single class of
securities under the Indenture. Capitalized terms herein are used as defined in
the Indenture unless otherwise defined herein. The terms of the Notes include
<PAGE>
A-4
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Section 77aaa-77bbbb) (the
"TIA"), as in effect on the date of the Indenture. Notwithstanding anything to
the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA Act for a statement of them. The
Notes are general unsecured obligations of the Company. Payment on each Note is
guaranteed on a senior subordinated basis by the Subsidiary Guarantors pursuant
to Article Eleven of the Indenture. To the extent of any conflict between the
terms of the Notes and the Indenture, the applicable terms of the Indenture
shall govern.
5. Subordination. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full in cash of all Senior Indebtedness of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. Except as set forth in the following
paragraph, the Notes will not be redeemable at the option of the Company prior
to April 1, 2003. Thereafter, the Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest 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), if redeemed during
the 12-month period commencing on April 1 of the years set forth below:
Redemption
Period Price
2003 ............................................... 104.438%
2004 ............................................... 102.958%
2005 ............................................... 101.479%
2006 and thereafter ................................ 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In
addition, at any time and from time to time prior to April 1, 2001, the Company
may redeem in the aggregate up to $50 million of the original principal amount
of the Notes with the proceeds of one or more Public Equity Offerings, at a
redemption price (expressed as a percentage of principal amount) of 108.875%
plus accrued interest 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 65% of the aggregate
principal amount of the Notes originally outstanding must remain outstanding
after each such redemption.
<PAGE>
A-5
In order to effect the foregoing redemption with the proceeds
of any Public Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1000.
Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Notes called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Notes will be to receive payment of the Redemption Price plus accrued and unpaid
interest, if any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
provide that, in the event of certain Asset Dispositions (as defined in the
Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Company
will make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.
9. Registration Rights. Pursuant to the Registration Rights
Agreement (as defined in the Indenture), the Company will be obligated to
consummate an exchange offer pursuant to which the Holder of this Note shall
have the right to exchange this Note for the Company's 8-7/8% Senior
Subordinated Exchange Notes due 2008 (the "Exchange Notes"), which shall have
been registered under the Securities Act, or the Company's 8-7/8% Senior
Subordinated Private Exchange Notes due 2008 (the "Private Exchange Notes"), in
each case in like principal amount and having terms identical in all material
respects to the Initial Notes. The Holders of the Initial Notes shall be
entitled to receive certain additional interest payments if such exchange offer
is not consummated and upon certain other conditions, all pursuant to and in
accordance with the terms of the Registration Rights Agreement. The Company
shall notify the Trustee of the amount of any such payments.
10. Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange of
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay certain transfer taxes or similar governmental charges payable in
connection therewith as permitted by the Indenture. The Registrar need not
register the transfer of or exchange of any Notes or portions thereof selected
for redemption (except, in the case of Notes to be redeemed in part, the portion
of such Notes not to be redeemed) or any Note for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or a notice of
redemption or 15 Business Days before any Interest Payment Date.
<PAGE>
A-6
11. Persons Deemed Owners. The registered Holder of a
Note shall be treated as the owner of it for all purposes.
12. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
13. Discharge Prior to Redemption or Maturity. If the Company
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
14. Amendment; Supplement; Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
15. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
16. Successors. When a successor assumes, in accordance with
the Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
17. Defaults and Remedies. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
<PAGE>
A-7
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
18. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.
19. No Recourse Against Others. No past, present or future
stockholder, director, officer, employee or incorporator, as such, of the
Company or any Subsidiary Guarantor shall have any liability for any obligation
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
20. Authentication. This Note shall not be valid until
the Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.
21. Governing Law. The Laws of the State of New York shall
govern this Note and the Indenture (and the Subsidiary Guarantees relating
thereto), without regard to principles of conflict of laws.
22. Abbreviations and Defined Terms. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
23. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders
of the Notes. No representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the other identification
numbers printed hereon.
24. Indenture. Each Holder, by accepting a Note, agrees
to be bound by all of the terms and provisions of the Indenture, as the same may
be amended from time to time.
<PAGE>
A-8
25. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Note, by acceptance hereof, acknowledges and agrees to the
provisions of the Registration Rights Agreement, including, without limitation,
the obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture. Requests may be made to:
TEREX CORPORATION, 500 Post Road East, Westport, CT 06880, Attn: Secretary.
<PAGE>
A-9
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
SUBSIDIARY GUARANTEE
Koehring Cranes, Inc., M&M Enterprises of Baraga, Inc.,
Payhauler Corp., PPM Cranes, Inc., Terex Aerials, Inc., Terex Baraga Products,
Inc., Terex Cranes, Inc., Terex Mining Equipment, Inc., Terex-RO Corporation,
and Terex-Telelect, Inc. (collectively, the "Subsidiary Guarantors"), have each
jointly and severally unconditionally guaranteed on a senior subordinated basis
(such guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") (i) the due and punctual payment of the principal of and
interest on the Notes, subject to any applicable grace period, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article Eleven of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Notes or any of 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, subject to any
applicable grace period, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of
Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture
are expressly set forth and are senior subordinated obligations of each
Subsidiary Guarantor, to the extent and in the manner provided, in Articles
Eleven and Twelve of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director, employee or incorporator,
as such, past, present or future, of each Subsidiary Guarantor shall have any
liability under the Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director, employee or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
KOEHRING CRANES, INC.
By:-----------------------
Name:
Title:
<PAGE>
A-10
M&M ENTERPRISES OF BARAGA, INC.
By:-----------------------
Name:
Title:
PAYHAULER CORP.
By:-----------------------
Name:
Title:
PPM CRANES, INC.
By:-----------------------
Name:
Title:
TEREX AERIALS, INC.
By:-----------------------
Name:
Title:
<PAGE>
A-11
TEREX BARAGA PRODUCTS, INC.
By:----------------------
Name:
Title:
TEREX CRANES, INC.
By:----------------------
Name:
Title:
TEREX MINING EQUIPMENT, INC.
By:----------------------
Name:
Title:
TEREX-RO CORPORATION
By:----------------------
Name:
Title:
TEREX-TELELECT, INC.
By:----------------------
Name:
Title:
<PAGE>
A-12
ASSIGNMENT FORM
If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to:
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint_______________, agent to transfer this Note on the books
of the Company. The agent may substitute another to act for him.
Date:_______________ Signed:_________________________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
(Signature must be guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
In connection with any transfer of this Note occurring prior
to the date which is the earlier of (i) the date of the declaration by the SEC
of the effectiveness of a registration statement under the Securities Act of
1933, as amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) March 31, 2000, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
<PAGE>
A-13
[Check One]
(1) __ to the Company or a subsidiary thereof; or
(2) __ pursuant to and in compliance with Rule 144A under the Securities Act;
or
(3) __ outside the United states to a "foreign person" in compliance with
Rule 904 of Regulation S under the Securities Act; or
(4) __ pursuant to the exemption from registration provided by Rule 144 under
the Securities Act; or
(5) __ pursuant to an effective registration statement under the Securities
Act; or
(6) __ pursuant to another available exemption from the registration
requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; provided that if box (3), (4) or (6) is checked, the
Company or the Trustee may require, prior to registering any such transfer of
the Notes, in its sole discretion, such legal opinions, certifications and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
<PAGE>
A-14
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in the Appendix to the Indenture shall have been satisfied.
Dated:________________ Signed:________________________________________________
(Sign exactly as name
appears on the other side
of this Security)
Signature Guarantee:
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing
this Note for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
Dated:__________________ ___________________________________________
NOTICE: To be executed by
an executive officer
<PAGE>
A-15
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, check the
appropriate box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state
the amount you elect to have purchased:
$-------------------
Dated: __________________ __________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: _______________________________
(Signature must be guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
<PAGE>
B-1
EXHIBIT B
FORM OF EXCHANGE NOTE AND PRIVATE EXCHANGE NOTE
CUSIP No.:880779 AH 6
TEREX CORPORATION
8-7/8% SENIOR SUBORDINATED NOTE DUE 2008
No. $
TEREX CORPORATION, a Delaware corporation (the "Company,"
which term includes any successor entity), for value received promises to pay to
___________ or registered assigns, the principal sum of ____________ Dollars, on
April 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Reference is made to the further provisions of this Note
contained herein, which will for all purposes have the same effect as if set
forth at this place.
IN WITNESS WHEREOF, the Company has caused this Note to be
signed manually or by facsimile by its duly authorized officers and a facsimile
of its corporate seal to be affixed hereto or imprinted hereon.
TEREX CORPORATION
By:
Name:
Title:
By:
Name:
Dated: ________________ Title:
<PAGE>
B-2
Certificate of Authentication
This is one of the 8-7/8% Senior Subordinated Notes due 2008
referred to in the within-mentioned Indenture.
