Document:

ex4-1.htm

Exhibit 4.1

 

==================================

 

CNO FINANCIAL GROUP, INC.

 

as Issuer

 

THE SUBSIDIARY GUARANTORS PARTIES

HERETO

 

6.375% Senior Secured Notes due 2020

==========

 

INDENTURE

 

Dated as of September 28, 2012

==========

 

WILMINGTON TRUST, NATIONAL ASSOCIATION

 

as Trustee

 

and

 

as Collateral Agent

 

==================================

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 
	  	  	  	
Page

	  	  	  	  
	
ARTICLE I

	  	  	  	  
	
Definitions and Incorporation by Reference

	  	  	  	  
	
SECTION 1.1.

	
Definitions

	  	
1

	
SECTION 1.2.

	
Other Definitions

	  	
44

	
SECTION 1.3.

	
Rules of Construction

	  	
45

	  	  	  	  
	
ARTICLE II

	  	  	  	  
	
The Notes

	  	  	  	  
	
SECTION 2.1.

	
Form and Dating

	  	
46

	
SECTION 2.2.

	
Form of Execution and Authentication

	  	
48

	
SECTION 2.3.

	
Registrar and Paying Agent

	  	
49

	
SECTION 2.4.

	
Paying Agent to Hold Money in Trust

	  	
49

	
SECTION 2.5.

	
Lists of Holders of the Notes

	  	
49

	
SECTION 2.6.

	
Transfer and Exchange

	  	
50

	
SECTION 2.7.

	
Replacement Notes

	  	
60

	
SECTION 2.8.

	
Outstanding Notes

	  	
60

	
SECTION 2.9.

	
Treasury Notes

	  	
61

	
SECTION 2.10.

	
Temporary Notes

	  	
61

	
SECTION 2.11.

	
Cancellation

	  	
61

	
SECTION 2.12.

	
Payment of Interest; Defaulted Interest

	  	
61

	
SECTION 2.13.

	
CUSIP and ISIN Numbers

	  	
62

	  	  	  	  
	
ARTICLE III

	  	  	  	  
	
Covenants

	  	  	  	  
	
SECTION 3.1.

	
Payment of Notes

	  	
63

	
SECTION 3.2.

	
Reports

	  	
63

	
SECTION 3.3.

	
Limitation on Indebtedness

	  	
64

	
SECTION 3.4.

	
Limitation on Restricted Payments

	  	
70

	
SECTION 3.5.

	
Limitation on Liens

	  	
76

	
SECTION 3.6.

	
Limitation on Restrictions on Distributions from Restricted Subsidiaries

	  	
77

	
SECTION 3.7.

	
Limitation on Sales of Assets and Subsidiary Stock

	  	
79

	
SECTION 3.8.

	
Limitation on Affiliate Transactions

	  	
82

	
SECTION 3.9.

	
Change of Control

	  	
84

	
SECTION 3.10.

	
Future Subsidiary Guarantors

	  	
86

	
SECTION 3.11.

	
Limitation on Lines of Business

	  	
87

 

  

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SECTION 3.12.

	
Effectiveness of Covenants

	  	
87

	
SECTION 3.13.

	
Compliance Certificate

	  	
88

	
SECTION 3.14.

	
Statement by Officers as to Default

	  	
88

	  	  	  	  
	
ARTICLE IV

	  	  	  	  
	
Successor Company and Successor Guarantor

	  	  	  	  
	
SECTION 4.1.

	
When Company May Merge or Otherwise Dispose of Assets

	  	
88

	
SECTION 4.2.

	
When a Subsidiary Guarantor May Merge or Otherwise Dispose of Assets

	  	
90

	  	  	  	  
	
ARTICLE V

	  	  	  	  
	
Redemption of Notes

	  	  	  	  
	
SECTION 5.1.

	
Optional Redemption

	  	
92

	
SECTION 5.2.

	
Election to Redeem; Notice to Trustee of Optional Redemptions

	  	
92

	
SECTION 5.3.

	
Selection by Trustee of Notes to Be Redeemed

	  	
93

	
SECTION 5.4.

	
Notice of Redemption

	  	
93

	
SECTION 5.5.

	
Deposit of Redemption Price

	  	
94

	
SECTION 5.6.

	
Notes Payable on Redemption Date

	  	
95

	
SECTION 5.7.

	
Notes Redeemed in Part

	  	
95

	  	  	  	  
	
ARTICLE VI

	  	  	  	  
	
Defaults and Remedies

	  	  	  	  
	
SECTION 6.1.

	
Events of Default

	  	
95

	
SECTION 6.2.

	
Acceleration

	  	
98

	
SECTION 6.3.

	
Other Remedies

	  	
99

	
SECTION 6.4.

	
Waiver of Past Defaults

	  	
99

	
SECTION 6.5.

	
Control by Majority

	  	
99

	
SECTION 6.6.

	
Limitation on Suits

	  	
100

	
SECTION 6.7.

	
Rights of Holders to Receive Payment

	  	
100

	
SECTION 6.8.

	
Collection Suit by Trustee

	  	
100

	
SECTION 6.9.

	
Trustee May File Proofs of Claim

	  	
100

	
SECTION 6.10.

	
Priorities

	  	
101

	
SECTION 6.11.

	
Undertaking for Costs

	  	
101

	  	  	  	  
	
ARTICLE VII

	  	  	  	  
	
Trustee

	  	  	  	  
	
SECTION 7.1.

	
Duties of Trustee

	  	
102

	
SECTION 7.2.

	
Rights of Trustee and Collateral Agent

	  	
103

	
SECTION 7.3.

	
Individual Rights of Trustee

	  	
105

 

  

-ii-

  

 

	
SECTION 7.4.

	
Disclaimer

	  	
105

	
SECTION 7.5.

	
Notice of Defaults

	  	
105

	
SECTION 7.6.

	
Compensation and Indemnity

	  	
105

	
SECTION 7.7.

	
Replacement of Trustee

	  	
107

	
SECTION 7.8.

	
Successor Trustee by Merger

	  	
107

	
SECTION 7.9.

	
Eligibility; Disqualification

	  	
108

	
SECTION 7.10.

	
Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification

	  	
108

	  	  	  	  
	
ARTICLE VIII

	  	  	  	  
	
Discharge of Indenture; Defeasance

	  	  	  	  
	
SECTION 8.1.

	
Discharge of Liability on Notes; Defeasance

	  	
108

	
SECTION 8.2.

	
Conditions to Defeasance

	  	
110

	
SECTION 8.3.

	
Application of Trust Money

	  	
111

	
SECTION 8.4.

	
Repayment to Company

	  	
111

	
SECTION 8.5.

	
Indemnity for U.S. Government Obligations

	  	
111

	
SECTION 8.6.

	
Reinstatement

	  	
112

	  	  	  	  
	
ARTICLE IX

	  	  	  	  
	
Amendments

	  	  	  	  
	
SECTION 9.1.

	
Without Consent of Holders

	  	
112

	
SECTION 9.2.

	
With Consent of Holders

	  	
114

	
SECTION 9.3.

	
Effect of Consents and Waivers

	  	
116

	
SECTION 9.4.

	
Notation on or Exchange of Notes

	  	
116

	
SECTION 9.5.

	
Trustee and Collateral Agent To Sign Amendments

	  	
116

	  	  	  	  
	
ARTICLE X

	  	  	  	  
	
Subsidiary Guarantee

	  	  	  	  
	
SECTION 10.1.

	
Subsidiary Guarantee

	  	
116

	
SECTION 10.2.

	
Limitation on Liability; Termination, Release and Discharge

	  	
118

	
SECTION 10.3.

	
Right of Contribution

	  	
120

	
SECTION 10.4.

	
No Subrogation

	  	
120

	  	  	  	  
	
ARTICLE XI

	  	  	  	  
	
Collateral and Security

	  	  	  	  
	
SECTION 11.1.

	
The Collateral

	  	
120

	
SECTION 11.2.

	
Further Assurances

	  	
121

	
SECTION 11.3.

	
Release of Liens on the Collateral

	  	
122

 

  

-iii-

  

 

	
SECTION 11.4.

	
Authorization of Actions to Be Taken by the Trustee or the Collateral Agent Under the Collateral Documents

	  	
123

	  	  	  	  
	
ARTICLE XII

	  	  	  	  
	
Miscellaneous

	  	  	  	  
	
SECTION 12.1.

	
Notices

	  	
126

	
SECTION 12.2.

	
Certificate and Opinion as to Conditions Precedent

	  	
127

	
SECTION 12.3.

	
Statements Required in Certificate or Opinion

	  	
128

	
SECTION 12.4.

	
Rules by Trustee, Paying Agent and Registrar

	  	
128

	
SECTION 12.5.

	
Days Other than Business Days

	  	
128

	
SECTION 12.6.

	
Governing Law

	  	
128

	
SECTION 12.7.

	
No Recourse Against Others

	  	
128

	
SECTION 12.8.

	
Successors

	  	
129

	
SECTION 12.9.

	
Multiple Originals

	  	
129

	
SECTION 12.10.

	
Table of Contents; Headings

	  	
129

	
SECTION 12.11.

	
Direction by Holders to Enter into Collateral Documents and the Intercreditor Agreement

	  	
129

	
SECTION 12.12.

	
Force Majeure

	  	
129

	
SECTION 12.13.

	
USA Patriot Act

	  	
129

	
SECTION 12.14.

	
Communication by Holders of Notes with other Holders of Notes

	  	
129

	
SECTION 12.15.

	
Subject to Intercreditor

	  	
129

 

	
EXHIBITS

	  	  	  	  
	
EXHIBIT A

	
Form of Note

	  	  
	
EXHIBIT B

	
Form of Certificate of Transfer

	  	  
	
EXHIBIT C

	
Form of Certificate of Exchange

	  	  
	
EXHIBIT D

	
Form of Certificate of Acquiring Institutional Accredited Investor

	  	  
	
EXHIBIT E

	
Form of Supplemental Indenture to be Delivered by Subsequent Subsidiary Guarantors

	  	  
	  	  	  	  

 

  

-iv-

  

 

INDENTURE, dated as of September 28, 2012 (this “Indenture”), among CNO FINANCIAL GROUP, INC., a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), certain subsidiaries of the Company from time to time parties hereto (the “Subsidiary Guarantors”) and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee (together with its successors and assigns, in such capacity, the “Trustee”) and as collateral agent (together with its successors and assigns in such capacity, the “Collateral Agent”).

 

Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders (as defined herein) of the Notes (as defined herein):

 

ARTICLE I

 

Definitions and Incorporation by Reference

 

SECTION 1.1.     Definitions.

 

“144A Global Note” means a Global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

 

“Acquired Indebtedness” means, with respect to any Person, Indebtedness (1) of a Person or any of its Subsidiaries existing at the time such Person is merged or consolidated with the Company or a Restricted Subsidiary or becomes a Restricted Subsidiary or (2) assumed in connection with the acquisition of assets from such Person, in each case whether or not Incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary or such acquisition, and Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. Acquired Indebtedness shall be deemed to have been Incurred, with respect to clause (1) of the preceding sentence, on the date such Person is merged or consolidated with the Company or a Restricted Subsidiary or becomes a Restricted Subsidiary and, with respect to clause (2) of the preceding sentence, on the date of consummation of such acquisition of assets.

 

“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Agent” means any Registrar, Paying Agent or co-registrar.

 

“Aggregate RBC Ratio” means, with respect to the Insurance Subsidiaries taken as a whole, on any date of determination, one-half of the ratio (expressed as a percentage) of (a) the aggregate “Total Adjusted Capital” (as defined by each relevant Insurance Subsidiary’s Department) for the Insurance Subsidiaries to (b) the aggregate “Authorized Control Level Risk-Based Capital” (as defined by each relevant Insurance Subsidiary’s Department) for the Insurance Subsidiaries.

 

  

  

  

 

“Annual Statement” means the annual statutory financial statement of any Insurance Subsidiary required to be filed with the insurance commissioner (or similar authority) of its jurisdiction of incorporation, which statement shall be in the form required by such Insurance Subsidiary’s jurisdiction of incorporation or, if no specific form is so required, in the form of financial statements permitted by such insurance commissioner (or such similar authority) to be used for filing annual statutory financial statements and shall contain the type of information permitted or required by such insurance commissioner (or such similar authority) to be disclosed therein, together with all exhibits or schedules filed therewith.

“Applicable Authorized Representatives” shall have the meaning assigned to such term in the Intercreditor Agreement.

 

“Applicable Premium” means, as determined by the Company with respect to a Note on any Redemption Date, the greater of:

 

(1)           1.0% of the principal amount of such Note; and

 

(2)           the excess, if any, of (a) the present value as of such Redemption Date of (i) the redemption price of such Note on October 1, 2015 as set forth in Section 5.1(a), plus (ii) the remaining scheduled interest payments due on such Note through October 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points, over (b) the then outstanding principal amount of such Note.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary that apply to such transfer or exchange or for other procedural matters.

 

“Asset Acquisition” means (1) an Investment by the Company or any Restricted Subsidiary in any other Person pursuant to which such Person shall become a Restricted Subsidiary or shall be consolidated or merged with the Company or any Restricted Subsidiary or (2) the acquisition by the Company or any Restricted Subsidiary of assets of any Person.

 

“Asset Disposition” means any sale, lease (other than an operating lease entered into in the ordinary course of business), transfer, issuance or other disposition, or a series of related sales, leases, transfers, issuances or dispositions that are part of a common plan, of shares of Capital Stock of a Restricted Subsidiary, including any transaction pursuant to a Reinsurance Agreement (other than directors’ qualifying shares or local ownership shares) (it being understood that the Capital Stock of the Company is not an asset of the Company), property or other assets (each referred to for the purposes of this definition as a “disposition”) by the Company or any of its Restricted Subsidiaries, including any disposition by means of a merger, consolidation or similar transaction.

 

  

-2-

  

 

Notwithstanding the preceding, the following items shall not be deemed to be Asset Dispositions:

 

(1)           a disposition of assets by a Restricted Subsidiary to the Company or by the Company or a Restricted Subsidiary to a Restricted Subsidiary;

 

(2)           the disposition of Cash Equivalents in the ordinary course of business or the voluntary termination of Hedging Obligations;

 

(3)           a disposition of inventory in the ordinary course of business;

 

(4)           a disposition of used, obsolete, worn out, damaged or surplus equipment or equipment or assets that are no longer used or useful in the conduct of the business of the Company and its Restricted Subsidiaries and that is disposed of in each case in the ordinary course of business;

 

(5)           the disposition of all or substantially all of the assets of the Company in a manner permitted pursuant to Article IV or any disposition that constitutes a Change of Control;

 

(6)           an issuance of Capital Stock by a Restricted Subsidiary to the Company or to a Restricted Subsidiary;

 

(7)           for purposes of Section 3.7 only, the making of a Permitted Investment or a disposition subject to Section 3.4;

 

(8)           dispositions of Capital Stock of a Restricted Subsidiary or property or other assets in a single transaction or a series of related transactions with an aggregate Fair Market Value of less than $10.0 million;

 

(9)           the creation of a Permitted Lien and dispositions in connection with Permitted Liens;

 

(10)         dispositions of receivables in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

 

(11)         the licensing or sublicensing of patents, trade secrets, know-how and other intellectual property, know-how or other general intangibles and licenses, leases or subleases of other property which do not materially interfere with the business of the Company and its Restricted Subsidiaries as operated immediately prior to the granting of such license, lease or sublease;

 

(12)         to the extent allowable under Section 1031 of the Code, any exchange of like property for use in a Related Business;

 

(13)         foreclosure on assets or transfers by reason of eminent domain;

 

  

-3-

  

 

(14)         any sale of Capital Stock, Indebtedness or other securities, of an Unrestricted Subsidiary;

 

(15)         a Sale/Leaseback Transaction that is made for cash consideration in an amount not less than the cost of the underlying fixed or capital asset and is consummated within 180 days after the Company or any Restricted Subsidiary acquires or completes the acquisition of such fixed or capital asset;

 

(16)         the receipt by the Company or any Restricted Subsidiary of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets;

 

(17)         operating leases in the ordinary course of business;

 

(18)         the surrender or waiver of contract rights or litigation rights or the settlement, release or surrender of tort or other litigation claims of any kind;

 

(19)         the contribution of any real property (including, without limitation, land, buildings and fixtures) by the Company or any of its Restricted Subsidiaries to a pension plan to satisfy funding obligations of the Company or any of its Restricted Subsidiaries under such plan;

 

(20)         the transfer of improvements, additions or alterations in connection with the lease of any property;

 

(21)         Dispositions of Investments by any Insurance Subsidiary (other than any of its Investments in Subsidiaries engaged in insurance lines of business) and Dispositions by the Company of Permitted Portfolio Investments, in each case, in the ordinary course of business consistent with past practices of the Company and its Subsidiaries taken as a whole and the investment policy approved by the board of directors of such Insurance Subsidiary or the Company, as the case may be;

 

(22)         Dispositions by Insurance Subsidiaries pursuant to Reinsurance Agreements so long as such disposition is entered into in the ordinary course of business for the purpose of managing insurance risk consistent with industry practice;

 

(23)         Dispositions of shares of Capital Stock in order to qualify members of the Board of Directors or equivalent governing body of the Company or a Subsidiary Guarantor or such other nominal shares required to be held other than by the Company or a Subsidiary Guarantor, as required by applicable law;

 

(24)         the sale and leaseback of the Company’s headquarters located in Carmel, Indiana, on fair and reasonable terms (as certified to the Trustee in an Officers’ Certificate); and

 

  

-4-

  

 

(25)         the settlement or early termination of any Permitted Bond Hedge and the settlement or early termination of any related Permitted Warrant.

 

“Attributable Indebtedness” in respect of a Sale/Leaseback Transaction means, as at the time of determination, (1) if such Sale/Leaseback Transaction does not constitute a Capitalized Lease Obligation, the present value (discounted at the interest rate implicit in the transaction) of the total obligations of the lessee for rental payments during the remaining term of the lease included in such Sale/Leaseback Transaction (including any period for which such lease has been extended), determined in accordance with GAAP or (2) if such Sale/Leaseback Transaction constitutes a Capitalized Lease Obligation, the amount of Indebtedness represented thereby will be determined in accordance with the definition of “Capitalized Lease Obligations.”

 

“Authorized Representative” means (i) in the case of any Credit Agreement Obligations or the Credit Agreement Secured Parties, the administrative agent under the New Senior Secured Credit Agreement, (ii) in the case of the Obligations under the Notes or the Secured Parties, the Trustee and (iii) in the case of any Series of Other First Lien Obligations or Other First Lien Secured Parties that become subject to the Intercreditor Agreement, the Authorized Representative named for such Series of Other First Lien Obligations in the applicable joinder agreement to the Intercreditor Agreement.

 

“Authentication Order” has the meaning assigned to such term in Section 2.2 hereof.

 

“Average Life” means, as of the date of determination, with respect to any Indebtedness or Preferred Stock, the quotient obtained by dividing (1) the sum of the products of the numbers of years from the date of determination to the dates of each successive scheduled principal payment of such Indebtedness or redemption or similar payment with respect to such Preferred Stock multiplied by the amount of such payment by (2) the sum of all such payments.

 

“Board of Directors” means:

 

(1)           with respect to a corporation, the Board of Directors of the corporation or any committee thereof duly authorized to act on behalf of the Board of Directors with respect to the relevant matter;

 

(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.

 

“Board Resolution” means a copy of a resolution certified by the Secretary or an Assistant Secretary of a company to have been duly adopted by the Board of Directors of such company and to be in full force and effect on the date of such certification, and delivered to the Trustee.

 

“Broker-Dealer” means any broker or dealer registered under the Exchange Act.

 

  

-5-

  

 

“Business Day” means each day that is not a Saturday, Sunday or other day on which commercial banking institutions in New York, New York or the place of payment are authorized or required by law to close.

 

“Capital and Surplus” means, as to any Insurance Subsidiary, as of any date, the total amount shown on line 38, page 3, column 1 (or such other line on which the equivalent information is provided on any other such Annual Statement) of the Annual Statement of such Insurance Subsidiary as of such date, or an amount determined in a consistent manner for any date other than one as of which an Annual Statement is prepared.

 

“Capital Stock” of any Person means (1) with respect to any Person that is a corporation, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any Common Stock or Preferred Stock, and (2) with respect to any Person that is not a corporation, any and all partnership, limited liability company, membership or other equity interests of such Person, but in each case excluding any debt securities convertible into any of the foregoing.

 

“Capitalized Expenditures” means, for any period, (a) the additions to property, plant and equipment capitalized in accordance with GAAP and other capital expenditures of the Company and its Subsidiaries that are (or would be) set forth in a consolidated statement of cash flows of the Company and its Subsidiaries for such period prepared in accordance with GAAP and (b) any Capitalized Lease Obligations incurred by the Company and its Subsidiaries during such period.

 

“Capitalized Lease Obligation” means an obligation that is required to be classified and accounted for as a capitalized lease for financial reporting purposes in accordance with GAAP, and the amount of Indebtedness represented by such obligation will be the capitalized amount of such obligation at the time any determination thereof is to be made as determined in accordance with GAAP, and the Stated Maturity thereof will be the date of the last payment of rent or any other amount due under such lease prior to the first date such lease may be terminated by the lessee without payment of a penalty.

 

“Cash Equivalents” means:

 

(1)           U.S. dollars, pounds sterling, euros, the national currency of any member state in the European Union, or in the case of any Foreign Subsidiary, such local currencies held by it from time to time in the ordinary course of business;

 

(2)           securities issued or directly and fully guaranteed or insured by the United States Government or issued by any agency or instrumentality of the United States (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)           marketable general obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition and, at the time of acquisition, having a credit rating of “A” or better from Standard & Poor’s Ratings Group, Inc. or A2 or better from Moody’s Investors Service, Inc.;

 

  

-6-

  

 

(4)           certificates of deposit, demand deposits, time deposits, eurodollar time deposits, overnight bank deposits or bankers’ acceptances having maturities of not more than one year from the date of acquisition thereof issued by any commercial bank (x) the long-term debt of which is rated at the time of acquisition thereof at least “A” or the equivalent thereof by Standard & Poor’s Ratings Group, Inc., or “A” or the equivalent thereof by Moody’s Investors Service, Inc. or (y) the short term commercial paper of such commercial bank or its parent company is rated at the time of acquisition thereof at least “A-1” or the equivalent thereof by Standard & Poor’s Ratings Group, Inc. or “P-1” or the equivalent thereof by Moody’s Investors Service, Inc., and having combined capital and surplus in excess of $500.0 million;

 

(5)           repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2), (3) and (4) above, entered into with any financial institution meeting the qualifications specified in clause (4) above;

 

(6)           commercial paper rated at the time of acquisition thereof at least “A-2” or the equivalent thereof by Standard & Poor’s Ratings Group, Inc. or “P-2” or the equivalent thereof by Moody’s Investors Service, Inc., or carrying an equivalent rating by a nationally recognized Rating Agency, if both of the two named Rating Agencies cease publishing ratings of investments, and in any case maturing within one year after the date of acquisition thereof;

 

(7)           instruments equivalent to those referred to in clauses (1) through (6) above denominated in euros or any foreign currency comparable in credit quality and tenor to those referred to in such clauses and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Restricted Subsidiary organized in such jurisdiction;

 

(8)           interests in any investment company or money market fund that invests 95% or more of its assets in instruments of the type specified in clauses (1) through (7) above and clause (11) below;

 

(9)           money market funds that (i) comply with the criteria set forth in Rule 2A-7 of the Investment Company Act of 1940, as amended, (ii) are rated at the time of acquisition thereof “AAA” or the equivalent by Standard & Poor’s Ratings Group, Inc. or “Aaa” or the equivalent thereof by Moody’s Investors Service, Inc. and (iii) have portfolio assets of at least $5.0 billion;

 

(10)         in the case of any Foreign Subsidiary, high quality short-term investments which are customarily used for cash management purposes in any country in which such Foreign Subsidiary operates; and

 

  

-7-

  

 

(11)         securities with maturities of one year or less from the date of acquisition backed by standby letters of credit issued by any commercial bank satisfying the requirements of clause (4) of this definition.

 

“CBOs” means notes or other instruments (other than CMOs) secured by collateral consisting primarily of debt securities and/or other types of debt obligations, including loans

 

“Change of Control” means:

 

(1)           any “person” or “group” of related persons (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of a majority of the total voting power of the Voting Stock of the Company (or its successors by merger, consolidation or purchase of all or substantially all of its assets);

 

(2)           the sale, assignment, lease, 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 assets of the Company and its Subsidiaries taken as a whole to any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) other than a Restricted Subsidiary; or

 

(3)           the adoption by the stockholders of the Company of a plan or proposal for the liquidation or dissolution of the Company.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“CMOs” means Notes or other instruments secured by collateral consisting primarily of mortgages, mortgage-backed securities and/or other types of mortgage-related obligations.

 

“Collateral” means all property and assets, whether now owned or hereafter acquired, in which Liens are, from time to time, purported to be granted to secure the Notes and the Subsidiary Guarantees pursuant to the Collateral Documents.

 

“Collateral Agent” has the meaning assigned to such term in the preamble to this Indenture.

 

“Collateral Documents” means the Security Agreement and any other instruments and documents executed and delivered pursuant to this Indenture or any of the foregoing, as the same may be amended, supplemented or otherwise modified from time to time and pursuant to which Collateral is pledged, assigned or granted to or on behalf of the Collateral Agent for the benefit of the Secured Parties.

 

“Commodity Agreement” means any commodity futures contract, commodity option, commodity swap agreement, commodity collar agreement, commodity cap agreement or other similar agreement or arrangement entered into by the Company or any Restricted Subsidiary.

 

  

-8-

  

 

“Common Stock” means with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or nonvoting) of such Person’s common stock whether or not outstanding on the Issue Date, and includes, without limitation, all series and classes of such common stock.

 

“Company” has the meaning assigned to such term in the preamble to this Indenture.

 

“Consolidated EBITDA” means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period:

 

(1)           increased (without duplication) by the following items to the extent deducted in calculating such Consolidated Net Income:

 

(a)           Consolidated Interest Expense; plus

 

(b)           Consolidated Income Taxes; plus

 

(c)           consolidated depreciation expense; plus

 

(d)           consolidated amortization expense or impairment charges recorded in connection with the application of FASB ASC 350 and FASB ASC 360; plus

 

(e)           other non-cash charges reducing Consolidated Net Income, including any write-offs or write-downs (excluding (i) any such non-cash charge to the extent it represents an accrual of or reserve for cash charges in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation and (ii) the amortization of PVFP); plus

 

(f)           any fees, charges or other expenses made or Incurred in connection with any actual or proposed non-ordinary course Investment, asset sale, acquisition, recapitalization or issuance of Capital Stock or Incurrence of Indebtedness or any amendment or modification of Indebtedness (including as a result of Statement of FASB ASC 805), including such fees, expenses or charges related to the Transactions; plus

 

(g)           the amount of any restructuring charges (including lease termination, severance and relocation expenses), integration costs or other business optimization expenses or non-ordinary course reserves or other non-recurring charges or expenses deducted (and not added back) in such period in computing Consolidated Net Income.

 

  

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(2)           decreased (without duplication) by non-cash items increasing Consolidated Net Income of such Person for such period (excluding any items which represent the recognition of deferred revenue, the reversal of any accrual of, or reserve for, anticipated cash charges that reduced Consolidated EBITDA in any prior period and any items for which cash was received in a prior period that did not increase Consolidated EBITDA in any prior period); and

 

(3)           increased or decreased (without duplication) to eliminate the following items to the extent reflected in Consolidated Net Income:

 

(a)           any non-ordinary course net gain or loss resulting in such period from Hedging Obligations and the application of FASB ASC 815;

 

(b)           all unrealized gains and losses relating to financial instruments or liabilities to which fair market value accounting is applied;

 

(c)           any net gain or loss resulting in such period from currency translation gains or losses related to currency remeasurements of Indebtedness (including any net loss or gain resulting from Hedging Obligations for currency exchange risk); and

 

(d)           effects of adjustments (including the effects of such adjustments pushed down to the Company and its Restricted Subsidiaries) in any line item in such Person’s consolidated financial statements pursuant to GAAP resulting from the application of purchase accounting in relation to any completed acquisition.

