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Sample Business ContractsHome: Sample Business Contracts:
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PEI HOLDINGS, INC.
as Issuer,
and the Guarantors party hereto
and
Bank One, N.A.
as Trustee
---------------------------------------------------------------
Indenture
Dated as of March 11, 2003
---------------------------------------------------------------
11% Senior Secured Notes due 2010
=========================================================
<PAGE>
CROSS REFERENCE TABLE
TIA Sections Indenture Sections
------------ ------------------
ss. 310(a)..................................................................7.10
(b)............................................................7.03, 7.08
ss. 311.....................................................................7.03
ss. 312(a).................................................................12.02
(b).................................................................12.02
ss. 313(a)..................................................................7.06
(c)............................................................7.05, 7.06
(d)..................................................................7.06
ss. 314....................................................................10.02
(a)..................................................................4.17
(b)..................................................................4.18
ss. 315(a)..................................................................7.02
(b)..................................................................7.02
(c)..................................................................7.02
(d)..................................................................7.02
ss. 316(a)................................................2.05, 6.02, 6.04, 6.05
ss. 316(b)...........................................................6.07, 10.05
ss. 316(c).................................................................12.02
ss. 317(a)(1)...............................................................6.08
(a)(2)...............................................................6.09
(b)..................................................................2.03
ss. 318 ...................................................................12.01
ii
<PAGE>
RECITALS
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................2
SECTION 1.02. Rules of Construction..........................................31
ARTICLE 2
THE NOTES
SECTION 2.01. Form, Dating and Denominations.................................31
SECTION 2.02. Execution and Authentication; Exchange Notes; Additional
Notes.......................................................33
SECTION 2.03. Registrar, Paying Agent and Authenticating Agent; Paying
Agent to Hold Money in Trust................................34
SECTION 2.04. Replacement Notes..............................................34
SECTION 2.05. Outstanding Notes..............................................35
SECTION 2.06. Temporary Notes................................................35
SECTION 2.07. Cancellation...................................................36
SECTION 2.08. CUSIP and CINS Numbers.........................................36
SECTION 2.09. Registration, Transfer and Exchange............................36
SECTION 2.10. Restrictions on Transfer and Exchange..........................39
SECTION 2.11. Temporary Offshore Global Notes................................41
ARTICLE 3
REDEMPTION; OFFER TO PURCHASE
SECTION 3.01. Optional Redemption............................................42
SECTION 3.02. Redemption with Proceeds of Equity Offering....................43
SECTION 3.03. Method and Effect of Redemption................................43
SECTION 3.04. Offer to Purchase..............................................44
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes...............................................46
SECTION 4.02. Maintenance of Office or Agency................................47
SECTION 4.03. Existence......................................................47
SECTION 4.04. [Intentionally omitted.].......................................48
SECTION 4.05. Maintenance of Properties and Insurance........................48
SECTION 4.06. Limitation on Incurrence of Indebtedness and Issuance of
Preferred Stock.............................................48
SECTION 4.07. Limitation on Restricted Payments..............................51
SECTION 4.08. Limitation on Liens............................................55
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SECTION 4.09. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries...........................55
SECTION 4.10. Limitation on Issuances and Sales of Equity Interests in
Restricted Subsidiaries.....................................57
SECTION 4.11. Additional Note Guarantees.....................................58
SECTION 4.12. Repurchase of Notes upon a Change of Control...................58
SECTION 4.13. Limitation on Asset Sales......................................60
SECTION 4.14. Transactions with Affiliates...................................62
SECTION 4.15. Business Activities............................................64
SECTION 4.16. Designation of Restricted and Unrestricted Subsidiaries........64
SECTION 4.17. Financial Reports..............................................66
SECTION 4.18. Reports to Trustee.............................................67
SECTION 4.19. Impairment of Security Interest; Further Assurances............68
ARTICLE 5
CONSOLIDATION, MERGER OR SALE OF ASSETS
SECTION 5.01. Consolidation, Merger or Sale of Assets of the Company.........68
SECTION 5.02. Consolidation, Merger or Sale of Assets of Playboy.............70
SECTION 5.03. Consolidation, Merger or Sale of Assets of Subsidiary
Guarantors..................................................71
ARTICLE 6
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default..............................................72
SECTION 6.02. Acceleration...................................................74
SECTION 6.03. Other Remedies.................................................74
SECTION 6.04. Waiver of Past Defaults........................................74
SECTION 6.05. Control by Majority............................................74
SECTION 6.06. Limitation on Suits............................................75
SECTION 6.07. Rights of Holders to Receive Payment...........................75
SECTION 6.08. Collection Suit by Trustee.....................................75
SECTION 6.09. Trustee May File Proofs of Claim...............................76
SECTION 6.10. Priorities.....................................................76
SECTION 6.11. Restoration of Rights and Remedies.............................76
SECTION 6.12. Undertaking for Costs..........................................77
SECTION 6.13. Rights and Remedies Cumulative.................................77
SECTION 6.14. Delay or Omission Not Waiver...................................77
SECTION 6.15. Waiver of Stay, Extension or Usury Laws........................77
ARTICLE 7
THE TRUSTEE
SECTION 7.01. General........................................................78
SECTION 7.02. Certain Rights of Trustee......................................78
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SECTION 7.03. Individual Rights of Trustee...................................79
SECTION 7.04. Trustee's Disclaimer...........................................80
SECTION 7.05. Notice of Default..............................................80
SECTION 7.06. Reports by Trustee to Holders..................................80
SECTION 7.07. Compensation and Indemnity.....................................80
SECTION 7.08. Replacement of Trustee.........................................81
SECTION 7.09. Successor Trustee by Merger....................................82
SECTION 7.10. Eligibility....................................................82
SECTION 7.11. Money Held in Trust............................................83
ARTICLE 8
DEFEASANCE AND DISCHARGE
SECTION 8.01. Discharge of Company's Obligations.............................83
SECTION 8.02. Legal Defeasance...............................................84
SECTION 8.03. Covenant Defeasance............................................85
SECTION 8.04. Application of Trust Money.....................................86
SECTION 8.05. Repayment to Company...........................................86
SECTION 8.06. Reinstatement..................................................87
ARTICLE 9
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.01. Amendments Without Consent of Holders..........................87
SECTION 9.02. Amendments With Consent of Holders.............................90
SECTION 9.03. Effect of Consent..............................................92
SECTION 9.04. Trustee's Rights and Obligations...............................92
SECTION 9.05. Conformity with Trust Indenture Act............................93
SECTION 9.06. Payments for Consents..........................................93
ARTICLE 10
SECURITY ARRANGEMENTS
SECTION 10.01. Security......................................................93
SECTION 10.02. Release of Collateral upon Sale of Assets.....................93
SECTION 10.03. Release of Collateral upon Release of Guarantee...............95
SECTION 10.04. Release upon Payment or Defeasance............................95
SECTION 10.05. Suits with Respect to Collateral..............................96
SECTION 10.06. Limitation on Duty of Trustee with Respect to the
Collateral.................................................96
ARTICLE 11
GUARANTEES
SECTION 11.01. The Guarantees................................................97
SECTION 11.02. Guarantee Unconditional.......................................97
SECTION 11.03. Discharge; Reinstatement......................................98
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SECTION 11.04. Waiver by the Guarantors......................................98
SECTION 11.05. Subrogation and Contribution..................................98
SECTION 11.06. Stay of Acceleration..........................................98
SECTION 11.07. Limitation on Amount of Guarantee.............................98
SECTION 11.08. Execution and Delivery of Guarantee...........................99
SECTION 11.09. Release of Guarantee..........................................99
SECTION 11.10. State Law Provisions..........................................99
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act of 1939..................................101
SECTION 12.02. Noteholder Communications; Noteholder Actions................101
SECTION 12.03. Notices......................................................102
SECTION 12.04. Certificate and Opinion as to Conditions Precedent...........102
SECTION 12.05. Statements Required in Certificate or Opinion................103
SECTION 12.06. Payment Date Other Than a Business Day.......................103
SECTION 12.07. Governing Law................................................103
SECTION 12.08. No Adverse Interpretation of Other Agreements................103
SECTION 12.09. Successors...................................................104
SECTION 12.10. Duplicate Originals..........................................104
SECTION 12.11. Separability.................................................104
SECTION 12.12. Table of Contents and Headings...............................104
SECTION 12.13. No Liability of Directors, Officers, Employees,
Incorporators, Members and Stockholders...................104
vi
<PAGE>
EXHIBITS
EXHIBIT A Form of Note
EXHIBIT B Form of Supplemental Indenture
EXHIBIT C Restricted Legend
EXHIBIT D DTC Legend
EXHIBIT E Regulation S Certificate
EXHIBIT F Rule 144A Certificate
EXHIBIT G Institutional Accredited Investor Certificate
EXHIBIT H Certificate of Beneficial Ownership
EXHIBIT I Temporary Offshore Global Note Legend
vii
<PAGE>
INDENTURE, dated as of March 11, 2003, between PEI Holdings, Inc., a
Delaware corporation, as the Company, the Guarantors party hereto and Bank One,
N.A., a national banking association, as Trustee.
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of up to $115,000,000 aggregate principal
amount of the Company's 11% Senior Secured Notes due 2010 and Exchange Notes to
be issued in exchange therefor as provided herein (together with, if and when
issued, any Additional Notes and Exchange Notes issued in exchange therefor as
provided herein, the "Notes"). All things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms, have been done,
and the Company has done all things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee and duly issued by
the Company, the valid obligations of the Company as hereinafter provided.