UNITED STATES TRUST COMPANY
OF NEW YORK,
as Trustee
Dated: _______________ By:______________________________
Authorized Signatory
[If the Note is to be issued in global form add the Global Securities Legend
from Exhibit 1 to the Appendix and the attachment from such Exhibit 1 captioned
"[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR DECREASES IN
GLOBAL SECURITY".]
[If the Note is a Private Exchange Note issued in a Private Exchange to an
Initial Purchaser holding an unsold portion of its initial allotment, add the
restricted securities legend from Exhibit 1 to Appendix A and replace the
Assignment Form with that included in Exhibit A.]
<PAGE>
B-3
(REVERSE OF SECURITY)
8-7/8% SENIOR SUBORDINATED NOTE DUE 2008
1. Interest. TEREX CORPORATION, a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate per annum shown above; [provided, however, that if a Registration Default
(as defined in the Registration Rights Agreement) occurs, additional cash
interest will accrue on this Note at a rate of 0.50% per annum from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured,
calculated on the principal amount of this Note as of the date on which such
interest is payable. Such interest is payable in addition to any other interest
payable from time to time with respect to this Note. The Trustee will not be
deemed to have notice of a Registration Default until it shall have received
actual notice of such Registration Default].1 Interest on the Notes will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from March 31, 1998. The Company will pay interest semi-annually in
arrears on each Interest Payment Date, commencing October 1, 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 Notes plus 1% per annum and on overdue installments of
interest (without regard to any applicable grace periods) at such higher rate to
the extent lawful.
2. Method of Payment. The Company shall pay interest on the
Notes (except defaulted interest) to the Persons who are the registered Holders
at the close of business on the Record Date immediately preceding the Interest
Payment Date even if the Notes are cancelled on registration of transfer or
registration of exchange after such Record Date. Holders must surrender Notes to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar. Initially, United States Trust
Company of New York, a New York banking corporation (the "Trustee"), will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to the Holders.
_____________________________
1 Insert if at the time of issuance of the Exchange Note or Private Exchange
Note (as the case may be) neither the Registered Exchange Offer has been
consummated nor a Shelf Registration Statement has been declared effective in
accordance with the Registration Rights Agreement.
<PAGE>
B-4
4. Indenture and Guarantee. The Company issued the Notes under
an Indenture, dated as of March 31, 1998 (the "Indenture"), among the Company,
the Subsidiary Guarantors named therein and the Trustee. [This Note is one of a
duly authorized issue of Exchange Notes of the Company designated as its 8-7/8%
Senior Subordinated Exchange Notes due 2008 (the "Exchange Notes").] [This Note
is one of a duly authorized issue of Private Exchange Notes of the Company
designated as its 8-7/8% Senior Subordinated Private Exchange Notes due 2008
(the "Private Exchange Notes").] The Notes are limited in aggregate principal
amount to $150,000,000. The Notes include the Initial Notes (the 8-7/8% Senior
Subordinated Notes due 2008), and the Private Exchange Notes and the Exchange
Notes issued in exchange for the Initial Notes pursuant to the Indenture. The
Initial Notes, the Private Exchange Notes and the Exchange Notes are treated as
a single class of securities under the Indenture. Capitalized terms herein are
used as defined in the Indenture unless otherwise defined herein. The terms of
the Notes include those stated in the Indenture and those made part of the
Indenture by reference to the TIA of 1939 (15 U.S. Code ss.ss. 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured obligations of the Company. Payment on each Note is
guaranteed on a senior subordinated basis by the Subsidiary Guarantors pursuant
to Article Eleven of the Indenture. To the extent of any conflict between the
terms of the Notes and the Indenture, the applicable terms of the Indenture
shall govern.
5. Subordination. The Notes are subordinated in right of
payment, in the manner and to the extent set forth in the Indenture, to the
prior payment in full in cash of all Senior Indebtedness of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. Each Holder by his acceptance hereof agrees to be bound
by such provisions and authorizes and expressly directs the Trustee, on his
behalf, to take such action as may be necessary or appropriate to effectuate the
subordination provided for in the Indenture and appoints the Trustee his
attorney-in-fact for such purposes.
6. Redemption.
(a) Optional Redemption. Except as set forth in the following
paragraph, the Notes will not be redeemable at the option of the Company prior
to April 1, 2003. Thereafter, the Notes will be redeemable, at the Company's
option, in whole or in part, at any time or from time to time, upon not less
than 30 nor more than 60 days' prior notice mailed by first-class mail to each
Holder's registered address, at the following redemption prices (expressed in
percentages of principal amount), plus accrued interest 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), if redeemed during
the 12-month period commencing on April 1 of the years set forth below:
<PAGE>
B-5
Redemption
Period Price
2003 ............................................... 104.438%
2004 ............................................... 102.958%
2005 ............................................... 101.479%
2006 and thereafter ................................ 100.000%
(b) Optional Redemption Upon Public Equity Offerings. In
addition, at any time and from time to time prior to April 1, 2001, the Company
may redeem in the aggregate up to $50 million of the original principal amount
of the Notes with the proceeds of one or more Public Equity Offerings, at a
redemption price (expressed as a percentage of principal amount) of 108.875%
plus accrued interest 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 65% of the aggregate
principal amount of the Notes originally outstanding must remain outstanding
after each such redemption.
In order to effect the foregoing redemption with the proceeds
of any Public Equity Offering, the Company shall make such redemption not more
than 120 days after the consummation of any such Public Equity Offering.
7. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Notes to be redeemed at such Holder's registered address. Notes in
denominations of $1,000 may be redeemed only in whole. Notes in denominations
larger than $1,000 may be redeemed in part but only in multiples of $1000.
Except as set forth in the Indenture, if monies for the
redemption of the Notes called for redemption shall have been deposited with the
Paying Agent for redemption on such Redemption Date, then, unless the Company
defaults in the payment of such Redemption Price plus accrued and unpaid
interest, if any, the Notes called for redemption will cease to bear interest
from and after such Redemption Date and the only right of the Holders of such
Notes will be to receive payment of the Redemption Price plus accrued and unpaid
interest, if any.
8. Offers to Purchase. Sections 4.16 and 4.17 of the Indenture
provide that, in the event of certain Asset Dispositions (as defined in the
Indenture) and upon the occurrence of a Change of Control (as defined in the
Indenture), and subject to further limitations contained therein, the Company
will make an offer to purchase certain amounts of the Notes in accordance with
the procedures set forth in the Indenture.
9. Denominations; Transfer; Exchange. The Notes are in
registered form, without coupons, in denominations of $1,000 and integral
multiples of $1,000. A Holder shall register the transfer of or exchange of
Notes in accordance with the Indenture. The Registrar may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and to pay certain transfer taxes or similar governmental charges payable in
connection therewith as permitted by the Indenture. The Registrar need not
<PAGE>
B-6
register the transfer of or exchange of any Notes or portions thereof selected
for redemption (except, in the case of Notes to be redeemed in part, the portion
of such Notes not to be redeemed) or any Note for a period beginning 15 Business
Days before the mailing of a notice of an offer to repurchase or a notice of
redemption or 15 Business Days before any Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of
a Note shall be treated as the owner of it for all purposes.
11. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent will
pay the money back to the Company (subject to any applicable abandoned property
law). After that, all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
12. Discharge Prior to Redemption or Maturity. If the Company
at any time deposits with the Trustee U.S. Legal Tender or U.S. Government
Obligations sufficient to pay the principal of and interest on the Notes to
redemption or maturity and complies with the other provisions of the Indenture
relating thereto, the Company will be discharged from certain provisions of the
Indenture and the Notes (including certain covenants, but excluding its
obligation to pay the principal of and interest on the Notes).
13. Amendment; Supplement; Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
written consent of the Holders of at least a majority in aggregate principal
amount of the Notes then outstanding, and any existing Default or Event of
Default or noncompliance with any provision may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without notice to or consent of any Holder, the parties
thereto may amend or supplement the Indenture or the Notes to, among other
things, cure any ambiguity, omission, defect or inconsistency, provide for
uncertificated Notes in addition to or in place of certificated Notes, or comply
with Article Five of the Indenture or make any other change that does not
adversely affect in any material respect the rights of any Holder of a Note.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Restricted Subsidiaries to,
among other things, incur additional Indebtedness, make payments in respect of
its Capital Stock or certain Indebtedness, enter into transactions with
Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important qualifications and exceptions. The Company must annually report to
the Trustee on compliance with such limitations.
15. Successors. When a successor assumes, in accordance with
the Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those obligations.
16. Defaults and Remedies. If an Event of Default occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
<PAGE>
B-7
in the manner, at the time and with the effect provided in the Indenture.
Certain events of bankruptcy and insolvency are Events of Default which will
result in the Notes being due and payable immediately upon the occurrence of
such Events of Default. Holders of Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. The Trustee is not obligated to
enforce the Indenture or the Notes unless it has received indemnity reasonably
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Notes then outstanding to direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of Notes notice of any continuing
Default or Event of Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
17. Trustee Dealings with Company. The Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Notes and may otherwise deal with the Company, its Subsidiaries or
their respective Affiliates as if it were not the Trustee.