 

“Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits or capital of such Person or such Person and its Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), including, without limitation, state, franchise and similar taxes and foreign withholding taxes regardless of whether such taxes or payments are required to be remitted to any governmental authority.

 

“Consolidated Interest Expense” means, for any period, the interest expense of the Company and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including but not limited to the portion of any payments or accruals with respect to Capitalized Lease Obligations that are allocable to interest expense, excluding (x) any write-offs of capitalized fees under a Debt Facility and all amendments thereto, (y) all non-cash charges for the amortization of deferred financing fees and debt issuance costs, and (z) any interest on tax reserves to the extent the Company has elected to treat such interest as an interest expense under FASB ASC 450 since its adoption; provided, that any interest expense associated with any Permitted Transaction shall not be included in this definition of Consolidated Interest Expense.

 

“Consolidated Net Income” means, for any period, the net income (loss) of the Company and its consolidated Restricted Subsidiaries determined on a consolidated basis in accordance with GAAP (before preferred stock dividends); provided, however, that there will not be included in such Consolidated Net Income:

 

  

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(1)           any net income (loss) of any Person if such Person is not a Restricted Subsidiary or that is accounted for by the equity method of accounting, except that:

 

  (a)           subject to the limitations contained in clauses (3) through (6) below, the Company’s equity in the net income of any such Person for such period will be included in such Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (2) below); and

 

  (b)           the Company’s equity in a net loss of any such Person for such period will be included in determining such Consolidated Net Income to the extent such loss has been funded with cash from the Company or a Restricted Subsidiary during such period;

 

(2)           any net income (but not loss) of any Restricted Subsidiary (other than a Subsidiary Guarantor or an Insurance Subsidiary) if such Restricted Subsidiary is subject to prior government approval or other restrictions due to the operation of its charter or any agreement, instrument, judgment, decree, order, statute, rule or government regulation (which have not been waived), directly or indirectly, on the payment of dividends or the making of distributions by such Restricted Subsidiary, directly or indirectly, to the Company, except that:

 

  (a)           subject to the limitations contained in clauses (3) through (6) below, the Company’s equity in the net income of any such Restricted Subsidiary for such period will be included in such Consolidated Net Income up to the aggregate amount of cash that could have been distributed by such Restricted Subsidiary during such period to the Company or another Restricted Subsidiary as a dividend (subject, in the case of a dividend to another Restricted Subsidiary, to the limitation contained in this clause); and

 

  (b)           the Company’s equity in a net loss of any such Restricted Subsidiary for such period will be included in determining such Consolidated Net Income;

 

(3)           any net income (but not loss) of all of the Insurance Subsidiaries determined on a consolidated basis; provided that, notwithstanding the foregoing, (i) there shall be included in Consolidated Net Income an amount equal to the aggregate amount that could be paid by the Insurance Subsidiaries as of the end of such period as a dividend, distribution or return of capital to the Company or any Restricted Subsidiary (other than an Insurance Subsidiary) without causing the Aggregate RBC Ratio of the Insurance Subsidiaries to be less than 225%, determined on a pro forma basis for (x) any dividends, distributions or returns of capital made during the period less any capital contributions made by the Company or a Restricted Subsidiary (other than an Insurance Subsidiary) in the Insurance Subsidiaries during such period, in each case to the extent not otherwise reflected in Consolidated Net Income of the Company and the Restricted Subsidiaries (other than the Insurance Subsidiaries) for such period and (y) any dividends, distributions or returns of capital made by the Insurance Subsidiaries after such period and through the date of determination and any capital contributions made by the Company or a Restricted Subsidiary (other than an Insurance Subsidiary) in the Insurance Subsidiaries after such period and through the date of determination and (ii) the amount referenced in the immediately preceding clause (i) shall in no event exceed the aggregate net income of the Insurance Subsidiaries, determined on a consolidated basis for such period;

 

  

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(4)           any after-tax effect of gain or loss (less all fees and expenses relating thereto) realized upon sales or other dispositions of any assets of the Company or such Restricted Subsidiary (including pursuant to any Sale/Leaseback Transaction) other than in the ordinary course of business;

 

(5)           any after-tax effect of income (loss) from the early extinguishment of Indebtedness or early termination of Hedging Obligations or other derivative instruments;

 

(6)           the after-tax effect of extraordinary gain or loss;

 

(7)           the after-tax effect of the cumulative effect of a change in accounting principles;

 

(8)           any after-tax effect of non-cash impairment charges recorded in connection with the application of FASB ASC 350 and FASB ASC 360; and

 

(9)           any non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of the Company or any Restricted Subsidiary.

 

“Corporate Trust Office” shall be at the address of the Trustee specified in Section 12.1 or such other address as to which the Trustee may give notice to the Company or Holders pursuant to the procedures set forth in Section 12.1. 

 

“Convertible Debentures Repurchase” means the transactions contemplated by the Debenture Repurchase Agreement by and among the Company and Paulson Credit Opportunities Master Ltd. and Paulson Recovery Master Fund Ltd., dated as of September 4, 2012 as in effect on the Issue Date.

 

“Credit Agreement Obligations” means (x) Indebtedness and other Obligations under the New Senior Secured Credit Agreement and (y) Obligations under Swap Contracts entered into by the Company or a Subsidiary Guarantor with a lender or affiliate of a lender (at the time such Swap Contract was entered into) under the New Senior Secured Credit Agreement to hedge interest rate risk of the Company or such Subsidiary Guarantor and Subsidiaries that are not Insurance Subsidiaries.

 

  

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“Credit Agreement Secured Parties” means the holders of the Credit Agreement Obligations.

 

“Currency Agreement” means in respect of a Person any foreign exchange contract, currency swap agreement, futures contract, option contract or other similar agreement as to which such Person is a party or a beneficiary.

 

“Debt Facility” or “Debt Facilities” means, with respect to the Company or any Subsidiary Guarantor, one or more financing arrangements (including, without limitation, credit facilities, indentures and note purchase agreements and including the New Senior Secured Credit Agreement) providing for revolving credit loans, term loans, letters of credit or other long-term indebtedness or issuances of debt securities evidenced by notes, debentures, bonds or similar instruments, in each case, as amended, restated, supplemented, modified, renewed, refunded, replaced or refinanced (including by means of sales of debt securities) in whole or in part from time to time (and whether or not with the original trustee, administrative agent, holders and lenders or another trustee, administrative agent or agents), including, without limitation, any agreement extending the maturity thereof or increasing the amount of available borrowings thereunder pursuant to incremental facilities or adding Subsidiaries of the Company as additional guarantors thereunder, and whether or not increasing the amount of Indebtedness that may be issued thereunder.

 

“Debt to Total Capitalization Ratio” means, as of any date, and giving pro forma effect to any Restricted Payment made or Indebtedness Incurred subsequent to such date, as well as any other pro forma adjustments in a manner consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio, the ratio of (a) the principal amount of, and accrued but unpaid interest on, all Indebtedness of the Company outstanding on such date, other than (i) Indebtedness owing to any Subsidiary Guarantor and (ii) the liabilities (if any) of the Company in respect of Swap Contracts as determined by reference to the Swap Termination Value thereof, to (b) Total Capitalization on such date.

 

“Default” means any event or condition that is, or after notice or passage of time or both would be, an Event of Default.

 

“Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.6 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

“Department” means, with respect to any Insurance Subsidiary, the governmental authority of such Insurance Subsidiary’s state of domicile with which such Insurance Subsidiary is required to file its Annual Statement.

 

  

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“Depositary” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depository institution hereinafter appointed by the Company.

 

“Designated Non-cash Consideration” means any consideration which is not cash or Cash Equivalents received by the Company or its Restricted Subsidiaries in connection with an Asset Disposition that is designated as Designated Non-cash Consideration pursuant to an Officers’ Certificate executed by the Company at the time of such Asset Disposition. Any particular item of Designated Non-cash Consideration will cease to be considered to be outstanding once it has been transferred, sold or otherwise exchanged for or converted into or for cash or Cash Equivalents.

 

“Disqualified Stock” means, with respect to any Person, any Capital Stock of such Person that by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event:  (1) matures or is mandatorily redeemable pursuant to a sinking fund obligation or otherwise;  (2) is convertible into or exchangeable for Indebtedness or Disqualified Stock (excluding Capital Stock which is convertible or exchangeable solely at the option of the Company or a Restricted Subsidiary (it being understood that upon such conversion or exchange it shall be an Incurrence of such Indebtedness or Disqualified Stock)); or (3) is redeemable at the option of the holder of the Capital Stock in whole or in part, in each case on or prior to the date 91 days after the earlier of the final maturity date of the Notes or the date the Notes are no longer outstanding; provided, however, that only the portion of Capital Stock that so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date will be deemed to be Disqualified Stock; provided, further, that 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 Asset Disposition (each defined in a substantially similar manner to the corresponding definitions in this Indenture) shall not constitute Disqualified Stock if the terms of such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) provide that the Company may not repurchase or redeem any such Capital Stock (and all such securities into which it is convertible or for which it is ratable or exchangeable) pursuant to such provision prior to compliance by the Company with Section 3.7 and Section 3.9 and such repurchase or redemption complies with Section 3.4.

 

“Equity Offering” means a public or private issuance for cash by the Company of its Common Stock, perpetual Preferred Stock, or options, warrants or rights with respect to its Common Stock, other than (x) public offerings with respect to the Company’s Common Stock, or options, warrants or rights, registered on Form S-4 or S-8, or (y) an issuance to any Subsidiary.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Existing Convertible Debentures” means the Company’s 7.0% Convertible Senior Debentures due 2016.

 

  

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“Existing Senior Secured Notes” means the Company’s 9.0% Senior Secured Notes due 2018.

 

“Excluded Property” has the meaning set forth in the Security Agreement.

 

“Fair Market Value” means, with respect to any property, the price that would reasonably be expected to be paid in an arm’s length free market transaction, for cash, between a willing seller and a willing buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair Market Value shall be determined, except as otherwise provided, by (x) if such decision involves a determination of Fair Market Value equal or less than $50.0 million, in Good Faith by the Company and (y) if such decision involves the determination of Fair Market Value in excess of $50.0 million, in good faith by the Board of Directors of the Company.

 

“First Lien Secured Indebtedness” means (a) the Credit Agreement Obligations, (b) the Obligations under the Notes and (c) any Other First Lien Obligations.

 

“First Lien Secured Parties” means (a) the Secured Parties under the New Senior Secured Credit Agreement, (b) the Secured Parties and (c) any Other First Lien Secured Parties.

 

“Fixed Charge Coverage Ratio” means, with respect to any Person for any period, the ratio of Consolidated EBITDA of such Person for such period to the Fixed Charges of such Person for such period.

 

In the event that the Company or any of its Restricted Subsidiaries Incurs, repays, repurchases or redeems any Indebtedness (other than in the case of revolving credit borrowings, in which case interest expense shall be computed based upon the average daily balance of such Indebtedness during the applicable period) or issues, repurchases or redeems Disqualified Stock or Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to or simultaneously with the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such Incurrence, repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Disqualified Stock or Preferred Stock, as if the same had occurred at the beginning of the applicable four-quarter period.

 

For purposes of making the computation referred to above, Investments, Asset Dispositions, Asset Acquisitions and discontinued operations (as determined in accordance with GAAP), in each case with respect to an operating unit of a business, and any operational changes that the Company or any Restricted Subsidiary has determined to make and/or has made during the four-quarter reference period or subsequent to such reference period and on or prior to or simultaneously with the Calculation Date shall be calculated on a pro forma basis assuming that all such events (and the change of any associated fixed charge obligations and the change in Consolidated EBITDA resulting therefrom) had occurred on the first day of the four-quarter reference period. If since the beginning of such period any Person that subsequently became a Restricted Subsidiary or was merged with or into the Company or any Restricted Subsidiary since the beginning of such period shall have made any Investment, Asset Disposition, Asset Acquisition or discontinued operation or operational change, in each case with respect to an operating unit of a business, that would have required adjustment pursuant to this definition, then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect thereto for such period as if such event had occurred at the beginning of the applicable four-quarter period.

 

  

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For purposes of this definition, whenever pro forma effect is to be given to any event, the pro forma calculations shall be made in Good Faith by the Company. Any such pro forma calculation may include adjustments appropriate, in the reasonable good faith determination of the Company to reflect operating expense reductions and other operating improvements, synergies or cost savings reasonably expected to result from such relevant pro forma event based on actions already taken and for which the full run-rate effect of such actions is expected to be realized within 12 months of such action. The Company shall have delivered to the Trustee an Officers’ Certificate signed by the Chief Financial Officer setting forth such operating expense reductions and other operating improvements, synergies or cost savings and calculations and information supporting them in reasonable detail.

 

If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest on such Indebtedness shall be calculated as if the rate in effect on the Calculation Date had been the applicable rate for the entire period (taking into account any Hedging Obligations applicable to such Indebtedness if such Hedging Obligation has a remaining term in excess of 12 months). Interest on a Capitalized Lease Obligation shall be deemed to accrue at an interest rate reasonably determined by a responsible financial or accounting officer of the Company to be the rate of interest implicit in such Capitalized Lease Obligation in accordance with GAAP. For purposes of making the computation referred to above, interest on any Indebtedness under a revolving credit facility computed on a pro forma basis shall be computed based upon the average daily balance of such Indebtedness during the applicable period. Interest on Indebtedness that may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rate, shall be deemed to have been based upon the rate actually chosen, or, if none, then based upon such optional rate chosen as the Company may designate.

 

For purposes of this definition, any amount in a currency other than U.S. dollars will be converted to U.S. dollars based on the average exchange rate for such currency for the most recent twelve month period immediately prior to the date of determination in a manner consistent with that used in calculating Consolidated EBITDA for the applicable period.

 

“Fixed Charges” means, with respect to any Person for any period, the sum, without duplication, of:

 

(1)           Consolidated Interest Expense of such Person for such period, and

 

(2)           all cash dividend payments (excluding items eliminated in consolidation) on any series of Preferred Stock or Disqualified Stock of such Person and its Restricted Subsidiaries.

 

  

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“Foreign Subsidiary” means any Restricted Subsidiary that is not organized or existing under the laws of the United States of America or any state thereof or the District of Columbia and any Subsidiary of such Restricted Subsidiary.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect as of the Issue Date, including those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession. All ratios and computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP, except that in the event the Company is acquired in a transaction that is accounted for using purchase accounting, the effects of the application of purchase accounting shall be disregarded in the calculation of such ratios and other computations contained in this Indenture.

 

“Global Note Legend” means the legend set forth in Section 2.1(b) hereof, which is required to be placed on all Global Notes issued under this Indenture.

 

“Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto issued in accordance with Section 2.1 or 2.6 hereof.

 

“Good Faith by the Company” means the decision in good faith by a responsible financial or accounting officer of the Company.

 

“Guarantee” means any obligation, contingent or otherwise, of any Person, directly or indirectly, guaranteeing any Indebtedness or other financial obligations of any other Person and any obligation, direct or indirect, contingent or otherwise, of such Person:

 

(1)           to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise); or

 

(2)           entered into for purposes of assuring in any other manner the obligee of such Indebtedness or other financial obligation of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, however, that the term “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. The term “Guarantee” used as a verb has a corresponding meaning.

 

“Hedging Obligations” of any Person means the obligations of such Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.  For the avoidance of doubt, any Permitted Convertible Indebtedness Call Transaction will not constitute Hedging Obligations.

 

  

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“Holder” means a Person in whose name a Note is registered on the Registrar’s books.

 

“IAI Global Note” means a Global Note bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in an initial denomination equal to the outstanding principal amount of the Notes initially sold to Institutional Accredited Investors.

 

“Immaterial Subsidiary” means any Subsidiary (other than an Insurance Subsidiary) that (a) has assets with an aggregate fair market value less than $5.0 million as of the end of the most recently ended fiscal quarter of the Company, (b) has aggregate revenues less than $10.0 million for the period of four consecutive fiscal quarters most recently ended, (c) has no Indebtedness (other than Indebtedness existing on the Issue Date and other Indebtedness in an aggregate principal amount not exceeding at any time one-half of the fair market value of the assets of such Subsidiary at such time), (d) is not integral to the business or operations of the Company or its Subsidiaries (other than Immaterial Subsidiaries) and (e) has no Subsidiaries (other than Immaterial Subsidiaries); provided that CNO Management Services Company will not be deemed to be an Immaterial Subsidiary so long as it is the manager of CNO Services, LLC pursuant to the latter’s limited liability company agreement.

 

“Incur” means to issue, create, assume, Guarantee, incur or otherwise become liable for; provided, however, that any Indebtedness or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary (whether by merger, consolidation, acquisition or otherwise) will be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary; and the terms “Incurred” and “Incurrence” have meanings correlative to the foregoing. Any Indebtedness issued at a discount (including Indebtedness on which interest is payable through the issuance of additional Indebtedness) shall be deemed incurred at the time of original issuance of the Indebtedness at the initial accreted amount thereof.

 

“Indebtedness” means, with respect to any Person on any date of determination (without duplication):

 

(1)           the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;

 

(2)           the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

 

(3)           the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto, except to the extent such reimbursement obligation relates to a Trade Payable or similar obligation to a trade creditor in each case incurred in the ordinary course of business) other than obligations with respect to letters of credit, bankers’ acceptances or similar instruments securing obligations (other than obligations described in clauses (1) and (2) above and clause (5) below) entered into in the ordinary course of business of such Person to the extent such letters of credit, bankers’ acceptances or similar instruments are not drawn upon or, to the extent drawn upon, such drawing is reimbursed no later than the fifth Business Day following receipt by such Person of a demand for reimbursement following payment on the letter of credit, bankers’ acceptance or similar instrument;

 

  

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(4)           the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except Trade Payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except (i) any such balance that constitutes a Trade Payable, accrued liability or similar obligation to a trade creditor, in each case accrued in the ordinary course of business, and (ii) any earn-out obligation until the amount of such obligation becomes a liability on the balance sheet of such Person in accordance with GAAP;

 

(5)           Capitalized Lease Obligations and all Attributable Indebtedness of such Person (whether or not such items would appear on the balance sheet of the guarantor or obligor);

 

(6)           the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock or, with respect to any Subsidiary that is not a Subsidiary Guarantor, any Preferred Stock (but excluding, in each case, any accrued dividends);

 

(7)           the principal component of all indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of (a) the Fair Market Value of such asset at such date of determination and (b) the amount of such indebtedness of such other Persons;

 

(8)           the principal component of Indebtedness of other Persons to the extent Guaranteed by such Person (whether or not such items would appear on the balance sheet of the guarantor or obligor); and

 

(9)           to the extent not otherwise included in this definition, net Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such Hedging Obligation that would be payable by such Person at such time).

 

In no event shall the term “Indebtedness” include (i) any indebtedness under any overdraft or cash management facilities so long as any such indebtedness is repaid in full no later than five Business Days following the date on which it was incurred or in the case of such indebtedness in respect of credit or purchase cards, within 60 days of its incurrence, (ii) obligations in respect of performance, appeal or other surety bonds or completion guarantees incurred in the ordinary course of business, (iii) except as provided in clause (5) above, any obligations in respect of a lease properly classified as an operating lease in accordance with GAAP, (iv) any liability for federal, state, local or other taxes not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP or (v) any customer deposits or advance payments received in the ordinary course of business.

 

  

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The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingent obligations at such date; provided that (x) contingent obligations arising in the ordinary course of business and not with respect to borrowed money of such Person or other Persons, (y) the obligations of any Person under Reinsurance Agreements shall be deemed not to constitute Indebtedness and (z) for the avoidance of doubt, obligations of any Person under a Permitted Bond Hedge Transaction or a Permitted Warrant Transaction shall be deemed not to constitute Indebtedness. Notwithstanding the foregoing, money borrowed and set aside at the time of the Incurrence of any Indebtedness in order to prefund the payment of interest on such Indebtedness shall not be deemed to be “Indebtedness,” provided that such money is held to secure the payment of such interest.

 

“Independent Financial Advisor” means (1) an accounting, appraisal or investment banking firm or (2) a consultant to Persons engaged in a Related Business, in each case of nationally recognized standing that is, in the good faith judgment of the Company, qualified to perform the task for which it has been engaged.

 

“Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

 

“Initial Notes” means the $275,000,000 in aggregate principal amount of 6.375% Senior Secured Notes due 2020 of the Company issued under this Indenture on the Issue Date.

 

“Initial Purchasers” means, with respect to the Initial Notes, Goldman, Sachs & Co., J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Wedbush Securities Inc. and FBR Capital Markets & Co.

 

“Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

 

“Insurance Subsidiary” means any Subsidiary of the Company that is required to be licensed as an insurer or reinsurer.

 

“Intercreditor Agreement” means the Intercreditor Agreement dated as of the Issue Date, among the Trustee, the Collateral Agent, on behalf of itself and the Secured Parties and JPMorgan Chase Bank, N.A., as administrative agent under the New Senior Secured Credit Agreement, on behalf of itself and the Credit Agreement Secured Parties, as the same may be amended, supplemented or otherwise modified from time to time.

 

“Interest Payment Date” means April 1 and October 1 of each year, commencing on April 1, 2013 and ending at the Stated Maturity of the Notes.

 

  

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“Interest Rate Agreement” means with respect to any Person any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement or other similar agreement or arrangement as to which such Person is party or a beneficiary.

 

“Investment” in any Person means any direct or indirect advance, loan (other than advances or extensions of credit in the ordinary course of business that are in conformity with GAAP recorded as accounts receivable on the balance sheet of the Company or its Restricted Subsidiaries) or other extensions of credit (including by way of Guarantee or similar arrangement, but excluding any debt or extension of credit represented by a bank deposit other than a time deposit) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition of Capital Stock, Indebtedness or other similar instruments issued by, such Person and all other items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided that none of the following will be deemed to be an Investment:

 

(1)           Hedging Obligations entered into in the ordinary course of business and in compliance with this Indenture;

 

(2)           endorsements of negotiable instruments and documents in the ordinary course of business;

 

(3)           an acquisition of assets, Capital Stock or other securities by the Company or a Subsidiary for consideration to the extent such consideration consists of Common Stock of the Company;

 

(4)           a deposit of funds in connection with an acquisition; provided that either such acquisition is consummated by or through a Restricted Subsidiary or such deposit is returned to the Person who made it;

 

(5)           an account receivable arising, or prepaid expenses or deposits made, in the ordinary course of business; and

 

(6)           licensing or transfer of know-how or intellectual property or the providing of services in the ordinary course of business.

 

For purposes of Section 3.4, (1) “Investment” will include the portion (proportionate to the Company’s equity interest in a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of the Fair Market Value of the net assets of such Restricted Subsidiary at the time that such Restricted Subsidiary is designated an Unrestricted Subsidiary; provided, however, that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue to have a permanent “Investment” in an Unrestricted Subsidiary in an amount (if positive) equal to (a) the Company’s aggregate “Investment” in such Subsidiary as of the time of such redesignation less (b) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the net assets (as conclusively determined in good faith by the Board of Directors of the Company) of such Subsidiary at the time that such Subsidiary is so redesignated a Restricted Subsidiary;  (2) any property transferred to or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at the time of such transfer, in each case as determined in good faith by the Board of Directors of the Company; and (3) the value of any “Investment” made by an Insurance Subsidiary shall be calculated net of any liabilities of the Insurance Subsidiary that are assumed by the Person in whom the Investment is being made.

 

  

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“Investment Grade Asset” means any Investment with a fixed maturity that has a rating of (x) at least BBB- by S&P and, if such Investment is rated by Moody’s, at least Ba2 from Moody’s or (y) at least Baa3 by Moody’s and, if such Investment is rated by S&P, at least BB from S&P, or, if such Investment is not rated by either S&P or Moody’s, an NAIC rating of at least Class 2.

 

“Investment Grade Rating” means a rating equal to or higher than Baa3 (or the equivalent) by Moody’s Investors Service, Inc. and BBB-(or the equivalent) by Standard & Poor’s Ratings Group, Inc., in each case, with a stable or better outlook; provided that a change in outlook shall not by itself cause the Company to lose its Investment Grade Rating.

 

“Investment Income” means the amount of earnings of the Company on Investments, net of expenses actually incurred in connection with such Investments and taking into account realized gains and losses on such Investments.

 

“Issue Date” means September 28, 2012.

 

 “Lien” means, with respect to any asset, any mortgage, lien (statutory or otherwise), pledge, hypothecation, 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; provided that in no event shall an operating lease (or any filing or agreement to give any financing statement in connection therewith) be deemed to constitute a Lien.

 

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

 

“NAIC” means the National Association of Insurance Commissioners or any successor thereto, or in the absence of the National Association of Insurance Commissioners or such successor, any other association, agency or other organization performing advisory, coordination or other like functions among insurance departments, insurance commissioners and similar governmental authorities of the various states of the United States toward the promotion of uniformity in the practices of such governmental authorities.

 

  

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“Net Available Cash” from an Asset Disposition means cash payments received (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or otherwise and net proceeds from the sale or other disposition of any securities or other assets received as consideration, but only as and when received, but excluding any other consideration received in the form of assumption by the acquiring Person of Indebtedness or other obligations relating to the properties or assets that are the subject of such Asset Disposition or received in any other non-cash form) therefrom, in each case net of: (1) all brokerage, legal, accounting, investment banking, title and recording tax expenses, commissions and other fees and expenses incurred, and all Federal, state, provincial, foreign and local taxes required to be paid or accrued as a liability under GAAP (after taking into account any available tax credits or deductions and any tax sharing agreements), as a consequence of such Asset Disposition; (2) all payments made on any Indebtedness (other than Pari Passu Lien Indebtedness) that is secured by any assets subject to such Asset Disposition, in accordance with the terms of any Lien upon such assets, or that must by its terms, or in order to obtain a necessary consent to such Asset Disposition, or by applicable law be repaid out of the proceeds from such Asset Disposition; (3) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Disposition; (4) the deduction of appropriate amounts to be provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the property or other assets disposed of in such Asset Disposition and retained by the Company or any Restricted Subsidiary after such Asset Disposition, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters; (5) any portion of the purchase price from an Asset Disposition placed in escrow (whether as a reserve for adjustment of the purchase price, or for satisfaction of indemnities in respect of such Asset Disposition); and (6) in the case of an Asset Disposition by an Insurance Subsidiary, proceeds that are not permitted to be paid as a dividend or distribution by such Insurance Subsidiary pursuant to regulatory restrictions provided, however, that in the cases of clauses (4) and (5), upon reversal of any such reserve or the termination of any such escrow, Net Available Cash shall be increased by the amount of such reversal or any portion of funds released from escrow to the Company or any Restricted Subsidiary.

 

“Net Cash Proceeds” means, with respect to any issuance or sale of Capital Stock of the Company or any Restricted Subsidiary or Indebtedness, the cash proceeds of such issuance or sale net of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and other fees, charges and expenses actually Incurred in connection with such issuance or sale and net of taxes paid or payable as a result of such issuance or sale (after taking into account any available tax credit or deductions and any tax sharing arrangements).

