EXHIBIT 4.2
OFFICERS' CERTIFICATE
RELATING TO
SECURITIES RESOLUTION NO. 1
OF
APPLIED POWER INC.
The undersigned, as Officers of Applied Power Inc. (the "Company"), do
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hereby certify that the attached is a true and correct copy of Securities
Resolution No. 1, relating to the Indenture, dated as of April 1, 1999 between
the Company and The First National Bank of Chicago, as trustee (the
"Indenture"), which has been duly adopted by an Officer of the Company as of
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April 1, 1999 pursuant to Board delegation on the 10th day of March, 1999; and
that said resolution has not been rescinded and remains in full force and
effect. Capitalized terms used but not defined herein have the meanings given
such terms in the Indenture.
IN WITNESS WHEREOF, this Officers' Certificate has been duly executed
on this 1st day of April, 1999.
By: /s/Richard G. Sim
_____________________________
Name: Richard G. Sim
Title: President and Chief
Executive Officer
By: /s/Robert C. Arzbaecher
_____________________________
Name: Robert C. Arzbaecher
Title: Chief Financial Officer
SECURITIES RESOLUTION NO. 1
OF
APPLIED POWER INC.
The actions described below are taken as of April 1, 1999 by the Board
of Directors (the "Board") of APPLIED POWER INC. (the "Company"), or by an
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Officer or committee of Officers pursuant to Board delegation on the 10th day of
March, 1999, and Section 2.01 of the Indenture, dated as of April 1, 1999, (the
"Indenture") between the Company and The First National Bank of Chicago, as
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trustee (the "Trustee"). Capitalized terms used but not defined herein have the
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meanings given such terms in the Indenture.
RESOLVED, that a new series of Securities is authorized as follows:
1. The title of the series is 8.75% Senior Subordinated Notes due 2009
(the "Securities").
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2. The form and terms of the Securities shall be substantially as set
forth in Exhibit 1 hereto.
3. The Company is hereby authorized to issue $200 million in aggregate
principal amount of the Securities and to offer such Securities pursuant to the
Company's Prospectus dated January 27, 1999 and the Prospectus Supplement dated
March 26, 1999. The Company is also hereby authorized, upon the approval of the
Board in the form of a resolution by the Board, to issue up to $100 million
aggregate principal amount of additional Securities under the Indenture with the
same terms (including interest rate, maturity and redemption terms) as the
Securities (the "Additional Securities") except that no Additional Securities
may be issued at a price that would cause such Additional Securities to have
"original issue discount" within the meaning of Section 1273 of the Internal
Revenue Code and provided such issuance complies with Section 10.1 of the
Securities.
This Securities Resolution shall be effective as of April 1, 1999.
EXHIBIT 1
Form of Security
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
No. 1 $200,000,000
APPLIED POWER INC.
8.75% Senior Subordinated Notes due 2009
CUSIP No. 038225AA6
APPLIED POWER INC.
promises to pay to Cede & Co.
or registered assigns
the principal sum of $200,000,000 Dollars on April 1, 2009
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: April 1, 1999
THE FIRST NATIONAL BANK OF CHICAGO
Transfer Agent and Paying Agent
APPLIED POWER INC.
By:_____________________________
By:_____________________________
(SEAL)
Authenticated:
THE FIRST NATIONAL BANK OF CHICAGO
Registrar
By:
Authorized Signature
8.75% Senior Subordinated Notes due 2009
1. INTEREST.
Applied Power Inc. ("Company"), a corporation organized and existing
under the laws of the State of Wisconsin, promises to pay interest on
the principal amount of this Security at the rate per annum shown
above. The Company will pay interest on April 1 and October 1 of each
year commencing October 1, 1999. Interest on the Securities will
accrue from the most recent date to which interest has been paid or,
if no interest has been paid, April 1, 1999. Interest will be
computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT.
The Company will pay interest on the Securities to the persons who are
registered holders of Securities at the close of business on the
record date for the next interest payment date, except as otherwise
provided in the Indenture. Principal of and premium, if any, and
interest on the Securities will be payable, and the Securities may be
presented for registration of transfer and exchange, at the office or
agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company will pay
principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts.
The Company may pay principal and interest by check payable in such
money. It may mail an interest check to a holder's registered
address.
3. SECURITIES AGENTS.
Initially, The First National Bank of Chicago, Attention: Corporate
Trust Division, will act as Paying Agent, Transfer Agent and
Registrar. The Company may change any Paying Agent or Transfer Agent
without notice or provide for more than one such agent. The Company
or any Affiliate may act in any such capacity. Subject to certain
conditions, the Company may change the Trustee.
4. INDENTURE.
The Company issued the securities of this series ("Securities") under
an Indenture dated as of April 1, 1999 ("Indenture") between the
Company and The First National Bank of Chicago ("Trustee"). The terms
of the Securities include those stated in the Indenture and in the
Securities Resolution creating the Securities and those made part of
the Indenture by the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
77aaa-77bbbb) (the "TIA"). All references to "Article" and "Section"
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contained herein refer to the relevant article or section, as the case
may be, in the Indenture and all references to "Paragraph" contained
herein refer to the numbered Paragraphs of this Security.
Securityholders are referred to the Indenture, the Securities
Resolution and the TIA for a statement of such terms.
5. OPTIONAL REDEMPTION.
The Securities will be subject to redemption, at the option of the
Company, in whole or in part, at any time on or after April 1, 2004
and prior to maturity, upon not less than 30 nor more than 60 days'
notice mailed to each Holder of Securities to be redeemed at such
Holder's address appearing in the register for the Securities, in
amounts of $1,000 or an integral multiple of $1,000, at the following
redemption prices (expressed as percentages of the principal amount)
plus accrued interest to but excluding the redemption date (subject to
the right of Holders of
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record on the relevant regular record date to receive interest due on
an interest payment date that is on or prior to the redemption date),
if redeemed during the 12-month period beginning April 1 of the years
indicated:
Redemption
Year Price
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2004................................................ 104.375%
2005................................................ 102.916%
2006................................................ 101.458%
2007 and thereafter................................. 100.000%
In addition, if on or before April 1, 2002, the Company receives net
proceeds from the sale of its Common Stock in one or more Public
Equity Offerings, the Company may, at its option, use all or a portion
of any such net proceeds to redeem Securities in an aggregate
principal amount of up to 35% of the sum of (i) the aggregate
principal amount of the Securities issued in this offering and (ii)
the aggregate principal amount of any Additional Securities issued
hereafter, provided, however, that at least 65% of each of (i) the
aggregate principal amount of Securities originally issued and (ii)
the aggregate amount of any Additional Securities issued hereafter
remains outstanding after such redemption. Such redemption must occur
on a redemption date within 75 days of such sale and upon not less
than 30 nor more than 60 days' notice mailed to each Holder of
Securities (and Additional Securities, if any) to be redeemed at such
Holder's address appearing in the register for the Securities or
register for the Additional Securities, as the case may be, in amounts
of $1,000 or an integral multiple of $1,000, at a redemption price of
108.75% of the principal amount of the Securities (and Additional
Securities, if any) plus accrued interest to but excluding the
redemption date (subject to the right of Holders of record on the
relevant regular record date to receive interest due on an interest
payment date that is on or prior to the redemption date).
If less than all the Securities are to be redeemed, the Trustee shall
select, in such manner as it shall deem fair and appropriate, the
particular Securities to be redeemed or any portion thereof that is an
integral multiple of $1,000.
6. SUBORDINATION OF SECURITIES.
6.1. Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by
his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Paragraph 6
(subject to the provisions of Article 8), the payment of the principal
of (and premium, if any) and interest on each and all of the
Securities are hereby expressly made subordinate and subject in right
of payment to the prior payment in full of all Senior Debt of the
Company. No provisions of this Paragraph 6 shall prevent the
occurrence of any Event of Default.
6.2. Payment Over of Proceeds Upon Dissolution, Etc.
Upon (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b) any liquidation,
dissolution or other winding up of the Company, whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy, or
(c) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company, then and in any
such event specified in (a),
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(b) or (c) above (each such event, if any, herein sometimes referred
to as a "Proceeding") the holders of Senior Debt of the Company shall
be entitled to receive payment in full of all amounts due or to become
due on or in respect of all Senior Debt of the Company, or provision
shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt of
the Company, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character, whether
in cash, property or securities, on account of principal of (or
premium, if any) or interest on the Securities or on account of any
purchase or other acquisition of Securities by the Company or any
Subsidiary of the Company (all such payments, distributions, purchases
and acquisitions, other than subordinated consideration (as defined
below), herein referred to, individually and collectively, as a
"Securities Payment"), and to that end the holders of Senior Debt of
the Company shall be entitled to receive, for application to the
payment thereof, any Securities Payment which may be payable or
deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Paragraph 6, the Trustee or the Holder of any Security shall have
received any Securities Payment before all Senior Debt of the Company
is paid in full or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of
Senior Debt of the Company, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to the Trustee
or, as the case may be, such Holder, then and in such event such
Securities Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of
assets of the Company for application to the payment of all Senior
Debt of the Company remaining unpaid, to the extent necessary to pay
all Senior Debt of the Company in full, after giving effect to any
concurrent payment or distribution to or for the holders of Senior
Debt of the Company.
For purposes of this Paragraph 6 only, the words "any payment or
distribution of any kind or character, whether in cash, property or
securities" shall not be deemed to include a payment or distribution
of stock or securities of the Company which stock or securities are
subordinated in right of payment to all then outstanding Senior Debt
of the Company to substantially the same extent as, or greater than,
the Securities are so subordinated as provided in this Paragraph 6
("subordinated consideration"). The consolidation of the Company with,
or the merger of the Company into, another Person or the liquidation
or dissolution of the Company following the conveyance or transfer of
all or substantially all of its properties and assets as an entirety
to another Person upon the terms and conditions set forth in Paragraph
10.15 and Article 5 shall not be deemed a Proceeding for the purposes
of this Paragraph 6 if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or transfer such properties and assets as an entirety, as the case may
be, shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions set forth in Paragraph 10.15 and
Article 5.