18. No Recourse Against Others. No past, present or future
stockholder, director, officer, employee or incorporator, as such, of the
Company or any Subsidiary Guarantor shall have any liability for any obligation
of the Company under the Notes or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes.
19. Authentication. This Note shall not be valid
until the Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.
20. Governing Law. The Laws of the State of New York shall
govern this Note and the Indenture (and the Subsidiary Guarantees relating
thereto), without regard to principles of conflict of laws.
21. Abbreviations and Defined Terms. Customary abbreviations
may be used in the name of a Holder of a Note or an assignee, such as: TEN COM
(= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
22. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes as a convenience to the Holders
of the Notes. No representation is made as to the accuracy of such numbers as
printed on the Notes and reliance may be placed only on the other identification
numbers printed hereon.
23. Indenture. Each Holder, by accepting a Note,
agrees to be bound by all of the termsand provisions of the Indenture, as the
same may be amended from time to time.
<PAGE>
B-8
24. Registration Rights. Pursuant to the Registration Rights
Agreement (as defined in the Indenture), the Company will have certain
obligations to the Holders of the Private Exchange Notes. The Holders of the
Private Exchange Notes shall be entitled to receive certain additional interest
payments upon certain conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement. The Company shall notify the Trustee
of the amount of any such payments.
The Company will furnish to any Holder of a Note upon written
request and without charge a copy of the Indenture, which has the text of this
Note in larger type. Requests may be made to: TEREX CORPORATION, 500 Post Road
East, Westport, CT 06880, Attn: Secretary.
<PAGE>
B-9
[FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE]
SUBSIDIARY GUARANTEE
Koehring Cranes, Inc., M&M Enterprises of Baraga, Inc.,
Payhauler Corp., PPM Cranes, Inc., Terex Aerials, Inc., Terex Baraga Products,
Inc., Terex Cranes, Inc., Terex Mining Equipment, Inc., Terex-RO Corporation,
and Terex-Telelect, Inc. (collectively, the "Subsidiary Guarantors"), have each
unconditionally guaranteed on a senior subordinated basis (such guarantee by the
Subsidiary Guarantors being referred to herein as the "Subsidiary Guarantee")
(i) the due and punctual payment of the principal of and interest on the Notes,
subject to any applicable grace period, whether at maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal and
interest, if any, on the Notes, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms set forth in Article Eleven of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Notes or any of 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, subject to any applicable grace period, whether at stated maturity, by
acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of
Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture
are expressly set forth and are senior subordinated obligations of each
Subsidiary Guarantor, to the extent and in the manner provided, in Articles
Eleven and Twelve of the Indenture, and reference is hereby made to such
Indenture for the precise terms of the Subsidiary Guarantee therein made.
No stockholder, officer, director, employee or incorporator,
as such, past, present or future, of each Subsidiary Guarantor shall have any
liability under the Subsidiary Guarantee by reason of his or its status as such
stockholder, officer, director, employee or incorporator.
The Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Notes upon which the
Subsidiary Guarantee is noted shall have been executed by the Trustee under the
Indenture by the manual signature of one of its authorized officers.
KOEHRING CRANES, INC.
By:
Name:
Title:
<PAGE>
B-10
M&M ENTERPRISES OF BARAGA, INC.
By:
Name:
Title:
PAYHAULER CORP.
By:
Name:
Title:
PPM CRANES, INC.
By:
Name:
Title:
TEREX AERIALS, INC.
By:
Name:
Title:
<PAGE>
B-11
TEREX BARAGA PRODUCTS, INC.
By:
Name:
Title:
TEREX CRANES, INC.
By:
Name:
Title:
TEREX MINING EQUIPMENT, INC.
By:
Name:
Title:
TEREX-RO CORPORATION
By:
Name:
Title:
TEREX-TELELECT, INC.
By:
Name:
Title:
<PAGE>
B-12
ASSIGNMENT FORM (2)
If you the Holder want to assign this Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to:
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint___________________________________, agent to transfer
this Note on the books of the Company. The agent may substitute another to act
for him.
Date:___________ Signed: _______________________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
(Signature must be guaranteed by an "eligible guarantor institution," that is, a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended).
______________________
2 If the Note is a Private Exchange Note, replace the Assignment Form with that
included in Exhibit A to the Indenture.
<PAGE>
B-13
[OPTION OF HOLDER TO ELECT PURCHASE]
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.16 or Section 4.17 of the Indenture, check the
appropriate box:
Section 4.16 [ ]
Section 4.17 [ ]
If you want to elect to have only part of this Note purchased
by the Company pursuant to Section 4.16 or Section 4.17 of the Indenture, state
the amount you elect to have purchased:
$____________________
Dated: __________________ _______________________________________________
NOTICE: The signature on this
assignment must correspond with
the name as it appears upon the
face of the within Note in
every particular without alteration
or enlargement or any change
whatsoever and be guaranteed by the
endorser's bank or broker.
Signature Guarantee: _________________________________
(Signature must be guaranteed by an "eligible guarantor
institution," that is, a bank, stockbroker, savings and loan association or
credit union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended).
<PAGE>
B-14
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ..................................... 7.10
(a)(2) ..................................... 7.10
(a)(3) ..................................... N.A.
(a)(4) ..................................... N.A.
(a)(5) ..................................... 7.08; 7.10
(b) ..................................... 7.08; 7.10; 13.02
(c) ..................................... N.A.
311(a) ..................................... 7.11
(b) ..................................... 7.11
(c) ..................................... N.A.
312(a) ..................................... 2.05
(b) ..................................... 13.03
(c) ..................................... 13.03
313(a) ..................................... 7.06
(b)(1) ..................................... N.A.
(b)(2) ..................................... 7.06
(c) ..................................... 7.06; 13.02
(d) ..................................... 7.06
314(a) ..................................... 4.07; 4.08; 13.02
(b) ..................................... N.A.
(c)(1) ..................................... 13.04
(c)(2) ..................................... 13.04
(c)(3) ..................................... N.A.
(d) ..................................... N.A.
(e) ..................................... 13.05
(f) ..................................... N.A.
315(a) ..................................... 7.01(b)
(b) ..................................... 7.05; 13.02
(c) ..................................... 7.01(a)
(d) ..................................... 7.01(c)
(e) ..................................... 6.11
316(a)(last sentence)..................................... 2.09
(a)(1)(A) ..................................... 6.05
(a)(1)(B) ..................................... 6.04
(a)(2) ..................................... N.A.