 

“Net Excess Cash Flow” means, for any period, the sum, without duplication, of

 

(1)           dividends paid in cash to the Company by any Subsidiary, net of Investments made in cash by the Company in any Subsidiary; plus

 

(2)           interest paid in cash to the Company by any Subsidiary pursuant to any Indebtedness owing by such Subsidiary to the Company; plus

 

(3)           interest or principal paid in cash to the Company with respect to any Surplus Debenture; plus

 

  

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(4)           amounts paid in cash to the Company under the Tax Sharing Agreement; plus

 

(5)           management and other similar fees received by the Company under servicing agreements or otherwise from any Subsidiary; plus

 

(6)           amounts paid in cash to the Company pursuant to a loan made to it by any Subsidiary; plus

 

(7)           the Company’s Investment Income received in cash; minus

 

(8)           cash operating expenses of the Company, which, for the avoidance of doubt, shall exclude the redemption price, repurchase price, premiums, fees, costs and expenses paid in cash incurred in connection with (a) the redemption or repurchase of the Existing Senior Secured Notes, (b) the Convertible Notes Repurchase, (c) any subsequent redemption or repurchase of the Existing Convertible Debentures and (d) any redemption or repurchase of any bonds, debentures or notes, including Permitted Convertible Indebtedness, issued subsequent to the Issue Date; minus

 

(9)           Capitalized Expenditures of the Company made in cash; minus

 

(10)         any amounts paid in cash in respect of the Company’s Fixed Charges, scheduled principal amortization of Indebtedness and mandatory repayments of Indebtedness (other than mandatory repayments of Indebtedness in connection with any Restricted Payment); minus

 

(11)         any amounts paid by the Company in respect of interest on or in repayment of any loan referred to in clause (6) above; minus

 

(12)         any amounts paid in cash by the Company to any Insurance Subsidiary in respect of any overpayment by such Insurance Subsidiary of amounts required to be paid by such Insurance Subsidiary to the Company under the Tax Sharing Agreement, in each case for such period.

 

“New Senior Secured Credit Agreement” means the credit agreement, dated as of the Issue Date, among the Company, JPMorgan Chase Bank, N.A. as administrative agent and the lenders from time to time party thereto, including any guarantees, collateral documents, instruments and agreements executed in connection therewith, and any amendments, supplements, modifications, extensions, renewals, restatements, refundings or refinancings thereof and any indentures or credit facilities or commercial paper facilities that replace, refund or refinance any part of the loans, Notes, other credit facilities or commitments thereunder, including any such replacement, refunding or refinancing facility or indenture that increases the amount borrowable thereunder or alters the maturity thereof (provided that such increase in borrowings is permitted under Section 3.3 and Section 3.5).

 

 “Non-Guarantor Subsidiary” means any Restricted Subsidiary that is not a Subsidiary Guarantor.

 

  

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“Non-Recourse Debt” means Indebtedness of a Person:

 

(1)           as to which neither the Company nor any Restricted Subsidiary (a) provides any Guarantee or credit support of any kind (including any undertaking, Guarantee, indemnity, agreement or instrument that would constitute Indebtedness) or (b) is directly or indirectly liable (as a guarantor or otherwise);

 

(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 other Indebtedness of the Company or any Restricted Subsidiary to declare a default under such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity; and

 

(3)           the explicit terms of which provide there is no recourse against any of the assets of the Company or its Restricted Subsidiaries.

 

“Non-U.S. Person” means a Person who is not a U.S. Person.

 

“Notes” means the Initial Notes and any Additional Notes, treated as a single class of securities.

 

“Notes Custodian” means the custodian with respect to the Global Note (as appointed by the Depositary), or any successor Person thereto and shall initially be the Trustee.

 

“Notes First Lien Percentage” means, at any time for purposes of Section 3.7, a fraction (expressed as a percentage), the numerator of which is the outstanding principal amount of the Notes at such time and the denominator of which is the outstanding principal amount of all outstanding Pari Passu Lien Indebtedness (including the Notes) at such time requiring a prepayment from a specified Asset Disposition.

 

“Obligations” means any principal, interest (including any interest accruing subsequent to the filing of a petition in bankruptcy, reorganization or similar proceeding at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable state, federal or foregoing law), penalties, fees, indemnifications, reimbursements (including, without limitation, reimbursement obligations with respect to letters of credit and bankers’ acceptances), damages and other liabilities, and guarantees of payment of such principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities, payable under the documentation governing any Indebtedness.

 

“Offering Circular” means the offering circular, dated as of September 20, 2012, relating to the offering of the Notes.

 

“Officer” means the Chairman of the Board, the Chief Executive Officer, the President, the Chief Financial Officer, the Chief Business Officer, any Executive Vice President, Senior Vice President or Vice President, the Treasurer or the Secretary of the Company or, in the event that a Person is a partnership or a limited liability company that has no such officers, a person duly authorized under applicable law by the general partner, managers, members or a similar body to act on behalf of such Person. Officer of any Subsidiary Guarantor has a correlative meaning.

 

  

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“Officers’ Certificate” means a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.

 

“Opinion of Counsel” means a written opinion from legal counsel who is reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company or a Subsidiary Guarantor.

 

“Original Lien Grantor” means the Company or any Subsidiary Guarantor that grants a Lien on any of its assets hereunder on the Issue Date.

 

“Other First Lien Obligations” shall have the meaning assigned to such term in the Intercreditor Agreement.

 

“Other First Lien Secured Party” means the holders of any Other First Lien Obligations and any Authorized Representative with respect thereto.

 

“Pari Passu Lien Indebtedness” means Indebtedness that is secured by a Lien permitted by clause (1), (33) or (35) of the definition of “Permitted Liens.”

 

“Participant” means, with respect to the Depositary, a Person who has an account with the Depositary.

 

“Paying Agent” means initially, the Trustee and thereafter, a replacement agent chosen by the Company in accordance with this Indenture.

 

“Permitted Bond Hedge” means any call or capped call option (or substantively equivalent derivative transaction) on the Company’s Common Stock purchased by the Company in connection with the issuance of any Permitted Convertible Indebtedness; provided that the purchase price for such Permitted Bond Hedge, less the proceeds received by the Company from the sale of any related Permitted Warrant, does not exceed the net proceeds received by the Company from the sale of such Permitted Convertible Indebtedness issued in connection with the Permitted Bond Hedge.

 

“Permitted Convertible Indebtedness” means Indebtedness of the Company permitted to be incurred under the terms of this Indenture that is either (a) convertible into Common Stock of the Company (and cash in lieu of fractional shares) and/or cash (in an amount determined by reference to the price of such Common Stock) or (b) sold as units with call options, warrants or rights to purchase (or substantially equivalent derivative transactions) that are exercisable for Common Stock of the Company and/or cash (in an amount determined by reference to the price of such Common Stock). For the avoidance of doubt, the Existing Convertible Debentures shall be Permitted Convertible Indebtedness.

 

“Permitted Convertible Indebtedness Call Transaction” means any Permitted Bond Hedge and any Permitted Warrant.

 

  

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“Permitted Investment” means an Investment by the Company or any Restricted Subsidiary in:

 

(1)           the Company or a Restricted Subsidiary, including through the purchase of Capital Stock of a Restricted Subsidiary;

 

(2)           any Investment by the Company or any of its Restricted Subsidiaries in a Person that is engaged in a Related Business if as a result of such Investment:

 

 (a)           such Person becomes a Restricted Subsidiary; or

 

 (b)           such Person, in one transaction or a series of related transactions, is merged or consolidated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary,

 

and, in each case, any Investment held by such Person; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger, consolidation or transfer;

 

(3)           cash and Cash Equivalents or Investments that constituted Cash Equivalents at the time made;

 

(4)           receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided, however, that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances;

 

(5)           commission, relocation, entertainment, payroll, travel and similar advances to cover matters that are expected at the time of such advances ultimately to be treated as expenses for accounting purposes and that are made in the ordinary course of business;

 

(6)           loans or advances to, or guarantees of third party loans to, employees, officers or directors of the Company or any Subsidiary in the ordinary course of business in an aggregate amount outstanding at any time not in excess of $5.0 million with respect to all loans or advances or guarantees made since the Issue Date (without giving effect to the forgiveness of any such loan);

 

(7)           any Investment acquired by the Company or any of its Restricted Subsidiaries:

 

 (a)           in exchange for any other Investment or accounts receivable held by the Company or any such Restricted Subsidiary in connection with or as a result of a judgment, bankruptcy, workout, reorganization or recapitalization of the issuer of such other Investment or accounts receivable;

 

  

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 (b)           as a result of a foreclosure by the Company or any of its Restricted Subsidiaries with respect to any secured Investment or other transfer of title with respect to any secured Investment in default; or

 

 (c)           in the form of notes payable, or stock or other securities issued by account debtors to the Company or any Restricted Subsidiary pursuant to negotiated agreements with respect to the settlement of such account debtor’s accounts, and other Investments arising in connection with the compromise, settlement or collection of accounts receivable, in each case in the ordinary course of business;

 

(8)           Investments made as a result of the receipt of non-cash consideration (including Designated Non-cash Consideration) from an Asset Disposition that was made pursuant to and in compliance with Section 3.7 or any other disposition of assets not constituting an Asset Disposition;

 

(9)           Investments in existence on the Issue Date and Investments committed to be made as of the Issue Date, and any extension, modification or renewal of any such Investments, or Investments purchased or received in exchange for such Investments, existing on the Issue Date, but only to the extent not involving additional advances, contributions or other Investments of cash or other assets or other increases thereof (other than as a result of the accrual or accretion of interest or original issue discount or the issuance of pay-in-kind securities, in each case, pursuant to the terms of such Investment as in effect on the Issue Date);

 

(10)         any Person to the extent such Investments consist of Currency Agreements, Interest Rate Agreements, Commodity Agreements and related Hedging Obligations, which transactions or obligations are Incurred in compliance with Section 3.3;

 

(11)         Guarantees of Indebtedness issued in accordance with Section 3.3;

 

(12)         Investments made in connection with the funding of contributions under any non-qualified retirement plan or similar employee compensation plan, including, without limitation, split-dollar insurance policies, in an amount not to exceed the amount of compensation expense recognized by the Company and its Restricted Subsidiaries in connection with such plans;

 

(13)         Investments received in settlement of debts created in the ordinary course of business and owing to the Company or any Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of a debtor;

 

(14)         any Person to the extent such Investments consist of prepaid expenses, negotiable instruments held for collection and lease, utility, unemployment insurance, workers’ compensation, performance and other similar deposits made in the ordinary course of business by the Company or any Restricted Subsidiary;

 

  

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(15)         prepayments and other credits to suppliers made in the ordinary course of business;

 

(16)         endorsements of negotiable instruments and documents in the ordinary course of business;

 

(17)         loans or advances or similar transactions with customers, distributors, clients, developers, suppliers or purchasers of goods or services in the ordinary course of business;

 

(18)         Investments by any Insurance Subsidiary (including by any Subsidiary of such Insurance Subsidiary that is not itself an Insurance Subsidiary) in the ordinary course of business and consistent with the investment policy approved by the Board of Directors of such Insurance Subsidiary;

 

(19)         Permitted Bond Hedges which constitute Investments;

 

(20)         Permitted Portfolio Investments; and

 

(21)         Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (21), in an aggregate amount at the time of such Investment not to exceed $125.0 million outstanding at any one time (with the Fair Market Value of such Investment being measured at the time made and without giving effect to subsequent changes in value).

 

“Permitted Junior Lien Intercreditor Agreement” means an intercreditor agreement between the Collateral Agent and the trustee or agent for the holders of any obligations secured by Liens that are subordinated to the Liens securing the Notes and any other First Lien Secured Indebtedness (the “Junior Liens”), on terms determined by the Company to be customary lien subordination terms for junior lien debt securities; provided that such intercreditor agreement shall provide:

 

(1)           notwithstanding the time, order or method of grant, creation, attachment or perfection of any Liens securing the Notes or any other First Lien Secured Indebtedness and such Junior Liens, the Liens securing the Notes and any such other First Lien Secured Indebtedness shall rank senior to any Junior Liens on the Collateral.

 

(2)           no holder of any obligation secured by any Junior Liens shall contest the validity or enforceability of the Liens securing the Notes or any other First Lien Secured Indebtedness.

 

(3)           until the payment and discharge in full of all obligations under this Indenture and any other First Lien Secured Indebtedness, the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent) will have the sole power to exercise remedies against the Collateral (subject to the right of the holders of obligations secured by Junior Liens to take protective measures with respect to the Junior Liens that the Company determines are customarily provided to junior lien creditors) and to foreclose upon and dispose of the Collateral. Upon any private or public sale of Collateral taken in connection with the exercise of remedies by the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent) which results in the release of the Liens securing the Notes and any other First Lien Secured Indebtedness, the Junior Liens on such item of Collateral will be automatically released.

 

  

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(4)           in connection with any enforcement action with respect to the Collateral or any insolvency or liquidation proceeding involving the Company or any Subsidiary Guarantor, all proceeds of Collateral will first be applied to the repayment of all obligations under the Notes and any other First Lien Secured Indebtedness prior to being applied to the obligations secured by such Junior Liens. If any holder of an obligation secured by Junior Liens receives any proceeds of Collateral in contravention of the foregoing, such proceeds will be turned over to the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent).

 

(5)           in connection with any insolvency or liquidation proceeding of the Company or any Subsidiary Guarantor, the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent) may consent to debtor-in-possession financings secured by a Lien on the Collateral ranking prior to or pari passu with the Lien on such Collateral securing the Notes and any other First Lien Secured Indebtedness or to the use of cash collateral constituting proceeds of the Collateral without the consent of any holder of obligations secured by Junior Liens, and no holder of obligations secured by such Junior Liens shall be entitled to object to such use of cash collateral or debtor-in-possession financing or to seek “adequate protection” in connection therewith (other than in the form of a junior lien on any additional items of collateral for the Notes and any other First Lien Secured Indebtedness which are granted in connection with such debtor-in-possession financing or use of cash collateral);

 

(6)           no holder of any obligation secured by Junior Liens may, without the consent of the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent) (x) seek relief from the automatic stay with respect to any Collateral, (y) object to any sale of any Collateral in any insolvency or liquidation proceeding which has been consented to by the Applicable Authorized Representative (provided that the Junior Liens attach to the proceeds of such sale with the priority set forth in the Permitted Junior Lien Intercreditor Agreement) or (z) object to any claim of any Holder of Notes to post-petition interest, fees or expenses on account of the Liens securing the First Lien Secured Indebtedness. and

 

(7)           no holder of obligations secured by Junior Liens shall support any plan or reorganization in connection with any insolvency or liquidation proceeding that is in contravention of the Permitted Junior Lien Intercreditor Agreement without the consent of the Applicable Authorized Representative (or, if there is no Applicable Authorized Representative at such time, the Collateral Agent).

 

  

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“Permitted Liens” means, with respect to any Person:

 

(1)           Liens on the Collateral securing Indebtedness Incurred pursuant to Section 3.3(b)(i);

 

(2)           (x) pledges or deposits by such Person under workers’ compensation laws, unemployment, general insurance and other insurance laws and old age pensions and other social security or retirement benefits or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Person is a party, or deposits to secure public or statutory or regulatory obligations of such Person or deposits of cash or United States government bonds to secure surety or appeal bonds to which such Person is a party, or good faith deposits as security for contested taxes or import or customs duties or for the payment of rent, in each case Incurred in the ordinary course of business and (y) collateral consisting of Cash Equivalents securing letters of credit issued in respect of obligations to insurers in an aggregate amount not to exceed $20.0 million at any time outstanding;

 

(3)           Liens imposed by law and carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens, in each case Incurred in the ordinary course of business;

 

(4)            Liens for taxes, assessments or other governmental charges or levies not yet subject to penalties for non-payment or that are being contested in good faith by appropriate proceedings provided appropriate reserves required pursuant to GAAP have been made in respect thereof;

 

(5)           Liens in favor of issuers of surety, appeal or performance bonds or letters of credit or bankers’ acceptances or similar obligations issued pursuant to the request of and for the account of such Person in the ordinary course of its business;

 

(6)           minor survey exceptions, encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or Liens incidental to the conduct of the business of such Person or to the ownership of its properties that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

 

(7)           Liens securing Hedging Obligations relating to Indebtedness so long as the related Indebtedness is, and is permitted to be under this Indenture, secured by a Lien on the same property securing such Hedging Obligation;

 

(8)           leases, licenses, subleases and sublicenses of assets (including, without limitation, real property and intellectual property rights) that do not materially interfere with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries;

 

  

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(9)           judgment Liens not giving rise to an Event of Default, and Liens securing appeal or surety bonds related to such judgment, so long as any appropriate legal proceedings that may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceedings may be initiated has not expired;

 

(10)         Liens for the purpose of securing the payment of all or a part of the purchase price of, or Capitalized Lease Obligations, mortgage financings, Purchase Money Indebtedness or other payments Incurred to finance assets or property (other than Capital Stock or other Investments) acquired, constructed, improved or leased in the ordinary course of business; provided that, in the case of this subclause (10):

 

 (a)           the aggregate principal amount of Indebtedness secured by such Liens is otherwise permitted to be incurred under this Indenture and does not exceed the cost of the assets or property so acquired, constructed or improved, plus reasonable fees and expenses of such Person incurred in connection therewith; and

 

 (b)           such Liens are created within 180 days of construction, acquisition or improvement of such assets or property and do not encumber any other assets or property of the Company or any Restricted Subsidiary other than such assets or property and assets affixed or appurtenant thereto and the proceeds thereof;

 

(11)         Liens that constitute banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a bank, depositary or other financial institution, whether arising by operation of law or pursuant to contract;

 

(12)         Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Company and its Restricted Subsidiaries in the ordinary course of business;

 

(13)         Liens existing on the Issue Date (other than Liens permitted under clause (1) above or (35)(A) below);

 

(14)         Liens on property or shares of stock of a Person at the time such Person becomes a Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary; provided further, however, that any such Lien may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

(15)         Liens on property at the time the Company or a Restricted Subsidiary acquired the property, including any acquisition by means of a merger or consolidation with or into the Company or any Restricted Subsidiary; provided, however, that such Liens are not created, Incurred or assumed in connection with, or in contemplation of, such acquisition; provided further, however, that such Liens may not extend to any other property owned by the Company or any Restricted Subsidiary;

 

  

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(16)         Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricted Subsidiary;

 

(17)         Liens on Capital Stock of Unrestricted Subsidiaries and Liens on property of an Unrestricted Subsidiary at the time that it is designated as a Restricted Subsidiary; provided that such Liens were not incurred in connection with or in contemplation of such designation;

 

(18)         good faith deposits as security for contested taxes or contested import to customs duties;

 

(19)         Liens securing Refinancing Indebtedness Incurred to refinance, refund, replace, amend, extend or modify, as a whole or in part, Indebtedness that was previously so secured pursuant to clauses (10), (13), (14), (15) and (19) of this definition; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the indebtedness being refinanced or is in respect of property that is the security for a Permitted Lien hereunder;

 

(20)         any interest or title of a lessor under any operating lease;

 

(21)         Liens on specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

 

(22)         Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with importation of goods;

 

(23)         Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale or purchase of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

 

(24)         Liens on funds of the Company or any Subsidiary held in deposit accounts with third party providers of payment services securing credit card charge-back reimbursement and similar cash management obligations of the Company or the Subsidiaries;

 

(25)         Liens of a collecting bank arising in the ordinary course of business under Section 4-208 of the Uniform Commercial Code in effect in the relevant jurisdiction covering only the items being collected upon;

 

(26)         Liens arising by operation of law or contract on insurance policies and the proceeds thereof to secure premiums thereunder;

 

  

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(27)         Liens on insurance policies and proceeds of insurance policies (including rebates of premiums) securing Indebtedness incurred pursuant to Section 3.3(b)(xii) to finance the payment of premiums on the insurance policies subject to such Liens;

 

(28)         statutory, common law or contractual Liens of landlords;

 

(29)         customary Liens granted in favor of a trustee to secure fees and other amounts owing to such trustee under an indenture or other agreement pursuant to which Indebtedness permitted under Section 3.3 is Incurred;

 

(30)         Liens on any cash earnest money deposit made by the Company or any Restricted Subsidiary in connection with any letter of intent or acquisition agreement that is not prohibited by this Indenture;

 

(31)         Liens in favor of credit card processors granted in the ordinary course of business;

 

(32)         Liens arising in connection with Cash Equivalents described in clause (5) of the definition of Cash Equivalents;

 

(33)         Liens securing other obligations in an amount not to exceed $75.0 million at any time outstanding;

 

(34)         Liens securing cash management obligations incurred in the ordinary course of business;

 

(35)         Liens securing (x)(A) Obligations with respect to Indebtedness Incurred pursuant to Section 3.3(b)(ii) , (B) Hedging Obligations and cash management obligations that are secured ratably (other than with respect to cash collateral for letters of credit) with Indebtedness outstanding pursuant to Section 3.3(b)(ii) and (C) Liens on cash or deposits granted to the collateral agent with respect to Indebtedness Incurred pursuant to Section 3.3(b)(ii) in respect of letters of credit issued and outstanding thereunder and (y) additional Pari Passu Lien Indebtedness in excess of the maximum amount permitted by clause (x)(A) above to the extent that after giving pro forma effect to the Incurrence of Indebtedness secured pursuant to this clause (y) and the application of the proceeds therefrom on such date, the Priority Leverage Ratio of the Company and the Restricted Subsidiaries would not exceed 1.25 to 1.00; provided that such Liens are subject to the terms of the Intercreditor Agreement; provided, further, that for all purposes of this clause (35)(y) only, Indebtedness under a revolving credit facility shall be deemed to be Incurred on the date on which commitments are provided with respect thereto and shall be deemed to have remained outstanding at all times until such commitments have been terminated;

 

(36)         Liens in connection with Permitted Transactions;

 

  

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(37)         Liens securing Indebtedness incurred pursuant to Section 3.3(b)(xiii) in an aggregate amount not to exceed $10.0 million and customary set-off rights in favor of depositary banks; and

 

(38)         collateral consisting of Cash Equivalents securing Permitted Swap Obligations in an aggregate amount not to exceed, at any time, $60.0 million; provided that, for purposes of this clause (38), in the case of Cash Equivalents described in clauses (2), (3), (4) and (11) of the definition thereof, the one year maturity limitation set forth in such clauses shall be disregarded.

 

“Permitted Portfolio Investments” means Investments by the Company or the Company’s Insurance Subsidiaries; provided that (a) in the case of an Investment in assets that are not Investment Grade Assets, after giving effect thereto, not more than 12% of the aggregate fair market value of all Investments held by the Company and the Insurance Subsidiaries, taken as a whole, may be comprised of Investments in assets that are not Investment Grade Assets (exclusive of the Investments referred to in paragraphs (b), (c), and (d) below and contract loans as specified on page 2, line 6 of the Company’s Annual Statements), (b) in the case of an Investment that is not NAIC rated, after giving effect thereto, not more than 6.0% of the aggregate fair market value of all Investments held by the Company and the Insurance Subsidiaries, taken as a whole, may be comprised of Investments that are not NAIC rated (exclusive of the Investments referred to in paragraphs (a), (c) and (d) hereof and contract loans as specified on page 2, line 6 of the Company’s Annual Statement), (c) in the case of an Investment in real property mortgage loans classified on Schedule B-Part 1 of the Annual Statement, after giving effect thereto, not more than 12.0% of the aggregate fair market value of all Investments held by the Company and the Insurance Subsidiaries, taken as a whole, may be comprised of Investments in assets that are Investments in real property mortgage loans classified on Schedule B-Part 1 of the Annual Statement (exclusive of Investments referred to in paragraphs (a), (b) and (d) hereof) and (d) in the case of an Investment in Capital Stock, after giving effect thereto, not more than 5.0% of the aggregate fair market value of all Investments held by the Company and the Insurance Subsidiaries, taken as a whole, may be comprised of Investments involving Capital Stock.

 

“Permitted Swap Obligations” means all obligations (contingent or otherwise) of the Company or any Subsidiary existing or arising under Swap Contracts, provided that such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with liabilities, commitments or assets held by such Person, or changes in the value of securities issued by such Person in conjunction with a securities repurchase program not otherwise prohibited under this Indenture, and not for purposes of speculation or taking a “market view.”

 

  

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“Permitted Transactions” means (a) mortgage-backed security transactions in which an investor sells mortgage collateral, such as securities issued by the Government National Mortgage Association and the Federal Home Loan Mortgage Corporation, for delivery in the current month while simultaneously contracting to repurchase “substantially the same” (as determined by the Public Securities Association and GAAP) collateral for a later settlement, (b) transactions in which an investor lends cash to a primary dealer and the primary dealer collateralizes the borrowing of the cash with certain securities, (c) transactions in which an investor lends securities to a primary dealer and the primary dealer collateralizes the borrowing of the securities with cash collateral, (d) transactions in which an investor makes loans of securities to a Broker-Dealer under an agreement requiring such loans to be continuously secured by cash collateral or United States government securities, (e) transactions structured as, and submitted to the NAIC Security Valuation Office for approval as, Replication (Synthetic Asset) Transactions (RSAT) (provided that, to the extent that such approval is not granted in respect of any such transaction, such transaction shall cease to constitute a Permitted Transaction 30 days following the date of such rejection, denial or non-approval) and (f) transactions in which a federal home loan mortgage bank (a “FHLMB”) makes loans to an Insurance Subsidiary, that are sufficiently secured by appropriate assets of such Insurance Subsidiary consisting of government agency mortgage-backed securities in accordance with the rules, regulations and guidelines of such FHLMB for its loan programs.

 

“Permitted Warrant” means any call option on, warrant or right to purchase (or substantively equivalent derivative transaction) the Company’s Common Stock sold by the Company substantially concurrently with any purchase by the Company of a related Permitted Bond Hedge.

 

“Person” means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

 

“Preferred Stock” means, as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person, over shares of Capital Stock of any other class of such Person.

 

“Priority Leverage Ratio” means, at any date, the ratio of

 

                 (i)  the aggregate principal amount of Pari Passu Lien Indebtedness of the Company and its Restricted Subsidiaries as of such date of calculation (determined on a consolidated basis in accordance with GAAP); provided that for purposes of calculating the Priority Leverage Ratio, Indebtedness under a revolving credit facility shall be deemed to be Incurred on the date on which commitments are provided with respect thereto and shall be deemed to have remained outstanding at all times until such commitments have been terminated, to

 

                 (ii) Consolidated EBITDA of the Company for the four full fiscal quarters for which internal financial statements are available immediately preceding such date on which such additional Indebtedness is Incurred;

 

and, in each case, with such pro forma adjustments as are consistent with the pro forma adjustment provisions set forth in the definition of Fixed Charge Coverage Ratio.

 

  

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“Private Placement Legend” means the legend set forth in Section 2.1(c) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions hereof.

 

“Purchase Money Indebtedness” means Indebtedness (including Capitalized Lease Obligations) Incurred (within 365 days of such purchase or lease) to finance or refinance the purchase, lease, construction, installation, or improvement of any assets used or useful in a Related Business (whether through the direct purchase of assets or through the purchase of Capital Stock of any Person owning such assets).

 

“PVFP” means the actuarial determined value of the right to receive future cash flows from insurance contracts in force on September 10, 2003, the day the Company’s reorganization became effective.

 

“QIB” means any “qualified institutional buyer” (as defined in Rule 144A).

 

“Rating Agencies” means Standard & Poor’s Ratings Group, Inc. and Moody’s Investors Service, Inc. or if Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both shall not make a rating on the Notes publicly available, a nationally recognized statistical rating agency or agencies, as the case may be, selected by the Company (as certified by a Board Resolution) which shall be substituted for Standard & Poor’s Ratings Group, Inc. or Moody’s Investors Service, Inc. or both, as the case may be.