In addition, the Guarantors party hereto have duly authorized the
execution and delivery of this Indenture as guarantors of the Notes. All things
necessary to make this Indenture a valid agreement of each Guarantor, in
accordance with its terms, have been done, and each Guarantor has done all
things necessary to make the Note Guarantee of such Guarantor, when the Notes
are executed by the Company and authenticated and delivered by the Trustee and
duly issued by the Company, the valid obligations of such Guarantor as
hereinafter provided.
This Indenture is subject to, and will be governed by, the provisions of
the Trust Indenture Act that are required to be a part of and govern indentures
qualified under the Trust Indenture Act.
THIS INDENTURE WITNESSETH
For and in consideration of the premises and the purchase of the Notes by
the Holders thereof, the parties hereto covenant and agree, for the equal and
proportionate benefit of all Holders, as follows:
<PAGE>
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Subsidiary of such specified
Person, whether or not such Indebtedness is incurred in connection with,
or in contemplation of, such other Person merging with or into, or
becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset acquired by
such specified Person, (to the extent of the fair market value of such
asset where the Indebtedness so secured is not the Indebtedness of such
Person), or Indebtedness otherwise assumed by such specified Person in
connection with an acquisition of assets from any other Person.
"Additional Notes" means any Notes issued under this Indenture in addition
to the Original Notes, including any Exchange Notes issued in exchange for such
Additional Notes, having the same terms in all respects as the Original Notes
except that interest will accrue on the Additional Notes from their date of
issuance.
"Administrative Agent" means Bank of America, N.A., as administrative
agent under the Credit Agreement or a successor agent or administrative agent.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise (it being understood that Playboy TV -- Latin America,
LLC is not an Affiliate of Playboy on the date of this Indenture as a result of
its ownership and governance structure as in effect on the date of this
Indenture). For purposes of this definition, the terms "controlling,"
"controlled by" and "under common control with" shall have correlative meanings.
"Agent" means any Registrar, Paying Agent or Authenticating Agent.
"Agent Member" means a member of, or a participant in, the Depositary.
2
<PAGE>
"Asset Sale" means (1) the sale, lease, conveyance or other disposition of
any assets or rights including by way of merger or consolidation; provided that
the sale, conveyance or other disposition of all or substantially all of the
assets of Playboy or the Company will be governed by Section 4.12 and/or Article
5 and not by the provisions of Section 4.13; and (2) the issuance of Equity
Interests by any of Playboy's Restricted Subsidiaries or the sale by Playboy or
any of its Restricted Subsidiaries of Equity Interests in any of its Restricted
Subsidiaries.
Notwithstanding the preceding, the following items shall not be deemed to
be Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of less than $1.0 million;
(2) a transfer of assets between or among Playboy and its Restricted
Subsidiaries;
(3) an issuance of Equity Interests by a Restricted Subsidiary to
Playboy or to another Restricted Subsidiary of Playboy;
(4) an issuance of Common Stock of Playboy.com to holders of
Playboy.com Series A Preferred Stock or pursuant to the exercise of
warrants outstanding on the date of this Indenture, in each case, as
required by the terms thereof as in effect on the date of this Indenture;
(5) the sale, lease or license of assets or rights in the ordinary
course of business consistent with past practice;
(6) the sale of obsolete or worn-out assets;
(7) the surrender or waiver of contract rights or settlement,
release or surrender of a contract, tort or other litigation claim in the
ordinary course of business;
(8) the granting of Liens not prohibited by this Indenture;
(9) the sale or other disposition of cash or Cash Equivalents or
other marketable securities (other than any marketable securities issued
by any Subsidiary of Playboy);
(10) any sale or other disposition of Equity Interests in or
Indebtedness or other securities of an Unrestricted Subsidiary; and
(11) a Restricted Payment or Permitted Investment that is not
prohibited by Section 4.07.
3
<PAGE>
"Asset Sale Offer" has the meaning assigned to such term in Section
4.13(d).
"Attributable Debt" means, in respect of a sale and leaseback transaction,
at the time of determination, (i) in the case of a capital lease, the Capital
Lease Obligation in respect thereof, or (ii) in all other cases, the present
value of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction,
including any period for which such lease has been extended or may, at the
option of the lessor, be extended. Such present value shall be calculated using
a discount rate equal to the rate of interest implicit in such transaction,
determined in accordance with GAAP.
"Authenticating Agent" refers to a Person engaged to authenticate the
Notes in the stead of the Trustee.
"Bankruptcy Default" has the meaning assigned to such term in Section
6.01.
"Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and
Rule 13d-5 under the Exchange Act, except that in calculating the beneficial
ownership of any particular "person" (as that term is used in Section 13(d)(3)
of the Exchange Act), such "person" shall be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the
general partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
Unless the context otherwise provides, "Board of Directors" refers to the Board
of Directors of Playboy.
"Board Resolution" means a resolution duly adopted by the Board of
Directors which is certified by the Secretary or an Assistant Secretary of
Playboy and remains in full force and effect as of the date of its
certification.
4
<PAGE>
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in The City of New York or in the city where the
Corporate Trust Office of the Trustee is located are authorized by law to close.
"Califa Agreement" means the Asset Purchase Agreement, dated as of June
29, 2001, among Playboy, Califa Entertainment Group, Inc., V.O.D., Inc., Steven
Hirsch, Dewi James and William Asher.
"Califa Obligation" means any obligation of Playboy, the Company or any
Restricted Subsidiary pursuant to or arising in connection with the Califa
Agreement or any related agreement, in each case, as amended from time to time.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
(2) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of corporate stock;
(3) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited); and
(4) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person; provided that the foregoing expressly
excludes any deferred compensation, phantom equity or similar benefit
plan.
"Cash Equivalents" means:
(1) United States dollars;
(2) securities issued or directly and fully guaranteed or insured by
the United States government or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than one year from the
date of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
5
<PAGE>
deposits, in each case, with any domestic commercial bank having capital
and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of
"B" or better;
(4) repurchase obligations with a term of not more than seven days
for underlying securities of the types described in clauses (2) and (3)
above entered into with any financial institution meeting the
qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable from
Moody's Investors Service, Inc. or Standard & Poor's Rating Services and
in each case maturing within one year after the date of acquisition; and
(6) money market funds at least 95% of the assets of which
constitute Cash Equivalents of the kinds described in clauses (1) through
(5) of this definition.
"Certificate of Beneficial Ownership" means a certificate substantially in
the form of Exhibit H.
"Certificated Note" means a Note in registered individual form without
interest coupons.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the
properties or assets of Playboy and its Restricted Subsidiaries, taken as
a whole, to any "person" (as that term is used in Section 13(d)(3) of the
Exchange Act);
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company or Playboy;
(3) any "person" or "group" (as such terms are used in Sections
13(d) and 14(d) of the Exchange Act), other than the Principal and his
Related Parties, becomes the Beneficial Owner, directly or indirectly, of
50% or more of the voting power of all classes of Voting Stock of Playboy,
provided that the Principal and his Related Parties are the Beneficial
Owner of less than 50% of the total voting power of all classes of Voting
Stock of Playboy;
(4) the first day on which a majority of the members of the board of
directors of Playboy are not Continuing Directors;
6
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(5) the Company or Playboy consolidates with, or merges with or
into, any Person, or any Person consolidates with, or merges with or into
the Company or Playboy, in any such event pursuant to a transaction in
which any of the outstanding Voting Stock of the Company or Playboy or
such other Person is converted into or exchanged for cash, securities or
other property, other than any such transaction where the Voting Stock of
the Company or Playboy outstanding immediately prior to such transaction
is converted into or exchanged for (or continues as) Voting Stock (other
than Disqualified Stock) of the surviving or transferee Person
constituting a majority of the outstanding shares of such Voting Stock of
such surviving or transferee Person (immediately after giving effect to
such issuance);
(6) the Principal and his Related Parities and Affiliates are, or
become, the Beneficial Owners, directly or indirectly, of more than 90% of
the total capital stock of Playboy; or
(7) Playboy ceases to own directly or indirectly 100% of the Equity
Interests of the Company other than the Hefner Securities.
"Clearstream" means Clearstream Banking Luxembourg S.A. and its
successors.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means any and all assets and rights and interest in or to the
property of the Company and each Guarantor, whether real or personal, tangible
or intangible, in which a Lien is granted or purported to be granted pursuant to
the Security Documents.
"Collateral Requirement" means the requirement that:
(1) all documents and instruments, including Uniform Commercial Code
financing statements and Mortgages, required by law to be filed,
registered or recorded to create the Liens intended to be created by the
Security Documents and perfect or record such Liens as valid Liens with
the priority set forth in the Security Documents and the Intercreditor
Agreement, free of any other Liens except for Permitted Liens, shall have
been filed, registered or recorded; and
(2) the Trustee shall have received, with respect to each Mortgaged
Property, counterparts of a Mortgage duly executed and delivered by the
record owner of such Mortgaged Property, a lender's title insurance policy
insuring the lien of each Mortgage, an existing survey of the Mortgaged
Property and the Opinions of Counsel required pursuant to Section 4.18(c).
7
<PAGE>
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means Capital Stock not entitled to any preference on
dividends or distributions, upon liquidation or otherwise.
"Company" means the party named as such in the first paragraph of this
Indenture or any successor obligor under this Indenture and the Notes pursuant
to Section 5.01.