6.3. No Payment When Senior Debt of the Company in Default.
In the event that any Senior Payment Default (as defined below) shall
have occurred and be continuing, then no Securities Payment shall be
made unless and until such Senior Payment Default shall have been
cured or waived or shall have ceased to exist or all amounts then due
and payable in respect of Senior Debt of the Company shall have been
paid in full, or provision shall have been made for such payment in
cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt of the Company.
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"Senior Payment Default" means any default in the payment of principal
of or premium, if any, or interest on any Senior Debt when due,
whether at the Stated Maturity of any such payment or by declaration
of acceleration, call for redemption or otherwise.
In the event that any Senior Nonmonetary Default (as defined below)
shall have occurred and be continuing, then, upon the receipt by the
Company and the Trustee of written notice of such Senior Nonmonetary
Default from the agent for the Senior Debt which is the subject of
such Senior Nonmonetary Default, no Securities Payment shall be made
during the period (the "Payment Blockage Period") commencing on the
date of such receipt of such written notice and ending on the earlier
of (i) the date on which such Senior Nonmonetary Default shall have
been cured or waived or shall have ceased to exist or all Senior Debt
the subject of such Senior Nonmonetary Default shall have been
discharged; (ii) the 179th day after the date of such receipt of such
written notice; or (iii) the date on which the Payment Blockage Period
shall have been terminated by written notice to the Company or the
Trustee from the agent for the Senior Debt initiating the Payment
Blockage Period. No more than one Payment Blockage Period may be
commenced with respect to the Securities during any 360-day period and
there shall be a period of at least 181 consecutive days during each
360-day period when no Payment Blockage Period is in effect. In
addition, no Senior Payment Default or Senior Nonmonetary Default that
existed or was continuing on the date of commencement of any Payment
Blockage Period shall be, or be made, the basis for the commencement
of a subsequent Payment Blockage Period, whether or not within a
period of 360 consecutive days, unless such Senior Payment Default or
Senior Nonmonetary Default shall have been cured for a period of not
less than 90 consecutive days.
"Senior Nonmonetary Default" means the occurrence or existence and
continuance of an event of default with respect to any Senior Debt,
other than a Senior Payment Default, permitting the holders of such
Senior Debt (or a trustee or agent on behalf of the holders thereof)
then to declare such Senior Debt due and payable prior to the date on
which it would otherwise become due and payable.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by
the foregoing provisions of this Paragraph 6, and if such fact shall,
at or prior to the time of such Securities Payment, have been made
known to the Trustee or, as the case may be, such Holder, then and in
such event such Securities Payment shall be paid over and delivered
forthwith to the Company.
The provisions of this Paragraph 6.3 shall not apply to any Securities
Payment with respect to which Paragraph 6.2 would be applicable.
6.4. Payment Permitted If No Default.
Nothing contained in this Paragraph 6.4 or in the Indenture or
elsewhere in any of the Securities shall prevent (a) the Company, at
any time except during the pendency of any Proceeding referred to in
Paragraph 6.2 or under the conditions described in Paragraph 6.3, from
making Securities Payments, or (b) the application by the Trustee of
any money deposited with it hereunder to Securities Payments or the
retention of such Securities Payment by the Holders, if, at the time
of such application by the Trustee, it did not have knowledge that
such Securities Payment would have been prohibited by the provisions
of this Paragraph 6.
6.5. Subrogation to Rights of Holders of Senior Debt of the Company.
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Subject to the payment in full of all amounts due or to become due on
or in respect of Senior Debt of the Company, or the provision for such
payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt of the Company, the Holders
of the Securities shall be subrogated to the rights of the holders of
such Senior Debt of the Company to receive payments and distributions
of cash, property and securities applicable to the Senior Debt of the
Company until the principal of (and premium, if any) and interest on
the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Debt of the Company of any cash, property or securities to which the
Holders of the Securities or the Trustee would be entitled except for
the provisions of this Paragraph 6, and no payments over pursuant to
the provisions of this Paragraph 6 to the holders of Senior Debt of
the Company by Holders of the Securities or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt of
the Company and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Debt of the Company.
6.6. Provisions Solely to Define Relative Rights.
The provisions of this Paragraph 6 are and are intended solely for the
purpose of defining the relative rights of the Holders on the one hand
and the holders of Senior Debt of the Company on the other hand.
Nothing contained in this Paragraph 6 or in the Indenture or elsewhere
in the Securities is intended to or shall (a) impair, as among the
Company, its creditors other than holders of Senior Debt of the
Company and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to
the rights under this Paragraph 6 of the holders of Senior Debt of the
Company, is intended to rank equally with all other general
obligations of the Company), to pay to the Holders of the Securities
the principal of (and premium, if any) and interest on the Securities
as and when the same shall become due and payable in accordance with
their terms; or (b) affect the relative rights against the Company of
the Holders of the Securities and creditors of the Company other than
the holders of Senior Debt of the Company; or (c) prevent the Trustee
or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under the Indenture, subject
to the rights, if any, under this Paragraph 6 of the holders of Senior
Debt of the Company to receive cash, property and securities otherwise
payable or deliverable to the Trustee or such Holder.
6.7. Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance hereof authorizes and
directs the Trustee on his behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in
this Paragraph 6 and appoints the Trustee his attorney-in-fact for any
and all such purposes.
6.8. No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt of the
Company to enforce subordination as herein provided 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, provisions and covenants of the Indenture and the
Securities, regardless of any knowledge thereof any such holder may
have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt of the Company may, at any time and from
time to time, without the consent of or notice
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to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Paragraph 6 or the
obligations hereunder of the Holders of the Securities to the holders
of Senior Debt 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 Debt of the Company, or
otherwise amend or supplement in any manner Senior Debt of the Company
or any instrument evidencing the same or any agreement under which
Senior Debt of the Company is outstanding; (ii) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt of the Company; (iii) release any
Person liable in any manner for the collection of Senior Debt of the
Company; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
6.9. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any
payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Paragraph 6 or any other
provision of the Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written
notice thereof from the Company or a holder of Senior Debt of the
Company or from any trustee therefor; and, prior to the receipt of any
such written notice, the Trustee, subject to the provisions of Article
7, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received
the notice provided for in this Paragraph 6 at least three Business
Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest on any
Security), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such
money was received and shall not be affected by any notice to the
contrary which may be received by it within three Business Days prior
to such date.
Subject to the provisions of Article 7, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt of the Company (or
a trustee therefor) to establish that such notice has been given by a
holder of Senior Debt of the Company (or a trustee therefor). In the
event that the Trustee determines in good faith that further evidence
is required with respect to the right of any Person as a holder of
Senior Debt of the Company to participate in any payment or
distribution pursuant to Article 7 or this Paragraph 6, the Trustee
may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the
Company held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under Article 7 or this
Paragraph 6, 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.
6.10. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Paragraph 6, the Trustee, subject to the provisions of Article
7, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in
which such Proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the
benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of
Securities, for the pur-
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pose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Debt of the Company
and other indebtedness of the Company, the amount thereof or payable
thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Paragraph 6.
6.11. Trustee Not Fiduciary for Holders of Senior Debt of the Company.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt of the Company and shall not be liable to any
such holders if it shall in good faith mistakenly pay over or
distribute to Holders of Securities or to the Company or to any other
Person cash, property or securities to which any holders of Senior
Debt of the Company shall be entitled by virtue of this Paragraph 6 or
otherwise.
6.12. Rights of Trustee as Holder of Senior Debt of the Company;
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Paragraph 6 with respect to any Senior Debt
of the Company which may at any time be held by it, to the same extent
as any other holder of Senior Debt of the Company, and nothing in the
Indenture shall deprive the Trustee of any of its rights as such
holder.
Nothing in this Paragraph 6 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.06 of the Indenture.
6.13. Paragraph 6 Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Paragraph 6 shall in such case (unless the
context otherwise requires) be construed as extending to and including
such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Paragraph 6 in
addition to or in place of the Trustee; provided, however, that
Paragraph 6.12 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
6.14. Defeasance of this Paragraph 6.
The subordination of the Securities of a series provided by this
Paragraph 6 is expressly made subject to the provisions for defeasance
or covenant defeasance in Article 8 and, anything herein to the
contrary notwithstanding, upon the effectiveness of any such
defeasance or covenant defeasance, the Securities of such series then
outstanding shall thereupon cease to be subordinated pursuant to this
Paragraph 6.
7. NOTICE OF REDEMPTION.
Notice of redemption will be mailed at least 30 but not more than 60
days before the redemption date to each holder of Securities to be
redeemed at his registered address.
A notice of redemption may provide that it is subject to the
occurrence of any event before the date fixed for such redemption as
described in such notice ("Conditional Redemption") and such notice of
Conditional Redemption shall be of no effect unless all such
conditions to the redemption have occurred before such date or have
been waived by the Company.
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8. DENOMINATIONS, TRANSFER, EXCHANGE.
The Securities are in registered form without coupons in denominations
of $1,000 and integral multiples thereof. The transfer of Securities
may be registered and Securities may be exchanged as provided in the
Indenture. The Transfer Agent may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and
to pay any taxes and fees required by law or the Indenture. The
Transfer Agent need not exchange or register the transfer of any
Security or portion of a Security selected for redemption. Also, it
need not exchange or register the transfer of any Securities for a
period of 15 days before a selection of Securities to be redeemed. No
service charge will be made or any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
9. PERSONS DEEMED OWNERS.
The registered holder of a Security may be treated as its owner for
all purposes.