 

“Record Date” for the interest payable on any applicable Interest Payment Date means March 15 and September 15 (whether or not a Business Day) next preceding such Interest Payment Date.

 

“Refinance” means, in respect of any Indebtedness, to refinance, extend, renew, refund, replace, repay, prepay, purchase, redeem, defease or retire, or to issue other Indebtedness in exchange or replacement for or to consolidate, such Indebtedness. “Refinanced” and “Refinancing” shall have correlative meanings.

 

“Refinancing Indebtedness” means any Indebtedness that Refinances any other Indebtedness, including any successive Refinancings, so long as:

 

(1)          such Indebtedness is in an aggregate principal amount (or if Incurred with original issue discount, an aggregate issue price) not in excess of the sum of:

 

(a)           the aggregate principal amount (or if Incurred with original issue discount, the aggregate accreted value) then outstanding of the Indebtedness being Refinanced, and

 

(b)           an amount necessary to pay any fees and expenses, including accrued and unpaid interest, premiums, transaction costs and defeasance costs, related to such Refinancing,

 

  

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(2)           the Average Life of such Indebtedness is equal to or greater than the Average Life of the Indebtedness being Refinanced,

 

(3)           the Stated Maturity of such Indebtedness is no earlier than the Stated Maturity of the Indebtedness being Refinanced, and

 

(4)           if the Indebtedness being Refinanced was subordinated to the Notes or the Subsidiary Guarantees, the new Indebtedness shall be subordinated to the Notes or the Subsidiary Guarantees, as applicable, at least to the same extent as such Indebtedness being Refinanced;

 

provided, however, that Refinancing Indebtedness shall not include:

 

(1)           Indebtedness of a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor that Refinances Indebtedness of the Company or a Subsidiary Guarantor, or

 

(2)           Indebtedness of the Company or a Restricted Subsidiary that Refinances Indebtedness of an Unrestricted Subsidiary.

 

“Registrar” means initially, the Trustee and thereafter, a replacement registrar chosen by the Company in accordance with this Indenture.

 

“Regulation S” means Regulation S promulgated under the Securities Act.

 

“Regulation S Global Note” means a Global Note bearing the Global Note Legend, the Private Placement Legend and the Regulation S Legend and deposited with or on behalf of the Depositary and registered in the name of the Depositary or its nominee, issued in an initial denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

 

“Regulation S Legend” means the legend set forth in Section 2.1(d) hereof, which is required to be placed on all Global Notes issued under this Indenture except where otherwise permitted by the provisions hereof.

 

“Reinsurance Agreements” means any agreement, contract, treaty, certificate or other arrangement by which any Insurance Subsidiary agrees to transfer or cede to another insurer all or part of the liability assumed or assets held by it under one or more insurance, annuity, reinsurance or retrocession policies, agreements, contracts, treaties, certificates or similar arrangements. Reinsurance Agreements shall include, but not be limited to, any agreement, contract, treaty, certificate or other arrangement that is treated as such by the applicable Department.

 

“Related Business” means any business that is the same as or related, ancillary or complementary to any of the businesses of the Company and its Restricted Subsidiaries on the Issue Date and any reasonable extension or evolution of any of the foregoing, including without limitation, the online business of the Company and its Restricted Subsidiaries.

 

  

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“Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

 

“Restricted Global Note” means a Global Note bearing the Private Placement Legend.

 

“Restricted Investment” means any Investment other than a Permitted Investment.

 

“Restricted Subsidiary” means any Subsidiary of the Company other than an Unrestricted Subsidiary.

 

“Rule 144” means Rule 144 promulgated under the Securities Act.

 

“Rule 144A” means Rule 144A promulgated under the Securities Act.

 

“Rule 903” means Rule 903 promulgated under the Securities Act.

 

“Rule 904” means Rule 904 promulgated under the Securities Act.

 

“S&P”  means Standard & Poor’s Ratings Group and any successor thereto.

 

“Sale/Leaseback Transaction” means any direct or indirect arrangement relating to property now owned or hereafter acquired by the Company or a Restricted Subsidiary whereby the Company or such Restricted Subsidiary transfers such property to a Person (other than the Company or any of its Subsidiaries) and the Company or such Restricted Subsidiary leases it from such Person.

 

“SEC” means the United States Securities and Exchange Commission.

 

“Secured Party” means (i) the Holders, (ii) the Trustee, (iii) the Collateral Agent and (iv) any successors, indorsees, transferees and assigns of each of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder.

 

“Security Agreement” means the security agreement dated September 28, 2012, among the Company, the Subsidiary Guarantors and the Collateral Agent, as the same may be amended, supplemented or otherwise modified from time to time.

 

 “Series” means (a) with respect to the First Lien Secured Parties, each of (i) the Credit Agreement Secured Parties (in their capacities as such), (ii) the Secured Parties (in their capacity as such) and (iii) the Other First Lien Secured Parties that become subject to the Intercreditor Agreement after the date hereof that are represented by a common Authorized Representative (in its capacity as such for such Other First Lien Secured Parties) and (b) with respect to any First Lien Secured Indebtedness, each of (i) the Credit Agreement Obligations, (ii) the Obligations under the Notes and (iii) the Other First Lien Obligations incurred pursuant to any applicable agreement, which pursuant to any joinder agreement to the Intercreditor Agreement, are to be represented under the Intercreditor Agreement by a common Authorized Representative (in its capacity as such for such Other First Lien Obligations).

 

  

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“Significant Subsidiary” means any Restricted Subsidiary that would be a “Significant Subsidiary” of the Company within the meaning of Rule 1-02 under Regulation S-X promulgated by the SEC.

 

“Stated Maturity” means, with respect to any security, the date specified in the agreement governing or certificate relating to such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision, but shall not include any contingent obligations to repay, redeem or repurchase any such principal prior to the date originally scheduled for the payment thereof.

 

“Subordinated Obligation” means any Indebtedness of the Company (whether outstanding on the Issue Date or thereafter Incurred) that is subordinated or junior in right of payment to the Notes pursuant to its terms. No Indebtedness of the Company shall be deemed to be subordinated or junior in right of payment to any other Indebtedness of the Company solely by virtue of Liens, guarantees, maturity or payments or structural subordination.

 

“Subsidiary” of any Person means (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), or (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). Unless otherwise specified herein, each reference to a Subsidiary will refer to a Subsidiary of the Company.

 

“Subsidiary Guarantee” means, individually, any Guarantee by a Subsidiary Guarantor pursuant to the terms of this Indenture and any supplemental indenture thereto, and, collectively, all such Guarantees. Each such Subsidiary Guarantee will be in the form prescribed by this Indenture.

 

“Subsidiary Guarantor” means each Restricted Subsidiary in existence on the Issue Date that provides a Subsidiary Guarantee on the Issue Date (and any other Restricted Subsidiary that provides a Subsidiary Guarantee in accordance with this Indenture); provided that upon release or discharge of such Restricted Subsidiary from its Subsidiary Guarantee in accordance with this Indenture, such Restricted Subsidiary ceases to be a Subsidiary Guarantor.

 

“substantially concurrent” means, with respect to two or more events, the occurrence of such events within 45 days of each other.

 

  

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“Surplus Debentures” means, as to any Insurance Subsidiary, debt securities of such Insurance Subsidiary issued to the Company or any other Subsidiary the proceeds of which are permitted to be included, in whole or in part, as Capital and Surplus of such Insurance Subsidiary as approved and permitted by the applicable Department.

 

“Swap Contract” means any agreement relating to any transaction (whether or not arising under a master agreement) that is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap or option, bond, note or bill option, interest rate option, futures contract, forward foreign exchange transaction, cap, collar or floor transaction, currency swap, cross-currency rate swap, swaption, currency option, credit derivative transaction or any other similar transaction (including any option to enter into any of the foregoing) or any combination of the foregoing, and any master agreement relating to or governing any or all of the foregoing.

 

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined by the Company based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.

 

“Tax Sharing Agreement” means the amended and restated consolidated income tax agreement dated January 1, 2004 among the Company and certain of its Subsidiaries as in effect on the Issue Date or as thereafter amended in any manner, that, taken as a whole, is not more disadvantageous to the Holders of the Company in any material respect than such agreement as it was in effect on the Issue Date.

 

“Total Capitalization” means, without duplication, (a) the amount described in clause (a) of the definition of “Debt to Total Capitalization Ratio” plus (b) the Total Shareholders’ Equity of the Company.

 

“Total Shareholders’ Equity” means the total common and preferred shareholders’ equity of the Company as determined in accordance with GAAP (calculated excluding (i) unrealized gains (losses) on securities as determined in accordance with FASB ASC 320 (Investments—Debt and Equity Securities) and (ii) any charges taken to write off any goodwill included on the Company’s balance sheet on the Issue Date to the extent such charges are required by FASB ASC 320 (Investments— Debt and Equity Securities) and ASC 350 (Intangibles—Goodwill and Others).

 

“TIA” means the Trust Indenture Act of 1939 as in effect on the date hereof.

 

“Trade Payables” means, with respect to any Person, any accounts payable to trade creditors created, assumed or Guaranteed by such Person arising in the ordinary course of business in connection with the acquisition of goods or services.

 

  

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“Transactions” means, collectively, the offering of the Notes and the Concurrent Transactions (as defined in the Offering Circular) and payment of the expenses in connection therewith.

 

“Treasury Rate” means, as obtained by the Company, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to October 1, 2015; provided, however, that if the period from the Redemption Date to October 1, 2015 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to October 1, 2015 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

“Trust Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall, in each case, have direct responsibility for the administration of this Indenture.

 

“Trustee” has the meaning assigned to such term in the preamble to this Indenture.

 

“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.

 

“Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

 

“Unrestricted Global Note” means a permanent Global Note substantially in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing Notes that do not bear the Private Placement Legend.

 

“Unrestricted Subsidiary” means (1) any Subsidiary of the Company that at the time of determination shall be designated an Unrestricted Subsidiary by the Board of Directors of the Company in the manner provided below; and (2) any Subsidiary of an Unrestricted Subsidiary.

 

  

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The Board of Directors of the Company may designate any Subsidiary of the Company (including any newly acquired or newly formed Subsidiary or a Person becoming a Subsidiary through merger or consolidation or Investment therein) to be an Unrestricted Subsidiary only if:

 

(1)           such Subsidiary or any of its Subsidiaries does not own any Capital Stock or Indebtedness of or have any Investment in, or own or hold any Lien on any property of, any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated or otherwise an Unrestricted Subsidiary;

 

(2)           all the Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of designation, and will at all times thereafter while they are Unrestricted Subsidiaries, consist of Non-Recourse Debt;

 

(3)           such designation and the Investment of the Company in such Subsidiary complies with Section 3.4;

 

(4)           such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries;

 

(5)           such Subsidiary is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation:

 

 (a)           to subscribe for additional Capital Stock of such Person; or

 

 (b)           to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

 

(6)           on the date such Subsidiary is designated an Unrestricted Subsidiary, such Subsidiary is not a party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary with terms substantially less favorable to the Company than those that might have been obtained from Persons who are not Affiliates of the Company.

 

Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a Board Resolution of the Company giving effect to such designation and an Officers’ Certificate certifying that such designation complies with the foregoing conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.

 

The Board of Directors of the Company may designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof and the Company could Incur at least $1.00 of additional Indebtedness pursuant to Section 3.3(a) on a pro forma basis taking into account such designation.

 

  

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“U.S. Government Obligations” means securities that are (1) direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged or (2) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the timely payment of which is unconditionally guaranteed as a full faith and credit obligation of the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligations or a specific payment of principal of or interest on any such U.S. Government Obligations held by such custodian for the account of the holder of such depositary receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the Holder of such depositary receipt from any amount received by the custodian in respect of the U.S. Government Obligations or the specific payment of principal of or interest on the U.S. Government Obligations evidenced by such depositary receipt.

 

“U.S. Person” means a U.S. Person as defined in Rule 902(k) of Regulation S under the Securities Act.

 

“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled to vote in the election of directors, managers or trustees, as applicable, of such Person.

 

“Wholly-Owned Subsidiary” means a Restricted Subsidiary, all of the Capital Stock of which (other than directors’ qualifying shares or local ownership shares) is owned by the Company or another Wholly Owned Subsidiary.

 

SECTION 1.2.     Other Definitions.

 

	
Term

	 	
Defined in

  Section  

	 	 	 
	
“actual knowledge”                                                                                                               

	 	
7.2(g)

	
“Additional Notes”                                                                                                               

	 	
2.2

	
“Affiliate Transaction”                                                                                                               

	 	
3.8(a)

	
“Agent Members”                                                                                                               

	 	
2.1(c)

	
“Asset Disposition Offer”                                                                                                               

	 	
3.7(c)

	
“Asset Disposition Offer Amount”                                                                                                               

	 	
3.7(d)

	
“Asset Disposition Offer Period”                                                                                                               

	 	
3.7(d)

	
“Asset Disposition Purchase Date”                                                                                                               

	 	
3.7(d)

	
“Bankruptcy Law”                                                                                                               

	 	
6.1

	
“Change of Control Offer”                                                                                                               

	 	
3.9(b)

	
“Change of Control Payment”                                                                                                               

	 	
3.9(b)(i)

	
“Change of Control Payment Date”                                                                                                               

	 	
3.9(b)(ii)

	
“Company Conference Call”

	 	
3.2(b)

 

  

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Term

	 	
Defined in

  Section  

	 	 	 
	
“covenant defeasance option”                                                                                                               

	 	
8.1(b)

	
“Custodian”                                                                                                               

	 	
6.1

	
“Defaulted Interest”                                                                                                               

	 	
2.12

	
“DTC”                                                                                                               

	 	
2.1(b)

	
“Event of Default”                                                                                                               

	 	
6.1(a)

	
“Excess Proceeds”                                                                                                               

	 	
3.7(c)

	
“Guarantor Obligations”                                                                                                               

	 	
10.1

	
“Initial Lien”                                                                                                               

	 	
3.5

	
“legal defeasance option”                                                                                                               

	 	
8.1(b)

	
“Notice of Default”                                                                                                               

	 	
6.1

	
“Paying Agent”                                                                                                               

	 	
2.3

	
“payment default”                                                                                                               

	 	
6.1(a)(vi)(A)

	
“Redemption Date”                                                                                                               

	 	
5.4

	
“Registrar”                                                                                                               

	 	
2.3

	
“Reinstatement Date”                                                                                                               

	 	
3.12(b)

	
“Restricted Payment”                                                                                                               

	 	
3.4(a)(iv)

	
“Restricted Period”                                                                                                               

	 	
2.6(b)(i)

	
“Special Interest Payment Date”                                                                                                               

	 	
2.12(a)

	
“Special Record Date”                                                                                                               

	 	
2.12(a)

	
“Successor Company”                                                                                                               

	 	
4.1(a)(i)

	
“Successor Guarantor”                                                                                                               

	 	
4.2(a)(i)

	
“Suspended Covenants”                                                                                                               

	 	
3.12(a)

	
“Suspension Period”                                                                                                               

	 	
3.12(b)

	
“Unutilized Excess Proceeds”                                                                                                               

	 	
3.7(c)

 

SECTION 1.3.     Rules of Construction.  Unless the context otherwise requires:

 

(a)           a term has the meaning assigned to it;

 

(b)           an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

 

(c)           “or” is not exclusive;

 

(d)           “including” means including without limitation;

 

(e)           words in the singular include the plural and words in the plural include the singular;

 

(f)           unsecured Indebtedness shall not be deemed to be subordinate or junior to secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

 

  

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(g)           references to sections of, or rules under, the Securities Act or Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time;

 

(h)           unless the context otherwise requires, any reference to an “Article,” “Section” or “clause” refers to an Article, Section or clause, as the case may be, of this Indenture; and

 

(i)           the words “herein,” “hereof” and “hereunder” and any other words of similar import refer to this Indenture as a whole and not any particular Article, Section, clause or other subdivision.

 

ARTICLE II

 

The Notes

 

SECTION 2.1. Form and Dating.

 

(a)           The Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A hereto, the terms of which are incorporated in and made a part hereof.  The Notes may have notations, legends or endorsements approved as to form by the Company, and required by law, stock exchange rule, agreements to which the Company is subject or usage.  Each Note shall be dated the date of its authentication.  The Notes shall be issuable only in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof.

 

(b)           The Notes shall initially be issued in the form of one or more Global Notes and The Depository Trust Company (“DTC”), its nominees, and their respective successors, shall act as the Depositary with respect thereto.  Each Global Note (i) shall be registered in the name of the Depositary for such Global Note or the nominee of such Depositary, (ii) shall be delivered by the Trustee to such Depositary or held by the Trustee as custodian for the Depositary pursuant to such Depositary’s instructions, and (iii) shall bear a Global Note Legend in substantially the following form:

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

  

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THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A NOMINEE OF THE DEPOSITARY OR A SUCCESSOR DEPOSITARY.  THIS NOTE IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

(c)           Except as permitted by Section 2.6(i)(B), any Note not registered under the Securities Act shall bear the following Private Placement Legend on the face thereof:

 

THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501 OF REGULATION D UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.

 

  

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(d)           Each Regulation S Global Note shall bear the following Regulation S Legend on the face thereof:

 

BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

Members of, or participants in, the Depositary (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depositary, or the Trustee as its custodian and the Depositary may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the Global Note for all purposes whatsoever, including but not limited to notices and payments.  Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices governing the exercise of the rights of a Holder of any Note.  Any notice to be delivered to DTC (including, but not limited to, a notice of redemption) may be delivered electronically by the Trustee or the Company in accordance with the Applicable Procedures.

 

SECTION 2.2. Form of Execution and Authentication.  An Officer shall sign the Notes for the Company by manual or facsimile signature.

 

If an Officer whose signature is on a Note no longer holds that office at the time the Note is authenticated, the Note shall nevertheless be valid.

 

A Note shall not be valid until authenticated by the manual signature of the Trustee.  The signature of the Trustee shall be conclusive evidence that the Note has been authenticated under this Indenture.

 

The Trustee shall authenticate (i) Initial Notes for original issue on the Issue Date in an aggregate principal amount of $275,000,000 and (ii) subject to the Company’s compliance with Sections 3.3 and 3.5, one or more series of Notes (“Additional Notes”) for original issue after the Issue Date (such Notes to be substantially in the form of Exhibit A) in an unlimited amount, in each case upon receipt of a written order of the Company, which shall, in the case of any issuance of Additional Notes, certify that such issuance is in compliance with Sections 3.3 and 3.5 (an “Authentication Order”).  In addition, each such Authentication Order shall specify the amount of Notes to be authenticated, the date on which the Notes are to be authenticated, whether the securities are to be Initial Notes or Additional Notes and the aggregate principal amount of Notes outstanding on the date of authentication, and shall further specify the amount of such Notes to be issued as Global Notes or Definitive Notes.  Such Notes shall initially be in the form of one or more Global Notes, which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Notes to be issued or (ii) shall be registered in the name of the Depositary or its nominee.  All Notes issued under this Indenture shall vote and consent together on all matters as one class and no series of Notes will have the right to vote or consent as a separate class on any matter.

 

  

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The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes.  Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so.  Each reference in this Indenture to authentication by the Trustee includes authentication by such agent.  An authenticating agent has the same rights as an Agent to deal with the Company or any Affiliate of the Company.

 

SECTION 2.3. Registrar and Paying Agent.  The Company shall maintain (i) an office or agency where Notes may be presented for registration of transfer or for exchange (including any co-registrar, the “Registrar”) and (ii) an office or agency where Notes may be presented for payment (“Paying Agent”).  The Registrar shall keep a register of the Notes and of their transfer and exchange.  The Company may appoint one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent.  The Company may change any Paying Agent, Registrar or co-registrar without prior notice to any Holder of a Note.  The Company shall notify the Trustee in writing and the Trustee shall notify the Holders of the Notes of the name and address of any Agent not a party to this Indenture.  The Company or any of its domestically incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.  The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture.  The agreement shall implement the provisions hereof that relate to such Agent.  The Company shall notify the Trustee in writing of the name and address of any such Agent.  If the Company fails to maintain a Registrar or Paying Agent, or fails to give the foregoing notice, the Trustee shall act as such, and shall be entitled to appropriate compensation in accordance with Section 7.11.

 

The Company initially appoints the Trustee as Registrar and Paying Agent and to act as Notes Custodian with respect to the Notes.

 

SECTION 2.4. Paying Agent to Hold Money in Trust.  The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent shall hold in trust for the benefit of the Holders of the Notes or the Trustee all money held by the Paying Agent for the payment of principal of, premium, if any, and interest on the Notes, and shall notify the Trustee in writing of any Default by the Company in making any such payment.  While any such Default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee.  The Company at any time may require a Paying Agent to pay all money held by such Paying Agent to the Trustee.  Upon payment over to the Trustee, the Paying Agent (if other than the Company or any of its domestically incorporated Wholly-Owned Subsidiaries) shall have no further liability for the money delivered to the Trustee.  If the Company or any of its domestically incorporated Wholly-Owned Subsidiaries acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders of the Notes all money held by it as Paying Agent.

 

SECTION 2.5. Lists of Holders of the Notes.  The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of the Notes.  If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders of the Notes, including the aggregate principal amount of the Notes held by each thereof.

 

  

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SECTION 2.6. Transfer and Exchange.

 

(a)           Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.  Global Notes will be exchanged by the Company for Definitive Notes, subject to any applicable laws, only (i) if the Company delivers to the Trustee notice from the Depositary that (A) the Depositary is unwilling or unable to continue to act as Depositary for the Global Notes or (B) the Depositary is no longer a clearing agency registered under the Exchange Act and, in either case, the Company fails to appoint a successor Depositary within 90 days after the date of such notice from the Depositary or (ii) if there shall have occurred and be continuing an Event of Default with respect to the Notes and the Depositary so requests.  In any such case, the Company will notify the Trustee in writing that, upon surrender by the Participants and Indirect Participants of their interests in such Global Note, certificated Notes will be issued to each Person that such Participants, Indirect Participants and DTC jointly identify as being the beneficial owner of the related Notes.  Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.7 and 2.10.  Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.6 or Section 2.7 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note.  A Global Note may not be exchanged for another Note other than as provided in this Section 2.6.  However, beneficial interests in a Global Note may be transferred and exchanged as provided in paragraph (b) or (c) below.

 

(b)           Transfer and Exchange of Beneficial Interests in the Global Notes.  The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions hereof and the Applicable Procedures.  Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth in this Indenture to the extent required by the Securities Act.  Transfers of beneficial interests in the Global Notes also shall require compliance with the applicable subparagraphs below.

 

(i)            Transfer of Beneficial Interests in the Same Global Note.  Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the 40th day after the later of the commencement of the offering of the Notes represented by the Regulation S Global Note and the issue date of such Notes (such period through and including such 40th day, the “Restricted Period”), no transfer of beneficial interests in a Regulation S Global Note may be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser) unless permitted by applicable law and made in compliance with subparagraphs (ii) and (iii) below.  Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note.  No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this subparagraph (i) unless specifically stated above.

 

  

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(ii)           All Other Transfers and Exchanges of Beneficial Interests in Global Notes.  In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either:

 

(a)       (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(2)       instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase; or

 

(b)       (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged; and

 

(2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above.

 

Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.6(k) hereof.

 

(iii)          Transfer of Beneficial Interests to Another Restricted Global Note.  A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of subparagraph (ii) above and the Registrar receives the following:

 

(A)           if the transferee will take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

(B)           if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; or

 

  

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(C)           if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(c) thereof.

 

(iv)          Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.  A beneficial interest in any Restricted Global Note may be exchanged by any Holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.6(b)(ii) above and:

 

(A)          such transfer is effected pursuant to an effective registration statement under the Securities Act; or

 

(B)           the Registrar receives the following:

 

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

 

(B) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company so requests or if the Applicable Procedures so require, an opinion of counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

If any such transfer is effected pursuant to subparagraph (A) or (B) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests exchanged or transferred pursuant to subparagraph (A) or (B) above.

 

  

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Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

 

(c)           Transfer and Exchange of Beneficial Interests for Definitive Notes.

 

(i)            Transfer and Exchange of Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes.  Subject to Section 2.6(a), if any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then upon receipt by the Registrar of the following documentation:

 

(A)           if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

 

(B)           if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)           if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)           if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (C) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(c) thereof; or

 

(E)           if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof,

 

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to paragraph (k) below, and the Company shall execute and, upon receipt of an Authentication Order the Trustee shall authenticate and deliver to the Person designated in the certificate a Restricted Definitive Note in the appropriate principal amount.  Any Restricted Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this paragraph (c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Restricted Definitive Notes to the Persons in whose names such Notes are so registered.  Any Restricted Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this subparagraph (i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

 

  

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(ii)           Transfer and Exchange of Beneficial Interests in Restricted Global Notes for Unrestricted Definitive Notes.  Subject to Section 2.6(a), a holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if:

 

(A)           such transfer is effected pursuant to an effective registration statement under the Securities Act; or

 

(B)           the Registrar receives the following:

 

(i)           if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

(ii)          if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

and, in each such case set forth in this subparagraph (B), if the Company so requests or if the Applicable Procedures so require, an opinion of counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(iii)          Transfer and Exchange of Beneficial Interests in Unrestricted Global Notes for Unrestricted Definitive Notes.  Subject to Section 2.6(a), if any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in subparagraph (b)(ii) above, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to paragraph (k) below, and the Company shall execute and, upon receipt of an Authentication Order the Trustee shall authenticate and deliver to the Person designated in the certificate a Definitive Note in the appropriate principal amount.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this subparagraph (c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant.  The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered.  Any Definitive Note issued in exchange for a beneficial interest pursuant to this subparagraph (c)(iii) shall not bear the Private Placement Legend.

 

  

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(d)           Transfer and Exchange of Definitive Notes for Beneficial Interests.

 

       (i)     Transfer and Exchange of Restricted Definitive Notes for Beneficial Interests in Restricted Global Notes.  If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

 

(A)          if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

 

(B)           if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

(C)           if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

 

(D)           if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (C) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(c) thereof; or

 

(E)           if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof,

 

the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in the case of clause (D) above, the IAI Global Note.

 

(ii)           Transfer and Exchange of Restricted Definitive Notes for Beneficial Interests in Unrestricted Global Notes.  A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

 

  

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(a)           if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in an Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

 

(b)           if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the applicable certifications in item (4) thereof;

 

and, in each such case set forth in this Section 2.6(d)(ii), if the Company so requests or if the Applicable Procedures so require, an opinion of counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained in this Indenture and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

Upon satisfaction of the conditions of any of the subparagraphs in this subparagraph (d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

 

(e)           Transfer and Exchange of Unrestricted Definitive Notes for Beneficial Interests in Unrestricted Global Notes.  A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time.  Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

 

If any such exchange or transfer from an Unrestricted Definitive Note or a Restricted Definitive Note, as the case may be, to a beneficial interest is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.2, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Unrestricted Definitive Notes or Restricted Definitive Notes, as the case may be, so transferred.

 

(f)           Transfer and Exchange of Definitive Notes for Definitive Notes.  Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this paragraph (f), the Registrar shall register the transfer or exchange of Definitive Notes.  Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or its attorney, duly authorized in writing.  In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this paragraph (f).

 

  

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(g)           Transfer of Restricted Definitive Notes to Restricted Definitive Notes.  (i) Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

 

(A)           if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

 

(B)           if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof;

 

(C)           if the transfer will be made to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (A) through (B) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(c) thereof; or

 

(D)           if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including, if the Company so requests, a certification or opinion of counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act.