"Consolidated Cash Flow" means, with respect to any specified Person for
any period, the Consolidated Net Income of such Person for such period plus
(without duplication):
(1) provision for taxes based on income or profits of such Person
and its Restricted Subsidiaries for such period, to the extent that such
provision for taxes was deducted in computing such Consolidated Net
Income; plus
(2) consolidated interest expense of such Person and its Restricted
Subsidiaries for such period, whether or not paid or accrued and whether
or not capitalized (including, without limitation, to the extent properly
characterized as interest expense in accordance with GAAP, amortization of
debt issuance costs and original issue discount, non-cash interest
payments, the interest component of any deferred payment obligations, the
interest component of all payments associated with Capital Lease
Obligations, imputed interest with respect to Attributable Debt,
commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect
of all payments made or received pursuant to Hedging Obligations), to the
extent that any such expense was deducted in computing such Consolidated
Net Income, provided that any amount of interest of a Restricted
Subsidiary, if the net income of such Restricted Subsidiary is excluded in
the calculation of Consolidated Net Income shall be excluded; plus
(3) non-cash imputed interest expense on the deferred acquisition
price of assets to the extent that such expense was deducted in computing
such Consolidated Net Income; plus
(4) depreciation, amortization (including amortization of goodwill
and other intangibles but excluding amortization of prepaid cash expenses
that were paid in a prior period) and other non-cash expenses (excluding
any such non-cash expense, to the extent that it represents an accrual of
or
8
<PAGE>
reserve for cash expenses in any future period or amortization of a
prepaid cash expense that was paid in a prior period; provided that this
exclusion shall not apply to restructuring reserves and the accretion of
the liquidation preference and mandatory redemption price on the
Playboy.com Series A Preferred Stock pursuant to the terms thereof as in
effect on the date of this Indenture) of such Person and its Subsidiaries
for such period to the extent that such depreciation, amortization and
other non-cash expenses were deducted in computing such Consolidated Net
Income; minus
(5) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue consistent with past practice;
minus
(6) investments in programming; minus
(7) cash expenses that relate to restructuring reserves other than
restructuring reserves taken on or prior to December 31, 2002;
in each case, on a consolidated basis and determined in accordance with GAAP.
Notwithstanding the preceding, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash expenses
of, a Restricted Subsidiary of Playboy shall be added to Consolidated Net Income
to compute Consolidated Cash Flow of Playboy only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to Playboy by such Restricted Subsidiary without prior governmental
approval (that has not been obtained), and without direct or indirect
restriction pursuant to the terms of its charter and all agreements,
instruments, judgments, decrees, orders, statutes, rules and governmental
regulations applicable to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified Person for
any period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Restricted Subsidiary thereof;
(2) the Net Income of any Restricted Subsidiary shall be excluded to
the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the
9
<PAGE>
terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders;
(3) the Net Income of any Person acquired in a pooling of interests
transaction for any period prior to the date of such acquisition shall be
excluded; and
(4) the cumulative effect of a change in accounting principles shall
be excluded.
"Continuing Directors" means, with respect to any specified Person, as of
any date of determination, any member of the board of directors of who
(1) was a member of such board of directors on the date of this
Indenture; or
(2) was nominated for election or elected to such board of directors
with the approval of (a) a majority of the Continuing Directors who were
members of such board at the time of such nomination or election or (b)
the Principal or a Related Party of the Principal.
"Corporate Trust Office" means the office of the Trustee at which this
Indenture is principally administered, which at the date of this Indenture is
located at 1 Bank One Plaza, Chicago, Illinois 60670, Attention: Corporate Trust
Administration, except that for purposes of Section 4.02, it shall mean the
office of the Trustee located at 55 Water Street, 1st Floor, Jeanette Park
Entrance, New York, New York 10041.
"Covenant Defeasance" has the meaning assigned to such term in Section
8.03.
"Credit Agreement" means that certain Credit Agreement, dated as of the
date hereof, among the Company, each lender from time to time party thereto and
the Administrative Agent providing for revolving credit borrowing and letters of
credit, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified, renewed, refunded, replaced or refinanced from time to time.
"Credit Facilities" means one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
with banks or other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of receivables to
such lenders or to special purpose entities formed to borrow from such lenders
against such receivables) or letters of credit and any Hedging Obligations owing
to the lenders
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thereunder and their affiliates, in each case, as amended, restated, modified,
renewed, refunded, replaced or refinanced in whole or in part from time to time.
"date of this Indenture" means March 11, 2003.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Depositary" means the depositary of each Global Note, which will
initially be DTC.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures (excluding any maturity as the result of the
redemption thereof at the option of the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature, except to the extent
that such Capital Stock is (either mandatorily or at the option of the issuer
thereof) redeemable solely with, or exchangeable solely for, any Equity
Interests of Playboy that are not Disqualified Stock; provided, however, that
only the portion of Capital Stock or other security which so matures, is
mandatorily redeemable or is so redeemable at the option of the holder prior to
such date will be deemed to be Disqualified Stock; provided further that, if
such Capital Stock or other security is issued to any employee or to any plan
for the benefit of employees of Playboy or its Subsidiaries or by any such plan
to such employees, such Capital Stock or other security will not constitute
Disqualified Stock solely because it may be required to be repurchased by
Playboy or any of its Subsidiaries in order to satisfy applicable statutory or
regulatory obligations as a result of such employee's termination, death or
disability. Notwithstanding the preceding sentence, any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require the Company to repurchase such Capital Stock upon the occurrence of a
change of control or an asset sale shall not constitute Disqualified Stock if
the terms of such Capital Stock provide that the Company may not repurchase or
redeem any such Capital Stock pursuant to such provisions unless such repurchase
or redemption complies with Section 4.07.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia or that Guarantees or otherwise provides direct credit support for
any Indebtedness of Playboy or the Company.
"DTC" means The Depository Trust Company, a New York corporation, and its
successors.
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"DTC Legend" means the legend set forth in Exhibit D.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offer and sale of Equity Interests (other than
Disqualified Stock) of Playboy for cash (other than offers and sales relating to
any employee benefit plan of Playboy).
"Euroclear" means Euroclear Bank S.A./N.V., and its successors or assigns,
as operator of the Euroclear System.
"Event of Default" has the meaning assigned to such term in Section 6.01.
"Excess Proceeds" has the meaning assigned to such term in Section 4.13.
"Exchange Act" means the Securities Exchange Act of 1934.
"Exchange Notes" means the Notes issued pursuant to this Indenture in
exchange for, and in an aggregate principal amount equal to, the Initial Notes
or any Initial Additional Notes in compliance with the terms of a Registration
Rights Agreement and containing terms substantially identical to the Initial
Notes or any Initial Additional Notes (except that (i) such Exchange Notes will
be registered under the Securities Act and will not be subject to transfer
restrictions or bear the Restricted Legend, and (ii) the provisions relating to
Liquidated Damages will be eliminated).
"Exchange Offer" means an offer by the Company to the Holders of the
Initial Notes or any Initial Additional Notes to exchange outstanding Notes for
Exchange Notes, as provided for in a Registration Rights Agreement.
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in a Registration Rights Agreement.
"Existing Indebtedness" means the aggregate principal amount of
Indebtedness of Playboy and its Subsidiaries (other than Indebtedness under the
Credit Agreement) in existence on the date of this Indenture, until such amounts
are repaid.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and its
Subsidiaries for such period, whether paid or accrued, including, without
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limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect
to Attributable Debt, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings,
and net of the effect of all payments made or received pursuant to Hedging
Obligations; provided that (a) any amount of interest of a Restricted
Subsidiary, if the net income of such Restricted Subsidiary is excluded in
the calculation of Net Income, and (b) non-cash imputed interest expense
on the deferred acquisition price of assets to the extent that the
obligation represented by such imputed interest is either required to be
or at the option of Playboy or such Restricted Subsidiary, as the case may
be, may be satisfied solely through the issuance of Equity Interests of
Playboy that are not Disqualified Stock shall be excluded; plus
(2) the consolidated interest of such Person and its Restricted
Subsidiaries that was capitalized during such period; plus
(3) any interest expense on Indebtedness of another Person that is
Guaranteed by such Person or one of its Restricted Subsidiaries or secured
by a Lien on assets of such Person or one of its Restricted Subsidiaries,
whether or not such Guarantee or Lien is called upon; plus
(4) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of Disqualified Stock or preferred
stock of such Person or any of its Restricted Subsidiaries, other than (i)
dividends on Equity Interests paid solely in Equity Interests of Playboy
(other than Disqualified Stock), (ii) dividends paid to Playboy or any of
its Restricted Subsidiaries, (iii) dividends and the accretion of the
liquidation preference and mandatory redemption price on the Playboy.com
Series A Preferred Stock pursuant to the terms thereof as in effect on the
date of this indenture and (iv) dividends on the Hefner Securities
permitted pursuant to Section 4.07(b)(9), times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the
then current combined federal, state and local statutory tax rate of such
Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"Foreign Subsidiary" means any Restricted Subsidiary of Playboy other than
a Domestic Restricted Subsidiary.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
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statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect on the date of this Indenture.
"Global Note" means a Note in registered global form without interest
coupons.
"Guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means:
(1) Playboy and
(2) each direct or indirect Domestic Restricted Subsidiary of
Playboy that executes a Note Guarantee in accordance with the provisions
of this Indenture,
and their respective successors and assigns unless and until such Guarantors are
released from the Note Guarantees pursuant to this Indenture.