10. RESTRICTIVE COVENANTS.
In addition to the covenants set forth in Article 4, the following
covenants apply to the Securities:
10.1 Limitation on Consolidated Debt
The Company may not, and may not permit any of its Restricted
Subsidiaries to, Incur any Debt (including Acquired Debt) unless
immediately after giving pro forma effect to the Incurrence of such
Debt (and Acquired Debt) and the receipt and application of the
proceeds thereof, the Consolidated Cash Flow Coverage Ratio of the
Company would be greater than 2.0 to 1.
Notwithstanding the foregoing limitation, the Company may, and may
permit any Restricted Subsidiary of the Company to, Incur the
following Debt:
(1) Debt under the Senior Bank Facility in an
aggregate principal amount at any one time not to exceed
$850 million, less any amounts by which any revolving credit
facility commitments under the Senior Bank Facility are
permanently reduced pursuant to Paragraph 10.7 (so long as
and to the extent that any required payments in connection
therewith are actually made), and any renewal, extension,
refinancing or refunding thereof in an amount which,
together with any amount remaining outstanding or available
under the Senior Bank Facility, does not exceed the amount
permitted under this clause (1);
(2) Debt owed by the Company to any Wholly Owned
Restricted Subsidiary of the Company for which fair value
has been received or Debt owed by a Subsidiary of the
Company to the Company or a Wholly Owned Restricted
Subsidiary of the Company; provided, however, that:
(a) any such Debt owing by the Company to a
Wholly Owned Restricted Subsidiary shall be
Subordinated Debt evidenced by an intercompany
promissory note, and
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(b) upon either:
(i) the transfer or other disposition by such Wholly
Owned Restricted Subsidiary or the Company of any Debt so
permitted to a Person other than the Company or another Wholly
Owned Restricted Subsidiary of the Company, or
(ii) the issuance (other than directors' qualifying
shares), sale, lease, transfer or other disposition of shares
of Capital Stock (including by consolidation or merger) of
such Wholly Owned Restricted Subsidiary to a Person other than
the Company such Wholly Owned Restricted Subsidiary,
the provisions of this clause (2) shall no longer be
applicable to such Debt and such Debt shall be deemed
to have been Incurred at the time of such transfer or
other disposition;
(3) Debt consisting of the Securities
(4) Debt consisting of Permitted Interest Rate or
Currency Price Agreements;
(5) Debt which is exchanged for or the proceeds of
which are used to refinance or refund, or any extension
or renewal of (each of the foregoing, a "refinancing"):
(a) the Securities,
(b) any Debt that is not described in any other
clause hereof that was outstanding on the date of
original issuance of the Securities,
(c) outstanding Debt Incurred pursuant to the first
sentence of this Paragraph 10.1, or
(d) any Debt Incurred under this clause (5) or
clause (6) below,
in each case in an aggregate principal amount not to exceed the
principal amount of the Debt so refinanced plus the amount of any
premium required to be paid in connection with such refinancing
pursuant to the terms of the Debt so refinanced or the amount of any
premium reasonably determined by the Company as necessary to
accomplish such refinancing by means of a tender offer or privately
negotiated repurchase, plus the expenses of the Company or the
Restricted Subsidiary, as the case may be, incurred in connection with
such refinancing; provided, however, that:
(i) Debt the proceeds of which are used to refinance
the Securities or Debt which is pari passu with or
subordinate in right of payment to the Securities shall only
be permitted if (x) in the case of any refinancing of the
Securities or Debt which is pari passu to the Securities,
the refinancing Debt is made pari passu to the Securities or
subordinated to the Securities, and (y) in the case of any
refinancing of Debt which is subordinated to the Securities,
the refinancing Debt constitutes Subordinated Debt; and
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(ii) in the case of any refinancing of Debt Incurred by
the Company, the refinancing Debt may be Incurred only by
the Company, and in the case of any refinancing of Debt
Incurred by a Restricted Subsidiary of the Company, the
refinancing Debt may be Incurred only by such Restricted
Subsidiary;
and provided, further, that Debt Incurred pursuant to this clause (5)
may not be Incurred more than 45 days prior to the application of the
proceeds to repay the Debt to be refinanced; and
(6) Debt not otherwise permitted to be Incurred
pursuant to clauses (1) through (5) above, which,
together with any other outstanding Debt Incurred
pursuant to this clause (6), has an aggregate principal
amount not in excess of $50 million at any time
outstanding.
For purposes of determining compliance with this Paragraph 10.1 in the
event that an item of proposed Debt meets the criteria of more than
one of the categories of Debt described in clauses (1) through (6)
above, or is entitled to be Incurred pursuant to the first paragraph
of this covenant, the Company will be permitted to classify such item
of Debt in any manner that complies with this covenant.
10.2 Limitation on Senior Subordinated Debt
The Company may not Incur any Debt which by its terms is (1)
subordinated in right of payment to any Senior Debt and (2) senior in
right of payment to the Securities.
10.3 Limitation on Issuance of Guarantees of Subordinated Debt
The Company may not permit any Restricted Subsidiary of the Company,
directly or indirectly, to assume, Guarantee or in any other manner
become liable with respect to any Debt of the Company that by its
terms is subordinate or junior in right of payment to the Securities.
10.4 Limitation on Liens Securing Subordinated Debt
The Company may not, and may not permit any of its Restricted
Subsidiaries to, create, incur, assume or suffer to exist any Lien on
or with respect to any property or assets of the Company or any
Restricted Subsidiary of the Company now owned or hereafter acquired
to secure any Debt of the Company or any Restricted Subsidiary that is
expressly by its terms subordinate or junior in right of payment to
any other Debt of the Company or such Restricted Subsidiary, without
making, or causing such Restricted Subsidiary to make, effective
provision for securing the Securities (1) equally and ratably with
such Debt as to such property or assets for so long as such Debt will
be so secured or (2) if such Debt is subordinate in right of payment
to the Securities, prior to such Debt as to such property or assets
for so long as such Debt will be so secured.
10.5 Limitation on Restricted Payments
A. The Company:
(1) may not, directly or indirectly, declare or pay any
dividend or make any distribution (including any payment in
connection with any merger or consolidation derived from
assets of the Company or any Restricted Subsidiary of the
Company) in respect of its Capital Stock or to the holders
thereof, excluding any dividends or distributions by the
Company payable solely in shares of its Capital Stock (other
than
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Redeemable Stock) or in options, warrants or other rights to
acquire its Capital Stock (other than Redeemable Stock),
(2) may not, and may not permit any Restricted Subsidiary
of the Company to, purchase, redeem, or otherwise acquire or
retire for value:
(a) any Capital Stock of the Company or any Restricted
Subsidiary of the Company, or
(b) any options, warrants or other rights to acquire
shares of Capital Stock of the Company or any
Restricted Subsidiary of the Company or any securities
convertible or exchangeable into shares of Capital
Stock of the Company or any Restricted Subsidiary of
the Company,
(3) may not make, or permit any Restricted Subsidiary of the
Company to make, any Investment other than a Permitted
Investment, and
(4) may not, and may not permit any Restricted Subsidiary
of the Company to, redeem, repurchase, defease or otherwise
acquire or retire for value prior to any scheduled maturity,
repayment or sinking fund payment Debt of the Company which
is subordinate or junior in right of payment to the
Securities.
(each of clauses (1) through (4) being a "Restricted Payment") unless:
(a) no Event of Default, or an event that with the
passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and
is continuing or would result from such Restricted
Payment,
(b) after giving pro forma effect to such Restricted
Payment as if such Restricted Payment had been made at
the beginning of the applicable four-fiscal-quarter
period, the Company could Incur at least $1.00 of
additional Debt pursuant to the terms of the Indenture
described in the first sentence of Paragraph 10.1
above, and
(c) upon giving effect to such Restricted Payment, the
aggregate of all Restricted Payments from the date of
issuance of the Securities does not exceed the sum of:
(i) 50% of cumulative Consolidated Net Income
(or, in case Consolidated Net Income is negative, less 100%
of such deficit) of the Company since March 1, 1999 through
the last day of the last full fiscal quarter ending
immediately preceding the date of such Restricted Payment
for which quarterly or annual financial statements are
available (taken as a single accounting period), plus
(ii) 100% of the aggregate net proceeds received
by the Company after the date of original issuance of the
Securities, including the fair market value of property
other than cash (determined in good faith by the Board as
evidenced by a resolution of the Board filed with the
Trustee), from contributions of capital or the issuance and
sale (other than to a Restricted Subsidiary) of Capital
Stock (other than Redeemable Stock) of the Company, options,
warrants or other rights to acquire Capital Stock (other
than Redeemable Stock) of the Company
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and Debt of the Company that has been converted into or
exchanged for Capital Stock (other than Redeemable Stock and
other than by or from a Restricted Subsidiary) of the
Company after the date of original issuance of the
Securities, provided that any such net proceeds received by
the Company from an employee stock ownership plan financed
by loans from the Company or a Restricted Subsidiary of the
Company shall be included only to the extent such loans have
been repaid with cash on or prior to the date of
determination, plus
(iii) an amount equal to the net reduction in
Investments by the Company and its Restricted Subsidiaries,
subsequent to the date of issuance of the Securities, in any
Person subject to clause (3) above upon the disposition,
liquidation or repayment (including by way of dividends)
thereof or from redesignations of Unrestricted Subsidiaries
as Restricted Subsidiaries, but in each such case only to
the extent such amounts are not included in Consolidated Net
Income of the Company and not to exceed in the case of any
one Person the amount of Investments previously made by the
Company and its Restricted Subsidiaries in such Person.