 

(ii)           Transfer and Exchange of Restricted Definitive Notes for Unrestricted Definitive Notes.  Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

 

(A)          any such transfer is effected pursuant to an effective registration statement under the Securities Act; or

 

(B)           the Registrar receives the following:

 

(A) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

 

(B) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

  

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and, in each such case set forth in this subparagraph (B), if the Company so requests, an opinion of counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

 

(h)           Transfer of Unrestricted Definitive Notes to Unrestricted Definitive Notes.  A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note.  Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

 

(i)            Private Placement Legend.

 

(A)                     Except as permitted by subparagraph (B) below, each Global Note (other than an Unrestricted Global Note) and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the Private Placement Legend.

 

(B)                      Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(ii), (c)(iii), (d)(ii), (e) or (g)(ii) of this Section 2.6 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

 

(j)            Global Note Legend.  Each Global Note shall bear the Global Note Legend.

 

(k)           Cancellation and/or Adjustment of Global Notes.  At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

 

  

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(l)             General Provisions Relating to Transfers and Exchanges.

 

(i)            To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order.

 

(ii)           No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.2, 2.10, 3.7, 3.9 and 5.7).

 

(iii)          Neither the Registrar nor the Trustee shall  be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except for the unredeemed portion of any Note being redeemed in part.

 

(iv)          All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits hereof, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

 

(v)           Neither the Trustee, the Registrar nor the Company shall be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business on a Business Day 15 days before the mailing of a notice of redemption of Notes and ending at the close of business on the day of such mailing or (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

 

(vi)          Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

 

(vii)         The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.2.

 

(viii)        All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.6 to effect a registration of transfer or exchange may be submitted by facsimile.

 

(ix)           The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Participants or Indirect Participants) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

 

  

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(x)           Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary.

 

(xi)          The Trustee shall have no responsibility or obligation to any Participant or Indirect Participant or any other Person with respect to the accuracy of the books or records, or the acts or omissions, of the Depositary or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any Participant or Indirect Participant or other Person (other than the Depositary) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the customary procedures of the Depositary. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its Participants or Indirect Participants.

 

SECTION 2.7. Replacement Notes.

 

If any mutilated Note is surrendered to the Trustee, or the Company and the Trustee receive evidence to their satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee’s requirements for replacements of Notes are met.  The Holder must supply indemnity or security sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent or any authenticating agent from any loss which any of them may suffer if a Note is replaced.  The Company and the Trustee may charge for their fees and expenses in replacing a Note including amounts to cover any tax, assessment, fee or other governmental charge that may be imposed in relation thereto.

 

Every replacement Note is an obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued here under.

 

SECTION 2.8. Outstanding Notes.

 

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section 2.8 as not outstanding.

 

If a Note is replaced pursuant to Section 2.7, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

 

If the principal amount of any Note is considered paid under Section 3.1 hereof, it shall cease to be outstanding and interest on it shall cease to accrue.

 

Subject to Section 2.9, a Note does not cease to be outstanding because the Company, a Subsidiary of the Company or an Affiliate of the Company holds the Note.

 

  

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SECTION 2.9. Treasury Notes.  In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, any Subsidiary of the Company or any Affiliate of the Company shall be considered as though not outstanding, except that for purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes which a Trust Officer actually knows to be so owned shall be so considered.  Notwithstanding the foregoing, Notes that are to be acquired by the Company, any Subsidiary of the Company or an Affiliate of the Company pursuant to an exchange offer, tender offer or other agreement shall not be deemed to be owned by the Company, a Subsidiary of the Company or an Affiliate of the Company until legal title to such Notes passes to the Company, such Subsidiary or such Affiliate, as the case may be. Upon request of the Trustee, the Company shall furnish to the Trustee promptly an Officers’ Certificate listing and identifying all Notes, if any known by the Company to be owned or held by or for the account of any of the Company or any Affiliate of the Company, and the Trustee shall be entitled to accept and rely upon such Officers’ Certificate as conclusive evidence of the facts therein set forth and of the fact that all Notes not listed therein are outstanding for the purpose of any determination.

 

SECTION 2.10. Temporary Notes.  Until Definitive Notes are ready for delivery, the Company may prepare and, upon receipt of an Authentication Order the Trustee shall authenticate temporary Notes.  Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company and the Trustee consider appropriate for temporary Notes.  Without unreasonable delay, the Company shall prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate definitive Notes in exchange for temporary Notes.  Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as Definitive Notes.

 

SECTION 2.11. Cancellation.  The Company at any time may deliver Notes to the Trustee for cancellation.  The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment.  The Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall dispose of all canceled Notes in its customary manner (subject to the record retention requirements of the Exchange Act).  The Company may not issue new Notes to replace Notes that it has redeemed or paid or that have been delivered to the Trustee for cancellation.

 

SECTION 2.12. Payment of Interest; Defaulted Interest.  Interest on any Note which is payable, and is punctually paid or duly provided for, on any interest payment date shall be paid to the Person in whose name such Note (or one or more predecessor Notes) is registered at the close of business on the regular Record Date for such interest at the office or agency of the Company maintained for such purpose pursuant to Section 2.3.

 

Any interest on any Note which is payable, but is not paid when the same becomes due and payable and such nonpayment continues for a period of 30 days shall forthwith cease to be payable to the Holder on the regular Record Date by virtue of having been such Holder, and such defaulted interest and (to the extent lawful) interest on such defaulted interest at the rate borne by the Notes (such defaulted interest and interest thereon herein collectively called “Defaulted Interest”) shall be paid by the Company, at its election in each case, as provided in clause (a) or (b) below:

 

  

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(a)           The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Notes (or their respective predecessor Notes) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner.  The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Note and the date (not less than 30 days after such notice unless a shorter period shall be acceptable to the Trustee) of the proposed payment (the “Special Interest Payment Date”), and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided.  Thereupon the Company shall fix a record date (the “Special Record Date”) for the payment of such Defaulted Interest, which shall be not more than 15 days and not less than 10 days prior to the Special Interest Payment Date and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment.  The Company shall promptly notify the Trustee, in writing, of such Special Record Date and shall, or at the written request and in the name and at the expense of the Company, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor to be given in the manner provided for in Section 12.1, not less than 10 days prior to such Special Record Date.  Notice of the proposed payment of such Defaulted Interest and the Special Record Date and Special Interest Payment Date therefor having been so given, such Defaulted Interest shall be paid on the Special Interest Payment Date to the Persons in whose names the Notes (or their respective Predecessor Notes) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (b).

 

(b)           The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this clause (b), such manner of payment shall be deemed practicable by the Trustee.

 

Subject to the foregoing provisions of this Section, each Note delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Note.

 

SECTION 2.13. CUSIP and ISIN Numbers.  The Company in issuing the Notes may use “CUSIP” and “ISIN” numbers (if then generally in use).  The Trustee shall not be responsible for the use of CUSIP and ISIN numbers, and the Trustee makes no representation as to their correctness as printed on any Note or notice to Holders.  The Company shall promptly notify the Trustee in writing of any change in the CUSIP and ISIN numbers.

 

  

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ARTICLE III

 

Covenants

 

SECTION 3.1. Payment of Notes.  The Company shall promptly pay, or caused to be paid, the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes and in this Indenture.  Principal, premium, if any, and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent holds in accordance with this Indenture money sufficient to pay all principal, premium, if any, and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture.

 

The Company shall pay interest on overdue principal at the rate specified therefor in the Notes.

 

Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

 

SECTION 3.2. Reports.

 

(a)           Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company shall provide to the Trustee and the registered Holders of the Notes, within 15 days of the applicable time periods specified in the relevant forms:

 

(1)           all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms (but without any requirement to provide separate financial statements of any Subsidiary of the Company), including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s independent registered public accounting firm; and

 

(2)           all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports; provided, however, that to the extent such reports are filed with the SEC and publicly available, such reports shall have been deemed to have been provided to the Holders and no additional copies need to be provided to the Holders, however, copies will still be delivered to the Trustee.

 

If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries and such Unrestricted Subsidiaries, either individually or collectively, would otherwise have been a Significant Subsidiary, then the quarterly and annual financial information required by the preceding paragraph shall include a summary presentation, in the footnotes to the financial statements, of the financial condition and results of operations of the Company and its Restricted Subsidiaries.

 

  

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In addition, the Company and the Subsidiary Guarantors shall make available to the Holders and to prospective investors, upon the request of such Holders, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to the extent such Notes constitute “restricted securities” within the meaning of the Securities Act.

 

The Company shall maintain a website to which all of the reports and press releases required by this Section 3.2 are posted (unless such reports are otherwise filed with the SEC).

 

(b)           So long as any Notes are outstanding, the Company will also:

 

(1) within 15 Business Days after providing the annual and quarterly information required pursuant to Section 3.2(a)(1) (or such earlier time as the Company determines), hold a conference call (the “Company Conference Call”) to discuss the results of operations for the relevant reporting period; and

 

(2)           issue a press release to an internationally recognized wire service no fewer than three Business Days prior to the proposed date of the Company Conference Call, announcing the time and date of the Company Conference Call and either including all information necessary to access the call or directing Holders, prospective investors that certify that they are qualified institutional buyers, securities analysts and market makers to contact the appropriate person at the Company to obtain such information. The Company Conference Call may be part of or separate from any earnings or similar conference call relating to the financial results of the Company or any of its Subsidiaries as long as such call otherwise meets the requirements of the foregoing clauses (1) and (2).

 

In addition, if at any time any direct or indirect parent company of the Company becomes a Subsidiary Guarantor (there being no obligation of any such parent to do so), such entity holds no material assets other than cash, cash equivalents and the Capital Stock of the Company or any other direct or indirect parent of the Company (and performs the related incidental activities associated with such ownership) and would comply with the requirements of Rule 3-10 of Regulation S-X promulgated by the SEC (or any successor provision), the reports, information and other documents required to be furnished to Holders pursuant to this Section 3.2 may, at the option of the Company, be furnished by and be those of such parent rather than the Company.

 

SECTION 3.3. Limitation on Indebtedness.

 

(a)           The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness); provided, however, that the Company and any Restricted Subsidiary that is a Subsidiary Guarantor may Incur Indebtedness (including Acquired Indebtedness) if the Fixed Charge Coverage Ratio of the Company and its Restricted Subsidiaries for the most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred would have been at least 2.00 to 1.00 determined on a pro forma basis (including a pro forma application of the net proceeds therefrom), as if the additional Indebtedness had been Incurred and the application of proceeds therefrom had occurred at the beginning of such four-quarter period.

 

  

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(b)           The provisions of Section 3.3(a) shall not apply to the Incurrence of the following Indebtedness:

 

(i)            Indebtedness of the Company evidenced by the Notes (other than Additional Notes) and Indebtedness of Subsidiary Guarantors evidenced by the Subsidiary Guarantees relating to the Notes (other than Additional Notes);

 

(ii)           Indebtedness Incurred pursuant to Debt Facilities in an aggregate principal amount not to exceed $975.0 million, at any time outstanding, less to the extent a permanent repayment or commitment reduction is required thereunder as a result of such application, the aggregate principal amount of all principal repayments following the Issue Date actually made under any Debt Facilities incurred in reliance on this clause (2) with Net Available Cash from Asset Dispositions;

 

(iii)          Guarantees by the Company or a Subsidiary Guarantor (including any Restricted Subsidiary the Company elects to cause to become a Subsidiary Guarantor in connection therewith) of Indebtedness permitted to be Incurred by the Company or a Restricted Subsidiary in accordance with the provisions of this Indenture; provided that (x) if such Indebtedness is by its express terms subordinated in right of payment to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, any such guarantee of such Subsidiary Guarantor with respect to such Indebtedness shall be subordinated in right of payment to such Subsidiary Guarantor’s Guarantee with respect to the Notes substantially to the same extent as such Indebtedness is subordinated to the Notes or the Guarantee of such Restricted Subsidiary, as applicable, and (y) Non-Guarantor Subsidiaries of Indebtedness Incurred by Non-Guarantor Subsidiaries in accordance with the provisions of this Indenture;

 

(iv)          Indebtedness of the Company owing to and held by any Restricted Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by the Company or any other Restricted Subsidiary; provided, however,

 

 (A)         if the Company is the obligor on Indebtedness owing to a Non-Guarantor Subsidiary, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes;

 

 (B)          if a Subsidiary Guarantor is the obligor on such Indebtedness and a Non-Guarantor Subsidiary is the obligee, such Indebtedness is subordinated in right of payment to the Subsidiary Guarantees of such Subsidiary Guarantor; and

 

  

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(C)           (1) any subsequent issuance or transfer of Capital Stock or any other event that results in any such Indebtedness being beneficially held by a Person other than the Company or a Restricted Subsidiary of the Company; and (2) any subsequent sale or other transfer of any such Indebtedness to a Person other than the Company or a Restricted Subsidiary of the Company; shall be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Subsidiary, as the case may be;

 

(v)          any Indebtedness (other than the Indebtedness described in clauses (i) and (ii)) outstanding on the Issue Date, and any Refinancing Indebtedness Incurred in respect of any Indebtedness described in clause (i), this clause (v) or clause (vi) or Incurred pursuant to Section 3.3(a);

 

(vi)          Indebtedness of Persons Incurred and outstanding on the date on which such Person became a Restricted Subsidiary or was acquired by, or merged or consolidated with or into, the Company or any Restricted Subsidiary (other than Indebtedness Incurred in connection with, or in contemplation of, such acquisition, merger or consolidation); provided, however, that at the time such Person is acquired by, or merged or consolidated with, the Company or any Restricted Subsidiary and after giving effect to the Incurrence of such Indebtedness pursuant to this clause (vi), either (x) the Company would have been able to Incur $1.00 of additional Indebtedness pursuant to Section 3.3(a) or (y) the Fixed Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be greater than such Fixed Charge Coverage Ratio immediately prior to such acquisition, merger or consolidation;

 

(vii)         Indebtedness under Hedging Obligations; provided, however, that such Hedging Obligations are entered into (i) in the ordinary course of business by any Insurance Subsidiary or (ii) to fix, manage or hedge interest rate, currency or commodity exposure of the Company or any Restricted Subsidiary and not for speculative purposes;

 

(viii)        (A) Purchase Money Indebtedness in an aggregate principal amount not to exceed $50.0 million at any one time outstanding pursuant to this clause (viii)(A), and Refinancing Indebtedness thereof (but disregarding the requirements of clauses (b) through (d), (x) and (y) of the definition thereof) and (B) Capitalized Lease Obligations arising from the sale and leaseback of the Company’s headquarters pursuant to clause (24) of the definition of “Asset Disposition”, and Refinancing Indebtedness thereof (but disregarding the requirements of clauses (b) through (d), (x) and (y) of the definition thereof);

 

(ix)           Indebtedness Incurred by the Company or its Restricted Subsidiaries in respect of workers’ compensation claims, health, disability or other employee benefits or property, casualty or liability insurance, self-insurance obligations, performance, bid, surety, appeal and similar bonds and completion Guarantees (not for borrowed money) or security deposits, letters of credit, banker’s guarantees or banker’s acceptances, in each case in the ordinary course of business (including letters of credit issued in connection with reinsurance transactions entered into in the ordinary course of business);

 

  

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(x)            Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price, earn-outs or similar obligations, in each case, Incurred or assumed in connection with the acquisition or disposition of any business or assets of the Company or any business, assets or Capital Stock of a Subsidiary, other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock for the purpose of financing such acquisition, provided that

 

 (A)         the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds, including non-cash proceeds (the Fair Market Value of such non-cash proceeds being measured at the time received and without giving effect to subsequent changes in value), actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and

 

 (B)          such Indebtedness is not reflected on the balance sheet of the Company or any of its Restricted Subsidiaries (contingent obligations referred to in a footnote to financial statements and not otherwise reflected on the balance sheet will not be deemed to be reflected on such balance sheet for purposes of this clause (x);

 

(xi)           Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument, including, but not limited to, electronic transfers, wire transfers and commercial card payments drawn against insufficient funds in the ordinary course of business (except in the form of committed or uncommitted lines of credit); provided, however, that such Indebtedness is extinguished within ten Business Days of Incurrence;

 

(xii)         Indebtedness Incurred by the Company or any Restricted Subsidiary in connection with third party insurance premium financing arrangements not to exceed $20.0 million at any one time outstanding;

 

(xiii)        Indebtedness owed to banks and other financial institutions Incurred in the ordinary course of business of the Company and its Restricted Subsidiaries with such banks or financial institutions that arise in connection with ordinary banking arrangements to provide treasury services or to manage cash balances of the Company and its Restricted Subsidiaries;

 

(xiv)        guarantees to suppliers or licensors (other than guarantees of Indebtedness) in the ordinary course of business;

 

(xv)         Indebtedness of the Company or any Restricted Subsidiary to the extent that the Net Proceeds thereof are promptly deposited to defease the Notes in accordance with Article VIII;

 

  

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(xvi)        any Surplus Debentures issued by any Insurance Subsidiary to the Company or any of its Subsidiaries that remain outstanding on the Issue Date, and extensions, renewals or replacements thereof;

 

(xvii)       Permitted Transactions entered into by Insurance Subsidiaries or by the Company in connection with Investments permitted by clause (20) of the definition of “Permitted Investment”;

 

(xviii)       non-recourse Indebtedness of Insurance Subsidiaries incurred in the ordinary course of business (x) existing or arising under swap contracts entered into by Insurance Subsidiaries or (y) resulting from the sale or securitization of non-admitted assets, policy loans, CBOs and CMOs;

 

(xix)         (x) Indebtedness (including Surplus Debentures) owed by the Company or any Restricted Subsidiary (other than any Non-Guarantor Subsidiary) to the Company or any Subsidiary (other than any Non-Guarantor Subsidiary); and (y) Indebtedness of the Company owing to any Restricted Subsidiary that is a Non-Guarantor Subsidiary pursuant to the Tax Sharing Agreement;

 

(xx)          Indebtedness (x) owed by any Non-Guarantor Subsidiary to any other Non-Guarantor Subsidiary or (y) owed by any Non-Guarantor Subsidiary to the Company or any other Subsidiary; provided that the aggregate principal amount outstanding under this clause (xx) shall not exceed $30.0 million at any time; and

 

(xxi)         in addition to the items referred to in clauses (i) through (xx) above, Indebtedness of the Company and its Restricted Subsidiaries in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness Incurred pursuant to this clause (xxi) and then outstanding, will not exceed $100.0 million at any time outstanding.

 

(c)           For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness Incurred pursuant to and in compliance with, this Section 3.3:

 

(i)            in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in Section 3.3(b) or could be Incurred pursuant to Section 3.3(a), the Company, in its sole discretion, may divide and classify such item of Indebtedness (or any portion thereof) on the date of Incurrence and may later reclassify such item of Indebtedness (or any portion thereof) in any manner that complies with this Section 3.3 and only be required to include the amount and type of such Indebtedness once; provided that all Indebtedness outstanding on the Issue Date under the New Senior Secured Credit Agreement shall be deemed Incurred on the Issue Date under Section 3.3(b)(ii) and may not later be reclassified;

 

(ii)           Guarantees of, or obligations in respect of letters of credit or banker’s acceptances related thereto relating to, Indebtedness that is otherwise included in the determination of a particular amount of Indebtedness shall not be included;

 

  

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(iii)          if obligations in respect of letters of credit are Incurred pursuant to a Debt Facility and are being treated as Incurred pursuant to Section 3.3(b)(ii) and the letters of credit relate to other Indebtedness, then such other Indebtedness shall not be included;

 

(iv)          the principal amount of any Disqualified Stock of the Company or a Restricted Subsidiary, or Preferred Stock of a Restricted Subsidiary that is not a Subsidiary Guarantor, will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;

 

(v)           Indebtedness permitted by this Section 3.3 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 3.3 permitting such Indebtedness; and

 

(vi)          the amount of Indebtedness issued at a price that is less than the principal amount thereof shall be equal to the amount of the liability in respect thereof determined in accordance with GAAP.

 

Accrual of interest, accrual of dividends, the accretion of accreted value or the amortization of debt discount, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock shall not be deemed to be an Incurrence of Indebtedness for purposes of this Section 3.3.  The amount of any Indebtedness outstanding as of any date shall be (i) the accreted value thereof in the case of any Indebtedness issued with original issue discount or the aggregate principal amount outstanding in the case of Indebtedness issued with interest payable-in-kind, (ii) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness, (iii) in the case of the guarantee by a specified Person of Indebtedness of another Person, the maximum liability to which the specified Person may be subject upon the occurrence of the contingency giving rise to the obligation and (iv) in the case of Indebtedness of others guaranteed solely by means of a Lien on any asset or property of the Company or any Restricted Subsidiary (and not to their other assets or properties generally), the lesser of (x) the Fair Market Value of such asset or property on the date on which such Indebtedness is Incurred and (y) the amount of the Indebtedness so secured.

 

(d)           For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is Incurred to Refinance other Indebtedness denominated in a foreign currency, and such Refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being Refinanced plus the amount of any reasonable premium (including reasonable tender premiums), defeasance costs and any reasonable fees and expenses incurred in connection with the issuance of such new Indebtedness. Notwithstanding any other provision of this Section 3.3, the maximum amount of Indebtedness that the Company may Incur pursuant to this Section 3.3 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies. The principal amount of any Indebtedness Incurred to Refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being Refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such Refinancing.

 

  

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SECTION 3.4. Limitation on Restricted Payments.

 

(a)           Unless the Debt to Total Capitalization Ratio as of the last day of the Company’s most recently ended fiscal quarter for which internal financial statements are available that immediately precedes the date of any Restricted Payment, calculated immediately after giving effect to such Restricted Payment and any related transactions on a pro forma basis, is equal to or less than 17.5%, the Company shall not, and shall not permit any of its Restricted Subsidiaries, directly or indirectly, to:

 

(i)            declare or pay any dividend or make any distribution (whether made in cash, securities or other property) on or in respect of its Capital Stock (including any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) other than:

 

 (A)          dividends or distributions payable solely in Capital Stock of the Company (other than Disqualified Stock) or in options, warrants or other rights to purchase such Capital Stock of the Company; and

 

 (B)           dividends or distributions by a Restricted Subsidiary payable to the Company or another Restricted Subsidiary (and if such Restricted Subsidiary is not a Wholly Owned Subsidiary, to its other holders of common Capital Stock on a pro rata basis or on a basis that results in the receipt by the Company or a Restricted Subsidiary of dividends or distributions of a greater value than it would receive on a pro rata basis);

 

(ii)           purchase, redeem, retire or otherwise acquire for value any Capital Stock of the Company held by Persons other than the Company or a Restricted Subsidiary (other than in exchange for Capital Stock of the Company (other than Disqualified Stock)); provided, however, that, for the avoidance of doubt, the redemption price or repurchase price paid in cash in connection with (i) the Convertible Debentures Repurchase, (ii) any subsequent redemption or repurchase of the Existing Convertible Debentures and (iii) any redemption or repurchase of any Permitted Convertible Indebtedness issued following the Issue Date that ranks equally in right of payment with the Notes, in each case, will not constitute Restricted Payments;

 

  

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(iii)          make any principal payment on, or purchase, repurchase, redeem, defease or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Subordinated Obligations other than the purchase, repurchase, redemption, defeasance or other acquisition of such Subordinated Obligations in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of purchase, repurchase, redemption, defeasance or acquisition; or

 

(iv)          make any Restricted Investment (all such payments and other actions referred to in clauses (i) through (iv) (other than any exception thereto) shall be referred to as a “Restricted Payment”), unless, at the time of and after giving effect to such Restricted Payment:

 

(1)           no Default shall have occurred and be continuing (or would result therefrom);

 

(2)           immediately after giving effect to such transaction on a pro forma basis, (1) the Company could Incur $1.00 of additional Indebtedness under Section 3.3(a) hereof; and (2) the Aggregate RBC Ratio exceeds 225%;

 

(3)           the aggregate amount of such Restricted Payment and all other Restricted Payments declared or made subsequent to the Issue Date (excluding Restricted Payments made pursuant to clauses (i), (ii), (iii), (v), (vi), (vii), (viii), (ix), (x), (xii), (xiii), (xiv), (xv), (xvi), (xvii), (xviii) and (xix) of Section 3.4(b)) would not exceed the sum of, without duplication:

 

 (A)            50% of the Net Excess Cash Flow for the period (taken as one accounting period) from July 1, 2012 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the case such Net Excess Cash Flow for such period is a deficit, minus 100% of such deficit), plus

 

 (B)            100% of the aggregate Net Cash Proceeds and the Fair Market Value of marketable securities or other property received by the Company or a Restricted Subsidiary from the issue or sale of its Capital Stock (other than Disqualified Stock) or other capital contributions subsequent to the Issue Date, other than:

 

   (x)           Net Cash Proceeds received from an issuance or sale of such Capital Stock to a Subsidiary of the Company or to an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination; and

 

  

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  (y)           Net Cash Proceeds received by the Company from the issue and sale of its Capital Stock or capital contributions to the extent applied to redeem Notes pursuant to Section 5.1(b); plus

 

(C)             the amount by which Indebtedness of the Company and its Restricted Subsidiaries is reduced on the Company’s consolidated balance sheet upon the conversion or exchange subsequent to the Issue Date of any Indebtedness of the Company or its Restricted Subsidiaries for Capital Stock (other than Disqualified Stock) of the Company (less the amount of any cash, or the Fair Market Value of any other property, distributed by the Company upon such conversion or exchange); plus

 

(D)             100% of the Net Cash Proceeds and the Fair Market Value of property other than cash and marketable securities from the sale or other disposition (other than to the Company or a Restricted Subsidiary) of Restricted Investments made after the Issue Date and redemptions and repurchases of such Restricted Investments from the Company or its Restricted Subsidiaries and repayment of Restricted Investments in the form of loans or advances from the Company and its Restricted Subsidiaries and releases of Guarantees that constitute Restricted Investments by the Company and its Restricted Subsidiaries (other than in each case to the extent the Restricted Investment was made pursuant to Section 3.4(b)(xi)); plus

 

(E)             100% of the Net Cash Proceeds and the Fair Market Value of property other than cash and marketable securities received by the Company or its Restricted Subsidiaries from the sale (other than to the Company or a Restricted Subsidiary) of the stock of an Unrestricted Subsidiary (other than in each case to the extent the Investment in such Unrestricted Subsidiary was made by the Company or a Restricted Subsidiary pursuant to Section 3.4(b)(xi) or (xvi) or to the extent such Investment constituted a Permitted Investment); plus

 

(F)              to the extent that any Unrestricted Subsidiary of the Company designated as such after the Issue Date is redesignated as a Restricted Subsidiary or any Unrestricted Subsidiary of the Company merges into or consolidates with the Company or any of its Restricted Subsidiaries or any Unrestricted Subsidiary transfers, dividends or distributes assets to the Company or a Restricted Subsidiary, in each case after the Issue Date, the Fair Market Value of such Subsidiary as of the date of such redesignation or such merger or consolidation, or in the case of the transfer, dividend or distribution of assets of an Unrestricted Subsidiary to the Company or a Restricted Subsidiary, the Fair Market Value of such assets of the Unrestricted Subsidiary, as determined at the time of the redesignation of such Unrestricted Subsidiary as a Restricted Subsidiary or at the time of such merger, consolidation or transfer, dividend or distribution of assets (other than an Unrestricted Subsidiary to the extent the Investment in such Unrestricted Subsidiary was made by a Restricted Subsidiary pursuant to Section 3.4(b)(xi) or to the extent such Investment constituted a Permitted Investment).