"Hedging Obligations" means, with respect to any specified Person, the
obligations of such Person under:
(1) interest rate swap agreements, interest rate cap agreements and
interest rate collar agreements; and
(2) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates, currency exchange rates or
commodity prices.
"Hefner Securities" means (i) preferred stock of the Company with an
aggregate liquidation preference of $26,735,490.69 issued in exchange for
promissory notes of Playboy.com outstanding on the date of this Indenture and
(ii) Equity Securities of Playboy (other than Disqualified Stock) issued in
exchange therefor.
"Holder" or "Noteholder" means the registered holder of any Note.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
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(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof),
excluding letters of credit securing obligations other than obligations
described in clauses (1), (2), (4) and (6) of this paragraph and entered
into in the ordinary course of business of such Person, to the extent such
letters of credit are not drawn upon, or if drawn upon, to the extent such
drawing is reimbursed no later than the third business day following
receipt by such Person of a demand for reimbursement;
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations or Attributable Debt;
(5) representing the balance deferred and unpaid of the purchase
price of any property or services, except any such balance that
constitutes an accrued expense or trade payable, which purchase price is
due more than six months after the date of placing such property in
service or taking delivery and title or the completing of such services
excluding any obligation to the extent that it is either required to be or
at the option of such Person may be satisfied solely through the issuance
of Equity Interests of Playboy that are not Disqualified Stock; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP.
In addition, the term "Indebtedness" includes
(1) all Indebtedness of others secured by a Lien on any asset of the
specified Person whether or not such Indebtedness is assumed by the
specified Person, provided that the amount of such Indebtedness shall be
the lesser of (A) the fair market value of such asset as of the date of
determination and (B) the amount of such Indebtedness, and, to the extent
not otherwise included, the Guarantee by the specified Person of any
Indebtedness of any other Person;
(2) obligations of such Person and its Restricted Subsidiaries to
repay Disqualified Stock; and
(3) the liquidation preference of all preferred stock of any of such
Person's Restricted Subsidiaries other than the Playboy.com Series A
Preferred Stock and the Hefner Securities.
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The amount of any Indebtedness outstanding as of any date shall be:
(1) with respect to any contingent obligation included as
Indebtedness, the maximum liability upon the occurrence of the contingency
giving rise to the obligation;
(2) with respect to any Hedging Obligation, the net amount payable
if such Hedging Obligation terminated at that time due to default by such
Person;
(3) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(4) the principal amount thereof, together with any interest thereon
that is more than 30 days past due, in the case of any other Indebtedness.
"Indenture" means this indenture, as amended or supplemented from time to
time.
"Initial Additional Notes" means Additional Notes issued in an offering
not registered under the Securities Act and any Notes issued in replacement
thereof, but not including any Exchange Notes issued in exchange therefor.
"Initial Notes" means the Notes issued on the Issue Date and any Notes
issued in replacement thereof, but not including any Exchange Notes issued in
exchange therefor.
"Initial Purchasers" means Banc of America Securities LLC and Lazard
Freres & Co. LLC.
"Institutional Accredited Investor Certificate" means a certificate
substantially in the form of Exhibit G hereto.
"Intercreditor Agreement" means the Intercreditor Agreement of even date
herewith among the Administrative Agent, the Trustee, Playboy, the Company and
Playboy's Domestic Restricted Subsidiaries in existence as of the date hereof.
"interest", in respect of the Notes, unless the context otherwise
requires, refers to interest and Liquidated Damages, if any.
"Interest Payment Date" means each March 15 and September 15 of each year,
commencing September 15, 2003.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons, including Affiliates, in the forms
of
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loans, including Guarantees or other obligations, advances or capital
contributions (excluding commission, travel and similar advances to officers,
employees, customers and suppliers made consistent with past practices),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
If the Company or any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect Restricted Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07(c). The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third Person
shall be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person in an amount equal to the fair market value of the
Investment held by the acquired Person in such third Person in an amount
determined as provided in Section 4.07(c).
"Issue Date" means the date on which the Original Notes are originally
issued under this Indenture.
"Legal Defeasance" has the meaning assigned to such term in Section 8.02.
"Leverage Ratio" means, on any date (the "transaction date"), the ratio of
(x) the sum of consolidated Indebtedness of Playboy and its
Restricted Subsidiaries to
(y) the aggregate amount of Consolidated Cash Flow of Playboy for
the four fiscal quarters immediately prior to the transaction date for
which internal financial statements are available (the "reference
period").
In making the foregoing calculation,
(1) any Indebtedness, Disqualified Stock or preferred stock to be
repaid or redeemed on the transaction date will be excluded; and
(2) pro forma effect (determined in accordance with Regulation S-X
under the Securities Act) will be given to
(A) the creation, designation or redesignation of Restricted
Subsidiaries and Unrestricted Subsidiaries,
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(B) the acquisition or disposition of companies, divisions or
lines of businesses by Playboy and its Restricted Subsidiaries,
including any acquisition or disposition of a company, division or
line of business since the beginning of the reference period by a
Person that became a Restricted Subsidiary after the beginning of
the reference period, and
(C) the discontinuation of any discontinued operations
that have occurred since the beginning of the reference period as if such
events had occurred, and, in the case of any disposition, the proceeds
thereof applied, on the first day of the reference period. To the extent
that pro forma effect is to be given to an acquisition or disposition of a
company, division or line of business, the pro forma calculation will be
based upon the most recent four full fiscal quarters for which the
relevant financial information is available.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages owed to the Holders
pursuant to a Registration Rights Agreement.
"Mortgaged Property" means all "Mortgaged Property" and/or "Trust
Property" as defined in any Mortgage and subject to any such Mortgage.
"Mortgages" means, collectively, (i) the Secured Priority Deed and Trust
with Assignment of Rents, Security Agreement and fixture filing dated as of the
Issue Date from Playboy Enterprises International, Inc., a Delaware corporation,
to Fidelity National Title Insurance Company for the benefit of the Trustee with
respect to 10236 Charing Cross Road, Holmby Hills, California and (ii) any
additional mortgage, deed of trust or similar instrument entered into by the
Company or any Guarantor from time to time after the Issue Date to provide a
security interest for the benefit of the Trustee and the Holders of the Notes.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain or loss, together with any related provision for taxes
on such gain or loss, realized in connection with: (a) any Asset Sale; or
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(b) the disposition of any securities by such Person or any of its
Restricted Subsidiaries or the extinguishment of any Indebtedness of such
Person or any of its Restricted Subsidiaries; and
(2) any extraordinary gain or loss, together with any related
provision for taxes on such extraordinary gain or loss.
"Net Proceeds" means the aggregate proceeds in cash or Cash Equivalents
received by Playboy or any of its Restricted Subsidiaries in respect of any
Asset Sale, including, without limitation, any cash or Cash Equivalents received
upon the sale or other disposition of any non-cash consideration received in any
Asset Sale, net of the direct costs relating to such Asset Sale, including,
without limitation, legal, accounting and investment banking fees, and sales
commissions, and any relocation expenses incurred as a result thereof, taxes
paid or payable as a result thereof, in each case, after taking into account any
available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness secured by a
Lien on the asset or assets that were the subject of such Asset Sale and any
reserve for adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Playboy nor any of its Restricted
Subsidiaries (a) provides credit support of any kind, including any
undertaking, agreement or instrument that would constitute Indebtedness,
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(2) no default with respect to which, including any rights that the
holders thereof may have to take enforcement action against an
Unrestricted Subsidiary, would permit upon notice, lapse of time or both
any holder of any Indebtedness of Playboy or any of its Restricted
Subsidiaries to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity;
and
(3) as to which the lenders have been notified in writing that they
will not have any recourse to the stock or assets of Playboy or any of its
Restricted Subsidiaries.
"Non-U.S. Person" means a Person that is not a U.S. person, as defined in
Regulation S.
"Note Guarantee" means the Guarantee of the Notes by a Guarantor pursuant
to this Indenture.
"Notes" has the meaning assigned to such term in the Recitals.
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"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offer to Purchase" has the meaning assigned to such term in Section 3.04.
"Officer" means the chairman of the Board of Directors, the president or
chief executive officer, any executive vice president, any senior vice
president, any vice president, the chief financial officer, the treasurer or any
assistant treasurer, or the secretary or any assistant secretary, of the
Company.
"Officers' Certificate" means a certificate signed in the name of the
Company (i) by the chairman of the Board of Directors, the president or chief
executive officer, any executive vice president, any senior vice president, or
any vice president and (ii) by the chief financial officer, the treasurer or any
assistant treasurer or the secretary or any assistant secretary.
"Offshore Global Note" means a Global Note representing Notes offered and
sold in offshore transactions in reliance on Regulation S.
"Opinion of Counsel" means a written opinion signed by legal counsel, who
may be an employee of or counsel to Playboy or any of its Subsidiaries and who,
in the case of any such opinion required to be delivered to the Trustee which is
provided by outside counsel, is reasonably acceptable to the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes issued in
exchange therefor.
"Paying Agent" refers to a Person engaged to perform the obligations of
the Trustee in respect of payments made or funds held hereunder in respect of
the Notes.
"Permanent Offshore Global Note" means an Offshore Global Note that does
not bear the Temporary Offshore Global Note Legend.
"Permitted Business" means any business conducted or proposed to be
conducted (as described in the offering memorandum dated March 6, 2003 relating
to the Notes) by Playboy, the Company and their Restricted Subsidiaries on the
date of this Indenture and other businesses reasonably related, complementary or
ancillary thereto.