Prior to the making of any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate setting forth the computations by which the
determinations required by clauses (b) and (c) above were made and stating that
no Event of Default, or event that with the passing of time or the giving of
notice, or both, would constitute an Event of Default, has occurred and is
continuing or will result from such Restricted Payment.
B. Notwithstanding the foregoing, so long as no Event of Default, or
event that with the passing of time or the giving of notice, or both, would
constitute an Event of Default, shall have occurred and is continuing or would
result therefrom:
(1) the Company may pay any dividend on Capital Stock of any class
within 60 days after the declaration thereof if, on the date when the
dividend was declared, the Company could have paid such dividend in
accordance with the foregoing provisions,
(2) the Company may refinance any Debt otherwise permitted by the
provision of the Indenture described in clause (5) of the second paragraph
under Paragraph 10.1 above or redeem, repurchase or otherwise acquire and
retire for value any Debt solely in exchange for or out of the net proceeds
of the substantially concurrent sale (other than from or to a Restricted
Subsidiary or from or to an employee stock ownership plan financed by loans
from the Company or a Restricted Subsidiary of the Company) of shares of
Capital Stock (other than Redeemable Stock) of the Company, provided that
the amount of net proceeds from such exchange or sale shall be excluded
from the calculation of the amount available for Restricted Payments
pursuant to the preceding paragraph,
(3) the Company may purchase, redeem, acquire or retire any shares of
Capital Stock of the Company solely in exchange for or out of the net
proceeds of the substantially concurrent sale (other than from or to a
Restricted Subsidiary of the Company or from or to an employee stock
ownership plan financed by loans from the Company or a Restricted
Subsidiary of the Company) of shares of Capital Stock (other than
Redeemable Stock) of the Company,
(4) the Company or a Restricted Subsidiary may purchase or redeem any
Senior Debt from Net Available Proceeds to the extent permitted under
Paragraph 10.7,
(5) the Company may make dividends or distributions pro rata to its
shareholders of shares of Capital Stock in any of its Subsidiaries (a
"Spin-off"), provided, that (i) immediately after giving effect to such
Spin-off, the Company could Incur at least $1.00 of additional Debt
pursuant to the first
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sentence of Paragraph 10.1, (ii) the greater of the aggregate fair market
value and aggregate book value of all such shares dividended or distributed
(measured at the time of such dividend or distribution) shall not exceed 5%
of the Consolidated Net Worth of the Company before giving effect to any
such Spin-off and (iii) the Consolidated Cash Flow Available for Fixed
Charges of the Company shall not decrease by more than 5% after giving
effect to any such Spin-off,
(6) the Company may acquire shares of Capital Stock to be contributed
by the Company on behalf of its employees to employee benefit programs;
provided that in each such case the amount to be purchased shall not exceed
5% of the compensation of such employee in any fiscal year, and
(7) the Company or any Restricted Subsidiary of the Company may make
Restricted Payments, in addition to Restricted Payments permitted by
clauses (1) through (6) above, not in excess of $20 million in the
aggregate after the date of the Indenture.
Any payment made pursuant to clauses (1), (3) or (5) of this Paragraph 10.5B
shall be a Restricted Payment for purposes of calculating aggregate Restricted
Payments pursuant to the preceding Paragraph 10.5A.
10.6 Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company may not, and may not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company:
(1) to pay dividends (in cash or otherwise) or make any other
distributions in respect of its Capital Stock or pay any Debt or other
obligation owed to the Company or any other Restricted Subsidiary of the
Company,
(2) to make loans or advances to the Company or any other Restricted
Subsidiary of the Company, or
(3) to transfer any of its property or assets to the Company or any
other Restricted Subsidiary of the Company.
Notwithstanding the foregoing, the Company may, and may permit any Restricted
Subsidiary of the Company to, suffer to exist any such encumbrance or
restriction:
(a) pursuant to any agreement in effect on the date of original
issuance of the Securities, including the Senior Bank Facility,
as described in a schedule to the Indenture,
(b) pursuant to an agreement relating to any Debt Incurred by a
Person (other than a Restricted Subsidiary of the Company
existing on the date of original issuance of the Securities or
any Restricted Subsidiary of the Company carrying on any of the
businesses of any such Restricted Subsidiary) prior to the date
on which such Person became a Restricted Subsidiary of the
Company and outstanding on such date and not Incurred in
anticipation of becoming a Restricted Subsidiary of the Company,
which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person
so acquired,
(c) pursuant to an agreement effecting a renewal, refunding or
extension of Debt Incurred pursuant to an agreement referred to
in clause (a) or (b) above, provided, however, that the
provisions contained in such renewal, refunding or extension
agreement relating to such encumbrance or restriction are no more
restrictive in any material re-
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spect than the provisions contained in the agreement the subject
thereof, as determined in good faith by the Board and evidenced
by a resolution of the Board filed with the Trustee,
(d) in the case of clause (3) above, restrictions contained in
any security agreement (including a capital lease) securing Debt
of a Restricted Subsidiary otherwise permitted hereunder, but
only to the extent such restrictions restrict the transfer of the
property subject to such security agreement,
(e) in the case of clause (3) above, customary nonassignment
provisions entered into in the ordinary course of business
consistent with past practices in leases and other contracts to
the extent such provisions restrict the transfer or subletting of
any such lease or the assignment of rights under any such
contract,
(f) any restriction with respect to a Restricted Subsidiary of
the Company imposed pursuant to an agreement for the sale or
disposition of all or substantially all of the Capital Stock or
assets of such Restricted Subsidiary, provided that such
restriction terminates if such sale or disposition is closed or
abandoned, or
(g) such encumbrance or restriction is the result of applicable
corporate law or regulation relating to the payment of dividends
or distributions.
10.7 Limitation on Asset Dispositions
The Company may not, and may not permit any of its Restricted
Subsidiaries to, make any Asset Disposition in one or more related transactions
unless:
(1) the Company or the Restricted Subsidiary, as the case may be,
receives consideration for such disposition at least equal to the fair
market value for the assets sold or disposed of as determined by the Board
in good faith and evidenced by a resolution of the Board filed with the
Trustee,
(2) at least 75% of the consideration for such disposition consists of
cash or readily marketable cash equivalents or the assumption of Debt
(other than Debt that is subordinated to the Securities) relating to such
assets and release from all liability on the Debt assumed, and
(3) all Net Available Proceeds, less any amounts invested within 360
days of such disposition in assets related to the business of the Company,
are applied within 360 days of such disposition:
(a) first, to the permanent repayment or reduction of Senior Debt
then outstanding under any agreements or instruments which would
require such application or prohibit payments pursuant to clause
(b) following,
(b) second, to the extent of remaining Net Available Proceeds, to
make an Offer to Purchase outstanding Securities at 100% of their
principal amount plus accrued interest to the date of purchase
and, to the extent required by the terms thereof, any other Debt
of the Company that is pari passu with the Securities at a price
no greater than 100% of the principal amount thereof plus accrued
interest to the date of purchase, and
(c) third, to the extent of any remaining Net Available Proceeds,
to any other use as determined by the Company which is not
otherwise prohibited by the Indenture.
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Pending final application of the Net Available Proceeds, the Company
may use the proceeds in any manner not prohibited hereunder and may temporarily
reduce Senior Debt then outstanding, provided that this temporary use will not
affect its obligations hereunder.
Notwithstanding the foregoing, the Company shall not be required to
make an Offer to Purchase pursuant to clause 3(b) above if the remaining Net
Available Proceeds after giving effect to the application required by clause
3(a) are less than $10 million.
10.8 Limitation on Sale and Leaseback Transactions
The Company may not, and may not permit any of its Restricted
Subsidiaries to, enter into any Sale and Leaseback Transaction unless the Sale
and Leaseback Transaction is treated as an Asset Disposition and all of the
conditions of Paragraph 10.7 (including the provisions concerning the
application of Net Available Proceeds) are satisfied with respect to such Sale
and Leaseback Transaction, treating all of the consideration received in such
Sale and Leaseback Transaction as Net Available Proceeds for purposes of such
covenant.
10.9 Limitation on the Issuance and Sale of Capital Stock of Restricted
Subsidiaries
The Company may not, and may not permit any of its Restricted
Subsidiaries to, directly or indirectly, issue, transfer, convey, sell, lease or
otherwise dispose of any shares of Capital Stock (including options, warrants or
other rights to purchase shares of such Capital Stock) of such or any other
Restricted Subsidiary of the Company (other than to the Company or a Wholly
Owned Restricted Subsidiary of the Company or in respect of any director's
qualifying shares or the ownership by foreign nationals of such Capital Stock to
the extent mandated by applicable law) to any Person unless:
(A) such issuance, transfer, conveyance, sale, lease or other
disposition, including the application of the Net Available Proceeds therefrom,
is made in accordance with the provisions of Paragraph 10.7 or the provisions of
clause (5) of Paragraph 10.5 B, and
(B) immediately after giving effect to such issuance, transfer,
conveyance, sale, lease or other disposition, (i) such Subsidiary would no
longer constitute a Restricted Subsidiary of the Company, and (ii) the Company
could make a Restricted Payment in an amount equal to the greater of the fair
market value and book value of the Company's remaining ownership interests in
such Subsidiary pursuant to the provisions described under Paragraph 10.5 and
such amount is thereafter treated as a Restricted Payment for the purpose of
calculating the aggregate amount available for Restricted Payments thereunder.
10.10 Transactions with Affiliates
The Company may not, and may not permit any of its Restricted
Subsidiaries to, enter into any transaction (or series of related transactions)
with an Affiliate of the Company (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company), including any Investment, either directly
or indirectly, unless such transaction is on terms no less favorable to the
Company or such Restricted Subsidiary than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate and
is in the best interests of the Company or such Restricted Subsidiary.