 

  

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(b)           The provisions of Section 3.4(a) hereof shall not prohibit

 

(i)            any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Capital Stock, Disqualified Stock or Subordinated Obligations or any Restricted Investment made in exchange for, or out of the proceeds of the substantially concurrent sale of, Capital Stock of the Company (other than (x) Disqualified Stock and (y) Capital Stock issued or sold to a Subsidiary or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or Guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination); provided, however, that the Net Cash Proceeds from such sale of Capital Stock shall be excluded from Section 3.4(a)(iv)(3)(B);

 

(ii)           any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Subordinated Obligations made by exchange for, or out of the proceeds of the substantially concurrent Incurrence of Refinancing Indebtedness;

 

(iii)          any purchase, repurchase, redemption, defeasance or other acquisition or retirement of Disqualified Stock of the Company or a Restricted Subsidiary made by exchange for or out of the proceeds of the substantially concurrent sale of Disqualified Stock of the Company or such Restricted Subsidiary, as the case may be, that, so long as such refinancing Disqualified Stock is permitted to be Incurred pursuant to Section 3.3;

 

(iv)          dividends paid within 90 days after the date of declaration if at such date of declaration such dividend would have complied with this provision;

 

(v)           the purchase, repurchase, redemption or other acquisition (including by cancellation of indebtedness), cancellation or retirement for value of Capital Stock, or options, warrants, equity appreciation rights or other rights to purchase or acquire Capital Stock, of the Company held by any existing or former employees, management or directors of or consultants to the Company or any Subsidiary of the Company or their assigns, estates or heirs, in each case in connection with the repurchase provisions under employee stock option or stock purchase agreements or other compensatory agreements approved by the Board of Directors of the Company; provided that such purchases, repurchases, redemptions, acquisitions, cancellations or retirements pursuant to this clause shall not exceed $5.0 million in the aggregate during any calendar year, although such amount in any calendar year (with any unused amounts in any year being available in succeeding years) may be increased by an amount not to exceed:

 

  

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(A)         the Net Cash Proceeds from the sale of Capital Stock (other than Disqualified Stock) of the Company to existing or former employees or members of management of the Company or any of its Subsidiaries that occurs after the Issue Date, to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments (provided that the Net Cash Proceeds from such sales or contributions shall be excluded from Section 3.4(a)(iv)(3)(B)); plus

 

(B)          the cash proceeds of key man life insurance policies received by the Company or its Restricted Subsidiaries after the Issue Date relating to the Company’s or such Restricted Subsidiaries’ key persons who are so insured; less

 

(C)          the amount of any Restricted Payments previously made with the cash proceeds described in the clauses (A) and (B) of this clause (v);

 

(vi)          the accrual, declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company issued in accordance with the terms of this Indenture;

 

(vii)         repurchases or other acquisitions of Capital Stock deemed to occur (i) upon the exercise of stock options, warrants, restricted stock units or other rights to purchase Capital Stock or other convertible securities if such Capital Stock represents a portion of the exercise price thereof or conversion price thereof or (ii) in connection with withholdings or similar taxes payable by any future, present or former employee, director or officer;

 

(viii)        the purchase, repurchase, redemption, defeasance or other acquisition or retirement for value of any Subordinated Obligations at a purchase price not greater than 101% of the principal amount of (plus accrued and unpaid interest on) such Subordinated Obligation in the event of a Change of Control in accordance with provisions similar to Section 3.9; provided that, prior to or simultaneously with such purchase, repurchase, redemption, defeasance or other acquisition or retirement, the Company has made a Change of Control Offer under this Indenture and has completed the repurchase or redemption of all Notes validly tendered for payment in connection with such Change of Control Offer under this Indenture;

 

(ix)           cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of the Company or other exchanges of securities of the Company or a Restricted Subsidiary in exchange for Capital Stock of the Company;

 

(x)            the purchase, repurchase, redemption, acquisition or retirement of Subordinated Obligations with Unutilized Excess Proceeds remaining after an Asset Disposition Offer pursuant to Section 3.7;

 

(xi)           other Restricted Payments not to exceed $175.0 million in the aggregate since the Issue Date;

 

  

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(xii)          the purchase of fractional shares of Capital Stock of the Company arising out of stock dividends, splits or combinations or mergers, consolidations or other acquisitions;

 

(xiii)         in connection with any acquisition by the Company or any of its Subsidiaries, the receipt or acceptance of the return to the Company or any of its Restricted Subsidiaries of Capital Stock of the Company constituting a portion of the purchase price consideration in settlement of indemnification claims or as a result of a purchase price adjustment (including earn outs or similar obligations);

 

(xiv)        the distribution of rights pursuant to any shareholder rights plan or the redemption of such for nominal consideration in accordance with the terms of any shareholder rights plan;

 

(xv)         payments or distributions to stockholders pursuant to appraisal rights required under applicable law in connection with any merger, consolidation or other acquisition by the Company or any Restricted Subsidiary;

 

(xvi)        the distribution or transfer, as a dividend, Investment or otherwise, of shares of Capital Stock of Unrestricted Subsidiaries;

 

(xvii)       the making of cash payments in connection with any conversion of Permitted Convertible Indebtedness in an aggregate amount since the date of the indenture therefor not to exceed the sum of (a) the principal amount of such Permitted Convertible Indebtedness plus (b) any payments received by the Company or any Restricted Subsidiaries pursuant to the exercise, settlement or termination of any related Permitted Bond Hedge;

 

(xviii)      any payments in connection with (including, without limitation, the purchase of) a Permitted Bond Hedge and the settlement of any related Permitted Warrant (a) by delivery of shares of the Company’s Common Stock upon net share settlement of such Permitted Warrant or (b) by (i) set-off of such Permitted Warrant against the related Permitted Bond Hedge and (ii) payment of an amount due upon termination of such Permitted Warrant in Common Stock or using cash received upon the exercise, settlement or termination of a Permitted Bond Hedge upon any early termination thereof; and

 

(xix)         the declaration and payment of dividends on the Company’s Common Stock in an amount up to $30.0 million in the aggregate during any calendar year;

 

provided, however, that at the time of and after giving effect to any Restricted Payment permitted under clauses (x), (xi) and (xv), no Default shall have occurred and be continuing or would occur as a consequence thereof.

 

(c)           The amount of all Restricted Payments (other than cash) shall be the Fair Market Value on the date of such Restricted Payment of the assets or securities proposed to be paid, transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment. The fair market value of any cash Restricted Payment shall be its face amount and any non-cash Restricted Payment shall be determined conclusively in Good Faith by the Company.

 

  

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For purposes of determining compliance with this Section 3.4, in the event that a proposed Restricted Payment (or portion thereof) meets the criteria of more than one of the categories of Restricted Payments described in clauses (i) through (xix) of Section 3.4(b), or is entitled to be made pursuant to Section 3.4(a), the Company shall be entitled to divide and classify such Restricted Payment (or portion thereof) on the date of its payment in any manner that complies with this Section 3.4.

 

If the Company or any Restricted Subsidiary makes a Restricted Investment or a Permitted Investment and the Person in which such Investment was made subsequently becomes a Restricted Subsidiary, to the extent such Investment resulted in a reduction of the amounts calculated under Section 3.4(a) or any other provision of this Section 3.4 or the definition of Permitted Investment (which was not subsequently reversed), then such amount shall be increased by the amount of such reduction to the extent of the lesser of (x) the amount of such Investment and (y) the Fair Market Value of such Investment at the time such Person becomes a Restricted Subsidiary.

 

(d)           The Company shall not permit any Unrestricted Subsidiary to become a Restricted Subsidiary except pursuant to the last sentence of the definition of “Unrestricted Subsidiary”. For purposes of designating any Restricted Subsidiary as an Unrestricted Subsidiary, all outstanding Investments by the Company and its Restricted Subsidiaries (except to the extent repaid) in the Subsidiary so designated shall be deemed to be Restricted Payments in an amount determined as set forth in the definition of “Investment”. Such designation shall be permitted only if a Restricted Payment in such amount would be permitted at such time and if such Subsidiary otherwise meets the definition of an Unrestricted Subsidiary.

 

SECTION 3.5. Limitation on Liens.  The Company shall not, and shall not permit any of its Restricted Subsidiaries to create, incur or assume any Lien (other than Permitted Liens) that secures any Indebtedness on any asset or property of the Company or such Restricted Subsidiary, other than Liens securing Indebtedness that are expressly junior in priority to the Liens on such property or assets securing the Notes pursuant to a Permitted Junior Lien Intercreditor Agreement. Additionally, the Company will not, and will not permit any of its Restricted Subsidiaries to incur or suffer to exist any Lien (the “Initial Lien”) on any Excluded Property to secure any Pari Passu Lien Indebtedness, unless the Company or such Restricted Subsidiary concurrently grants a Lien to the Collateral Agent to secure the Notes ranking pari passu with such Lien securing such Pari Passu Lien Indebtedness; provided however, that any such Lien on Excluded Property created to secure the Notes pursuant to this sentence shall provide by its terms that upon the release and discharge of the Initial Lien on such Excluded Property by the collateral agent for the Pari Passu Lien Indebtedness secured by such Initial Lien, the Lien on such Excluded Property securing the Notes shall be automatically and unconditionally released and discharged and the Company may take any action necessary to memorialize such release or discharge.

 

  

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SECTION 3.6. Limitation on Restrictions on Distributions from Restricted Subsidiaries.

 

(a)           The Company shall not, and shall not permit any Restricted Subsidiary to create or otherwise cause or permit to exist any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

 

(i)            (A) pay dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or

 

(B)           pay any Indebtedness or other obligations owed to the Company or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);

 

(ii)            make any loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or

 

(iii)          sell, lease or transfer any of its property or assets to the Company or any Restricted Subsidiary (it being understood that such transfers shall not include any type of transfer described in clause (i) or (ii) of this Section 3.6(a)).

 

(b)           The restrictions in Section 3.6(a) shall not prohibit encumbrances or restrictions existing under or by reason of:

 

(i)            any encumbrance or restriction pursuant to an agreement in effect at or entered into on the Issue Date, including, without limitation, this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement and the New Senior Secured Credit Agreement (and related documentation) in effect on such date;

 

(ii)           any encumbrance or restriction with respect to a Person or assets pursuant to an agreement in effect on or before the date on which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or a Restricted Subsidiary (other than Capital Stock or Indebtedness Incurred as consideration in, or to provide all or any portion of the funds or credit support utilized to consummate, the transaction or series of related transactions pursuant to which such Person became a Restricted Subsidiary or was acquired by, merged into or consolidated with the Company or in contemplation of the transaction) or such assets were acquired by the Company or any Restricted Subsidiary; provided, that any such encumbrance or restriction shall not extend to any Person or the assets or property of the Company or any other Restricted Subsidiary other than the Person and its Subsidiaries or the assets and property so acquired and that, in the case of Indebtedness, was permitted to be Incurred pursuant to this Indenture;

 

  

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(iii)          any encumbrance or restriction pursuant to an agreement effecting a Refinancing of Indebtedness Incurred pursuant to an agreement referred to in clause (i) or (ii) of this Section 3.6(b) or this clause (iii) or contained in any amendment, restatement, modification, renewal, supplement, refunding, replacement or Refinancing of an agreement referred to in clause (i) or (ii) of this Section 3.6(b) or this clause (iii); provided, however, that the encumbrances and restrictions with respect to such Restricted Subsidiary contained in any such agreement are no less favorable (as determined in Good Faith by the Company) in any material respect, taken as a whole, to the Holders of the Notes than the encumbrances and restrictions contained in such agreements referred to in clause (i) or (ii) of this Section 3.6(b) on the Issue Date or the date such Restricted Subsidiary became a Restricted Subsidiary or was merged into or consolidated with a Restricted Subsidiary, whichever is applicable;

 

(iv)          in the case of Section 3.6(a)(iii), encumbrances or restrictions arising in connection with Liens permitted to be Incurred under the provisions of Section 3.5 that apply only to the assets subject to such Liens;

 

(v)           Purchase Money Indebtedness permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in Section 3.6(a)(iii) on the property so acquired;

 

(vi)          contracts for the sale of assets, including customary restrictions with respect to a Subsidiary of the Company pursuant to an agreement that has been entered into for the sale or disposition of all or a portion of the Capital Stock or assets of such Subsidiary;

 

(vii)         restrictions on cash or other deposits or net worth imposed by customers or lessors or required by insurance, surety or bonding companies under contracts entered into in the ordinary course of business;

 

(viii)        any customary provisions in leases, subleases or licenses and other agreements entered into by the Company or any Restricted Subsidiary in the ordinary course of business;

 

(ix)           encumbrances or restrictions arising or existing by reason of applicable law or any applicable rule, regulation, order, permit or grant, including for the avoidance of doubt, any encumbrance or restriction on any Insurance Subsidiary by any governmental authority having the power to regulate such Insurance Subsidiary;

 

(x)            encumbrances or restrictions contained in or arising under indentures or debt instruments or other debt arrangements Incurred or Preferred Stock issued by Subsidiary Guarantors in accordance with Section 3.3 that are not more restrictive, taken as a whole (as determined in Good Faith by the Company), than those applicable to the Company in this Indenture and the New Senior Secured Credit Agreement on the Issue Date (which results in encumbrances or restrictions comparable to those applicable to the Company at a Restricted Subsidiary level);

 

  

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(xi)           encumbrances or restrictions contained in or arising under indentures or other debt instruments or debt arrangements Incurred or Preferred Stock issued by Restricted Subsidiaries that are not Subsidiary Guarantors subsequent to the Issue Date pursuant to clauses (ii), (v), (vi), (vii) and (xiv) of Section 3.3(b) by Restricted Subsidiaries, provided that such encumbrances and restrictions contained in any agreement or instrument shall not materially affect the Company’s ability to make anticipated principal or interest payments on the Notes (as determined in Good Faith by the Company);

 

(xii)          under any contract, instrument or agreement relating to Indebtedness of any Foreign Subsidiary which imposes restrictions solely on such Foreign Subsidiary and its Subsidiaries;

 

(xiii)         customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business; and

 

(xiv)         customary provisions contained in leases, licenses and other similar agreements entered into in the ordinary course of business.

 

SECTION 3.7. Limitation on Sales of Assets and Subsidiary Stock.

 

(a)           The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any Asset Disposition following the Issue Date unless:

 

(i)             the Company or such Restricted Subsidiary, as the case may be, receives consideration at least equal to the Fair Market Value (such Fair Market Value to be determined as of the date of contractually agreeing to such Asset Disposition) of the assets subject to such Asset Disposition; and

 

(ii)           at least 75% of the consideration from such Asset Disposition received by the Company or such Restricted Subsidiary, as the case may be, is in the form of cash or Cash Equivalents.

 

The Company shall determine the Fair Market Value of any consideration from such Asset Disposition that is not cash or Cash Equivalents.

 

(b)           Any Net Available Cash received by the Company or any Restricted Subsidiary from any Asset Disposition shall be applied at the Company’s election:

 

(x)           in the case of any Asset Disposition by a Non-Guarantor Subsidiary or consisting of Capital Stock of a Non-Guarantor Subsidiary, to repay Indebtedness of a Non-Guarantor Subsidiary,

 

  

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(y)           to reinvest in or acquire assets (including Capital Stock or other securities purchased in connection with the acquisition of Capital Stock or property of another Person that is or becomes a Restricted Subsidiary of the Company or that would constitute a Permitted Investment under clause (2) of the definition thereof) used or useful in a Related Business (including, in the case of Asset Dispositions by an Insurance Subsidiary, securities or other investment assets of the type purchased by such Insurance Subsidiary in the ordinary course of business); provided that to the extent the assets subject to such Asset Disposition were Collateral, such newly acquired assets shall also be Collateral, or

 

(z)            to repay, prepay, purchase, redeem or otherwise acquire Pari Passu Lien Indebtedness under the New Senior Secured Credit Agreement (and, if the Pari Passu Lien Indebtedness so repaid, prepaid, purchased, redeemed or acquired, is under a revolving credit facility, effect a permanent reduction in the availability thereunder in an amount equal to the aggregate principal amount of Pari Passu Lien Indebtedness under such revolving credit facility so repaid, prepaid, purchased, redeemed or acquired).

 

(c)           All Net Available Cash that is not applied or invested (or committed pursuant to a written agreement to be applied or invested) as provided in subclause (x), (y) or (z) of the preceding paragraph within 365 days after receipt (or in the case of any amount committed to be so applied or reinvested, which are not actually so applied or reinvested within 180 days following such 365 day period) will be deemed to constitute “Excess Proceeds”. When the aggregate amount of Excess Proceeds exceeds $50.0 million, the Company will be required to make an offer (“Asset Disposition Offer”) to all Holders in an amount equal to the Notes First Lien Percentage (determined with respect to any Net Available Cash from any Asset Disposition included in such Excess Proceeds at the time of such Asset Disposition) of such Excess Proceeds to purchase the maximum principal amount of the Notes (on a pro rata basis) that may be purchased out of the Note First Lien Percentage of such Excess Proceeds, at an offer price in cash equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the date of purchase (subject to the rights of Holders of record on any Record Date to receive payments of interest on the related Interest Payment Date), in accordance with the procedures set forth in this Indenture in integral multiples of $1,000 (except that no Note will be purchased in part if the remaining principal amount would be less than $2,000). To the extent that the aggregate amount of Notes so validly tendered and not properly withdrawn pursuant to an Asset Disposition Offer is less than the Notes First Lien Percentage of such Excess Proceeds, the Company may use any remaining portion of such Excess Proceeds that is not applied to purchase Notes (“Unutilized Excess Proceeds”) for general corporate purposes, the repayment of Indebtedness or as otherwise required pursuant to its other contractual requirements, subject to the terms of this Indenture. If the aggregate principal amount of Notes surrendered by Holders exceeds the Notes First Lien Percentage of such Excess Proceeds, the Notes to be purchased shall be selected by the Company on a pro rata basis on the basis (except that no Note will be purchased in part if the remaining principal amount would be less than $2,000) of the aggregate principal amount of tendered Notes. Upon completion of such Asset Disposition Offer, the amount of Excess Proceeds shall be reset at zero. For the avoidance of doubt, the Company shall be permitted to apply Net Available Cash from any Asset Disposition (other than the Notes First Lien Percentage thereof) to repay, prepay redeem, purchase or otherwise acquire Pari Passu Lien Indebtedness at any time; provided that any such Pari Passu Lien Indebtedness shall be cancelled by the Company and deemed no longer outstanding; provided, further, that if the Pari Passu Lien Indebtedness so repaid, prepaid, purchased, redeemed or acquired, is under a revolving credit facility, the Company shall effect a permanent reduction in the availability thereunder in an amount equal to the aggregate principal amount of Pari Passu Lien Indebtedness under such revolving credit facility so repaid, prepaid, purchased, redeemed or acquired.

 

  

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(d)           The Asset Disposition Offer shall remain open for a period of 20 Business Days following its commencement, except to the extent that a longer period is required by applicable law (the “Asset Disposition Offer Period”). No later than five Business Days after the termination of the Asset Disposition Offer Period (the “Asset Disposition Purchase Date”), the Company shall purchase the principal amount of Notes required to be purchased pursuant to this Section 3.7 (the “Asset Disposition Offer Amount”) or, if less than the Asset Disposition Offer Amount has been so validly tendered and not properly withdrawn, all Notes validly tendered in response to the Asset Disposition Offer.

 

(i)            On or before the Asset Disposition Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Asset Disposition Offer Amount of Notes or portions of Notes validly tendered and not properly withdrawn pursuant to the Asset Disposition Offer, or if less than the Asset Disposition Offer Amount has been validly tendered and not properly withdrawn, all Notes validly tendered and not properly withdrawn, in each case in minimum denominations of $1,000 (except that no Note shall be purchased in part if the remaining principal amount would be less than $2,000). The Company or the Paying Agent, as the case may be, shall promptly (but in any case not later than five Business Days after termination of the Asset Disposition Offer Period) mail or deliver to each tendering Holder of Notes an amount equal to the purchase price of the Notes validly tendered and not properly withdrawn by such holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon receipt of an Authentication Order, shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered; provided that each such new Note shall be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess thereof. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof.

 

(e)           For the purposes of this Section 3.7, the following are deemed to be Cash Equivalents: (x) any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the Notes thereto) of the Company or any Restricted Subsidiary of the Company (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets (including, without limitation, liabilities relating to insurance products); (y) any Notes or other obligations or other securities or assets received by the Company or such Restricted Subsidiary of the Company from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received); and (z) any Designated Non-cash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Dispositions having an aggregate Fair Market Value (determined in Good Faith by the Company), taken together with all other Designated Non-cash Consideration received pursuant to this clause (z) that is at that time outstanding, not to exceed $25.0 million at the time of the receipt of such Designated Non-cash Consideration (with the Fair Market Value of each item of Designated Non-cash Consideration being measured at the time received and without giving effect to subsequent changes in value).

 

  

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(f)            The Company shall comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Section 3.7.  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 3.7, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 3.7.

 

(g)           Pending the final application of any such Net Available Cash, the Company or its Restricted Subsidiaries may temporarily reduce revolving indebtedness under any Debt Facility or otherwise invest such Net Available Cash in Cash Equivalents.

 

SECTION 3.8. Limitation on Affiliate Transactions.

 

(a)           The Company shall not, and shall not permit any of its Restricted Subsidiaries to enter into or conduct any transaction (including the purchase, sale, lease or exchange of any property or the rendering of any service) with any Affiliate of the Company (an “Affiliate Transaction”) unless:

 

(i)             the terms of such Affiliate Transaction, when viewed together with any related Affiliate Transactions, are not materially less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could have been obtained in a comparable transaction at the time of such transaction in arm’s-length dealings with a Person who is not an Affiliate;

 

(ii)            in the event such Affiliate Transaction involves an aggregate consideration in excess of $15.0 million, the terms of such transaction have been approved by a majority of the disinterested members of the Board of Directors of the Company (and such majority determines that such Affiliate Transaction satisfies the criteria in clause (i) above); and

 

(iii)           in the event such Affiliate Transaction involves an aggregate consideration in excess of $25.0 million, the Company has received an opinion from an Independent Financial Advisor that such Affiliate Transaction is fair, from a financial point of view, to the Company and the Restricted Subsidiaries, as applicable, or not materially less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate.

 

(b)           The provisions of Section 3.8(a) shall not apply to:

 

(i)            any (x) Restricted Payment permitted to be made pursuant to Section 3.4 and (y) Permitted Investment in any Person that is an Affiliate of the Company solely as a result of ownership of Investments in such Person by the Company or any Restricted Subsidiary;

 

  

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(ii)           any issuance of securities, or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements and other compensation arrangements, options to purchase Capital Stock of the Company pursuant to restricted stock plans, long-term incentive plans, stock appreciation rights plans, participation plans or similar employee benefits plans, pension plans or similar plans or agreements or arrangements approved by the Board of Directors of the Company;

 

(iii)           loans or advances to employees, officers or directors of the Company or any Subsidiary of the Company in the ordinary course of business, in an aggregate amount outstanding at any time not in excess of $5.0 million (without giving effect to the forgiveness of any such loan);

 

(iv)          any transaction between or among the Company and any Restricted Subsidiary or between or among Restricted Subsidiaries, and any Guarantees issued by the Company or a Restricted Subsidiary for the benefit of the Company or a Restricted Subsidiary;

 

(v)           the payment of reasonable and customary compensation (including fees, benefits, severance, change of control payments and incentive arrangements) to, and employee benefit arrangements, including, without limitation, split-dollar insurance policies, and indemnity or similar arrangements provided on behalf of, directors, officers, employees and agents of the Company or any Subsidiary, whether by charter, bylaw, statutory or contractual provisions;

 

(vi)          the existence of, and the performance of obligations of the Company or any of its Restricted Subsidiaries under the terms of any agreement to which the Company or any of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements may be amended, modified, supplemented, extended or renewed from time to time; provided, however, that any future amendment, modification, supplement, extension or renewal entered into after the Issue Date shall be permitted to the extent that its terms, taken as a whole, are not more disadvantageous to the Holders of the Notes in any material respect, as determined in Good Faith by the Company, than the terms of the agreements in effect on the Issue Date;

 

(vii)         any agreement between any Person and an Affiliate of such Person existing at the time such Person is acquired by or merged with or into or consolidated with the Company or a Restricted Subsidiary; provided that such agreement was not entered into in contemplation of such acquisition, merger or consolidation, or any amendment thereto (so long as any such amendment is not disadvantageous in any material respect to the Holders, as determined in Good Faith by the Company, when taken as a whole as compared to the applicable agreement as in effect on the date of such acquisition or merger);

 

  

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(viii)        insurance transactions, intercompany pooling and other reinsurance transactions entered into in the ordinary course of business and consistent with past practice;

 

(ix)           any purchases by the Company’s Affiliates of Indebtedness of the Company or any of its Restricted Subsidiaries the majority of which Indebtedness is placed with Persons who are not Affiliates;

 

(x)            arrangements for indemnification payments for directors and officers of the Company and its Subsidiaries;

 

(xi)           any issuance or sale of Capital Stock (other than Disqualified Stock) to Affiliates of the Company and the granting of registration and other customary rights in connection therewith or any contribution to the Capital Stock of the Company or any Restricted Subsidiary;

 

(xii)          transactions in which the Company or any Restricted Subsidiary, as the case may be, delivers to the Trustee a letter from an Independent Financial Advisor stating that such transaction is fair to the Company or such Restricted Subsidiary from a financial point of view or stating that the terms are not materially less favorable than those that might reasonably have been obtained by the Company or such Restricted Subsidiary in a comparable transaction at such time on an arms’ length basis from a Person that is not an Affiliate; and

 

(xiii)         the Transactions and the payment of all fees and expenses related to the Transactions, including without limitation the Convertible Debentures Repurchase, in each case as contemplated in the Offering Circular.

 

SECTION 3.9. Change of Control.

 

(a)           If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Notes as described under Section 5.1, each Holder shall have the right to require the Company to repurchase all or any part (in integral multiples of $1,000 except that no Note may be tendered in part if the remaining principal amount would be less than $2,000) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

(b)           Within 30 days following any Change of Control, except to the extent the Company has exercised its right to redeem all of the Notes under Section 5.1, the Company shall mail a notice (the “Change of Control Offer”) to each Holder or otherwise give notice in accordance with the applicable procedures of DTC, with a copy to the Trustee, stating:

 

(i)             that a Change of Control Offer is being made and that all Notes properly tendered pursuant to such Change of Control Offer will be accepted for purchase by the Company at a purchase price in cash equal to 101% of the principal amount of such Notes plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on a Record Date to receive interest on the relevant Interest Payment Date) (the “Change of Control Payment”);

 

  

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(ii)            the repurchase date (which shall be no earlier than 30 days nor later than 60 days from the date such notice is mailed or otherwise delivered in accordance with the applicable procedures of DTC) (the “Change of Control Payment Date”);

 

(iii)           the procedures determined by the Company, consistent with this Indenture, that a Holder must follow in order to have its Notes repurchased;

 

(iv)          that any Notes not tendered will continue to accrue interest in accordance with the terms of this Indenture;

 

(v)           that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;

 

(vi)          that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes delivered for purchase and a statement that such Holder is unconditionally withdrawing its election to have such Notes purchased; and

 

(vii)         that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

 

(c)            On the Change of Control Payment Date, the Company shall, to the extent lawful:

 

(i)            accept for payment all Notes or portions of Notes (in principal amounts of $2,000 or larger integral multiples of $1,000 in excess thereof) properly tendered pursuant to the Change of Control Offer;

 

(ii)           deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes validly tendered; and

 

(iii)          deliver or cause to be delivered to the Trustee for cancellation the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

 

  

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(d)           The Paying Agent shall promptly submit electronically or mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and upon receipt of an Authentication Order the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note (it being understood that, notwithstanding anything in this Indenture to the contrary, no Opinion of Counsel or Officers’ Certificate will be required for the Trustee to authenticate or deliver such new Note) equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a minimum principal amount of $2,000 or integral multiples of $1,000 in excess thereof.

 

(e)           The Change of Control provisions described above shall be applicable whether or not any other provisions of this Indenture are applicable.