"Permitted Investments" means:
(1) any Investment in Playboy, the Company or a Restricted
Subsidiary of Playboy;
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(2) any Investment in Cash Equivalents and, in the case of any
Subsidiary of Playboy that was not formed under the laws of the United
States or any state thereof or the District of Columbia, Investments in
short-term instruments substantially similar to Cash Equivalents and
customarily used in the country in which such Subsidiary is located;
(3) any Investment by Playboy or any Restricted Subsidiary of
Playboy in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Playboy and
a Guarantor; or
(b) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or
is liquidated into, Playboy, the Company, a Wholly-Owned Restricted
Subsidiary of Playboy that is a Guarantor or Playboy.com or any of
its Wholly-Owned Restricted Subsidiaries;
(4) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.13;
(5) any Investment made solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of Playboy;
(6) Hedging Obligations;
(7) any Investments made solely to fund Playboy's 1997 deferred
compensation plan for non-employee directors or any successor plan
approved by the Board of Directors of Playboy;
(8) any Investments received in satisfaction of judgments,
settlements of debt or compromises of obligations incurred in the ordinary
course of business, including pursuant to any plan of reorganization or
similar arrangement upon the bankruptcy or insolvency of any trade
creditor, customer or joint venture partner;
(9) receivables owing to Playboy, the Company or any Restricted
Subsidiary of the Company if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms; provided that such trade terms may include such concessionary trade
terms as Playboy, the Company or such Restricted Subsidiary deems
reasonable under the circumstances;
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(10) Investments in joint ventures to which Playboy, the Company or
a Restricted Subsidiary is party on the date of this Indenture, in an
aggregate amount not to exceed $2.5 million;
(11) Investments in a Person received solely in exchange for (a)
licenses to intellectual property (other than an exclusive license or
licenses to use in the United States or a majority of states or states
incorporating a majority of the population of the United States thereof
(i) the Playboy name or Rabbit Head Design for all or substantially all of
its current uses, (ii) all or substantially all of the video and film
library owned by Playboy and its Subsidiaries for all or substantially all
of its current uses or (iii) all or substantially all of the image library
owned by Playboy and its Subsidiaries for all or substantially all of its
current uses) or (b) other property (excluding cash or Cash Equivalents)
in an aggregate amount in the case of clause (b) not to exceed $5.0
million;
(12) Investments deemed to have been made as a result of the
acquisition of a Person that at the time of such acquisition held
instruments constituting Investments that were not acquired in
contemplation of the acquisition of such Person; and
(13) 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), when taken together with
all other Investments made pursuant to this clause (13) since the date of
this Indenture, not to exceed $5.0 million.
"Permitted Liens" means:
(1) Liens on the assets (other than Primary Collateral) of the
Company and any Guarantor securing Obligations under or with respect to
Credit Facilities (including interest, fees, costs and expenses and
including Hedging Obligations owing to the lenders thereunder and their
Affiliates), provided that the aggregate principal amount of such
Obligations (excluding interest, fees, costs and expenses thereon) so
secured does not exceed $30 million;
(2) Liens securing the Notes or any Note Guarantee;
(3) Liens in favor of the Company or any Guarantor;
(4) Liens on property or assets of a Person existing at the time
such Person is acquired by, merged with or into or consolidated with
Playboy or any of its Restricted Subsidiaries; provided that such Liens
were not entered into in contemplation of such merger or consolidation and
do
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not extend to any assets other than those of the Person merged into or
consolidated with Playboy or the Restricted Subsidiary;
(5) Liens on property or assets existing at the time of acquisition
thereof by Playboy or any of its Restricted Subsidiaries, provided that
such Liens were not entered into in contemplation of such acquisition and
do not extend to any property other than the property or assets so
acquired;
(6) Liens existing on the date of this Indenture;
(7) any attachment or judgment Lien not constituting an Event of
Default;
(8) Liens upon real or personal property acquired after the date of
this Indenture; provided that (a) such Lien is created solely for the
purpose of securing Indebtedness incurred to finance all or any part of
the purchase price or cost of construction or improvement of the property
or assets subject thereto and such Lien is created prior to, at the time
of or within 12 months after the later of the acquisition, completion of
construction or commencement of full operation of such property or assets
or to refinance any such Indebtedness previously so secured; (b) the
principal amount of the Indebtedness secured by such Lien does not exceed
100% of such cost; and (c) such Lien must not extend to or cover any
property or assets other than such item of property or assets and any
improvements on such item;
(9) Liens on the assets of the Company and any Guarantor securing
Indebtedness permitted by Section 4.06 which Liens (x) do not extend to
any assets other than the Collateral and (y) rank equally in right of
payment with or are junior to the Liens securing the Notes; provided that
any Liens on the Primary Collateral securing Obligations under or with
respect to the Credit Facilities must be junior to the Liens securing the
Notes;
(10) Liens of taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and subject to appropriate reserves
in conformity with GAAP;
(11) Liens incurred in the ordinary course of business not securing
Indebtedness and not in the aggregate materially detracting from the value
of the properties or their use in the operation of the business of Playboy
and its Restricted Subsidiaries;
(12) Liens incurred in the ordinary course of business of Playboy or
any Restricted Subsidiary of Playboy with respect to obligations that do
not exceed $10.0 million at any one time outstanding;
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(13) extensions, renewals or replacements of any Liens referred to
in clauses (4), (5), (6) or (8) of this definition in connection with the
refinancing of the obligations secured thereby, provided that such Lien
does not extend to any other property and, except as contemplated by the
definition of "Permitted Refinancing Indebtedness," the amount secured by
such Lien is not increased;
(14) Liens, bonds and deposits to secure the performance of
statutory obligations, bids, trade contracts and leases, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in
the ordinary course of business (including bonds in connection with
sweepstakes);
(15) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customer duties in connection with the
importation of goods and other similar Liens arising in the ordinary
course of business;
(16) leases and subleases granted to third Persons not materially
interfering with the ordinary course of business of Playboy and its
Restricted Subsidiaries taken as a whole;
(17) Liens incurred or pledges or deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security laws or regulations;
(18) deposits made in the ordinary course of business to secure
liability to insurance carriers;
(19) licensing agreements for use of intellectual property entered
into in the ordinary course of business;
(20) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by Playboy and its
Restricted Subsidiaries in the ordinary course of business;
(21) Liens securing Hedging Obligations entered into for the purpose
of managing interest rate risk with respect to the Credit Facilities or
the Notes which are otherwise permitted under this Indenture;
(22) any Lien arising as a result of the sale of an option pursuant
to Section 4.14(b)(4);
(23) Liens on any item of Product or rights in Product to the extent
securing residuals, deferments or participations payable by Playboy or any
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Restricted Subsidiary of Playboy relating exclusively to such items of
Product or rights in Product; and
(24) Liens on any asset relating to any item of Product or rights in
Product acquired by Playboy or any of its Restricted Subsidiaries granted
in accordance with customary industry practice in favor of any lender or
financier financing any or all of the development, acquisition or
production costs of such item of Product or in favor of any person
guaranteeing the completion of production or delivery of such item of
Product, provided the Lien is and will remain confined to the same Product
or rights in Product so acquired.
"Permitted Refinancing Indebtedness" means any Indebtedness of Playboy or
any of its Restricted Subsidiaries issued in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund other
Indebtedness of Playboy or any of its Restricted Subsidiaries (other than
intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of any reasonably determined premium
necessary to accomplish such refinancing and such reasonable expenses
incurred in connection therewith);
(2) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by Playboy, the Company or
by the Restricted Subsidiary that is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
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"Person" means an individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Playboy" means Playboy Enterprises, Inc., a Delaware corporation, or any
successor obligor under this Indenture and its Guarantee pursuant to Section
5.02.
"Playboy.com" means Playboy.com, Inc., a Delaware corporation.
"Playboy Mansion" means the property located at 10236 Charing Cross Road,
Holmby Hills, California.
"Pledge Agreements" means, collectively, each pledge agreement now or
hereafter delivered by Playboy or any of its Restricted Subsidiaries, whereby
such Person pledges to the Trustee, as security for such Person's Obligations
under the Notes and for such Person's liabilities under any applicable Note
Guarantee, 100% of such Person's interests in the Equity Interests of each
Domestic Restricted Subsidiary or 65% of such Person's interests in the Equity
Interests of each first-tier Subsidiary that is a Foreign Subsidiary.
"Primary Collateral" means all Trademarks (as defined in the Security
Documents) owned as of the date of this Indenture or hereafter acquired by the
Company or any of the Guarantors.
"Principal" means Hugh M. Hefner or the Hugh M. Hefner 1991 Trust, acting
by its trustees, or in the event of Hugh M. Hefner's death, the Hugh M. Hefner
1991 Trust and its successor trusts, acting by their trustees; the estate of
Hugh M. Hefner, acting by its personal representatives; the Hugh M. Hefner
Foundation, acting by its directors; the beneficiaries of the Hugh M. Hefner
1991 Trust and its successor trusts; the beneficiaries of the estate of Hugh M.
Hefner; or the heirs at law or descendants of Hugh M. Hefner or trusts created
for their benefit.
"principal" of any Debt means the principal amount of such Debt, (or if
such Debt was issued with original issue discount, the face amount of such Debt
less the remaining unamortized portion of the original issue discount of such
Debt), together with, unless the context otherwise indicates, any premium then
payable on such Debt.