(b) ..................................... 6.07
(c) ..................................... 9.05
317(a)(1) ..................................... 6.08
(a)(2) ..................................... 6.09
(b) ..................................... 2.04
<PAGE>
B-15
318(a) ...................................... 13.01
(c) ...................................... 13.01
N.A. means Not Applicable
NOTE: This Cross-Reference Table shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
i
TABLE OF CONTENTS
Page
ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions..............................................1
SECTION 1.02. Incorporation by Reference of TIA.......................21
SECTION 1.03. Rules of Construction...................................22
SECTION 1.04. One Class of Securities.................................22
ARTICLE TWO THE NOTES
SECTION 2.01. Form and Dating.........................................22
SECTION 2.02. Execution and Authentication; Aggregate Principal
Amount..................................................23
SECTION 2.03. Registrar and Paying Agent..............................24
SECTION 2.04. Paying Agent To Hold Assets in Trust....................24
SECTION 2.05. Noteholder Lists........................................25
SECTION 2.06. [Intentionally Omitted].................................25
SECTION 2.07. Replacement Notes.......................................25
SECTION 2.08. Outstanding Notes.......................................25
SECTION 2.09. Treasury Notes..........................................26
SECTION 2.10. Temporary Notes.........................................26
SECTION 2.11. Cancellation............................................26
SECTION 2.12. Defaulted Interest......................................27
SECTION 2.13. CUSIP Number............................................27
SECTION 2.14. Deposit of Moneys.......................................27
ARTICLE THREE REDEMPTION
SECTION 3.01. Notices to Trustee......................................27
SECTION 3.02. Selection of Notes To Be Redeemed.......................28
SECTION 3.03. Notice of Redemption....................................28
SECTION 3.04. Effect of Notice of Redemption..........................29
SECTION 3.05. Deposit of Redemption Price.............................29
SECTION 3.06. Notes Redeemed in Part..................................30
SECTION 3.07. Optional Redemption.....................................30
<PAGE>
ii
ARTICLE FOUR COVENANTS
SECTION 4.01. Payment of Notes........................................31
SECTION 4.02. Maintenance of Office or Agency.........................31
SECTION 4.03. Corporate Existence.....................................31
SECTION 4.04. Payment of Taxes and Other Claims.......................31
SECTION 4.05. Maintenance of Properties and Insurance.................32
SECTION 4.06. Compliance Certificate; Notice of Default...............32
SECTION 4.07. Compliance with Laws....................................33
SECTION 4.08. SEC Reports.............................................33
SECTION 4.09. Waiver of Stay, Extension or Usury Laws.................34
SECTION 4.10. Limitation on Restricted Payments.......................34
SECTION 4.11. Limitation on Restrictions on Distributions
from Restricted Subsidiaries......... ................36
SECTION 4.12. Limitation on Affiliate Transactions....................37
SECTION 4.13. Limitation on Indebtedness..............................38
SECTION 4.14. Limitation on the Sale or Issuance of Capital
Stock of Restricted Subsidiaries........................39
SECTION 4.15. Limitation on Other Senior Subordinated Debt............40
SECTION 4.16. Change of Control.......................................40
SECTION 4.17. Limitation on Sales of Assets and Subsidiary Stock......41
SECTION 4.18. Limitation on Indebtedness and Preferred Stock
of Restricted Subsidiaries..............................44
SECTION 4.19. Limitation on Liens Securing Subordinated Indebtedness..45
SECTION 4.20. Future Subsidiary Guarantors........................ ...46
SECTION 4.21. Limitation on Designations of Unrestricted Subsidiaries.46
SECTION 4.22. Limitation on Lines of Business.........................47
ARTICLE FIVE SUCCESSOR CORPORATION
SECTION 5.01. Merger, Consolidation and Sale of Assets of the Compan..48
SECTION 5.02. Successor Corporation Substituted for the Company.......49
SECTION 5.03. Merger, Consolidation and Sale of Assets of
Any Subsidiary Guarantor................................49
SECTION 5.04. Successor Corporation Substituted for
Subsidiary Guarantor....................................49
ARTICLE SIX DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.......................................50
SECTION 6.02. Acceleration............................................51
SECTION 6.03. Other Remedies..........................................52
SECTION 6.04. Waiver of Past Defaults.................................52
SECTION 6.05. Control by Majority.....................................53
SECTION 6.06. Limitation on Suits.....................................53
SECTION 6.07. Rights of Holders To Receive Payment....................53
SECTION 6.08. Collection Suit by Trustee..............................54
SECTION 6.09. Trustee May File Proofs of Claim........................54
SECTION 6.10. Priorities..............................................54
SECTION 6.11. Undertaking for Costs...................................55
<PAGE>
iii
ARTICLE SEVEN TRUSTEE
SECTION 7.01. Duties of Trustee.......................................55
SECTION 7.02. Rights of Trustee.......................................56
SECTION 7.03. Individual Rights of Trustee............................57
SECTION 7.04. Trustee's Disclaimer....................................58
SECTION 7.05. Notice of Default.......................................58
SECTION 7.06. Reports by Trustee to Holders...........................58
SECTION 7.07. Compensation and Indemnity..............................58
SECTION 7.08. Replacement of Trustee..................................59
SECTION 7.09. Successor Trustee by Merger, Etc........................61
SECTION 7.10. Eligibility; Disqualification...........................61
SECTION 7.11. Preferential Collection of Claims Against Company.......61
ARTICLE EIGHT DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 8.01. Discharge of Liability on Notes; Defeasance.............62
SECTION 8.02. Conditions to Defeasance................................62
SECTION 8.03. Application of Trust Money..............................64
SECTION 8.04. Repayment to Company....................................64
SECTION 8.05. Indemnity for Government Obligations....................64
SECTION 8.06. Reinstatement...........................................65
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders..............................65
SECTION 9.02. With Consent of Holders.................................66
SECTION 9.03. Effect on Senior Indebtedness...........................67
SECTION 9.04. Compliance with TIA.....................................67
SECTION 9.05. Revocation and Effect of Consents.......................67
SECTION 9.06. Notation on or Exchange of Notes........................68
SECTION 9.07. Trustee To Sign Amendments, Etc.........................68
SECTION 9.08. Payment for Consent.....................................69
<PAGE>
B-19
ARTICLE TEN SUBORDINATION
SECTION 10.01. Notes Subordinated to Senior Indebtedness...............69
SECTION 10.02. No Payment on Notes in Certain Circumstances............69
SECTION 10.03. Payment Over of Proceeds upon Dissolution, Etc..........71
SECTION 10.04. Payments May Be Paid Prior to Dissolution...............72
SECTION 10.05. Subrogation.............................................73
SECTION 10.06. Obligations of the Company Unconditional................73
SECTION 10.07. Notice to Trustee.......................................74
SECTION 10.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.......................................74
SECTION 10.09. Trustee's Relation to Senior Indebtedness...............74
SECTION 10.10. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of
Senior Indebtedness.....................................75
SECTION 10.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes..................................75
SECTION 10.12. This Article Ten Not To Prevent Events of Default.......76
SECTION 10.13. Trustee's Compensation Not Prejudiced...................76
SECTION 10.14. Acceleration of Payment of Notes........................76
<PAGE>
iv
ARTICLE ELEVEN GUARANTEES
SECTION 11.01. Unconditional Guarantee.................................77
SECTION 11.02. Subordination of Subsidiary Guarantee...................78
SECTION 11.03. Severability............................................78
SECTION 11.04. Release of Subsidiary Guarantor from the
Subsidiary Guarantee....................................78
SECTION 11.05. Limitation on Amount Guaranteed; Contribution by
Subsidiary Guarantors...................................78
SECTION 11.06. Waiver of Subrogation...................................80
SECTION 11.07. Execution of Subsidiary Guarantee.......................80
SECTION 11.08. Waiver of Stay, Extension or Usury Laws.................81
SECTION 11.09. Effectiveness of Subsidiary Guarantee...................81
ARTICLE TWELVE SUBORDINATION OF GUARANTEE OBLIGATIONS
SECTION 12.01. Subsidiary Guarantee Obligations Subordinated to
Senior Indebtedness of Subsidiary Guarantors............82
SECTION 12.02. No Payment on Notes in Certain Circumstances............82
SECTION 12.03. Payment Over of Proceeds upon Dissolution, Etc..........84
SECTION 12.04. Payments May Be Paid Prior to Dissolution...............85
SECTION 12.05. Subrogation.............................................86
SECTION 12.06. Obligations of Subsidiary Guarantor Unconditional.......86
SECTION 12.07. Notice to Trustee.......................................87
SECTION 12.08. Reliance on Judicial Order or Certificate of
Liquidating Agent.......................................87
<PAGE>
v
SECTION 12.09. Trustee's Relation to Subsidiary Guarantor's
Senior Indebtedness.....................................88
SECTION 12.10. Subordination Rights Not Impaired by Acts or
Omissions of Subsidiary Guarantors or Holders of
Subsidiary Guarantors' Senior Indebtedness..............88
SECTION 12.11. Noteholders Authorize Trustee To Effectuate
Subordination of Notes..................................89
SECTION 12.12. This Article Twelve Not To Prevent Events of Default....89
ARTICLE THIRTEEN MISCELLANEOUS
SECTION 13.01. TIA Controls............................................90
SECTION 13.02. Notices ................................................90
SECTION 13.03. Communications by Holders with Other Holders............91
SECTION 13.04. Certificate and Opinion as to Conditions Precedent......91
SECTION 13.05. Statements Required in Certificate or Opinion...........92
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar...............92
SECTION 13.07. Legal Holidays..........................................92
SECTION 13.08. Governing Law...........................................93
SECTION 13.09. No Adverse Interpretation of Other Agreements...........93
SECTION 13.10. No Recourse Against Others..............................93
SECTION 13.11. Successors..............................................93
SECTION 13.12. Duplicate Originals.....................................93
SECTION 13.13. Severability............................................94
<PAGE>
v
Signatures .......................................................95
Appendix ........................................................I
Exhibit A - Form of Initial Note and Guarantee ............................ A-1
Exhibit A - Form of Exchange Note and Private Exchange
Exchange Note and Guarantee ................................... B-1
Note: This Table of Contents shall not, for any purpose, be deemed to be part
of this Indenture.
<PAGE>
1
$150,000,000
Terex Corporation
8-7/8% Senior Subordinated Notes due 2008
REGISTRATION RIGHTS AGREEMENT
March 31, 1998
Credit Suisse First Boston Corporation
CIBC Oppenheimer Corp.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
BancBoston Securities Inc.
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
Terex Corporation, a Delaware corporation (the "Issuer"), proposes to issue
and sell to Credit Suisse First Boston Corporation, CIBC Oppenheimer Corp.,
Morgan Stanley & Co. Incorporated, Salomon Brothers Inc, and BancBoston
Securities Inc. (collectively, the "Initial Purchasers"), upon the terms set
forth in a purchase agreement of even date herewith (the "Purchase Agreement"),
$150.0 million aggregate principal amount of its 8-7/8% Senior Subordinated
Notes due 2008 (the "Initial Securities") to be unconditionally guaranteed (the
"Guaranties") by Koehring Cranes, Inc., M&M Enterprises of Baraga, Inc.,
Payhauler Corp., PPM Cranes, Inc., Terex Aerials, Inc., Terex Baraga Products,
Inc., Terex Cranes, Inc., Terex Mining Equipment, Inc., Terex-RO Corporation,
and Terex-Telelect, Inc. (the "Guarantors" and together with the Issuer, the
"Company"). The Initial Securities will be issued pursuant to an Indenture,
dated the date hereof (the "Indenture"), among the Issuer, the Guarantors named
therein and United States Trust Company of New York, as trustee (the "Trustee").