For any transaction that involves:
(1) in excess of $2 million a majority of the disinterested members
of the Board shall determine that the transaction satisfies the above
criteria and shall evidence such a determination by a resolution of the
Board filed with the Trustee, or
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(2) in excess of $10 million the Company shall also obtain an opinion
from a nationally recognized expert with experience in appraising the terms
and conditions of the type of transaction (or series of related transactions)
for which the opinion is required stating that such transaction (or series of
related transactions) is on terms no less favorable to the Company or such
Restricted Subsidiary than those that could be obtained in a comparable
arm's-length transaction with an entity that is not an Affiliate of the
Company, which opinion shall be filed with the Trustee.
The foregoing requirements shall not apply to:
(1) Any employment agreement or employee benefit arrangement with any
officer or director entered into in the ordinary course of business and
consistent with past practice;
(2) Payment of reasonable directors' fees to directors who are not
employees of the Company;
(3) Reasonable and customary indemnification of officers and directors
of the Company or any Restricted Subsidiary pursuant to bylaws, statutory
provisions or indemnification agreements;
(4) any Restricted Payment that is permitted to be paid under the
provisions of Paragraph 10.5;
(5) Purchases and sales of goods and services in the ordinary course
of business on terms customary in the industry;
(6) Any transaction pursuant to agreements in effect on the date of
issuance of the Securities; and
(7) Written agreements entered into or assumed in connection with
acquisitions of other businesses with persons who were not Affiliates prior
to such transactions.
10.11 Change of Control
Within 30 days of the occurrence of a Change of Control, the Company
will be required to make an Offer to Purchase all outstanding Securities at a
purchase price equal to 101% of their principal amount plus accrued interest to
the date of purchase. A "Change of Control" will be deemed to have occurred at
such time as:
(1) any Person or any Persons acting together that would constitute a
"group" (a "Group") for purposes of Section 13 (d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor provision
thereto, together with any Affiliates thereof, shall beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act or any successor provision
thereto), directly or indirectly, at least 50% of the aggregate voting power
of all classes of Voting Stock of the Company (for the purposes of this
clause (1) a Person shall be deemed to beneficially own the Voting Stock of a
corporation that is beneficially owned (as defined above) by another
corporation (a "parent corporation") if such Person beneficially owns (as
defined above) at least 50% of the aggregate voting power of all classes of
Voting Stock of such parent corporation), or
(2) any Person or Group, together with any Affiliates thereof, shall
succeed in having a sufficient number of its nominees elected to the Board of
the Company such that such nominees, when added to any existing director
remaining on the Board of the Company after such election who was a nominee
of or is an Affiliate of such Person or Group, will constitute a majority of
the Board of the Company, or
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(3) the Company shall, directly or indirectly, transfer, sell, lease
or otherwise dispose of all or substantially all of its assets, or
(4) there shall be adopted a plan of liquidation or dissolution of
the Company.
Notwithstanding the foregoing, a transaction effected to create a holding
company of the Company shall not be deemed to involve a "Change of Control" if
(1) pursuant to such transaction the Company becomes a wholly owned Subsidiary
of such holding company and (2) as a result of such transaction the holders of
Capital Stock of such holding company are substantially the same as the holders
of Capital Stock of the Company immediately prior to such transaction; provided
that following any such holding company transaction, this covenant shall apply
to both the Company and such holding company, and references in this definition
of "Change of Control" to the Company shall thereafter be treated as references
to either the Company or such holding company, as applicable.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act.
10.12 Payments for Consent
The Company may not, and may not permit any of its Restricted
Subsidiaries to, 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 the Indenture or the Securities unless such consideration is
offered to be paid or is paid to all Holders of the Securities that consent,
waive or agree to amend in the time frame set forth in the solicitation document
relating to such consent, waiver or agreement.
10.13 Provision of Financial Information
For so long as any of the Securities are outstanding, the Company
shall file with the SEC the annual reports, quarterly reports and other
documents which a reporting company is required to file with the SEC pursuant to
Section 13 (a) or 15 (d) of the Exchange Act or any successor provisions
thereto.
10.14 Unrestricted Subsidiaries
The Company may designate any of its Subsidiaries to be an
"Unrestricted Subsidiary" as provided below in which event such Subsidiary and
each other Person that is then or thereafter becomes a Subsidiary of such
Subsidiary will be deemed to be an Unrestricted Subsidiary.
An "Unrestricted Subsidiary" means:
(1) any Subsidiary designated as such by the Board as set forth
below where:
(a) neither the Company nor any of its other Subsidiaries (other
than another Unrestricted Subsidiary):
(i) provides credit support for, or any Guarantee of, any
Debt of such Subsidiary or any Subsidiary of such Subsidiary
(including any undertaking, agreement or instrument evidencing
such Debt), or
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(ii) is directly or indirectly liable for any Debt of such
Subsidiary or any Subsidiary of such Subsidiary, and
(b) no default with respect to any Debt of such Subsidiary or any
Subsidiary of such Subsidiary (including any right which the
holders thereof may have to take enforcement action against such
Subsidiary) would permit (upon notice, lapse of time or both) any
holder of any other Debt of the Company and its Subsidiaries (other
than another Unrestricted Subsidiary) to declare a default on such
other Debt or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity, and
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board may designate any Subsidiary to be an Unrestricted
Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds
any Lien on any property of, any other Subsidiary of the Company which is not a
Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted
Subsidiary, provided that either (1) the Subsidiary to be so designated has
total assets of $1,000 or less or (2) immediately after giving effect to such
designation, the Company could Incur at least $1.00 of additional Debt pursuant
to the first sentence of Paragraph 10.1 and provided, further, that the Company
could make a Restricted Payment in an amount equal to the greater of the fair
market value and book value of such Subsidiary pursuant to Paragraph 10.5 and
such amount is thereafter treated as a Restricted Payment for the purpose of
calculating the aggregate amount available for Restricted Payments thereunder.
10.15. Mergers, Consolidations and Certain Sales of Assets
The Company may not, in a single transaction or a series of related
transactions, consolidate with or merge into any other Person or permit any
other Person to consolidate with or merge into the Company or directly or
indirectly, transfer, sell, lease or otherwise dispose of all or substantially
all of its assets unless:
(1) in a transaction in which the Company does not survive or in which
the Company sells, leases or otherwise disposes of all or substantially all
of its assets, the successor entity to the Company is organized under the
laws of the United States of America or any State thereof or the District of
Columbia and shall expressly assume, by a supplemental indenture executed and
delivered to the Trustee in form satisfactory to the Trustee, all of the
Company's obligations under the Indenture,
(2) immediately before and after giving effect to such transaction and
treating any Debt which becomes an obligation of the Company or a Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the transaction, no
Event of Default or event that with the passing of time or the giving of
notice, or both, would constitute an Event of Default shall have occurred and
be continuing,
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company (or other successor entity to the
Company) is equal to or greater than that of the Company immediately prior to
the transaction,
(4) immediately after giving effect to such transaction and treating
any Debt which becomes an obligation of the Company or a Restricted
Subsidiary as a result of such transaction as having been Incurred by the
Company or such Restricted Subsidiary at the time of the transaction, the
Company (including any successor entity to the Company) could Incur at least
$1.00 of additional Debt pursuant to the first sentence of Paragraph 10.1 and
(5) the provisions of Section 5.01 (3) and (5) of the Indenture have
been complied with.
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Except as provided in clause (5) of this Paragraph 10.15, the
provisions of Article 5 of the Indenture do not apply to the Securities.
11. MODIFICATION AND WAIVERS.
Subject to certain exceptions, the Indenture or the Securities may be
amended with the consent of the holders of a majority in principal
amount of the securities of all series affected by the amendment.
Subject to certain exceptions, a default on a series may be waived
with the consent of the holders of a majority in principal amount of
the series.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended, among other things, to cure any ambiguity,
omission, defect or inconsistency; to provide for assumption of
Company obligations to Securityholders; or to make any change that
does not materially adversely affect the rights of any Securityholder
provided, however, that no such modification or amendment may, without
the consent of the Holder of each outstanding Security affected
thereby:
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security,
(2) reduce the principal amount of, or the premium or interest on, any
Security,
(3) change the place or currency of payment of principal of or premium
or interest on any Security,
(4) impair the right to institute suit for the enforcement of any
payment on or with respect to any Security,
(5) reduce the above-stated percentage of outstanding Securities
necessary to modify or amend the Indenture or the Securities,
(6) reduce the percentage of aggregate principal amount of outstanding
Securities necessary for waiver of compliance with certain provisions of
the Indenture or the Securities or for waiver of certain defaults,
(7) modify any provisions of the Indenture or the Securities relating
to the modification and amendment of the Indenture or the Securities or the
waiver of past defaults or covenants, except as otherwise specified,
(8) modify any of the provisions of the Indenture or the Securities
relating to the subordination of the Securities in a manner adverse to the
Holders, or
(9) following the mailing of any Offer to Purchase, modify any Offer
to Purchase for the Securities required under Paragraphs 10.7 or 10.11 in a
manner materially adverse to the Holders thereof.
The foregoing clauses (1) through (9) shall apply to the modifications
or amendments to the Securities and replace clauses (1) through (7) of Section
10.02 of the Indenture to the extent such clauses would otherwise be applicable
to the Securities.
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12. SUCCESSORS.
When a successor assumes all the obligations of the Company under the
Securities and the Indenture (in accordance with the provisions
thereof), the Company will be released from those obligations.