"Product" means any still or motion pictures, films, videos, movies, sound
recordings, script or similar audio, print or visual media of communication in
use now, in the past or in the future or any elements thereof in which Playboy
or any Restricted Subsidiary of Playboy has any proprietary or financial
interest including merchandising rights related thereto.
"Register" has the meaning assigned to such term in Section 2.09.
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"Registrar" means a Person engaged to maintain the Register.
"Registration Rights Agreement" means (i) the Registration Rights
Agreement dated on or about the Issue Date by and among the Company, Playboy,
the Subsidiary Guarantors listed on the signature pages thereof and the Initial
Purchasers with respect to the Initial Notes, and (ii) with respect to any
Additional Notes, any registration rights agreements between the Company and the
other parties thereto relating to rights given by the Company to the purchasers
of Additional Notes to register such Additional Notes or exchange them for Notes
registered under the Securities Act.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the March 1 or September 1 (whether or not a Business Day) next
preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially in the form
of Exhibit E hereto.
"Related Party" means:
(1) any controlling stockholder, partner, member, 80% (or more)
owned Subsidiary, or spouse, descendant, or beneficiary of any Principal;
or
(2) the Hugh M. Hefner 1991 Trust and its successor trusts, acting
by their trustees; the Hugh M. Hefner Foundation; any other trust
established by a Principal for the primary benefit of the Principal or his
or her spouse, descendants, or heirs at law; any other charitable
foundation created by Hugh M. Hefner; and any corporation, partnership,
limited liability company, or other entity, the stockholders, partners,
members, owners, or Persons beneficially holding an 80% or more
controlling interest of which consist of any one or more Principals and/or
such Persons referred to in the immediately preceding clause (1).
"Responsible Officer" means any officer assigned by the Trustee to
administer corporate trust matters and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his or her knowledge of, and familiarity with, the particular
subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Legend" means the legend set forth in Exhibit C.
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"Restricted Payment" has the meaning assigned to such term in Section
4.07.
"Restricted Period" means the relevant 40-day distribution compliance
period as defined in Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary, it being understood that the
Company shall be a Restricted Subsidiary of Playboy at all times that it is a
Subsidiary of Playboy.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Certificate" means (i) a certificate substantially in the form
of Exhibit F hereto or (ii) a written certification addressed to the Company and
the Trustee to the effect that the Person making such certification (x) is
acquiring such Note (or beneficial interest) for its own account or one or more
accounts with respect to which it exercises sole investment discretion and that
it and each such account is a qualified institutional buyer within the meaning
of Rule 144A, (y) is aware that the transfer to it or exchange, as applicable,
is being made in reliance upon the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A, and (z) acknowledges that it has
received such information regarding the Company as it has requested pursuant to
Rule 144A(d)(4) or has determined not to request such information.
"Securities Act" means the Securities Act of 1933.
"Security Agreements" means, collectively, each security agreement now or
hereafter executed by Playboy and any of its Domestic Restricted Subsidiaries
pursuant to which such Person grants to the Trustee, as security for the
Obligations hereunder or under the Notes, a Lien on substantially all of its
personal property.
"Security Documents" means the Security Agreements, the Pledge Agreements,
the Mortgages and all other agreements, instruments and documents now or
hereafter executed and delivered in connection with this Indenture pursuant to
which Liens are granted or purported to be granted to the Trustee in Collateral
securing all or part of the Obligations hereunder or under the Notes, each at
the time of its execution in form and substance reasonably satisfactory to the
Trustee.
"Shelf Registration Statement" means the Shelf Registration Statement as
defined in a Registration Rights Agreement.
"Significant Restricted Subsidiary" means any Restricted Subsidiary that
would, or group of Restricted Subsidiaries that would, taken together, be a
"significant subsidiary" as defined in Rule 1-02(w)(1) or (2) of Regulation S-X
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promulgated under the Securities Act, as such regulation is in effect on the
date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person:
(1) any corporation, association or other business entity of which
more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person (or a combination thereof); and
(2) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or
(b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantors" means each Guarantor, other than Playboy.
Temporary Offshore Global Note" means an Offshore Global Note that bears
the Temporary Offshore Global Note Legend.
"Temporary Offshore Global Note Legend" means the legend set forth in
Exhibit I.
"Trustee" means the party named as trustee in the first paragraph of this
Indenture or any successor trustee under this Indenture pursuant to Article 7.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
"U.S. Global Note" means a Global Note that bears the Restricted Legend
representing Notes offered and sold in reliance on Rule 144A.
"U.S. Government Obligations" means obligations issued or directly and
fully guaranteed or insured by the United States of America or by any agent or
instrumentality thereof, provided that the full faith and credit of the United
States of America is pledged in support thereof.
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"Unrestricted Subsidiary" means any Subsidiary of Playboy that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a
Board Resolution, but only to the extent that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with Playboy or any of its Restricted Subsidiaries unless
the terms of any such agreement, contract, arrangement or understanding
are no less favorable to Playboy or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not Affiliates of
Playboy or such Restricted Subsidiary;
(3) is a Person with respect to which neither Playboy nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to
subscribe for additional Equity Interests or (b) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results;
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Playboy or any of its Restricted
Subsidiaries; and
(5) has at least one director on its Board of Directors that is not
a director or executive officer of Playboy or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of Playboy or any of its Restricted Subsidiaries.
Any designation of a Restricted Subsidiary of Playboy as an Unrestricted
Subsidiary shall be evidenced to the trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Playboy
as of such date and, if such Indebtedness is not permitted to be incurred as of
such date under Section 4.06, the Company shall be in default of such Section.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
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(1) the sum of the products obtained by multiplying (a) the amount
of each then remaining installment, sinking fund, serial maturity or other
required payments of principal, including payment at final maturity, in
respect thereof, by (b) the number of years (calculated to the nearest
one-twelfth) that will elapse between such date and the making of such
payment; by
(2) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified 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 and one or more Wholly Owned Restricted
Subsidiaries of such Person.
SECTION 1.02. Rules of Construction. Unless the context otherwise requires
or except as otherwise expressly provided,
(1) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(2) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Section, Article or
other subdivision;
(3) all references to Recitals, Sections or Articles or Exhibits
refer to Recitals, Sections or Articles or Exhibits of or to this
Indenture unless otherwise indicated;
(4) references to agreements or instruments, or to statutes or
regulations, are to such agreements or instruments, or statutes or
regulations, as amended from time to time (or to successor statutes and
regulations); and
(5) in the event that a transaction meets the criteria of more than
one category of permitted transactions or listed exceptions the Company
may classify such transaction as it, in its sole discretion, determines.
ARTICLE 2
THE NOTES
SECTION 2.01. Form, Dating and Denominations. (a) The Notes and the
Trustee's certificate of authentication will be substantially in the form
attached as Exhibit A. The terms and provisions contained in the form of the
Notes annexed as Exhibit A constitute, and are hereby expressly made, a part of
this Indenture.
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The Notes may have notations, legends or endorsements required by law, rules of
or agreements with national securities exchanges to which the Company is
subject, or usage. Each Note will be dated the date of its authentication. The
Notes will be issuable in denominations of $1,000 in principal amount and any
multiple of $1,000 in excess thereof.
(b) (1) Except as otherwise provided in Section 2.01(c), Section
2.10(b)(3), (b)(5), or (c) or Section 2.09(b)(4), each Initial Note or Initial
Additional Note (other than a Permanent Offshore Note) will bear the Restricted
Legend on the face thereof.
(2) Each Global Note, whether or not an Initial Note or Additional
Note, will bear the DTC Legend on the face thereof.
(3) Each Temporary Offshore Global Note will bear the Temporary
Offshore Global Note Legend on the face thereof.
(4) Initial Notes offered and sold in reliance on Regulation S will
be issued as provided in Section 2.11(a).
(5) Initial Notes offered and sold in reliance on any exception
under the Securities Act other than Regulation S and Rule 144A will be
issued, and upon the request of the Company to the Trustee, Initial Notes
offered and sold in reliance on Rule 144A may be issued, in the form of
Certificated Notes.
(6) Exchange Notes will be issued, subject to Section 2.09(b), in
the form of one or more Global Notes.
(c) (1) If the Company determines (upon the advice of counsel and such
other certifications and evidence as the Company may reasonably require) that a
Note is eligible for resale pursuant to Rule 144(k) under the Securities Act (or
a successor provision) and that the Restricted Legend is no longer necessary or
appropriate in order to ensure that subsequent transfers of the Note (or a
beneficial interest therein) are effected in compliance with the Securities Act,
or
(2) after an Initial Note or any Initial Additional Note is (x) sold
pursuant to an effective registration statement under the Securities Act,
pursuant to a Registration Rights Agreement or otherwise, or (y) is
validly tendered for exchange into an Exchange Note pursuant to an
Exchange Offer,
the Company may instruct the Trustee to cancel the Note and issue to the Holder
thereof (or to its transferee) a new Note of like tenor and amount, registered
in the name of the Holder thereof (or its transferee), that does not bear the
Restricted Legend, and the Trustee will comply with such instruction.
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(d) By its acceptance of any Note bearing the Restricted Legend (or any
beneficial interest in such a Note), each Holder thereof and each owner of a
beneficial interest therein acknowledges the restrictions on transfer of such
Note (and any such beneficial interest) set forth in this Indenture and in the
Restricted Legend and agrees that it will transfer such Note (and any such
beneficial interest) only in accordance with this Indenture and such legend.