As an inducement to the Initial Purchasers, the Company agrees with the Initial
Purchasers, for the benefit of the holders of the Initial Securities (including,
without limitation, the Initial Purchasers), the Exchange Securities (as defined
below) and the Private Exchange Securities (as defined below) (collectively, the
"Holders"), as follows:
1. Registered Exchange Offer. The Company shall, at its own cost, prepare
and, not later than 60 days after (or if the 60th day is not a business day, the
first business day thereafter) the date of original issue of the Initial
Securities (the "Issue Date"), file with the Securities and Exchange Commission
(the "Commission") a registration statement (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act of 1933, as amended
<PAGE>
2
(the "Securities Act"), with respect to a proposed offer (the "Registered
Exchange Offer") to the Holders of Transfer Restricted Securities (as defined in
Section 6 hereof), who are not prohibited by any law or policy of the Commission
from participating in the Registered Exchange Offer, to issue and deliver to
such Holders, in exchange for the Initial Securities, a like aggregate principal
amount of debt securities (the "Exchange Securities") of the Company issued
under the Indenture and identical in all material respects to the Initial
Securities (except for the transfer restrictions relating to the Initial
Securities and the provisions relating to the matters described in Section 6
hereof) that would be registered under the Securities Act. The Company shall use
its best efforts to cause such Exchange Offer Registration Statement to become
effective under the Securities Act within 150 days (or if the 150th day is not a
business day, the first business day thereafter) after the Issue Date of the
Initial Securities and shall keep the Exchange Offer Registration Statement
effective for not less than 30 days (or longer, if required by applicable law)
after the date notice of the Registered Exchange Offer is mailed to the Holders
(such period being called the "Exchange Offer Registration Period").
If the Company effects the Registered Exchange Offer, the Company will be
entitled to close the Registered Exchange Offer 30 days after the commencement
thereof provided that the Company has accepted all the Initial Securities
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer.
Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Company shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities (as defined in Section 6
hereof) electing to exchange the Initial Securities for Exchange Securities
(assuming that such Holder is not an affiliate of the Company within the meaning
of the Securities Act, acquires the Exchange Securities in the ordinary course
of such Holder's business and has no arrangements or understandings with any
person to participate in the distribution of the Exchange Securities and is not
prohibited by any law or policy of the Commission from participating in the
Registered Exchange Offer) 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 acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (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 (a) Annex A hereto on the cover, (b) Annex B hereto in
the "Exchange Offer Procedures" section and the "Purpose of the Exchange Offer"
section, and (c) 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 Registered Exchange Offer and (ii) an
Initial Purchaser that elects to sell Exchange Securities acquired in exchange
for Securities constituting any portion of an unsold allotment 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
sale.
<PAGE>
3
The Company shall use its 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 lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements
in order to resell the Exchange Securities; provided, however, that in the case
where such prospectus and any amendment or supplement thereto must be delivered
by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser
of 180 days and the date on which all Exchanging Dealers and the Initial
Purchasers have sold all Exchange Securities held by them (unless such period is
extended pursuant to Section 3(j) below).
If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Initial Securities acquired by it and having the status of an
unsold allotment in the initial distribution, the Company, simultaneously with
the delivery of the Exchange Securities pursuant to the Registered Exchange
Offer, shall issue and deliver to such Initial Purchaser upon the written
request of such Initial Purchaser, in exchange (the "Private Exchange") for the
Initial Securities held by such Initial Purchaser, a like principal amount of
debt securities of the Company issued under the Indenture and identical in all
material respects (including the existence of restrictions on transfer under the
Securities Act and the securities laws of the several states of the United
States, but excluding provisions relating to the matters described in Section 6
hereof) to the Initial Securities (the "Private Exchange Securities"). The
Initial Securities, the Exchange Securities and the Private Exchange Securities
are herein collectively called the "Securities".
In connection with the Registered 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 Registered Exchange Offer open for not less than 30 days
(or longer, if required by applicable law) after the date notice thereof is
mailed to the Holders;
(c) utilize the services of a depositary for the Registered Exchange
Offer with an address in the Borough of Manhattan, The City of New York,
which may be the Trustee or an affiliate of the Trustee;
(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 Registered Exchange Offer shall remain open; and
(e) otherwise comply in all material respects with all applicable
laws.
As soon as practicable after the close of the Registered Exchange Offer or
the Private Exchange, as the case may be, the Company shall:
(x) accept for exchange all the Securities properly tendered and not
properly withdrawn pursuant to the Registered Exchange Offer and the
Private Exchange in accordance with the terms of the Exchange Offer
Registration Statement and the Letter of Transmittal filed as an exhibit
thereto;
<PAGE>
4
(y) deliver to the Trustee for cancellation all the Initial Securities
so accepted for exchange; and
(z) cause the Trustee to authenticate and deliver promptly Exchange
Securities or Private Exchange Securities, as the case may be, to each
Holder of the Initial Securities, equal in aggregate principal amount to
the Initial Securities of such Holder so accepted for exchange.
The Indenture will provide that the Exchange Securities will not be subject
to the transfer restrictions set forth in the Indenture and that all the
Securities will vote and consent together on all matters as one class and that
none of the Securities will have the right to vote or consent as a class
separate from one another on any matter.
Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid on the
Initial Securities surrendered in exchange therefor or, if no interest has been
paid on the Initial Securities, from the date of original issue of the Initial
Securities. Each Exchange Security and Private Exchange Security will bear
interest at the rate set forth thereon; provided, that interest with respect to
the period prior to the issuance thereof shall accrue at the rate or rates borne
by the Initial Securities from time to time during such period.
Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Company that at the time of the consummation of the
Registered 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 or resale of the Securities or the Exchange Securities in
violation of the Securities Act, (iii) such Holder is not an "affiliate," as
defined in Rule 405 of the Securities Act, of the Company or if it is an
affiliate, such Holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, (iv) if such Holder
is not a broker-dealer, that it is not engaged in, and does not intend to engage
in, the distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities and that it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities.
Notwithstanding any other provisions hereof, the Company will use its best
efforts to 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 an 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.
<PAGE>
5
2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Company
is not permitted to effect a Registered Exchange Offer, as contemplated by
Section 1 hereof, (ii) the Exchange Offer Registration Statement is not declared
effective within 150 days of the Issue Date (or if the 150th day is not a
business day, the first business day thereafter), (iii) any Initial Purchaser so
requests with respect to the Initial Securities (or the Private Exchange
Securities) not eligible to be exchanged for Exchange Securities in the
Registered Exchange Offer and held by it following consummation of the
Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer)
is not eligible to participate in the Registered Exchange Offer and such Holder
notifies the Company within 60 days following consummation of the Registered
Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer)
that participates in the Registered Exchange Offer, such Holder does not receive
freely tradeable Exchange Securities on the date of the exchange and such Holder
notifies the Company within 60 days following consummation of the Registered
Exchange Offer, the Company shall take the following actions:
(a) The Company shall, at its cost, as promptly as practicable (but in
no event more than 30 days after so required or requested pursuant to this
Section 2) file with the Commission and thereafter shall use its best
efforts to cause to be declared effective a registration statement (the
"Shelf Registration Statement" and, together with the Exchange Offer
Registration Statement, a "Registration Statement") on an appropriate form
under the Securities Act relating to the offer and sale of the Transfer
Restricted Securities (as defined in Section 6 hereof) by the Holders
thereof from time to time in accordance with the methods of distribution
set forth in the Shelf Registration Statement and Rule 415 under the
Securities Act (hereinafter, the "Shelf Registration"); provided, however,
that no Holder (other than an Initial Purchaser) shall be entitled to have
the Securities held by it covered by such Shelf Registration Statement
unless such Holder agrees in writing to be bound by all the provisions of
this Agreement applicable to such Holder.
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective in order to permit the
prospectus included therein to be lawfully delivered by the Holders of the
relevant Securities, for a period of up to two years (or for such longer
period if extended pursuant to Section 3(j) below) from the date of its
effectiveness or such shorter period that will terminate when all the
Securities covered by the Shelf Registration Statement (i) have been sold
pursuant thereto or (ii) are no longer restricted securities (as defined in
Rule 144 under the Securities Act, or any successor rule thereof) (the
"Shelf Registration Period"). The Company shall be deemed not to have used
its best efforts to keep the Shelf Registration Statement effective during
the requisite period if it voluntarily takes any action that would result
in Holders of Securities covered thereby not being able to offer and sell
such Securities during that period, unless such action is required by
applicable law.