 

(f)           The Company shall not be required to make a Change of Control Offer following a Change of Control if (i) a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer or (ii) a notice of redemption for all of the outstanding Notes has been given pursuant to this Indenture unless and until there is a default in payment of the applicable redemption price, plus accrued and unpaid interest to, but excluding, the proposed Redemption Date. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making the Change of Control Offer.

 

(g)           The Company shall comply, to the extent applicable, with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws or regulations thereunder in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in this Indenture by virtue of the conflict.

 

SECTION 3.10. Future Subsidiary Guarantors.

 

(a)           The Company shall cause (i) each Wholly Owned Subsidiary (other than any Foreign Subsidiary, any Insurance Subsidiary or any Subsidiary of an Insurance Subsidiary) that is formed or acquired following the Issue Date and (ii) any other Subsidiary that Incurs Indebtedness in reliance on Section 3.3(b)(ii) to execute and deliver to the Trustee a supplemental indenture to this Indenture, substantially in the form of Exhibit E hereto, pursuant to which such Restricted Subsidiary shall fully and unconditionally Guarantee, on a joint and several basis, the full and prompt payment of the principal of, premium, if any, and interest in respect of the Notes on a senior secured basis (to the extent provided in the Collateral Documents) and all other obligations under this Indenture, on the terms set forth in Article X; provided that any Wholly Owned Subsidiary that constitutes an Immaterial Subsidiary need not become a Subsidiary Guarantor until 10 Business Days after the date on which financial statements are required to be delivered under this Indenture for the fiscal quarter in which it ceases to be an Immaterial Subsidiary.

 

  

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(b)           Each Restricted Subsidiary that becomes a Subsidiary Guarantor on or after the Issue Date shall also become a party to the Security Agreement and the other applicable Collateral Documents and, to the extent required by the Security Agreement, shall as promptly as practicable execute and deliver such security instruments, financing statements and certificates as may be necessary to vest in the Collateral Agent a perfected first priority security interest on a pari passu basis with the Liens securing any Pari Passu Lien Indebtedness (subject to Permitted Liens) in properties and assets that constitute Collateral as security for the Notes or the Subsidiary Guarantees and as may be necessary to have such property or asset added to the applicable Collateral as required under the Collateral Documents and this Indenture, and thereupon all provisions of this Indenture relating to the Collateral shall be deemed to relate to such properties and assets to the same extent and with the same force and effect.

 

SECTION 3.11. Limitation on Lines of Business.  The Company shall not, and shall not permit any Restricted Subsidiary to, engage in any business other than a Related Business.

 

SECTION 3.12. Effectiveness of Covenants.

 

(a)           After the Issue Date, following the first day: (i) the Notes have an Investment Grade Rating from both of the Ratings Agencies; and (ii) no Default has occurred and is continuing under this Indenture; the Company and its Restricted Subsidiaries shall not be subject to Sections 3.3, 3.4, 3.6, 3.7, 3.8, 3.10 and 4.1(a)(iv) (collectively, the “Suspended Covenants”).  Additionally, upon the commencement of a Suspension Period (as defined below), the amount of Excess Proceeds will be reset to zero.

 

(b)           If at any time the Notes’ credit rating is downgraded from an Investment Grade Rating by any Rating Agency, then the Suspended Covenants shall thereafter be reinstated as if such covenants had never been suspended (the “Reinstatement Date”) and be applicable pursuant to the terms of this Indenture (including in connection with performing any calculation or assessment to determine compliance with the terms of this Indenture), unless and until the Notes subsequently attain an Investment Grade Rating and no Default or Event of Default is in existence (in which event the Suspended Covenants shall no longer be in effect for such time that the Notes maintain an Investment Grade Rating); provided, however, that no Default, Event of Default or breach of any kind shall be deemed to exist or have occurred under this Indenture, the Notes, the Subsidiary Guarantees or any of the Collateral Documents with respect to the Suspended Covenants based on, and none of the Company or any of its Subsidiaries shall bear any liability for, any actions taken or events occurring during the Suspension Period (as defined below), or any actions taken at any time pursuant to any contractual obligation arising prior to the Reinstatement Date, regardless of whether such actions or events would have been permitted if the applicable Suspended Covenants remained in effect during such period. The period of time between the date of suspension of the covenants and the Reinstatement Date is referred to as the “Suspension Period”.

 

  

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(c)           On the Reinstatement Date, all Indebtedness Incurred during the Suspension Period shall be deemed to have been outstanding on the Issue Date, so that it is classified as permitted under Section 3.3(b)(v).  Calculations made after the Reinstatement Date of the amount available to be made as Restricted Payments under Section 3.4 shall be made as though Section 3.4 had been in effect since the Issue Date and throughout the Suspension Period.  Accordingly, Restricted Payments made during the Suspension Period shall reduce the amount available to be made as Restricted Payments under Section 3.4(a) to the extent such Restricted Payments were not otherwise permitted to be made pursuant to Section 3.4(b)(i) through (xix); provided that the amount available to be made as Restricted Payments on the Reinstatement Date pursuant to the first paragraph shall not be reduced below zero solely as a result of such Restricted Payments made during a Suspension Period.

 

(d)           During any period when the Suspended Covenants are suspended, the Board of Directors of the Company may not designate any of the Company’s Subsidiaries as Unrestricted Subsidiaries pursuant to this Indenture.

 

(e)           The Company shall deliver to the Trustee an Officers’ Certificate notifying the Trustee of any Reinstatement Date or the commencement of any Suspension Period and certifying that such suspension or reinstatement complied with the foregoing provisions, and in no event shall the Trustee be charged with the knowledge of such Suspension Period or Reinstatement Date, except to the extent that a Trust Officer has received such Officers’ Certificate. In the case of a Suspension Period such notice shall list the Suspended Covenants.

 

SECTION 3.13. Compliance Certificate.  The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company (commencing with the fiscal year ending December 31, 2012) an Officers’ Certificate stating whether or not the signers know of any Default or Event of Default that occurred during such period.  If they do, the certificate shall describe the Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.

 

SECTION 3.14. Statement by Officers as to Default.  The Company shall deliver to the Trustee, within 30 days after the knowledge thereof if such event is still continuing, written notice in the form of an Officers’ Certificate of any Event of Default or any event which, with notice or the lapse of time or both, would constitute an Event of Default under Section 6.1(a)(i), (ii), (iii), (iv), (v), (vi), (ix), (x) or (xi), which shall include their status and what action the Company is taking or proposing to take in respect thereof.

 

ARTICLE IV

 

Successor Company and Successor Guarantor

 

SECTION 4.1. When Company May Merge or Otherwise Dispose of Assets.

 

(a)           The Company shall not consolidate with or merge with or into (whether or not the Company is the surviving corporation), or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries, taken as a whole, in one or more related transactions, to, any Person unless:

 

(i)            if other than the Company, the resulting, surviving or transferee Person (the “Successor Company”) shall be a corporation, partnership or limited liability company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia or any territory thereof;

 

  

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(ii)           the Successor Company (if other than the Company) and, in the case of a Successor Company that is not a corporation, a corporate co-issuer, assume pursuant to a supplemental indenture or other documentation instruments, executed and delivered to the Trustee, all of the obligations of the Company under the Notes, this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreement and, to the extent required by and subject to the limitations set forth in the Security Agreement, will cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Company, together with such financing statements or comparable documents to the extent required by and subject to the limitations set forth in the Security Agreement, as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions;

 

(iii)           immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Company, the Successor Company or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Company, the Successor Company or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing;

 

(iv)          immediately after giving pro forma effect to such transaction and any related financing transactions, as if such transactions had occurred at the beginning of the applicable four-quarter period;

 

(A)          the Company or the Successor Company, as applicable, would be able to Incur at least $1.00 of additional Indebtedness pursuant to Section 3.3(a); or

 

(B)          the Fixed Charge Coverage Ratio for the Successor Company and its Restricted Subsidiaries would be greater than the Fixed Charge Coverage Ratio immediately prior to such transaction;

 

(v)           if the Successor Company is not the Company, each Subsidiary Guarantor (unless it is the other party to the transactions above, in which case clause (i) of Section 4.1(b) shall apply) shall have by supplemental indenture confirmed that its Subsidiary Guarantee shall apply to such Person’s obligations in respect of this Indenture and the Notes and its obligations under the Collateral Documents and the Intercreditor Agreement shall continue to be in effect and, to the extent required by and subject to the limitations set forth in the Security Agreement, shall cause such amendments, supplements or other instruments to be executed, filed, and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by such Subsidiary Guarantor, together with such financing statements or comparable documents to the extent required by and subject to the limitations set forth in the Security Agreement, as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions; and

 

  

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(vi)          the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Section 4.1 and, if any supplement to any Collateral Document is required in connection with such transaction, such supplement shall comply with the applicable provisions of this Indenture.

 

(b)           Without compliance with Sections 4.1(a)(iii) and (iv):

 

(i)            any Restricted Subsidiary may consolidate with, merge with or into or to the Company or a Subsidiary Guarantor so long as no Capital Stock of the Restricted Subsidiary is distributed to any Person other than the Company or a Subsidiary Guarantor, and

 

(ii)           the Company may merge with an Affiliate of the Company solely for the purpose of reincorporating the Company in another jurisdiction to realize tax or other benefits, so long as the amount of Indebtedness of the Company and its Restricted Subsidiaries is not increased thereby; provided that, in the case of a Restricted Subsidiary that merges into the Company, the Company shall not be required to comply with the preceding clause (vi).

 

(c)           Upon satisfaction of the conditions set forth in Section 4.1(a) or 4.1(b), as applicable, the Company shall be released from its obligations under this Indenture and the Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreement.

 

(d)           Solely for the purpose of computing amounts under Sections 3.4(a)(iv)(3)(A), (a)(iv)(3)(B), (a)(iv)(3)(C) and (a)(iv)(3)(D), the Successor Company shall only be deemed to have succeeded and be substituted for the Company with respect to periods subsequent to the effective time of such merger, consolidation, combination or transfer of assets.

 

  

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SECTION 4.2. When a Subsidiary Guarantor May Merge or Otherwise Dispose of Assets.

 

(a)           The Company shall not permit any Subsidiary Guarantor to consolidate with or merge with or into (whether or not the Subsidiary Guarantor is the surviving corporation), or sell, assign, convey, transfer, lease, convey or otherwise dispose of all or substantially all of its properties and assets, in one or more related transactions, to any Person (other than to the Company or another Subsidiary Guarantor), unless:

 

(i)            if such entity remains a Subsidiary Guarantor, (A) the resulting, surviving or transferee Person (the “Successor Guarantor”) shall be a corporation, partnership, trust or limited liability company organized and existing under the laws of the United States of America, any State of the United States, the District of Columbia or any other territory thereof; (B) the Successor Guarantor, if other than such Subsidiary Guarantor, expressly assumes in writing by supplemental indenture (and other applicable documents), executed and delivered to the Trustee all the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee, this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreement and, to the extent required by and subject to the limitations set forth in the Security Agreement, shall cause such amendments, supplements or other instruments to be executed, filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien on the Collateral owned by or transferred to the Successor Guarantor, together with such financing statements or comparable documents to the extent required by and subject to the limitations set forth in the Security Agreement, as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement or a similar document under the Uniform Commercial Code or other similar statute or regulation of the relevant states or jurisdictions; (C) immediately after giving effect to such transaction (and treating any Indebtedness which becomes an obligation of the Successor Guarantor or any Restricted Subsidiary as a result of such transaction as having been Incurred by the Successor Guarantor or such Restricted Subsidiary at the time of such transaction), no Default or Event of Default shall have occurred and be continuing; and (D) the Company shall have delivered to the Trustee an Officers’ Certificate and Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture; and

 

(ii)           if such transaction constitutes an Asset Disposition, the transaction is made in compliance with Section 3.7 (it being understood that only such portion of the Net Available Cash as is required to be applied on the date of such transaction in accordance with the terms of this Indenture needs to be applied in accordance therewith at such time), to the extent applicable.

 

(b)           Upon satisfaction of the conditions set forth in Section 4.2(a), the applicable  Subsidiary Guarantor shall be released from its obligations under this Indenture and its Subsidiary Guarantee and the Successor Guarantor shall succeed to, and be substituted for, and may exercise every right and power of, a Subsidiary Guarantor under this Indenture, the Collateral Documents (as applicable) and the Intercreditor Agreement.

 

(c)           Notwithstanding the foregoing, any Subsidiary Guarantor may (i) merge with or into or transfer all or part of its properties and assets to another Subsidiary Guarantor or the Company or (ii) merge with a Restricted Subsidiary of the Company solely for the purpose of reincorporating the Subsidiary Guarantor in a State of the United States or the District of Columbia, as long as the amount of Indebtedness of such Subsidiary Guarantor and its Restricted Subsidiaries is not increased thereby.

 

  

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ARTICLE V

 

Redemption of Notes

 

SECTION 5.1. Optional Redemption.

 

(a)           Except as set forth in Section 5.1(b) and (c), the Notes are not redeemable until October 1, 2015.  On and after October 1, 2015, the Company may redeem all or, from time to time, a part of the Notes at the following redemption prices (expressed as a percentage of principal amount of the Notes to be redeemed) plus accrued and unpaid interest on the Notes, if any, to, but excluding, the applicable Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period beginning on October 1 of the years indicated below:

	  	 	 	 
	
Year

	 	
Percentage

	 
	
2015

	 	 	104.781	%
	
2016

	 	 	103.188	%
	
2017

	 	 	101.594	%
	
2018 and thereafter

	 	 	100.000	%

 

(b)           The Company may on any one or more occasions prior to October 1, 2015 redeem up to 35% of the original principal amount of the Notes (including any Additional Notes) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price of  106.375% of the principal amount thereof plus accrued and unpaid interest, if any, to, but excluding, the applicable Redemption Date (subject to the right of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided that

 

(i)            at least 65% of the original principal amount of the Notes (including any Additional Notes) remains outstanding after each such redemption; and

 

(ii)           the redemption occurs within 90 days after the closing of such Equity Offering.

 

Notice of any redemption pursuant to this Section 5.1(b) may, at the Company’s discretion, be subject to one or more conditions precedent, including the completion of an Equity Offering or other corporate transaction.

 

(c)           In addition, at any time prior to October 1, 2015, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

  

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SECTION 5.2. Election to Redeem; Notice to Trustee of Optional Redemptions.  If the Company elects to redeem Notes pursuant to Section 5.1, the Company shall furnish to the Trustee, at least 5 Business Days (or such shorter period as the Trustee may agree) before notice of redemption is required to be mailed or caused to be mailed to Holders pursuant to Section 5.4, an Officers’ Certificate setting forth (a) the paragraph or subparagraph of such Note and/or Section of this Indenture pursuant to which the redemption shall occur, (b) the Redemption Date, (c) the principal amount of the Notes to be redeemed and (d) the redemption price.  The Company shall deliver to the Trustee such documentation and records as shall enable the Trustee to select the Notes to be redeemed pursuant to Section 5.3.

 

SECTION 5.3. Selection by Trustee of Notes to Be Redeemed.  In the case of any partial redemption, selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not listed, then on as nearly a pro rata basis as possible or by lot or such other similar method in accordance with the Applicable Procedures (subject to such rounding as may be necessary so that Notes are redeemed in whole increments of $1,000 and no Note of $2,000 in principal amount or less shall be redeemed in part), and in accordance with the Applicable Procedures.  If any Note is to be redeemed in part only, the notice of redemption relating to such Note will state the portion of the principal amount thereof to be redeemed.  A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note in accordance with Section 5.7.

 

The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount thereof to be redeemed.

 

For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the portion of the principal amount of such Note which has been or is to be redeemed.

 

SECTION 5.4. Notice of Redemption.  The Company shall mail or cause to be mailed by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address or in accordance with the applicable procedures of DTC not less than 30 nor more than 60 days prior to a date fixed for redemption (a “Redemption Date”), to each Holder of Notes to be redeemed; provided, however, that redemption notices may be mailed more than 60 days prior to a Redemption Date if the notice is issued in connection with Article VIII. At the Company’s written request, the Trustee shall give notice of redemption in the Company’s name and at the Company’s expense; provided that the Company shall have delivered to the Trustee, at least 5 Business Days (or such shorter period as the Trustee may agree) before notice of redemption is required to be mailed or caused to be mailed to Holder pursuant to this Section 5.4 (unless a shorter notice shall be agreed to by the Trustee), an Officers’ Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the following paragraph.

 

  

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All notices of redemption shall be prepared by the Company and shall state:

 

(a)           the Redemption Date,

 

(b)           the redemption price, if then determinable, and if not, then a method for determination, and the amount of accrued interest, if any, to, but excluding, the Redemption Date payable as provided in Section 5.6, if any,

 

(c)           if less than all outstanding Notes are to be redeemed, the identification of the particular Notes (or portion thereof) to be redeemed, as well as the aggregate principal amount of Notes to be redeemed and the aggregate principal amount of Notes to be outstanding after such partial redemption,

 

(d)           in case any Note is to be redeemed in part only, the notice which relates to such Note shall state that on and after the Redemption Date, upon surrender of such Note, the Holder shall receive, without charge, a new Note or Notes of authorized denominations for the principal amount thereof remaining unredeemed,

 

(e)           that on the Redemption Date the redemption price (and accrued interest, if any, to, but excluding, the Redemption Date payable as provided in Section 5.6) shall become due and payable upon each such Note, or the portion thereof, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest on Notes called for redemption (or the portion thereof) shall cease to accrue on and after said date,

 

(f)            the place or places where such Notes are to be surrendered for payment of the redemption price and accrued interest, if any,

 

(g)           the name and address of the Paying Agent,

 

(h)           that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price,

 

(i)            the CUSIP number, and that no representation is made as to the accuracy or correctness of the CUSIP number, if any, listed in such notice or printed on the Notes, and

 

(j)             the Section of this Indenture pursuant to which the Notes are to be redeemed.

 

SECTION 5.5. Deposit of Redemption Price.  By no later than 10:00 a.m. (New York City time) on the Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 2.4) an amount of money sufficient to pay the redemption price of, and accrued interest on, all the Notes which are to be redeemed on that date.  The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price.

 

  

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SECTION 5.6. Notes Payable on Redemption Date.  Notice of redemption having been given as aforesaid, the Notes so to be redeemed shall, on the Redemption Date, become due and payable at the redemption price therein specified (together with accrued interest, if any, to, but excluding, the Redemption Date) (except as provided for in the last paragraph of Section 5.1(b)), and from and after such date (unless the Company shall default in the payment of the redemption price and accrued interest) such Notes shall cease to bear interest.  Upon surrender of any such Note for redemption in accordance with said notice, such Note shall be paid by the Company at the redemption price, together with accrued interest, if any, to, but excluding, the Redemption Date (subject to the rights of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

If any Note called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes.

 

If a Redemption Date is on or after a Record Date and on or before the related Interest Payment Date, the accrued and unpaid interest, if any, shall be paid to the Person in whose name the Note is registered at the close of business on such Record Date, and no additional interest shall be payable to Holders whose Notes shall be subject to redemption by the Company.

 

SECTION 5.7. Notes Redeemed in Part.  Any Note which is to be redeemed only in part (pursuant to the provisions of this Article) shall be surrendered at the office or agency of the Company maintained for such purpose pursuant to Section 2.3 (with, if the Company so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing), and the Company shall execute, and, upon receipt of an Authentication Order, the Trustee shall authenticate and make available for delivery to the Holder of such Note at the expense of the Company, a new Note or Notes, of any authorized denomination as requested by such Holder, in an aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Note so surrendered, provided that each such new Note shall be in a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof.

 

ARTICLE VI

 

Defaults and Remedies

 

SECTION 6.1.     Events of Default.

 

(a)           Each of the following is an event of default (an “Event of Default”):

 

(i)            default in any payment of interest on any Note when the same becomes due, and the such default continues for a period of 30 days;

 

  

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(ii)           default in the payment of principal of or premium, if any, on any Note when the same becomes due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise;

 

(iii)          failure by the Company to comply with its obligations under Section 3.9 or Article IV;

 

(iv)          failure by the Company to comply for 45 days after notice as provided below with any of its obligations under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.10 and 3.11 (in each case, other than matters that would constitute an Event of Default under Section 6.1(a)(iii));

 

(v)           failure by the Company or any Subsidiary Guarantor to comply for 60 days after notice as provided below with its other agreements (except as provided in clauses (a)(i) through (a)(iv) of this Section 6.1) contained in this Indenture or under the Notes or the Collateral Documents;

 

(vi)          the Company or any of its Restricted Subsidiaries defaults under any mortgage, indenture or instrument under which there is issued or by which there is secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), other than Indebtedness owed to the Company or a Restricted Subsidiary, whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, which default:

 

(A)          is caused by a failure to pay principal on such Indebtedness at its final stated maturity within the grace period provided in the agreements or instruments governing such Indebtedness (“payment default”); or

 

(B)          results in the acceleration of such Indebtedness prior to its stated final maturity;

 

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $50.0 million or more (or its foreign currency equivalent);

 

(vii)         the Company or a Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary pursuant to or within the meaning of any Bankruptcy Law (as defined below):

 

(A)          commences a voluntary case or proceeding with respect to itself;

 

(B)           consents to the entry of an order for relief against it in an involuntary case or proceeding;

 

  

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(C)          consents to the appointment of a Custodian (as defined below) of it or for substantially all of its property; or

 

(D)          makes a general assignment for the benefit of its creditors;

 

or takes any comparable action under any foreign laws relating to insolvency;

 

(viii)        a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

 

(A)          is for relief against the Company or any Significant Subsidiary or a group of Restricted Subsidiaries that, taken together (as of the date of the latest audited financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, in an involuntary case;

 

(B)          appoints a Custodian of the Company, any Significant Subsidiary or a group of Restricted Subsidiaries that, taken together (as of the date of the latest audited financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary, for any substantial part of its property; or

 

(C)          orders the winding up or liquidation of the Company, any Significant Subsidiary or a group of Restricted Subsidiaries that, taken together (as of the date of the latest audited financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary;

 

(ix)          failure by the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together (as of the date of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary to pay final and non-appealable judgments aggregating in excess of $50.0 million (or its foreign currency equivalent) (net of any amounts that are covered by insurance), which judgments remain unsatisfied or undischarged for any period of 60 consecutive days during which a stay of enforcement of such judgments shall not be in effect;

 

(x)           any Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that taken together (as of the date of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of this Indenture and the Subsidiary Guarantees) or is declared null and void in a judicial proceeding or any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the date of the latest audited consolidated financial statements of the Company and its Restricted Subsidiaries) would constitute a Significant Subsidiary denies or disaffirms its obligations under this Indenture, its Subsidiary Guarantee, any Collateral Document or the Intercreditor Agreement and the Company fails to cause such Restricted Subsidiary or Restricted Subsidiaries, as the case may be, to rescind such denials or disaffirmations within 30 days; and

 

  

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(xi)          with respect to any Collateral having a fair market value in excess of $30.0 million, individually or in the aggregate, (A) the failure of the security interest with respect to such Collateral under the Collateral Documents, at any time, to be in full force and effect for any reason other than in accordance with the terms of the Collateral Documents and the terms of this Indenture or the Intercreditor Agreement, as applicable, and other than the satisfaction in full of all obligations under this Indenture and discharge of this Indenture if such failure continues for 60 days or (B) the assertion by the Company or any Subsidiary Guarantor, in any pleading in any court of competent jurisdiction, that any such security interest is invalid or unenforceable, except in each case for the failure or loss of perfection resulting from the failure of the Collateral Agent to maintain possession of certificates actually delivered to it representing securities pledged under the Collateral Documents if such assertion is not rescinded within 30 days.

 

The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body.

 

Notwithstanding the foregoing, a default under clauses (iv), (v) or (xi)(A) or (xi)(B) of this Section 6.1(a) shall not constitute an Event of Default until the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes notify the Company of the default and the Company does not cure such default within the time specified in clauses (iv), (v) or (xi)(A) or (xi)(B) of this paragraph after receipt of such notice.  Such notice must specify the Default, demand that it be remedied and state that such notice is a “Notice of Default.”

 

The term “Bankruptcy Law” means Title 11, United States Code, or any similar Federal or state law for the relief of debtors.  The term “Custodian” means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law.

 

SECTION 6.2. Acceleration.  If an Event of Default (other than an Event of Default specified in Section 6.1(a)(vii) or (viii) with respect to the Company) occurs and is continuing, the Trustee by notice in writing specifying the Event of Default that it is a “notice” to the Company, or the Holders of at least 25% in principal amount of the then outstanding Notes by notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes to be due and payable.  Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest, if any, shall, subject to Section 6.4, be immediately due and payable.  In the event of a declaration of acceleration of the Notes because an Event of Default set forth in Section 6.1(a)(vi) above has occurred and is continuing, such declaration of acceleration of the Notes shall be automatically rescinded and annulled if the default triggering such Event of Default pursuant to Section 6.1(a)(vi) shall be remedied or cured by the Company or a Restricted Subsidiary or waived by the holders of the relevant Indebtedness within 30 days after the declaration of acceleration with respect thereto and if (1) the annulment of the acceleration of the Notes would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, except nonpayment of principal, premium or interest, if any, on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.  If an Event of Default specified in Section 6.1(a)(vii) or (viii) with respect to the Company occurs and is continuing, the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes shall become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders.

 

  

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SECTION 6.3. Other Remedies.  If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of or interest on the Notes or to enforce the performance of any provision of the Notes, this Indenture (including sums owed to the Trustee and Collateral Agent and their agents and counsel), the Subsidiary Guarantees, Collateral Documents or the Intercreditor Agreement.

 

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding.  A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default.  No remedy is exclusive of any other remedy.  All available remedies are cumulative to the extent permitted by law.

 

SECTION 6.4. Waiver of Past Defaults.  The Holders of a majority in principal amount outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes) Notes by notice to the Trustee may waive an existing Default or Event of Default and its consequences (except a Default or Event of Default in the payment of the principal of, premium or interest on a Note) and rescind any such acceleration with respect to the Notes and its consequences if (1) rescission would not conflict with any judgment or decree of a court of competent jurisdiction and (2) all existing Events of Default, other than the nonpayment of the principal of, premium, if any, and interest on the Notes that have become due solely by such declaration of acceleration, have been cured or waived.

 

SECTION 6.5. Control by Majority.  The Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or the Collateral Agent or of exercising any trust or power conferred on the Trustee or the Collateral Agent.  However, the Trustee or the Collateral Agent, as the case may be, may refuse to follow any direction that conflicts with law or this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement, or, subject to Sections 7.1 and 7.2, that the Trustee determines in good faith is unduly prejudicial to the rights of other Holders or would involve the Trustee or the Collateral Agent in personal liability; provided, however, that the Trustee or the Collateral Agent may take any other action deemed proper by the Trustee or the Collateral Agent that is not inconsistent with such direction.  Prior to taking any action under this Indenture, the Trustee or the Collateral Agent shall be entitled to indemnity, security or prefunding satisfactory to it in its sole discretion against all losses, liabilities and expenses caused by taking or not taking such action.

 

  

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SECTION 6.6. Limitation on Suits.  Except to enforce the right to receive payment of principal, premium, if any, or interest when due, no Holder may pursue any remedy with respect to this Indenture or the Notes unless, subject to the provisions of the Intercreditor Agreement:

 

(i)            the Holder has previously given to the Trustee written notice stating that an Event of Default is continuing;

 

(ii)           the Holders of at least 25% in principal amount of the Notes then outstanding have made a written request to the Trustee to pursue the remedy;

 

(iii)          such Holder or Holders have offered to the Trustee security or indemnity satisfactory to the Trustee against any loss, liability or expense;

 

(iv)          the Trustee has not complied with the request within 60 days after receipt of the request and the offer of security or indemnity; and

 

(v)           the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction that is inconsistent with the request during such 60-day period.