13. DEFEASANCE PRIOR TO REDEMPTION OR MATURITY; SATISFACTION AND DISCHARGE.
Subject to certain conditions contained in Article 8 of the Indenture,
the Company at any time may terminate some or all of its obligations
under the Securities and the Indenture if the Company deposits with
the Trustee money or U.S. Government Obligations for the payment of
principal and interest on the Securities to redemption or maturity.
U.S. Government Obligations are securities backed by the full faith
and credit of the United States of America or certificates
representing an ownership interest in such Obligations. The
Securities Resolution creating the Securities and the Indenture to the
extent governing the Securities will cease to be of further effect as
to all outstanding Securities, if: (1) the Company will have paid or
caused to be paid the principal of and interest on the Securities as
and when the same will have become due and payable, or (2) all
outstanding Securities (except lost, stolen or destroyed Securities
which have been replaced or paid) have been delivered to the Trustee
for cancellation; provided, that notwithstanding the foregoing the
--------
Indenture shall remain in effect with respect to: (a) rights of
registration of transfer and exchange and the Company's right of
optional redemption, (b) substitution of apparently mutilated,
defaced, destroyed, lost or stolen Securities, (c) rights of Holders
to receive payment of principal of and interest on the Securities, (d)
rights, obligations and immunities of the Trustee under the Indenture,
and (e) rights of the Holders of the Securities as beneficiaries of
the Indenture with respect to any property deposited with the Trustee
payable to all or any of them.
14. DEFAULTS AND REMEDIES.
The following will be Events of Default with respect to the
Securities:
(1) failure to pay principal of (or premium, if any, on) any Security
when due,
(2) failure to pay any interest on any Security when due, continued
for 30 days,
(3) default in the payment of principal and interest on Securities
required to be purchased pursuant to an Offer to Purchase as described
under Paragraphs 10.7 and 10.11 when due and payable,
(4) failure to perform or comply with the provisions described under
Paragraph 10.15,
(5) failure to perform any other covenant or agreement of the Company
under the Indenture or the Securities continued for 60 days after written
notice to the Company by the Trustee or Holders of at least 25% in
aggregate principal amount of outstanding Securities,
(6) default under the terms of any instrument evidencing or securing
Debt for money borrowed by the Company or any Restricted Subsidiary of the
Company having an outstanding principal amount of $20 million individually
or in the aggregate which default results in the acceleration of the
payment of such indebtedness or constitutes the failure to pay such
indebtedness when due,
(7) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any Restricted Subsidiary of the Company in
an amount in excess of $20 million which re
-21-
mains undischarged or unstayed for a period of 60 days after the date on
which the right to appeal has expired, and
(8) any of the events described in Section 6.01 (5) or (6) of the
Indenture.
If an Event of Default occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the Securities may
declare the principal of all of the Securities to be due and payable
immediately.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may require indemnity
satisfactory to it before it enforces the Indenture or the Securities.
Subject to certain limitations specified in the Indenture, holders of
a majority in principal amount of the Securities may direct the
Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it
determines that withholding notice is in their interests. The Company
must furnish an annual compliance certificate to the Trustee.
15. TRUSTEE DEALINGS WITH COMPANY.
The First National Bank of Chicago, the Trustee under the Indenture,
in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates,
and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
16. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for
the issue of the Securities.
17. AUTHENTICATION.
This Security shall not be valid until authenticated by a manual
signature of the Registrar.
18. ABBREVIATIONS.
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as: TEN COM (=tenants in common), TEN ENT (=tenants
by the entirety), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), U/G/M/A (=Uniform
Gifts to Minors Act) and U/T/M/A (=Uniform Transfers to Minors Act).
19. DEFINITIONS
The following definitions of certain terms used in this Security shall
apply to such terms as used herein and in the Indenture to the extent
applicable to the Securities.
"Acquired Debt" of any particular Person means Debt of any other
Person existing at the time such other Person merged with or into or became a
Subsidiary of such particular Person or assumed by such particular Person in
connection with the acquisition of assets from any other Person, and not
incurred by such
-22-
other Person in connection with, or in contemplation of, such other Person
merging with or into such particular Person or becoming a Subsidiary of such
particular Person or such acquisition.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing; provided, that direct
or indirect beneficial ownership of 10% or more of the Voting Stock of a Person
shall be deemed to be control.
"Asset Disposition" by any Person means any transfer, conveyance,
sale, lease or other disposition by such Person or any of its Restricted
Subsidiaries (including any issuance or sale by a Restricted Subsidiary of
Capital Stock of such Restricted Subsidiary and including a consolidation or
merger or other sale of any such Restricted Subsidiary with, into or to another
Person in a transaction in which such Restricted Subsidiary ceases to be a
Restricted Subsidiary, but excluding a disposition by a Restricted Subsidiary of
such Person to such Person or a Wholly Owned Restricted Subsidiary of such
Person or by such Person to a Wholly Owned Restricted Subsidiary of such Person)
of:
(1) shares of Capital Stock (other than directors' qualifying shares)
or other ownership interests of a Restricted Subsidiary of such Person,
(2) substantially all of the assets of such Person or any of its
Restricted Subsidiaries representing a division or line of business, or
(3) other assets or rights of such Person or any of its Restricted
Subsidiaries outside of the ordinary course of business;
provided in each case that the aggregate consideration for such transfer,
conveyance, sale, lease or other disposition is equal to $5 million or more.
"Capital Lease Obligation" of any Person means the obligation to pay
rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability on
the face of a balance sheet of such Person in accordance with generally accepted
accounting principles. The stated maturity of such obligation 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. The principal amount of such obligation shall be the
capitalized amount thereof that would appear on the face of a balance sheet of
such Person in accordance with generally accepted accounting principles.
"Capital Stock" of any Person means any and all shares, interests,
participations or other equivalents (however designated) of corporate stock or
other equity participations, including partnership interests, whether general or
limited, of such Person.
"Cash Equivalents" means:
(1) direct obligations of the United States of America or any agency
thereof having maturities of not more than one year from the date of
acquisition,
(2) time deposits and certificates of deposit of any domestic
commercial bank of recognized standing having capital and surplus in excess
of $500 million, with maturities of not more than one year from the date of
acquisition,
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(3) repurchase obligations issued by any bank described in clause (2)
above with a term not to exceed 30 days,
(4) commercial paper rated at least A-1 or the equivalent thereof by
S&P or at least P-1 or the equivalent thereof by Moody's, in each case
maturing within one year after the date of acquisition, and
(5) shares of any money market mutual fund, or similar fund, in each
case having assets in excess of $500 million, which invests predominantly
in investments of the types describes in clauses (1) through (4) above.
"Common Stock" of any Person means Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Consolidated Cash Flow Available for Fixed Charges" for any period
means the Consolidated Net Income of the Company and its Restricted Subsidiaries
for such period increased by the sum of:
(1) Consolidated Interest Expense of the Company and its Restricted
Subsidiaries for such period,
(2) Consolidated Income Tax Expense of the Company and its Restricted
Subsidiaries for such period,
(3) the consolidated depreciation and amortization expense included in
the income statement of the Company and its Restricted Subsidiaries for
such period, and
(4) all other non-cash items reducing Consolidated Net Income of the
Company and its Restricted Subsidiaries, less all non-cash items increasing
Consolidated Net Income of the Company and its Restricted Subsidiaries;
provided, however, that there shall be excluded therefrom the Consolidated Cash
Flow Available for Fixed Charges (if positive) of any Restricted Subsidiary of
the Company (calculated separately for such Restricted Subsidiary in the same
manner as provided above for the Company) that is subject to a restriction which
prevents the payment of dividends or the making of distributions to the Company
or another Restricted Subsidiary of the Company to the extent of such
restriction.
"Consolidated Cash Flow Coverage Ratio" as of any date of
determination means the ratio of:
(1) Consolidated Cash Flow Available for Fixed Charges of the Company
and its Restricted Subsidiaries for the period of the most recently
completed four consecutive fiscal quarters for which quarterly or annual
financial statements are available, to
(2) Consolidated Fixed Charges of the Company and its Restricted
Subsidiaries for such period;
provided, however, that Consolidated Fixed Charges shall be adjusted to give
effect on a pro forma basis to any Debt that has been Incurred by the Company or
any Restricted Subsidiary since the beginning of such period that remains
outstanding and to any Debt that is proposed to be Incurred by the Company or
any Restricted Subsidiary as if in each case such Debt had been incurred on the
first day of such period and as if any Debt that (1) is or will no longer be
outstanding as the result of the Incurrence of any such Debt or (2) had been
repaid or retired during such period had not been outstanding as of the first
day of such period; provided further, however,
-24-
that in making such computation, the Consolidated Interest Expense of the
Company and its Restricted Subsidiaries attributable to interest on any proposed
Debt bearing a floating interest rate shall be computed on a pro forma basis as
if the rate in effect on the date of computation had been the applicable rate
for the entire period; and provided further that, in the event the Company or
any of its Restricted Subsidiaries has made Asset Dispositions or acquisitions
of assets not in the ordinary course of business (including acquisitions of
other Persons by merger, consolidation or purchase of Capital Stock) during or
after such period, the computation of the Consolidated Cash Flow Coverage Ratio
shall be made on a pro forma basis in accordance with Regulation S-X promulgated
under the Securities Act of 1933, as amended (the "Securities Act"), as if the
Asset Dispositions or acquisitions had taken place on the first day of such
period.
"Consolidated Fixed Charges" for any period means the sum of:
(1) Consolidated Interest Expense, and
(2) the consolidated amount of interest capitalized by the Company and
its Restricted Subsidiaries during such period calculated in accordance
with generally accepted accounting principles.