(c) Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall use its best efforts to cause the Shelf
Registration Statement and the related prospectus and any amendment or
supplement thereto, as of the effective date of the Shelf Registration
Statement, amendment or supplement, (i) to comply in all material respects
with the applicable requirements of the
<PAGE>
6
Securities Act and the rules and regulations of the Commission and (ii) not
to contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:
(a) The Company shall (i) furnish to each Initial Purchaser, 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, in the event that an Initial Purchaser
(with respect to any portion of an unsold allotment from the original
offering) is participating in the Registered Exchange Offer or the Shelf
Registration Statement, the Company shall use its best efforts to reflect
in each such document, when so filed with the Commission, such comments as
such Initial Purchaser reasonably may, on a timely basis, propose; (ii)
include substantially 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 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 Registered
Exchange Offer; (iii) if requested by an 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; (iv) include within the prospectus
contained in the Exchange Offer Registration Statement a section entitled
"Plan of Distribution," which shall contain a summary statement of the
positions taken or policies made by the staff of the Commission with
respect to the potential "underwriter" status of any broker-dealer that is
the beneficial owner (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of Exchange
Securities received by such broker-dealer in the Registered Exchange Offer
(a "Participating Broker-Dealer"), whether such positions or policies have
been publicly disseminated by the staff of the Commission or such positions
or policies, in the reasonable judgment of the Initial Purchasers based
upon advice of counsel (which may be in-house counsel), represent the
prevailing views of the staff of the Commission; and (v) in the case of a
Shelf Registration Statement, include the names of the Holders, who propose
to sell Securities pursuant to the Shelf Registration Statement, as selling
securityholders. In connection with the preparation and filing of a Shelf
Registration Statement, the Company may require each Holder to agree to (1)
keep confidential any material non-public information relating to the
Company received by such Holders and not to publicly disclose such
information and (ii) to abstain from trading any securities of the Company
in violation of applicable securities laws on the basis of any such
material non-public information, in each case until such information has
been made generally available to the public.
(b) The Company shall give written notice to the selling Holders of
the Securities and any Participating Broker-Dealer from whom the Company
has
<PAGE>
7
received prior written notice that it will be a Participating Broker-Dealer
in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v)
hereof shall be accompanied by an instruction to suspend the use of the
prospectus until the requisite changes have been made):
(i) when the Registration Statement or any amendment thereto has
been filed with the Commission and when the Registration Statement or
any post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments or
supplements to the 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 the Registration Statement or the
initiation of any proceedings for that purpose;
(iv) of the receipt by the Company or its legal counsel of any
notification with respect to the suspension of the qualification of
the 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 Company to
make changes in the Registration Statement or the prospectus in order
that the Registration Statement or the prospectus do not contain an
untrue statement of a material fact nor omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the prospectus, in light of the circumstances
under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain the
withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Registration Statement.
(d) The Company shall furnish to each Holder of Securities included
within the coverage of the Shelf Registration, without charge, at least one
copy of the Shelf Registration Statement and any post-effective amendment
thereto, including financial statements and schedules, and, if the Holder
so requests in writing, all exhibits thereto (including those, if any,
incorporated by reference).
(e) The Company shall deliver to each Exchanging Dealer and each
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 any Initial Purchaser or any such Holder requests, all
exhibits thereto (including those incorporated by reference).
<PAGE>
8
(f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Securities included within the coverage of the Shelf
Registration, without charge, as many copies of the prospectus (including
each preliminary prospectus) included in the Shelf Registration Statement
and any amendment or supplement thereto as such person may reasonably
request. The Company consents, subject to the provisions of this Agreement,
to the use of the prospectus or any amendment or supplement thereto by each
of the selling Holders of the Securities in connection with the offering
and sale of the Securities covered by the prospectus, or any amendment or
supplement thereto, included in the Shelf Registration Statement.
(g) The Company shall deliver to each Initial Purchaser, any
Exchanging Dealer, any Participating Broker-Dealer and such other persons
required to deliver a prospectus following the Registered Exchange Offer,
without charge, as many copies of the final prospectus included in the
Exchange Offer Registration Statement and any amendment or supplement
thereto as such persons may reasonably request. The Company consents,
subject to the provisions of this Agreement, to the use of the prospectus
or any amendment or supplement thereto by any Initial Purchaser, if
necessary, any Exchanging Dealer, any Participating Broker-Dealer and such
other persons required to deliver a prospectus following the Registered
Exchange Offer in connection with the offering and sale of the Exchange
Securities covered by the prospectus, or any amendment or supplement
thereto, included in such Exchange Offer Registration Statement.
(h) Prior to any public offering of the Securities, pursuant to any
Registration Statement, the Company shall register or qualify or cooperate
with the Holders of the Securities included therein and their respective
counsel in connection with the registration or qualification of the
Securities for offer and sale under the securities or "blue sky" laws of
such states of the United States as any Holder of the Securities 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 covered by such Registration Statement; provided, however, that
the Company shall not be required to (i) qualify to do business in any
jurisdiction where it is not then so qualified or (ii) take any action
which would subject it to service of process or to taxation in any
jurisdiction where it is not then so subject.
(i) The Company shall cooperate with the Holders of the Securities to
facilitate the timely preparation and delivery of certificates representing
the Securities to be sold pursuant to any Registration Statement free of
any restrictive legends and in such denominations and registered in such
names as the Holders may request a reasonable period of time prior to sales
of the Securities pursuant to such Registration Statement.
(j) Upon the occurrence of any event contemplated by paragraphs (ii)
through (v) of Section 3(b) above during the period for which the Company
is required to maintain an effective Registration Statement, the Company
shall promptly prepare and file a post-effective amendment to the
Registration Statement or a supplement to the related prospectus and any
other required document so that, as thereafter delivered to Holders of the
Securities or purchasers of Securities, the prospectus will not contain an
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
If the Company notifies the Initial Purchasers, the Holders of the
Securities and any known Participating Broker-Dealer in accordance with
paragraphs (ii) through (v) of Section 3(b)
<PAGE>
9
above to suspend the use of the prospectus until the requisite changes to
the prospectus have been made, then the Initial Purchasers, the Holders of
the Securities and any such Participating Broker-Dealers shall suspend use
of such prospectus, and the period of effectiveness of the Shelf
Registration Statement provided for in Section 2(b) above and the Exchange
Offer Registration Statement provided for in Section 1 above shall each be
extended by the number of days from and including the date of the giving of
such notice to and including the date when the Initial Purchasers, the
Holders of the Securities and any known Participating Broker-Dealer shall
have received such amended or supplemented prospectus pursuant to this
Section 3(j).
(k) Not later than the effective date of the applicable Registration
Statement, the Company will provide a CUSIP number for the Initial
Securities, the Exchange Securities or the Private Exchange Securities, as
the case may be, and provide the applicable trustee with printed
certificates for the Initial Securities, the Exchange Securities or the
Private Exchange Securities, as the case may be, in a form eligible for
deposit with The Depository Trust Company.
(l) The Company will comply in all material respects with all rules
and regulations of the Commission to the extent and so long as they are
applicable to the Registered Exchange Offer or the Shelf Registration and
will make generally available to its security holders (or otherwise provide
in accordance with Section 11(a) of the Securities Act) an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act,
no 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
Registration Statement, which statement shall cover such 12-month period.
(m) To the extent required by applicable law, the Company shall cause
the Indenture to be qualified under the Trust Indenture Act of 1939, as
amended, in a timely manner and containing such changes, if any, as shall
be necessary for such qualification. In the event that such qualification
would require the appointment of a new trustee under the Indenture, the
Company shall appoint a new trustee thereunder pursuant to the applicable
provisions of the Indenture.
(n) The Company may require each Holder of Securities to be sold
pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder and the distribution of the Securities as
the Company may from time to time reasonably require for inclusion in the
Shelf Registration Statement, and the Company may exclude from such
registration the Securities of any Holder that unreasonably fails to
furnish such information within a reasonable time (but not more than ten
days) after receiving such request.
(o) The Company shall enter into such customary agreements (including,
if requested in the case of a Shelf Registration, an underwriting agreement
in customary form) and take all such other action, if any, as any Holder of
the Securities shall reasonably request in order to facilitate the
disposition of the Securities pursuant to any Shelf Registration.