SECTION 2.02. Execution and Authentication; Exchange Notes; Additional
Notes. (a) An Officer shall execute the Notes for the Company by facsimile or
manual signature in the name and on behalf of the Company. If an Officer whose
signature is on a Note no longer holds that office at the time the Note is
authenticated, the Note will still be valid.
(b) A Note will not be valid until the Trustee manually signs the
certificate of authentication on the Note, with the signature conclusive
evidence that the Note has been authenticated under this Indenture.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Notes executed by the Company to the
Trustee for authentication. The Trustee will authenticate and deliver
(i) Initial Notes for original issue in the aggregate principal
amount not to exceed $115,000,000,
(ii) Initial Additional Notes from time to time for original issue
in aggregate principal amounts specified by the Company, and
(iii) Exchange Notes from time to time for issue in exchange for a
like principal amount of Initial Notes or Initial Additional Notes
after the following conditions have been met:
(1) Receipt by the Trustee of an Officers' Certificate specifying
(A) the amount of Notes to be authenticated and the date on
which the Notes are to be authenticated,
(B) whether the Notes are to be Initial Notes or Additional
Notes or Exchange Notes,
(C) in the case of Initial Additional Notes, that the issuance
of such Notes does not contravene any provision of Article 4,
(D) whether the Notes are to be issued as one or more Global
Notes or Certificated Notes, and
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(E) other information the Company may determine to include or
the Trustee may reasonably request.
(2) In the case of Initial Additional Notes, receipt by the Trustee
of an Opinion of Counsel confirming that the Holders of the outstanding
Notes will be subject to federal income tax in the same amounts, in the
same manner and at the same times as would have been the case if such
Additional Notes were not issued.
(3) In the case of Exchange Notes, effectiveness of an Exchange
Offer Registration Statement and consummation of the exchange offer
thereunder (and receipt by the Trustee of an Officers' Certificate to that
effect). Initial Notes or Initial Additional Notes exchanged for Exchange
Notes will be cancelled by the Trustee.
SECTION 2.03. Registrar, Paying Agent and Authenticating Agent; Paying
Agent to Hold Money in Trust. (a) The Company may appoint one or more Registrars
and one or more Paying Agents, and the Trustee may appoint an Authenticating
Agent, in which case each reference in this Indenture to the Trustee in respect
of the obligations of the Trustee to be performed by that Agent will be deemed
to be references to the Agent. The Company may act as Registrar or (except for
purposes of Article 8) Paying Agent. In each case the Company and the Trustee
will enter into an appropriate agreement with the Agent implementing the
provisions of this Indenture relating to the obligations of the Trustee to be
performed by the Agent and the related rights. The Company initially appoints
the Trustee as Registrar and Paying Agent.
(b) The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of the
Holders or the Trustee all money held by the Paying Agent for the payment of
principal of and interest on the Notes and will promptly notify the Trustee of
any default by the Company in making any such payment. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee and
account for any funds disbursed, and the Trustee may at any time during the
continuance of any payment default, upon written request to a Paying Agent,
require the Paying Agent to pay all money held by it to the Trustee and to
account for any funds disbursed. Upon doing so, the Paying Agent will have no
further liability for the money so paid over to the Trustee.
SECTION 2.04. Replacement Notes. If a mutilated Note is surrendered to the
Trustee or if a Holder claims that its Note has been lost, destroyed or
wrongfully taken, the Company will issue and the Trustee will authenticate a
replacement Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding. Every replacement Note is an additional
obligation of the Company and entitled to the benefits of this Indenture. If
required by the Trustee or the Company, an indemnity must be furnished that is
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sufficient in the judgment of both the Trustee and the Company to protect the
Company and the Trustee from any loss they may suffer if a Note is replaced. The
Company may charge the Holder for the expenses of the Company and the Trustee in
replacing a Note. In case the mutilated, lost, destroyed or wrongfully taken
Note has become or is about to become due and payable, the Company in its
discretion may pay the Note instead of issuing a replacement Note.
SECTION 2.05. Outstanding Notes. (a) Notes outstanding at any time are all
Notes that have been authenticated by the Trustee except for
(1) Notes cancelled by the Trustee or delivered to it for
cancellation;
(2) any Note which has been replaced pursuant to Section 2.04 unless
and until the Trustee and the Company receive proof satisfactory to them
that the replaced Note is held by a bona fide purchaser; and
(3) on or after the maturity date or any redemption date or date for
purchase of the Notes pursuant to an Offer to Purchase, those Notes
payable or to be redeemed or purchased on that date for which the Trustee
(or Paying Agent, other than the Company or an Affiliate of the Company)
holds money sufficient to pay all amounts then due.
(b) A Note does not cease to be outstanding because the Company or one of
its Affiliates holds the Note, provided that in determining whether the Holders
of the requisite principal amount of the outstanding Notes have given or taken
any request, demand, authorization, direction, notice, consent, waiver or other
action hereunder, Notes owned by the Company or any Affiliate of the Company
will be disregarded and deemed not to be outstanding, (it being understood that
in determining whether the Trustee is protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only Notes which the Trustee knows to be so owned will be so
disregarded). Notes so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Company or any Affiliate of the Company.
SECTION 2.06. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee will authenticate temporary
Notes. Temporary Notes will be substantially in the form of definitive Notes but
may have insertions, substitutions, omissions and other variations determined to
be appropriate by the Officer executing the temporary Notes, as evidenced by the
execution of the temporary Notes. If temporary Notes are issued, the Company
will cause definitive Notes to be prepared without unreasonable delay. After the
preparation of definitive Notes, the temporary Notes will be exchangeable for
definitive Notes upon surrender of the temporary Notes at the office or agency
of
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the Company designated for the purpose pursuant to Section 4.02, without charge
to the Holder. Upon surrender for cancellation of any temporary Notes the
Company will execute and the Trustee will authenticate and deliver in exchange
therefor a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes will be entitled to the
same benefits under this Indenture as definitive Notes.
SECTION 2.07. Cancellation. The Company at any time may deliver to the
Trustee for cancellation any Notes previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and may
deliver to the Trustee for cancellation any Notes previously authenticated
hereunder which the Company has not issued and sold. Any Registrar or the Paying
Agent will forward to the Trustee any Notes surrendered to it for transfer,
exchange or payment. The Trustee will cancel all Notes surrendered for transfer,
exchange, payment or cancellation and dispose of them in accordance with its
normal procedures or the written instructions of the Company. The Company may
not issue new Notes to replace Notes it has paid in full or delivered to the
Trustee for cancellation.
SECTION 2.08. CUSIP and CINS Numbers. The Company in issuing the Notes may
use "CUSIP" and "CINS" numbers, and the Trustee will use CUSIP numbers or CINS
numbers in notices of redemption or exchange or in Offers to Purchase as a
convenience to Holders, the notice to state that no representation is made as to
the correctness of such numbers either as printed on the Notes or as contained
in any notice of redemption or exchange or Offer to Purchase. The Company will
promptly notify the Trustee of any change in the CUSIP or CINS numbers.
SECTION 2.09. Registration, Transfer and Exchange. (a) The Notes will be
issued in registered form only, without coupons, and the Company shall cause the
Trustee to maintain a register (the "Register") of the Notes, for registering
the record ownership of the Notes by the Holders and transfers and exchanges of
the Notes.
(b) (1) Each Global Note will be registered in the name of the Depositary
or its nominee and, so long as DTC is serving as the Depositary thereof, will
bear the DTC Legend.
(2) Each Global Note will be delivered to the Trustee as custodian
for the Depositary. Transfers of a Global Note (but not a beneficial
interest therein) will be limited to transfers thereof in whole, but not
in part, to the Depositary, its successors or their respective nominees,
except (1) as set forth in Section 2.09(b)(4) and (2) transfers of
portions thereof in the form of Certificated Notes may be made upon
request of an Agent Member (for itself or on behalf of a beneficial owner)
by written notice given to the Trustee by or on behalf of the Depositary
in accordance
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with customary procedures of the Depositary and in compliance with this
Section and Section 2.10.
(3) Agent Members will have no rights under this Indenture with
respect to any Global Note held on their behalf by the Depositary, and the
Depositary may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and Holder of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, the
Depositary or its nominee may grant proxies and otherwise authorize any
Person (including any Agent Member and any Person that holds a beneficial
interest in a Global Note through an Agent Member) to take any action
which a Holder is entitled to take under this Indenture or the Notes, and
nothing herein will impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of
the rights of a holder of any security.
(4) If (x) the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary for a Global Note and a successor
depositary is not appointed by the Company within 90 days of the notice or
(y) an Event of Default has occurred and is continuing and the Trustee has
received a request from the Depositary, the Trustee will promptly exchange
each beneficial interest in the Global Note for one or more Certificated
Notes in authorized denominations having an equal aggregate principal
amount registered in the name of the owner of such beneficial interest, as
identified to the Trustee by the Depositary, and thereupon the Global Note
will be deemed canceled. If such Note does not bear the Restricted Legend,
then the Certificated Notes issued in exchange therefor will not bear the
Restricted Legend. If such Note bears the Restricted Legend, then the
Certificated Notes issued in exchange therefor will bear the Restricted
Legend, provided that any Holder of any such Certificated Note issued in
exchange for a beneficial interest in a Temporary Offshore Global Note
will have the right upon presentation to the Trustee of a duly completed
Certificate of Beneficial Ownership after the Restricted Period to
exchange such Certificated Note for a Certificated Note of like tenor and
amount that does not bear the Restricted Legend, registered in the name of
such Holder.