"Consolidated Income Tax Expense" for any period means the
consolidated provision for income taxes of the Company and its Restricted
Subsidiaries for such period calculated on a consolidated basis in accordance
with generally accepted accounting principles.
"Consolidated Interest Expense" means for any period the consolidated
Interest expense included in a consolidated income statement (without deduction
of interest income) of the Company and its Restricted Subsidiaries for such
period calculated on a consolidated basis in accordance with generally accepted
accounting principles, including without limitation or duplication (or, to the
extent not so included, with the addition of):
(1) the amortization of Debt discounts,
(2) the amortization of any payments or fees with respect to letters
of credit, bankers' acceptances or similar facilities,
(3) the amortization of fees with respect to interest rate swap or
similar agreements or foreign currency hedge, exchange or similar
agreements,
(4) Preferred Stock dividends of the Company or Restricted
Subsidiaries of the Company (other than such dividends (a) in respect of
Redeemable Stock or (b) payable in Capital Stock other than Redeemable
Stock) declared and paid or payable,
(5) accrued dividends on Redeemable Stock of the Company or its
Restricted Subsidiaries (other than such dividends payable solely in
Capital Stock other than Redeemable Stock), whether or not declared or
paid,
(6) interest on Debt Guaranteed by the Company and its Restricted
Subsidiaries, and
(7) the portion of any rental obligation allocable to interest
expense.
"Consolidated Net Income" for any period means the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that there shall be excluded therefrom:
-25-
(1) the net income (or loss) of any Person acquired by of the Company
or a Restricted Subsidiary of the Company in a pooling-of-interests
transaction for any period prior to the date of such transaction,
(2) the net income (or loss) of any Person that is not a Subsidiary of
the Company except to the extent of the amount of dividends or other
distributions actually paid to the Company or a Subsidiary of the Company
by such Person during such period,
(3) gains or losses on Asset Dispositions by the Company or its
Restricted Subsidiaries,
(4) all extraordinary gains and extraordinary losses,
(5) the cumulative effect of changes in accounting principles, and
(6) the tax effect of any of the items described in clauses (1)
through (5) above;
provided, further, that for purposes of any determination pursuant to Paragraph
10.5, there shall further be excluded therefrom the net income (but not net
loss) of any Restricted Subsidiary of the Company that is subject to a
restriction which prevents the payment of dividends or the making of
distributions to the Company or another Restricted Subsidiary of the Company to
the extent of such restriction.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with generally accepted accounting principles, less amounts
attributable to Redeemable Stock of such Person; provided that, with respect to
the Company, adjustments following the date of the Indenture to the accounting
books and records of the Company in accordance with Accounting Principles Board
Opinions Nos. 16 and 17 (or successor opinions thereto) or otherwise resulting
from the acquisition of control of the Company by another Person shall not be
given effect to.
"Debt" means (without duplication), with respect to any Person,
whether recourse is to all or a portion of the assets of such Person and whether
or not contingent:
(1) every obligation of such Person for money borrowed,
(2) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations Incurred in
connection with the acquisition of property, assets or businesses,
(3) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
(4) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable or accrued liabilities
arising in the ordinary course of business which are not overdue or which
are being contested in good faith),
(5) every Capital Lease Obligation of such Person,
(6) all Receivables Sales of such Person, together with any obligation
of such Person to pay any discount, interest, fees, indemnities, penalties,
recourse, expenses or other amounts in connection therewith,
(7) all Redeemable Stock issued by such Person,
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(8) Preferred Stock of Restricted Subsidiaries of such Person held by
Persons other than such Person or one of its Wholly Owned Restricted
Subsidiaries,
(9) every obligation under Interest Rate or Currency Agreements of
such Person, and
(10) every obligation of the type referred to in clauses (1) through
(9) of another Person and all dividends of another Person the payment of
which, in either case, such Person has Guaranteed or is responsible or
liable for, directly or indirectly, as obligor, Guarantor or otherwise.
Debt shall not include any obligation to pay contingent purchase price
payments, earn-outs, indemnification obligations or similar items to the buyer
or seller of any business or assets acquired or sold by the Company or a
Restricted Subsidiary to the extent such obligations are not required to be
reflected on the balance sheet of the Company or such Restricted Subsidiary in
accordance with generally accepted accounting principles (footnote disclosure of
such obligations shall not be deemed to be reflected on the balance sheet for
this purpose).
The "amount" or "principal amount" of Debt at any time of
determination as used herein represented by (1) any Receivables Sale, shall be
the amount of the unrecovered capital or principal investment of the purchaser
(other than the Company or a Wholly Owned Restricted Subsidiary of the Company)
thereof (excluding amounts representative of yield or interest earned on such
investment with respect to which such purchaser has recourse to the seller and
(2) any Redeemable Stock, shall be the maximum fixed redemption or repurchase
price in respect thereof.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing, or having the economic effect of
guaranteeing, any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Debt or to purchase (or to advance or supply funds for
the purchase of) any security for the payment of such Debt,
(2) to purchase property, securities or services for the purpose of
assuring the holder of such Debt of the payment of such Debt, or
(3) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Debt (and "Guaranteed," "Guaranteeing" and
"Guarantor" shall have meanings correlative to the foregoing);
provided, however, that the Guarantee by any Person shall not include
endorsements by such Person for Collection or deposit, in either case, in the
ordinary course of business.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise), assume,
Guarantee or otherwise become liable in respect of such Debt or other obligation
or the recording, as required pursuant to generally accepted accounting
principles or otherwise, of any such Debt or other obligation on the balance
sheet of such Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring"
shall have meanings correlative to the foregoing); provided, however, that a
change in generally accepted accounting principles that results in an obligation
of such Person that exists at such time becoming Debt shall not be deemed an
Incurrence of such Debt.
"Interest Rate or Currency Agreement" of any Person means any forward
contract, futures contract, swap, option or other financial agreement or
arrangement (including, without limitation, caps, floors,
-27-
collars and similar agreements) relating to, or the value of which is dependent
upon, interest rates or currency exchange rates or indices.
"Investment" by any Person means any direct or indirect loan, advance
or other extension of credit or capital contribution (by means of transfers of
cash or other property to others or payments for property or services for the
account or use of others, or otherwise) to, or purchase or acquisition of
Capital Stock, bonds, notes, debentures or other securities or evidence of Debt
issued by, any other Person, including any payment on a Guarantee of any
obligation of such other Person.
"Lien" means, with respect to any property or assets, any mortgage or
deed of trust, pledge, hypothecation, assignment, Receivables Sale, deposit
arrangement, security interest, lien, charge, easement (other than any easement
not materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
"Moody's" means Moody's Investors Services, Inc.
"Net Available Proceeds" from any Asset Disposition by any Person
means cash or readily marketable cash equivalents received (including by way of
sale or discounting of a note, installment receivable or other receivable, but
excluding any other consideration received in the form of assumption by the
acquired of Debt or other obligations relating to such properties or assets)
therefrom by such Person, net of:
(1) 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 accrued as a liability as a consequence of such
Asset Disposition,
(2) all payments made by such Person or its Restricted Subsidiaries on
any Debt which is secured by such assets in accordance with the terms of
any Lien upon or with respect to such assets or which must by the terms of
such Lien, or in order to obtain a necessary consent to such Asset
Disposition or by applicable law, be repaid out of the proceeds from such
Asset Disposition,
(3) all distributions and other payments made to minority interest
holders in Restricted Subsidiaries of such Person or joint ventures as a
result of such Asset Disposition, and
(4) appropriate amounts to be provided by such Person or any
Restricted Subsidiary thereof, as the case may be, as a reserve in
accordance with generally accepted accounting principles against any
liabilities associated with such assets and retained by such Person or any
Restricted Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination
costs associated with such Asset Disposition, in each case as determined by
the Board, in its reasonable good faith judgment evidenced by a resolution
of the Board filed with the Trustee; provided, however, that any reduction
in such reserve following the consummation of such Asset Disposition will
be treated for all purposes of the Indenture and the Securities as a new
Asset Disposition at the time of such reduction with Net Available Proceeds
equal to the amount of such reduction.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder at his address
appearing in the Security Register on the date of the Offer describing the
transaction or transactions necessitating the Offer and offering to purchase up
to the principal amount of Securities specified in such Offer at the purchase
price specified in such Offer (as determined pursuant to the Indenture). Unless
otherwise required by applicable law, the Offer shall specify an expiration date
(the "Expiration Date") of the Offer to Purchase which shall be, subject to any
contrary requirements of applica-
-28-
ble law, not less than 30 days or more than 60 days after the date of such Offer
and a settlement date (the "Purchase Date") for purchase of Securities within
five Business Days after the Expiration Date. The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Securities
pursuant to the Offer to Purchase.
"Permitted Interest Rate or Currency Agreement" of any Person means
any Interest Rate or Currency Agreement entered into with one or more financial
institutions in the ordinary course of business that is designed to protect such
Person against fluctuations in interest rates or currency exchange rates with
respect to Debt Incurred and which shall have a notional amount no greater than
the payments due with respect to the Debt being hedged thereby, or in the case
of currency protection agreements, against currency exchange rate fluctuations
in the ordinary course of business relating to then existing financial
obligations or then existing or sold production and not for purposes of
speculation.