<PAGE>
10
(p) In the case of any Shelf Registration, the Company shall (i) make
reasonably available for inspection by the Holders of the Securities named
in the Shelf Registration Statement, any underwriter participating in any
disposition pursuant to the Shelf Registration Statement and any attorney,
accountant or other agent retained by the Holders of the Securities named
in the Shelf Registration Statement or any such underwriter all relevant
financial and other records, pertinent corporate documents and properties
of the Company and (ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by the Holders of the Securities named in the Shelf Registration
Statement or any such underwriter, attorney, accountant or agent retained
by the Holders of the Securities named in the Shelf Registration Statement
in connection with the Shelf Registration Statement, in each case, as shall
be reasonably necessary to enable such persons, to conduct a reasonable
investigation within the meaning of Section 11 of the Securities Act;
provided, however, that the foregoing inspection and information gathering
shall be coordinated on behalf of the Initial Purchasers by you and on
behalf of the other parties, by one counsel designated by and on behalf of
such other parties as described in, and subject to the provisions of,
Section 4 hereof.
(q) In the case of any Shelf Registration, the Company, if requested
by any Holder of Securities named in the Shelf Registration Statement,
shall cause (i) its counsel to deliver an opinion and updates thereof
relating to the Securities in customary form addressed to such Holders and
the managing underwriters, if any, thereof and dated, in the case of the
initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such opinion shall
include, without limitation, the due incorporation and good standing of the
Company and its subsidiaries; the qualification of the Company and its
subsidiaries to transact business as foreign corporations; the due
authorization, execution and delivery of the relevant agreement of the type
referred to in Section 3(o) hereof; the due authorization, execution,
authentication and issuance, and the validity and enforceability, of the
applicable Securities; the absence of material legal or governmental
proceedings involving the Company and its subsidiaries; the absence of
governmental approvals required to be obtained in connection with the Shelf
Registration Statement, the offering and sale of the applicable Securities,
or any agreement of the type referred to in Section 3(o) hereof; the
compliance in all material respects as to form of such Shelf Registration
Statement and any documents incorporated by reference therein and of the
Indenture with the requirements of the Securities Act and the Trust
Indenture Act, respectively; and, as of the date of the opinion and as of
the effective date of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence from such
Shelf Registration Statement and the prospectus included therein, as then
amended or supplemented, and from any documents incorporated by reference
therein of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading (in the case of any such documents,
in the light of the circumstances existing at the time that such documents
were filed with the Commission under the Exchange Act); (ii) its officers
to execute and deliver all customary documents and certificates and updates
thereof requested by any underwriters of the applicable Securities and
(iii) its independent public accountants and the independent public
accountants with respect to any other entity for which financial
<PAGE>
11
information is provided in the Shelf Registration Statement to provide to
the selling Holders of the applicable Securities and any underwriter
therefor a comfort letter in customary form and covering matters of the
type customarily covered in comfort letters in connection with primary
underwritten offerings, subject to receipt of appropriate documentation as
contemplated, and only if permitted, by Statement of Auditing Standards No.
72.
(r) In the case of the Registered Exchange Offer, if requested by any
Initial Purchaser or any known Participating Broker-Dealer, the Company
shall cause (i) its counsel to deliver to such Initial Purchaser or such
Participating Broker-Dealer a signed opinion in the form set forth in
Sections 6(c) and (d) of the Purchase Agreement with such changes as are
customary in connection with the preparation of a Registration Statement
and (ii) its independent public accountants to deliver to such Initial
Purchaser or such Participating Broker-Dealer a comfort letter, in
customary form, meeting the requirements as to the substance thereof as set
forth in Section 6(a) of the Purchase Agreement, with appropriate date
changes.
(s) If a Registered Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Initial Securities by Holders to the
Company (or to such other Person as directed by the Company) in exchange
for the Exchange Securities or the Private Exchange Securities, as the case
may be, the Company shall mark, or caused to be marked, on the Initial
Securities so exchanged that such Initial Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities, as
the case may be; in no event shall the Initial Securities be marked as paid
or otherwise satisfied.
(t) The Company will use its best efforts to (a) if the Initial
Securities have been rated prior to the initial sale of such Initial
Securities, confirm that such ratings will apply to the Securities covered
by a Registration Statement, or (b) if the Initial Securities were not
previously rated, cause the Securities covered by a Registration Statement
to be rated with the appropriate rating agencies, if so requested by
Holders of a majority in aggregate principal amount of Securities covered
by such Registration Statement, or by the managing underwriters, if any.
(u) In the event that any broker-dealer registered under the Exchange
Act shall underwrite any Securities or participate as a member of an
underwriting syndicate or selling group or "assist in the distribution"
(within the meaning of the Conduct Rules (the "Rules") of the National
Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
Holder of such Securities or as an underwriter, a placement or sales agent
or a broker or dealer in respect thereof, or otherwise, the Company will
assist such broker-dealer in complying with the requirements of such Rules,
including, without limitation, by (i) if such Rules, including Rule 2720,
shall so require, engaging a "qualified independent underwriter" (as
defined in Rule 2720) to participate in the preparation of the Registration
Statement relating to such Securities, to exercise usual standards of due
diligence in respect thereto and, if any portion of the offering
contemplated by such Registration Statement is an underwritten offering or
is made through a placement or sales agent, to recommend the yield of such
Securities, (ii) indemnifying any such qualified independent underwriter
<PAGE>
12
to the extent of the indemnification of underwriters provided in Section 5
hereof and (iii) providing such information to such broker-dealer as may be
required in order for such broker-dealer to comply with the requirements of
the Rules.
(v) The Company shall use its best efforts to take all other steps
necessary to effect the registration of the Securities covered by a
Registration Statement contemplated hereby.
4. Registration Expenses. The Company shall bear all fees and expenses
incurred by it in connection with the performance of its obligations under
Sections 1 through 3 hereof (including the reasonable fees and expenses, if any,
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Initial Purchasers,
incurred in connection with the Registered Exchange Offer, which fees and
expenses shall not exceed $10,000), whether or not the Registered Exchange Offer
or a Shelf Registration is filed or becomes effective, and, in the event of a
Shelf Registration, shall bear or reimburse the Holders of the Securities
covered thereby for the reasonable fees and disbursements of not more than one
firm of counsel designated by the Holders of a majority in principal amount of
the Initial Securities covered thereby to act as counsel for the Holders of the
Initial Securities in connection therewith.
5. Indemnification. (a) The Company agrees to indemnify and hold harmless
each Holder of the Securities, any Participating Broker-Dealer and each person,
if any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Holder Indemnified Parties") from and against any losses,
claims, damages or liabilities, joint or several, or any actions in respect
thereof (including, but not limited to, any losses, claims, damages, liabilities
or actions relating to purchases and sales of the Securities) to which each
Holder Indemnified Party may become subject under the Securities Act, the
Exchange Act or otherwise, insofar as such losses, claims, damages, liabilities
or actions arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in a Registration Statement or in a
prospectus contained in a Registration Statement (a "Prospectus") or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration Statement, or arise out of, or are based upon, 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, and shall
reimburse, as incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action in respect thereof; provided,
however, that (i) the Company shall not be liable in any such case to the extent
that such loss, claim, damage, liability or actions in respect thereof arises
out of or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in a Registration Statement or Prospectus or
in any amendment or supplement thereto or in any preliminary prospectus relating
to a Shelf Registration in reliance upon and in conformity with written
information pertaining to such Holder or its distribution and furnished to the
Company by or on behalf of such Holder specifically for inclusion therein and
(ii) with respect to any untrue statement or omission or alleged untrue
statement or omission made in any preliminary prospectus relating to a Shelf
Registration Statement, the indemnity agreement contained in this subsection (a)
shall not inure to the benefit of any Holder or Participating Broker-Dealer from
whom the person asserting any such losses, claims, damages, liabilities or
actions in respect thereof purchased the Securities concerned, to the extent
<PAGE>
13
that a prospectus relating to such Securities was required to be delivered by
such Holder or Participating Broker-Dealer under the Securities Act in
connection with such purchase and any such loss, claim, damage, liability or
action in respect thereof of such Holder or Participating Broker-Dealer results
from the fact that there was not sent or given to such person, at or prior to
the written confirmation of the sale of such Securities to such person, a copy
of the final prospectus if the Company had previously furnished copies thereof
to such Holder or Participating Broker-Dealer; provided further, however, that
this indemnity agreement will be in addition to any liability which the Company
may otherwise have to such Holder Indemnified Party. The Company shall also
indemnify underwriters, their officers and directors and each person who
controls such underwriters within the meaning of the Securities Act or the
Exchange Act to the same extent as provided above with respect to the
indemnification of the Holders of the Securities if requested by such Holders.
(b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act from
and against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Company or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, in each
case only to the extent that such untrue statement or omission or alleged untrue
statement or omission was made in reliance upon and in conformity with written
information pertaining to such Holder or its distribution and furnished to the
Company by or on behalf of such Holder specifically for inclusion therein; and,
subject to the limitation set forth in the immediately preceding clause, shall
reimburse, as incurred, the Company for any legal or other expenses reasonably
incurred by the Company or any such controlling person in connection with
investigating or defending any loss, claim, damage, liability or action in
respect thereof. This indemnity agreement will be in addition to any liability
which such Holder may otherwise have to the Company or any of its controlling
persons.