(c) Each Certificated Note will be registered in the name of the holder
thereof or its nominee.
(d) A Holder may transfer a Note (or a beneficial interest therein) to
another Person or exchange a Note (or a beneficial interest therein) for another
Note or Notes of any authorized denomination by presenting to the Trustee a
written request therefor stating the name of the proposed transferee or
requesting such an exchange, accompanied by any certification, opinion or other
document
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required by Section 2.10. The Trustee will promptly register any transfer or
exchange that meets the requirements of this Section by noting the same in the
register maintained by the Trustee for the purpose; provided that
(x) no transfer or exchange will be effective until it is registered
in such register and
(y) the Trustee will not be required (i) to issue, register the
transfer of or exchange any Note for a period of 15 days before a
selection of Notes to be redeemed or purchased pursuant to an Offer to
Purchase, (ii) to register the transfer of or exchange any Note so
selected for redemption or purchase in whole or in part, except, in the
case of a partial redemption or purchase, that portion of any Note not
being redeemed or purchased, or (iii) if a redemption or a purchase
pursuant to an Offer to Purchase is to occur after a Regular Record Date
but on or before the corresponding Interest Payment Date, to register the
transfer of or exchange any Note on or after the Regular Record Date and
before the date of redemption or purchase. Prior to the registration of
any transfer, the Company, the Trustee and their agents will treat the
Person in whose name the Note is registered as the owner and Holder
thereof for all purposes (whether or not the Note is overdue), and will
not be affected by notice to the contrary.
From time to time the Company will execute and the Trustee will
authenticate additional Notes as necessary in order to permit the registration
of a transfer or exchange in accordance with this Section.
No service charge will be imposed in connection with any transfer or
exchange of any Note, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith (other than a transfer tax or other similar governmental charge
payable upon exchange pursuant to subsection (b)(4)).
(e) (1) Global Note to Global Note. If a beneficial interest in a Global
Note is transferred or exchanged for a beneficial interest in another Global
Note, the Trustee will (x) record a decrease in the principal amount of the
Global Note being transferred or exchanged equal to the principal amount of such
transfer or exchange and (y) record a like increase in the principal amount of
the other Global Note. Any beneficial interest in one Global Note that is
transferred to a Person who takes delivery in the form of an interest in another
Global Note, or exchanged for an interest in another Global Note, will, upon
transfer or exchange, cease to be an interest in such Global Note and become an
interest in the other Global Note and, accordingly, will thereafter be subject
to all transfer and exchange restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
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(2) Global Note to Certificated Note. If a beneficial interest in a
Global Note is transferred or exchanged for a Certificated Note, the
Trustee will (x) record a decrease in the principal amount of such Global
Note equal to the principal amount of such transfer or exchange and (y)
deliver one or more new Certificated Notes in authorized denominations
having an equal aggregate principal amount to the transferee (in the case
of a transfer) or the owner of such beneficial interest (in the case of an
exchange), registered in the name of such transferee or owner, as
applicable.
(3) Certificated Note to Global Note. If a Certificated Note is
transferred or exchanged for a beneficial interest in a Global Note, the
Trustee will (x) cancel such Certificated Note, (y) record an increase in
the principal amount of such Global Note equal to the principal amount of
such transfer or exchange and (z) in the event that such transfer or
exchange involves less than the entire principal amount of the canceled
Certificated Note, deliver to the Holder thereof one or more new
Certificated Notes in authorized denominations having an aggregate
principal amount equal to the untransferred or unexchanged portion of the
canceled Certificated Note, registered in the name of the Holder thereof.
(4) Certificated Note to Certificated Note. If a Certificated Note
is transferred or exchanged for another Certificated Note, the Trustee
will (x) cancel the Certificated Note being transferred or exchanged, (y)
deliver one or more new Certificated Notes in authorized denominations
having an aggregate principal amount equal to the principal amount of such
transfer or exchange to the transferee (in the case of a transfer) or the
Holder of the canceled Certificated Note (in the case of an exchange),
registered in the name of such transferee or Holder, as applicable, and
(z) if such transfer or exchange involves less than the entire principal
amount of the canceled Certificated Note, deliver to the Holder thereof
one or more Certificated Notes in authorized denominations having an
aggregate principal amount equal to the untransferred or unexchanged
portion of the canceled Certificated Note, registered in the name of the
Holder thereof.
SECTION 2.10. Restrictions on Transfer and Exchange. (a) The transfer or
exchange of any Note (or a beneficial interest therein) may only be made in
accordance with this Section and Section 2.09 and, in the case of a Global Note
(or a beneficial interest therein), the applicable rules and procedures of the
Depositary. The Trustee shall refuse to register any requested transfer or
exchange that does not comply with the preceding sentence.
(b) Subject to paragraph (c), the transfer or exchange of any Note (or a
beneficial interest therein) of the type set forth in column A below for a Note
(or a beneficial interest therein) of the type set forth opposite in column B
below may
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only be made in compliance with the certification requirements (if any)
described in the clause of this paragraph set forth opposite in column C below.
A B C
U.S. Global Note U.S. Global Note (1)
U.S. Global Note Offshore Global Note (2)
U.S. Global Note Certificated Note (3)
Offshore Global Note U.S. Global Note (4)
Offshore Global Note Offshore Global Note (1)
Offshore Global Note Certificated Note (5)
Certificated Note U.S. Global Note (4)
Certificated Note Offshore Global Note (2)
Certificated Note Certificated Note (3)
(1) No certification is required.
(2) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee a duly completed Regulation S
Certificate; provided that if the requested transfer or exchange is made
by the Holder of a Certificated Note that does not bear the Restricted
Legend, then no certification is required.
(3) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee (x) a duly completed Rule 144A
Certificate, (y) a duly completed Regulation S Certificate or (z) a duly
completed Institutional Accredited Investor Certificate, and/or an Opinion
of Counsel and such other certifications and evidence as the Company may
reasonably require in order to determine that the proposed transfer or
exchange is being made in compliance with the Securities Act and any
applicable securities laws of any state of the United States; provided
that if the requested transfer or exchange is made by the Holder of a
Certificated Note that does not bear the Restricted Legend, then no
certification is required. In the event that (i) the requested transfer or
exchange takes place after the Restricted Period and a duly completed
Regulation S Certificate is delivered to the Trustee or (ii) a
Certificated Note that does not bear the Restricted Legend is surrendered
for transfer or exchange, upon transfer or exchange the Trustee will
deliver a Certificated Note that does not bear the Restricted Legend.
(4) The Person requesting the transfer or exchange must deliver or
cause to be delivered to the Trustee a duly completed Rule 144A
Certificate.
(5) Notwithstanding anything to the contrary contained herein, no
such exchange is permitted if the requested exchange involves a beneficial
interest in a Temporary Offshore Global Note. If the requested
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transfer involves a beneficial interest in a Temporary Offshore Global
Note, the Person requesting the transfer must deliver or cause to be
delivered to the Trustee (x) a duly completed Rule 144A Certificate or (y)
a duly completed Institutional Accredited Investor Certificate and/or an
Opinion of Counsel and such other certifications and evidence as the
Company may reasonably require in order to determine that the proposed
transfer is being made in compliance with the Securities Act and any
applicable securities laws of any state of the United States. If the
requested transfer or exchange involves a beneficial interest in a
Permanent Offshore Global Note, no certification is required and the
Trustee will deliver a Certificated Note that does not bear the Restricted
Legend.
(c) No certification is required in connection with any transfer or
exchange of any Note (or a beneficial interest therein)
(1) after such Note is eligible for resale pursuant to Rule 144(k)
under the Securities Act (or a successor provision); provided that the
Company has provided the Trustee with an Officer's Certificate to that
effect, and the Company may require from any Person requesting a transfer
or exchange in reliance upon this clause (1) an opinion of counsel and any
other reasonable certifications and evidence in order to support such
certificate; or
(2) (x) sold pursuant to an effective registration statement,
pursuant to the Registration Rights Agreement or otherwise or (y) which is
validly tendered for exchange into an Exchange Note pursuant to an
Exchange Offer.
Any Certificated Note delivered in reliance upon this paragraph will not
bear the Restricted Legend.
(d) The Trustee will retain copies of all certificates, opinions and other
documents received in connection with the transfer or exchange of a Note (or a
beneficial interest therein), and the Company will have the right to inspect and
make copies thereof at any reasonable time upon written notice to the Trustee.
SECTION 2.11. Temporary Offshore Global Notes. (a) Each Note originally
sold by the Initial Purchasers in reliance upon Regulation S will be evidenced
by one or more Offshore Global Notes that bear the Temporary Offshore Global
Note Legend.
(b) An owner of a beneficial interest in a Temporary Offshore Global Note
(or a Person acting on behalf of such an owner) may provide to the Trustee (and
the Trustee will accept) a duly completed Certificate of Beneficial Ownership at
any time after the Restricted Period (it being understood that the
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Trustee will not accept any such certificate during the Restricted Period).
Promptly after acceptance of a Certificate of Beneficial Ownership with respect
to such a beneficial interest, the Trustee will cause such beneficial interest
to be exchanged for an equivalent beneficial interest in a Permanent Offshore
Global Note, and will (x) permanently reduce the principal amount of such
Temporary Offshore Global Note by the amount of such beneficial interest and (y)
increase the principal amount of such Permanent Offshore Global Note by the
amount of such beneficial interest.
(c) Notwithstanding anything to the contrary contained herein, beneficial
interests in a Temporary Offshore Global |