"Permitted Investments" means:
(1) an Investment in the Company or a Wholly Owned Restricted
Subsidiary of the Company,
(2) an Investment in a Person, if such Person or a Subsidiary of such
Person will, as a result of the making of such Investment and all other
contemporaneous related transactions, become a Wholly Owned Restricted
Subsidiary of the Company or be merged or consolidated with or into or
transfer or convey all or substantially all its assets to the Company or a
Wholly Owned Restricted Subsidiary of the Company,
(3) a Temporary Cash Investment,
(4) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses
in accordance with generally accepted accounting principles,
(5) stock, obligations or securities received in settlement of debts
owing to the Company or a Restricted Subsidiary of the Company as a result
of bankruptcy or insolvency proceedings or upon the foreclosure,
perfection, enforcement or agreement in lieu of foreclosure of any Lien in
favor of the Company or a Restricted Subsidiary of the Company,
(6) any consolidation or merger of a Wholly Owned Restricted
Subsidiary of the Company to the extent otherwise permitted under the
Indenture or the Securities,
(7) trade accounts arising in the ordinary course of business and any
commercially reasonable refinancing or restructuring thereof undertaken in
good faith,
(8) any Investment made as a result of the receipt of non-cash
consideration from an Asset Disposition that was made pursuant to and in
compliance with Paragraph 10.7,
(9) any acquisition of assets solely in exchange for the issuance of
Capital Stock (other than Redeemable Stock) of the Company,
(10) Investments in Permitted Interest Rate or Currency Agreements,
(11) other Investments in any Person having an aggregate fair market
value (measured on the date each such Investment was made and without
giving effect to subsequent changes in value),
-29-
when taken together with all other Investments made pursuant to this clause
(11) since the date of the Indenture, not to exceed $25 million.
"Person" means any individual, corporation, partnership, joint
venture, trust, estate, unincorporated organization or government or any agency
or political subdivision thereof.
"Preferred Stock" of any Person means Capital Stock of such Person of
any class or classes (however designated) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of Capital
Stock of any other class of such Person.
"Public Equity Offering" means an underwritten primary public offering
of Common Stock of the Company pursuant to an effective registration statement
under the Securities Act.
"Receivables" means receivables, chattel paper, instruments, documents
or intangibles evidencing or relating to the right to payment of money.
"Receivables Sale" of any Person means any sale of Receivables of such
Person (pursuant to a purchase facility or otherwise), other than in connection
with a disposition of the business operations of such Person relating thereto or
a disposition of defaulted Receivables for purpose of collection and not as a
financing arrangement.
"Redeemable Stock" of any Person means any Capital Stock of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (including upon the
occurrence of an event) matures or is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or is convertible into or exchangeable for
Debt or is redeemable at the option of the holder thereof, in whole or in part,
at any time prior to the final Stated Maturity of the Securities.
"Restricted Subsidiary" means any Subsidiary, whether existing on or
after the date of the Indenture, unless such Subsidiary is an Unrestricted
Subsidiary.
"S&P" means Standard & Poor's Ratings Services a division of The
McGraw-Hill Companies, Inc.
"Sale and Leaseback Transaction" of any person means an arrangement
with any lender or investor or to which such lender or investor is a party
providing for the leasing by such Person of any property or asset of such Person
which has been or is being sold or transferred by such Person more than 365 days
after the acquisition thereof or the completion of construction or commencement
of operation thereof to such lender or investor or to any person to whom funds
have been or are to be advanced by such lender or investor on the security of
such property or asset. The stated maturity of such arrangement shall be the
date of the last payment of rent or any other amount due under such arrangement
prior to the first date on which such arrangement may be terminated by the
lessee without payment of a penalty.
"Senior Bank Facility" means our Multicurrency Credit Agreement, dated
as of October 14, 1998, as it may be amended or restated from time to time.
"Senior Debt" with respect to any Person, means:
(1) the principal of (and premium, if any) and interest (including
interest accruing on or after the filing of any petition in bankruptcy or
for reorganization relating to such Person whether or not such claim for
post-petition interest is allowed in such proceeding) on, and penalties and
any obligation of such Person for reimbursement, indemnities and fees
relating to, the Senior Bank Facility,
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(2) the principal of (and premium, if any) and interest on Debt of
such Person for money borrowed, whether Incurred on or prior to the date of
original issuance of the Securities or thereafter, and any amendments,
renewals, extensions, modifications, refinancings and refundings of any
such Debt,
(3) any reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person, and
(4) Permitted Interest Rate or Currency Agreements entered into with
respect to Debt described in clauses (1), (2) and (3) above.
Notwithstanding the foregoing, none of the following shall constitute Senior
Debt of any Person:
(a) any Debt as to which the terms of the instrument creating or
evidencing the same provide that such Debt is on a parity with, or not
superior in right of payment to, the Securities,
(b) any Debt which is subordinated in right of payment in any
respect to any other Debt of such Person,
(c) Debt evidenced by the Securities,
(d) any Debt owed to the Company or to a Person when such Person
is a Subsidiary of the Company,
(e) any obligation of such Person arising from Redeemable Stock of
such Person,
(f) that portion of any Debt which is Incurred in violation of the
Indenture, and
(g) Debt which, when Incurred and without respect to any election
under Section 1111(b) of Title 11, United States Code, is without
recourse to such Person.
"Subordinated Debt" means Debt of the Company as to which the payment
of principal of (and premium, if any) and interest and other payment obligations
in respect of such Debt shall be subordinate to the prior payment in full of the
Securities to at least the following extent:
(1) no payments of principal of (or premium, if any) or interest on or
otherwise due in respect of such Debt may be permitted for so long as any
default in the payment of principal of (or premium, if any) or interest on
the Securities exists,
(2) in the event that any other default that with the passing of time
or the giving of notice, or both, would constitute an Event of Default
exists with respect to the Securities, upon notice by 25% or more in
principal amount of the Securities to the Trustee, the Trustee shall have
the right to give notice to the Company and the holders of such Debt (or
trustees or agents therefor) of a payment blockage, and thereafter no
payments of principal of (or premium, if any) or interest on or otherwise
due in respect of such Debt may be made for a period of 179 days from the
date of such notice, and
(3) such Debt may not:
(a) provide for payments of principal of such Debt at the
stated maturity thereof or by way of a sinking fund applicable
thereto or by way of any mandatory redemption, defeasance,
retirement or repurchase thereof by the Company (including any
re-
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demption, retirement or repurchase which is contingent upon events or
circumstances, but excluding any retirement required by virtue of
acceleration of such Debt upon an event of default thereunder), in each
case prior to the final Stated Maturity of the Securities, or
(b) permit redemption or other retirement (including pursuant to an offer
to purchase made by the Company) of such other Debt at the option of the
holder thereof prior to the final Stated Maturity of the Securities, other
than a redemption or other retirement at the option of the holder of such
Debt (including Pursuant to an offer to purchase made by the Company) which
is conditioned upon a change of control of the Company pursuant to
provisions substantially similar to those described under Paragraph 10.11
(and which shall provide that such Debt will not be repurchased pursuant to
such provisions prior to the Company's repurchase of the Securities
required to be repurchased by the Company pursuant to the provisions of
Paragraph 10.11).
"Subsidiary" of any Person means (1) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is owned,
directly or indirectly, by such Person or by one or more other Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof or (2) any
other Person (other than a corporation) in which such Person, or one or more
other Subsidiaries of such Person or such Person and one or more other
Subsidiaries thereof, directly or indirectly, has at least a majority ownership
and power to direct the policies, management and affairs thereof.
"Temporary Cash Investments" means any Investment in the following
kinds of instruments:
(1) readily marketable obligations issued or unconditionally
Guaranteed as to principal and interest by the United States of America or
by any agency or authority controlled or supervised by and acting as an
instrumentality of the United States of America if, on the date of purchase
or other acquisition of any such instrument by the Company or any
Restricted Subsidiary of the Company, the remaining term to maturity or
interest rate adjustment is not more than two years;
(2) obligations (including, but not limited to, demand or time
deposits, bankers' acceptances and certificates of deposit) issued or
Guaranteed by a depository institution or trust company incorporated under
the laws of the United States of America, any state thereof or the District
of Columbia, provided that:
(a) such instrument has a final maturity nor more than one year
from the date of purchase thereof by the Company or any Restricted
Subsidiary of the Company, and
(b) such depository institution or trust company has at the time
of the Company's or such Restricted Subsidiary's Investment
therein or contractual commitment providing for such Investment:
(i) capital, surplus and undivided profits (as of the date
such institution's most recently published financial
statements) in excess of $100 million, and
(ii) the long-term unsecured debt obligations (other than
such obligations rated on the basis of the credit of a Person
other than such institution) of such institution, at the time
of the Company's or such Restricted Subsidiary's Investment
therein or contractual commitment providing for such
Investment, are rated in the highest rating category of both
S&P and Moody's;
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(3) commercial paper issued by any corporation, if such commercial
paper has, at the time of the Company's or any Restricted Subsidiary of the
Company's Investment therein or contractual commitment providing for such
Investment credit ratings of at least A-1 by S&P and P-1 by Moody's;
(4) money market mutual or similar funds having assets in excess of
$100 million;
(5) readily marketable debt obligations issued by any corporation, if
at the time of the Company's or any Restricted Subsidiary of the Company's
Investment therein or contractual commitment providing for such Investment:
(a) the remaining term to maturity is not more than two years,
and
(b) such debt obligations are rated in one of the two highest
rating categories of both S&P and Moody's;
(6) demand or time deposit accounts used in the ordinary course of
business with commercial banks the balances in which are at all times fully
Insured as to principal and interest by the Federal Deposit Insurance
Corporation or any successor thereto; and
(7) to the extent not otherwise included herein, Cash Equivalents. In
the event that either S&P or Moody's ceases to publish ratings of the type
provided herein, a replacement rating agency shall be selected by the
Company with the consent of the Trustee, and in each case the rating of
such replacement rating agency most nearly equivalent to the corresponding
S&P or Moody's rating, as the case may be, shall be used for purposes
hereof.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such Person or by one or more Wholly Owned Restricted
Subsidiaries of such Person or by such Person and one or more Wholly Owned
Restricted Subsidiaries of such Person.
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