(c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under Section 5(a) or (b) above, notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not, in any event, relieve the indemnifying
party from any liabilities to any indemnified party otherwise than under
paragraph (a) or (b) above. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof the indemnifying party will not be liable to such
indemnified party under this Section 5 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof, other than reasonable costs of investigation. In no event shall an
indemnifying party be liable for fees and expenses of more than one counsel (in
addition to any local counsel) separate form their own counsel for all
<PAGE>
14
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action. An indemnifying party shall not be liable for any settlement of
any proceeding effected without its prior written consent; provided, however,
that if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees it shall be liable for any settlement effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (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.
(d) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other from the exchange of the Securities,
pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by
the foregoing clause (i) 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 indemnifying party or
parties on the one hand and the indemnified party or parties on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative fault of the parties 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 such indemnifying party on
the one hand or such Holder or such indemnified party, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding any other provision of this Section 5(d), the
Holders of the Securities shall not be required to contribute any amount in
excess of the amount by which the net proceeds received by such Holders from the
sale of the Securities pursuant to a Registration Statement exceeds the amount
of damages which such Holders have otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
paragraph (d), each person, if any, who controls such Holder Indemnified Party
within the meaning of the Securities Act or the Exchange Act shall have the same
<PAGE>
15
rights to contribution as such Holder Indemnified Party and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act shall have the same rights to contribution as the Company.
(e) The agreements contained in this Section 5 shall survive the sale of
the Securities pursuant to a Registration Statement and 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 indemnified party.
<PAGE>
16
6. Additional Interest Under Certain Circumstances. (a) Additional interest
(the "Additional Interest") with respect to the Initial Securities shall be
assessed as follows if any of the following events occur (each such event in
clauses (i) through (iii) below a "Registration Default":
(i) If by May 30, 1998 (or if such day is not a business day, the
first business day thereafter) neither the Exchange Offer Registration
Statement nor a Shelf Registration Statement has been filed with the
Commission;
(ii) If by September 27, 1998 (or if such day is not a business day,
the first business day thereafter) neither the Registered Exchange Offer is
consummated nor, if required in lieu thereof, the Shelf Registration
Statement is declared effective by the Commission; or
(iii) If after either the Exchange Offer Registration Statement or the
Shelf Registration Statement is declared effective (A) such Registration
Statement thereafter ceases to be effective; or (B) such Registration
Statement or the related prospectus ceases to be usable (except as
permitted in paragraph (b)) in connection with resales of Transfer
Restricted Securities during the periods specified herein because either
(1) any event occurs as a result of which the related prospectus forming
part of such Registration Statement would include any 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, or (2) it shall be necessary to amend such
Registration Statement or supplement the related prospectus, to comply with
the Securities Act or the Exchange Act or the respective rules thereunder.
Additional Interest shall accrue on the Initial Securities over and above the
interest set forth in the title of the Securities from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all such Registration Defaults have been cured, at a rate of 0.50% per
annum.
(b) A Registration Default referred to in Section 6(a)(iii)(B) hereof shall
be deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Company that would need to be described in such Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Company is proceeding promptly and in good faith to amend or supplement such
Shelf Registration Statement and related prospectus to describe such events;
provided, however, that in any case if such Registration Default occurs for a
continuous period in excess of 30 days, Additional Interest shall be payable in
accordance with the above paragraph from the day such Registration Default
occurs until such Registration Default is cured.
(c) Any amounts of Additional Interest due pursuant to clause (i), (ii) or
(iii) of Section 6(a) above will be payable in cash on the regular interest
payment dates with respect to the Initial Securities. The amount of Additional
Interest will be determined by multiplying the applicable Additional Interest
rate by the principal amount of the Initial Securities, multiplied by a
fraction, the numerator of which is the number of days such Additional Interest
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months), and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until (i) the date
on which such Transfer Restricted Security has been exchanged by a person other
than a broker-dealer for a freely transferable Exchange Security in the
Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the
Registered Exchange Offer of an Initial Security for an Exchange Note, the date
on which such Exchange Note is sold to a purchaser who receives from such
broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Initial Security has been effectively registered under the Securities Act
and disposed of in accordance with the Shelf Registration Statement or (iv) the
date on which such Initial Securities is distributed to the public pursuant to
Rule 144 under the Securities Act or is saleable pursuant to Rule 144(k) under
the Securities Act.
7. Rules 144 and 144A. The Company shall use its best efforts to 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 request of any Holder of Initial Securities, make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rules 144 and 144A. The Company covenants that it
will take such further action as any Holder of Initial Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Initial Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Company by the Initial Purchasers upon request. Upon the request of any Holder
of Initial 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 are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering with the consent of the Company,
which consent shall not be unreasonably withheld.
<PAGE>
17
No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.
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, except by the Company and the written
consent of the Holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents.
(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, first-class mail,
facsimile transmission, or air courier which guarantees overnight delivery:
(1) if to a Holder of the Securities, at the most current address given by
such Holder to the Company.
(2) if to the Initial Purchasers;
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Fax No.: (212) 325-8278
Attention: Transactions Advisory Group
with a copy to:
Skadden, Arps, Slate, Meagher and Flom LLP
919 Third Avenue
New York, New York 10022
Attention: Mark C. Smith, Esq.
(3) if to the Company, at its address as follows:
Terex Corporation
500 Post Road East
Suite 320
Westport, Connecticut 06880
Attention: Eric I Cohen, Esq.
<PAGE>
18
with a copy to:
Robinson Silverman Pearce Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Attention: Stuart A. Gordon, Esq.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(c) No Inconsistent Agreements. The Company hereby agrees that any
Registration Statement shall, unless otherwise agreed upon by the Initial
Purchasers, include only those Securities required to be included thereunder
pursuant to the terms of this Agreement. The Company has not, as of the date
hereof, entered into, nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(d) Successors and Assigns. This Agreement shall be binding upon each of
the parties and their respective successors and assigns.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
(h) Severability. If any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
(i) Securities Held by the Company or its Affiliates. Whenever the consent
or approval of Holders of a specified percentage of principal amount of
Securities is required hereunder, Securities held by the Company or its
affiliates (other than subsequent Holders of Securities if such subsequent
Holders are deemed to be affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
<PAGE>
19
(j) Agent for Service; Submission to Jurisdiction; Waiver of
Immunities. By the execution and delivery of this Agreement, the Company
(i) acknowledges that it has, by separate written instrument, irrevocably
designated and appointed Terex Corporation (and any successor entity), as its
authorized agent upon which process may be served in any suit or proceeding
arising out of or relating to this Agreement that may be instituted in any
federal or state court in the State of New York or brought under federal or
state securities laws, and acknowledges that Terex Corporation has accepted such
designation, (ii) submits to the nonexclusive jurisdiction of any such court in
any such suit or proceeding, and (iii) agrees that service of process upon Terex
Corporation and written notice of said service to the Company shall be deemed in
every respect effective service of process upon it in any such suit or
proceeding. The Company further agrees to take any and all action, including the
execution and filing of any and all such documents and instruments, as may be
necessary to continue such designation and appointment of Terex Corporation in
full force and effect so long as any of the Securities shall be outstanding. To
the extent that the Company may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service of notice, attachment
prior to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, it hereby irrevocably waives such immunity in
respect of this Agreement, to the fullest extent permitted by law.
<PAGE>
20
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers, the Issuer and the Guarantors in accordance with
its terms.
Very truly yours,
TEREX CORPORATION
By:____________________________
Name:
Title:
KOEHRING CRANES, INC.
By:____________________________
Name:
Title:
M&M ENTERPRISES OF BARAGA, INC.
By:____________________________
Name:
Title:
PAYHAULER CORP.
By:____________________________
Name:
Title:
<PAGE>
21
PPM CRANES, INC.
By:____________________________
Name:
Title:
TEREX AERIALS, INC.
By:____________________________
Name:
Title:
TEREX BARAGA PRODUCTS, INC.
By:____________________________
Name:
Title:
TEREX CRANES, INC.
By:____________________________
Name:
Title:
TEREX MINING EQUIPMENT, INC.
By:____________________________
Name:
Title:
<PAGE>
22
TEREX-RO CORPORATION
By:____________________________
Name:
Title:
TEREX-TELELECT, INC.
By: ____________________________
Name:
Title:
<PAGE>
23
The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.
Credit Suisse First Boston Corporation
CIBC Oppenheimer Corp.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
BancBoston Securities Inc.
By: Credit Suisse First Boston Corporation
By:_____________________________
Name:
Title:
<PAGE>
24
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 Initial Securities
where such Initial 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 180 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."
<PAGE>
25
ANNEX B
Each broker-dealer that receives Exchange Securities for its own account in
exchange for Securities, where such Initial 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."
<PAGE>
26
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 Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 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.
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 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 180 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 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 brokers
or dealers and will indemnify the Holders of the Securities (including any
broker-dealers) against certain liabilities, including liabilities under the
Securities Act.
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 Initial 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.