 

A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over another Holder.

 

SECTION 6.7. Rights of Holders to Receive Payment.  Notwithstanding any other provision of this Indenture, the right of any Holder to receive payment of principal of, premium (if any) or interest on the Notes held by such Holder, on or after the respective due dates expressed in the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

 

SECTION 6.8. Collection Suit by Trustee.  If an Event of Default specified in Section 6.1(a)(i) or (ii) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with interest on any unpaid interest to the extent lawful) and the amounts provided for in Section 7.6.

 

SECTION 6.9. Trustee May File Proofs of Claim.  The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and Collateral Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent and their agents and counsel) and the Holders allowed in any judicial proceedings relative to the Company, its Subsidiaries or their respective creditors or properties and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.6. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, the Collateral Agent, either agents and counsel, and any other amounts due to the Trustee and Collateral Agent under Section 7.6 hereof out of the estate in any proceeding shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holder may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise.   Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan or reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in such proceeding.

 

  

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SECTION 6.10. Priorities.  Subject to the terms of the Intercreditor Agreement and Section 11.4(f) the Trustee shall pay out any money or property received by it, whether pursuant to the foreclosure or other remedial provisions contained in the Collateral Documents or otherwise, in the following order:

 

First:       to the Trustee and Collateral Agent for amounts due to each of them under Section 7.6 and under the Collateral Documents;

 

Second:  to Holders for amounts due and unpaid on the Notes for principal, premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium, if any, and interest, respectively; and

 

Third:     to the Company or, to the extent the Trustee receives any amount for any Subsidiary Guarantor, to such Subsidiary Guarantor, or as a court of competent jurisdiction shall direct.

 

The Trustee may fix a record date and payment date for any payment to Holders pursuant to this Section.  At least 15 days before such record date, the Company shall mail to each Holder and the Trustee a notice that states the record date, the payment date and amount to be paid.

 

SECTION 6.11. Undertaking for Costs.  In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant.  This Section does not apply to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in outstanding principal amount of the Notes.

 

  

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ARTICLE VII

 

Trustee

 

SECTION 7.1. Duties of Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture, the Collateral Documents and the Intercreditor Agreement, as the case may be and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person’s own affairs; provided that if an Event of Default occurs and is continuing, the Trustee shall be under no obligation to exercise any of the rights or powers under this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement at the request or direction of any of the Holders unless such Holders have offered the Trustee indemnity, security or prefunding satisfactory to the Trustee in its sole discretion, as applicable, against loss, liability or expense.

 

(b)           Except during the continuance of an Event of Default:

 

(i)            the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, the Collateral Documents and the Intercreditor Agreement and no implied covenants or obligations shall be read into this Indenture, any Collateral Document and the Intercreditor Agreement against the Trustee; and

 

(ii)           the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee under this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents and the Intercreditor Agreement, as applicable.  However, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents and the Intercreditor Agreement, as the case may be (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

 

(c)           The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that:

 

(i)            this paragraph does not limit the effect of paragraph (b) of this Section;

 

(ii)           the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer or Trust Officers unless it is proved in a final and non-appealable decision of a court of competent jurisdiction that the Trustee was grossly negligent in ascertaining the pertinent facts;

 

  

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(iii)          the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.5; and

 

(iv)          The Collateral Agent shall not have any fiduciary or other implied duties of any kind or nature to any person, regardless of whether an Event of Default has occurred and is continuing.

 

(d)           The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

 

(e)           Money held in trust by the Trustee or the Collateral Agent need not be segregated from other funds except to the extent required by law.

 

(f)            No provision of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or thereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

 

(g)           Every provision of this Indenture, the Collateral Documents and the Intercreditor Agreement relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section.

 

(h)           The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee, security, prefunding or indemnity satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

 

SECTION 7.2. Rights of Trustee and Collateral Agent.

 

(a)           The Trustee may conclusively rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond or any other paper or document believed by it to be genuine and to have been signed or presented by the proper Person or Persons.  The Trustee need not investigate any fact or matter stated in the document.

 

(b)           Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an Opinion of Counsel or both.  The Trustee shall  not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel.

 

(c)           The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care.

 

  

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(d)           The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct, respectively, does not constitute willful misconduct or gross negligence as determined in a final and non-appealable decision of a court of competent jurisdiction.

 

(e)           The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder or under the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement in good faith and in accordance with the advice or opinion of such counsel.

 

(f)           The Trustee shall not be bound to make any investigation into any statement, warranty or representation, or the facts or matters stated in any resolution, certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond or other paper or document made or in connection with this Indenture, any other Collateral Document or the Intercreditor Agreement; moreover, the Trustee shall not be bound to make any investigation into (i) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, in any other Collateral Document or the Intercreditor Agreement, (ii) the occurrence of any default, or the validity, enforceability, effectiveness or genuineness of this Indenture, any other Collateral Document, the Intercreditor Agreement or any other agreement, instrument or document, (iii) the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (iv) the value or the sufficiency of any Collateral, (v) the satisfaction of any condition set forth in any Collateral Document, other than to confirm receipt of items expressly required to be delivered to it or (vi) the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.  The Trustee shall have no liability with respect to any action or inaction taken by or with respect to any Sub-Collateral Agent (as defined in the Security Agreement).

 

(g)           The Trustee shall not be deemed to have knowledge of any Default or Event of Default except any Default or Event of Default of which a Trust Officer shall have (x) received written notification from the Company or Holders at the Corporate Trust Office of the Trustee and such notice references the Notes and this Indenture or (y) obtained “actual knowledge.”  “Actual knowledge” shall mean the actual fact or statement of knowing by a Trust Officer without independent investigation with respect thereto.

 

(h)           In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

 

  

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(i)            The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, the Collateral Agent, and each agent, custodian and other Person employed to act hereunder and under the Collateral Documents and the Intercreditor Agreement.

 

(j)            The Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture.

 

(k)           The permissive rights of the Trustee enumerated herein shall not be construed as duties.

 

(l)            The Company shall provide prompt written notice to the Trustee of any change to its fiscal year.

 

SECTION 7.3. Individual Rights of Trustee.  Each of the Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company, the Subsidiary Guarantors or their Affiliates with the same rights it would have if it were not Trustee.  Any Paying Agent, Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Trustee must comply with Section 7.9.  In addition, the Trustee shall be permitted to engage in transactions with the Company; provided, however, that if the Trustee acquires any conflicting interest the Trustee must (i) eliminate such conflict within 90 days of acquiring such conflicting interest, (ii) apply to the SEC for permission to continue acting as Trustee or (iii) resign.

 

SECTION 7.4. Disclaimer.  The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement, it shall not be accountable for the Company’s use of the Notes or the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication or for the use or application of any funds received by any Paying Agent other than the Trustee.

 

SECTION 7.5. Notice of Defaults.  If a Default occurs and is continuing and is known to the Trustee, the Trustee shall mail to each Holder, with a copy to the Collateral Agent, notice of the Default within 90 days after the Trustee obtains such knowledge.  Except in the case of a Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold from the Holders notice of any continuing Default if the Trustee determines in good faith that withholding the notice is in the interests of Holders.

 

  

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SECTION 7.6. Compensation and Indemnity.  The Company shall pay to each of the Trustee and the Collateral Agent from time to time such compensation for its services as the parties shall agree in writing from time to time.  The Trustee’s compensation and the Collateral Agent’s compensation shall not be limited by any law on compensation of a trustee of an express trust.  The Company shall reimburse each of the Trustee and the Collateral Agent upon request for all reasonable out-of-pocket expenses incurred or made by it, including, but not limited to, costs of collection, costs of preparing and reviewing reports, certificates and other documents, costs of preparation and mailing of notices to Holders and reasonable costs of counsel, in addition to the compensation for its services.  Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee’s agents, counsel, accountants and experts.  The Company shall indemnify the Collateral Agent, any predecessor Collateral Agent, the Trustee or any predecessor Trustee in each of its capacities hereunder (including Paying Agent, and Registrar), and each of their officers, directors, employees, counsel and agents, against any and all loss, liability or expense (including, but not limited to, reasonable attorneys’ fees and expenses) incurred by it in connection with the administration of this trust and the performance of its duties hereunder and under the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement, including the costs and expenses of enforcing this Indenture (including this Section 7.6), the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement and of defending itself against any claims (whether asserted by any Holder, the Company or otherwise).  The Collateral Agent and the Trustee shall notify the Company promptly of any claim for which it may seek indemnity.  Failure by the Collateral Agent and the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder.  The Company shall defend the claim and the Collateral Agent and the Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel.  The Company need not reimburse any expense or indemnify against any loss, liability or expense incurred by the Collateral Agent and the Trustee through their own willful misconduct, gross negligence or bad faith as determined in a final and non-appealable decision of a court of competent jurisdiction.

 

To secure the Company’s payment obligations in this Section, the Collateral Agent and the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes.  The right of the Collateral Agent and the Trustee to receive payment of any amounts due under this Section 7.6 shall not be subordinate to any other liability or indebtedness of the Company.

 

The Company’s payment obligations pursuant to this Section and any lien arising hereunder shall survive the discharge of this Indenture and the resignation or removal of the Trustee or Collateral Agent.  When the Trustee or Collateral Agent incurs expenses after the occurrence of a Default specified in Section 6.1(a)(vii) or (viii) with respect to the Company, the expenses are intended to constitute expenses of administration under any Bankruptcy Law.

 

Pursuant to Section 10.1, the obligations of the Company hereunder are jointly and severally guaranteed by the Subsidiary Guarantors.

 

The obligation of the Company under this Section 7.6 shall survive satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee.

 

  

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SECTION 7.7. Replacement of Trustee.  The Trustee may resign at any time by so notifying the Company.  The Holders of a majority in principal amount of the Notes may remove the Trustee by so notifying the Company and the Trustee in writing and may appoint a successor Trustee.  The Company shall remove the Trustee if:

 

(i)            the Trustee fails to comply with Section 7.9;

 

(ii)           the Trustee is adjudged bankrupt or insolvent;

 

(iii)          a receiver or other public officer takes charge of the Trustee or its property; or

 

(iv)          the Trustee otherwise becomes incapable of acting.

 

If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

 

A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company.  Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture.  The successor Trustee shall mail a notice of its succession to Holders.  The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.6.

 

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of at least 10% in principal amount of the Notes may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

 

If the Trustee fails to comply with Section 7.9, unless the Trustee’s duty to resign is stayed, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

 

Notwithstanding the replacement of the Trustee pursuant to this Section 7.7, the Company’s obligations under Section 7.6 shall continue for the benefit of the retiring Trustee.

 

SECTION 7.8. Successor Trustee by Merger.  If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee.

 

  

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In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

 

SECTION 7.9. Eligibility; Disqualification.  The Trustee shall have a combined capital and surplus of at least $50.0 million as set forth in its most recent filed annual report of condition.

 

SECTION 7.10. Limitation on Duty of Trustee and Collateral Agent in Respect of Collateral; Indemnification.

 

(a)           Beyond the exercise of reasonable care in the custody thereof, neither the Trustee nor the Collateral Agent shall have any duty as to any Collateral in their possession or control or in the possession or control of any agent or bailee or any income thereon or as to preservation of rights against prior parties or any other rights pertaining thereto and neither the Trustee nor the Collateral Agent shall be responsible for filing any financing or continuation statements or recording any documents or instruments in any public office at any time or times or otherwise perfecting or maintaining the perfection of any security interest in the Collateral.  The Trustee and the Collateral Agent shall be deemed to have exercised reasonable care in the custody of the Collateral in their possession if the Collateral is accorded treatment substantially equal to that which they accord their own property and shall not be liable or responsible for any loss or diminution in the value of any of the Collateral, by reason of the act or omission of any carrier, forwarding agency or other agent or bailee selected by the Trustee or the Collateral Agent in good faith.

 

Neither the Trustee nor the Collateral Agent shall have any duty to ascertain or inquire as to the performance or observance of any of the terms of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement by the Company, the Subsidiary Guarantors or any other Person.

 

ARTICLE VIII

 

Discharge of Indenture; Defeasance

 

SECTION 8.1. Discharge of Liability on Notes; Defeasance.

 

(a)           When (i) (x) the Company delivers to the Trustee all outstanding Notes (other than Notes replaced pursuant to Section 2.7) for cancellation or (y) all outstanding Notes not theretofore delivered to the Trustee for cancellation have become due and payable by reason of making a notice of redemption pursuant to Section 5.4 hereof or otherwise, or will become due and payable within one year or may be called for redemption within one year under arrangements pursuant to Article V and the Company or any Subsidiary Guarantor irrevocably deposits or causes to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders in U.S. dollars, U.S. Government Obligations, or a combination thereof, in such amounts as shall be sufficient without consideration of any reinvestment of interest to pay and discharge the entire Indebtedness on such Notes not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to, but excluding, the date of maturity or redemption, as the case may be; (ii) no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit (other than a default resulting from borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) and such deposit shall not result in a breach or violation of, or constitute a default under, any material instrument (other than this Indenture) to which the Company or any Subsidiary Guarantor is a party or by which the Company or any Subsidiary Guarantor is bound; (iii) the Company or any Subsidiary Guarantor has paid or caused to be paid all sums payable by the Company on the date of deposit to the Trustee under this Indenture; and (iv) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of such Notes at maturity or the Redemption Date, as the case may be, then this Indenture shall, subject to Section 8.1(c), cease to be of further effect.

 

  

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(b)           Subject to Sections 8.1(c) and 8.2, the Company at its option and at any time may terminate (i) all the obligations of the Company and any Subsidiary Guarantor under the Notes, this Indenture and the Collateral Documents (“legal defeasance option”) or (ii) the obligations of the Company and any Subsidiary Guarantor under Sections 3.2, 3.3, 3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12 and 4.1(a)(iv) and the Collateral Documents and the Company and the Subsidiary Guarantors may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant or provision, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or provision or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply with such covenants or provisions shall no longer constitute a Default or an Event of Default under Section 6.1(a)(iii) (only with respect to Section 3.9, 6.1(a)(iv), 6.1(a)(v), 6.1(a)(vi), 6.1(a)(vii) (only with respect to Significant Subsidiaries or a group of Restricted Subsidiaries that, taken together (as of the latest audited financial statements of the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary), Section 6.1(a)(viii) (only with respect to Significant Subsidiaries or a group of Restricted Subsidiaries that, taken together (as of the latest audited financial statements of the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary) and 6.1(a)(ix) (clause (ii) being referred to as the “covenant defeasance option”), but except as specified above, the remainder of this Indenture and the Notes shall be unaffected thereby.  The Company may exercise its legal defeasance option notwithstanding its prior exercise of its covenant defeasance option.

 

If the Company exercises its legal defeasance option, payment of the Notes may not be accelerated because of an Event of Default.  If the Company exercises its covenant defeasance option, payment of the Notes may not be accelerated because of an Event of Default specified in Section 6.1(a)(iii) (only with respect to Section 3.9, 6.1(a)(iv), 6.1(a)(v) (only with respect to the covenants subject to such covenant defeasance), 6.1(a)(vi), 6.1(a)(vii) (only with respect to Significant Subsidiaries or a group of Restricted Subsidiaries that, taken together (as of the latest audited financial statements of the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary), 6.1(a)(viii) (only with respect to Significant Subsidiaries or a group of Restricted Subsidiaries that, taken together (as of the latest audited financial statements of the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary) or 6.1(a)(ix), 6.1(a)(x) or 6.1(a)(xi) or because of the failure of the Company to comply with Section 4.1(a)(iv).

 

  

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Upon satisfaction of the conditions set forth herein and upon request of the Company, the Trustee shall acknowledge in writing the discharge of those obligations that the Company terminates.

 

(c)           Notwithstanding the provisions of Sections 8.1(a) and (b), the Company’s obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.12, 3.1, 6.7, 6.8, 7.1, 7.2, 7.6, 7.7, 8.1(b) (with respect to legal defeasance), 8.3,  8.4, 8.5 and 8.6 shall survive until the Notes have been paid in full.  Thereafter, the Company’s obligations in Sections 6.7, 7.6, 8.4 and 8.5 shall survive.

 

SECTION 8.2. Conditions to Defeasance.  The Company may exercise its legal defeasance option or its covenant defeasance option only if:

 

(i)            the Company shall irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, U.S. dollars or U.S. Government Obligations, or a combination of U.S. dollars and U.S. Government Obligations, in such amounts as shall be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding Notes issued hereunder on the Stated Maturity or on the applicable Redemption Date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular Redemption Date;

 

(ii)           in the case of legal defeasance, the Company has delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee stating that, subject to customary assumptions and exclusions, (a) the Company has received from, or there has been published by, the U.S. Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders shall not recognize income, gain or loss for U.S. federal income tax purposes as a result of such legal defeasance and shall be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such legal defeasance had not occurred;

 

(iii)          in the case of covenant defeasance, the Company has delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee stating that, subject to customary assumptions and exclusions, the Holders of the respective outstanding Notes shall not recognize income, gain or loss for U.S. federal income tax purposes as a result of such covenant defeasance and shall be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred;

 

  

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(iv)          such legal defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

 

(v)           no Default or Event of Default has occurred and is continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowings);

 

(vi)          the Company shall deliver to the Trustee an Opinion of Counsel stating that, assuming, among other things, no intervening bankruptcy of the Company between the date of deposit and the 91st day following the deposit and assuming that no Holder is an “insider” of the Company under applicable bankruptcy law, after the 91st day following the deposit, the trust funds shall not be subject to the effect of Section 547 of Title 11 of the United States Code;

 

(vii)         the Company shall deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

 

(viii)        the Company shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel (which Opinion of Counsel may be subject to customary assumptions and exclusions), each stating that all conditions precedent relating to the legal defeasance or the covenant defeasance, as the case may be, have been complied with.

 

SECTION 8.3. Application of Trust Money.  The Trustee shall hold in trust money or U.S. Government Obligations deposited with it pursuant to this Article VIII.  It shall apply the deposited money and the money from U.S. Government Obligations through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes.

 

SECTION 8.4. Repayment to Company.  Anything herein to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon receipt of an Officers’ Certificate any money or U.S. Government Obligations held by it as provided in this Article VIII which are in excess of the amount thereof which would then be required to be deposited to effect legal defeasance or covenant defeasance, as applicable.

 

Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal of or interest on the Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.

 

SECTION 8.5. Indemnity for U.S. Government Obligations.  The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against deposited U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations.

 

  

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SECTION 8.6. Reinstatement.  If the Trustee or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company and each Subsidiary Guarantor under this Indenture, the Notes, the Subsidiary Guarantees and the Collateral Documents shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such money or U.S. Government Obligations in accordance with this Article VIII; provided, however, that, if the Company or the Subsidiary Guarantors have made any payment of interest on or principal of any Notes because of the reinstatement of its obligations, the Company or the Subsidiary Guarantors, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee or Paying Agent.

 

ARTICLE IX

 

Amendments

 

SECTION 9.1. Without Consent of Holders.  This Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents and the Intercreditor Agreement may be amended or supplemented without notice to or consent of any Holder:

 

(i)            to cure any ambiguity, omission, defect or inconsistency;

 

(ii)           to comply with (a) Article IV in respect of the assumption by a Successor Company of an obligation of the Company under this Indenture, the Notes and the Collateral Documents and (b) Article IV and Article X in respect of the assumption by a Person of the obligations of a Subsidiary Guarantor under its Subsidiary Guarantee, this Indenture, the Collateral Documents and the Intercreditor Agreement;

 

(iii)          to provide for or facilitate the issuance of uncertificated Notes in addition to or in place of certificated Notes;

 

(iv)          to comply with the rules of any applicable depositary;

 

(v)           to add Guarantees with respect to the Notes or to release a Subsidiary Guarantor from its obligations under its Subsidiary Guarantee or this Indenture in accordance with the applicable provisions of this Indenture;

 

(vi)          to add additional assets as Collateral to secure the Notes and the Subsidiary Guarantees;

 

(vii)         to release Liens in favor of the Collateral Agent in the Collateral as provided in Section 11.3 or otherwise in accordance with the terms of this Indenture, Collateral Documents or the Intercreditor Agreement;

 

  

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(viii)        to add to the covenants of the Company and its Restricted Subsidiaries or Events of Default for the benefit of the Holders or to make changes that would provide additional rights to the Holders, or to surrender any right or power herein conferred upon the Company or any Subsidiary Guarantor;

 

(ix)          to make any change that does not adversely affect the rights of any Holder in any material respect;

 

(x)           to comply with any requirement of the SEC in connection with the qualification of this Indenture under the TIA, as amended, if applicable;

 

(xi)          to provide for the appointment of a successor trustee; provided that the successor trustee is otherwise qualified and eligible to act as such under the terms of this Indenture; or provide for the appointment of a successor Collateral Agent;

 

(xii)         to enter into a Permitted Junior Lien Intercreditor Agreement;

 

(xiii)        to conform the text of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement to any provision of the “Description of the Notes” section of the Offering Circular; or

 

(xiv)        to provide for or confirm the issuance of Additional Notes in accordance with the terms of this Indenture.

 

In addition, no consent of the Holders will be required under the Collateral Documents and the Intercreditor Agreement to any amendments and other modifications to the Collateral Documents and the Intercreditor Agreement (A) to add other parties (or any authorized agent thereof or trustee therefor) holding Pari Passu Lien Indebtedness that are Incurred in compliance with this Indenture and the Collateral Documents, (B) to establish that the Liens on any Collateral securing such Pari Passu Lien Indebtedness shall be pari passu under the Intercreditor Agreement with the Liens on such Collateral securing the Obligations under this Indenture and the Notes, all on the terms provided for in the Intercreditor Agreement as in effect immediately prior to such amendment or other modification and (C) to provide that the Liens securing the Notes are senior to the Liens securing other Indebtedness pursuant to the terms of a Permitted Junior Lien Intercreditor Agreement.

 

After an amendment under this Section becomes effective, the Company shall mail to Holders, or in accordance with the with the applicable procedures of DTC, a notice briefly describing such amendment.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section.  A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a tender of such Holder’s Note shall not be rendered invalid by such tender.

 

Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Sections 7.2 and 12.2 hereof, the Trustee and the Collateral Agent shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture, but the Trustee and the Collateral Agent shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

  

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SECTION 9.2. With Consent of Holders.  This Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents and the Intercreditor Agreement may be amended or supplemented with the consent of the Holders of a majority in principal amount of the Notes then outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).  Any past default or compliance with the provisions of this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement may be waived with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).  However, without the consent of each Holder of an outstanding Note affected, no amendment, supplement or waiver may:

 

(i)            reduce the principal amount of Notes whose Holders must consent to an amendment;

 

(ii)           reduce the rate of or change the stated time for payment of interest on any Note;

 

(iii)          reduce the principal of or extend the Stated Maturity of any Note;

 

(iv)          waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes issued hereunder (except a rescission of acceleration of the Notes issued hereunder by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes with respect to a nonpayment default and a waiver of the payment default that resulted from such acceleration);

 

(v)           reduce the premium payable upon the redemption or repurchase of any Note or change the time at which any Note may be redeemed or repurchased in accordance with Section 3.9 or Article V, whether through an amendment or waiver of provisions in the covenants or otherwise;

 

(vi)          make any Note payable in a currency other than that stated in the Note;

 

(vii)         impair the right of any Holder to receive payment of principal, premium, if any, and interest on such Holder’s Notes on or after the due dates therefor or to institute suit for the enforcement of any payment on or with respect to such Holder’s Notes;

 

(viii)        make any change in the amendment provisions in this Section 9.2;

 

(ix)          modify the Subsidiary Guarantees of any Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries) would constitute a Significant Subsidiary in any manner, taken as a whole, materially adverse to the Holders;

 

  

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(x)           release any Subsidiary Guarantor that is a Significant Subsidiary or group of Subsidiary Guarantors that, taken together (as of the latest audited consolidated financial statements for the Company and its Restricted Subsidiaries), would constitute a Significant Subsidiary from any of its obligations under its Subsidiary Guarantee or this Indenture, except in compliance with the terms thereof; or

 

(xi)          make the Notes or the Guarantees subordinated in right of payment to any other obligations, or subordinate the liens securing the Notes or the Guarantees.

 

In addition, without the consent of the Holders of at least 66 2/3% of the aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), no amendment, supplement or waiver may (1) modify any Collateral Document or the provisions in this Indenture dealing with Collateral Documents or application of trust moneys in any manner, taken as a whole, materially adverse to the Holders or otherwise release any Collateral other than in accordance with this Indenture, the Collateral Documents and the Intercreditor Agreement; or (2) modify the Intercreditor Agreement in any manner adverse to the Holders in any material respect other than in accordance with the terms of this Indenture, the Collateral Documents and the Intercreditor Agreement.

 

It shall not be necessary for the consent of the Holders under this Section to approve the particular form of any proposed amendment or supplement, but it shall be sufficient if such consent approves the substance thereof.  A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a tender of such Holder’s Note shall not be rendered invalid by such tender.

 

Upon the request of the Company accompanied by a Board Resolution authorizing the execution of any such amended or supplemental indenture, and upon receipt by the Trustee of the documents described in Sections 7.2 and 12.2 hereof, the Trustee and the Collateral Agent shall join with the Company and the Subsidiary Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee and the Collateral Agent shall not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

 

After an amendment or supplement under this Indenture, the Notes, the Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement becomes effective, the Company shall mail to the Holders a notice briefly describing such amendment or supplement.  The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment or supplement under this Section.

 

  

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SECTION 9.3. Effect of Consents and Waivers.  A consent to an amendment, supplement or a waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note.  After an amendment or waiver becomes effective, it shall bind every Holder.  An amendment or waiver made pursuant to Section 9.2 shall become effective upon receipt by the Trustee of the requisite number of written consents.

 

The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture.  If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or revoke such consent or to take any such action, whether or not such Persons continue to be Holders after such record date.

 

SECTION 9.4. Notation on or Exchange of Notes.  If an amendment changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee.  The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder.  Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue, and upon receipt of an Authentication Order the Trustee shall authenticate a new Note that reflects the changed terms.  Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment.

 

SECTION 9.5. Trustee and Collateral Agent To Sign Amendments.  The Trustee and Collateral Agent shall sign any amendment, supplement or waiver authorized pursuant to this Article IX if the amendment, supplement or waiver does not, in the sole determination of the Trustee or Collateral Agent, adversely affect the rights, duties, liabilities or immunities of the Trustee or Collateral Agent.  In signing any amendment, supplement or waiver pursuant to this Article IX, the Trustee or Collateral Agent shall be entitled to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that such amendment, supplement or waiver is authorized or permitted by or complies with this Indenture, the Collateral Documents and the Intercreditor Agreement and that such amendment, supplement or waiver is the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to customary exceptions.  Notwithstanding the foregoing, no Opinion of Counsel will be required for the Trustee or Collateral Agent to execute any amendment or supplement adding a new Subsidiary Guarantor under this Indenture.

 

  

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ARTICLE X

 

Subsidiary Guarantee

 

SECTION 10.1. Subsidiary Guarantee.  Subject to the provisions of this Article X, each Subsidiary Guarantor hereby fully, unconditionally and irrevocably guarantees, as primary obligor and not merely as surety, jointly and severally with each other Subsidiary Guarantor, to each Holder of the Notes, to the extent lawful, and the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the principal of, premium, if any, and interest on the Notes and all other obligations of the Company under this Indenture and the Notes (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Company or any Subsidiary Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and the obligations under Section 7.6) and the Collateral Documents (all the foregoing being hereinafter collectively called the “Guarantor Obligations”).  Each Subsidiary Guarantor agrees (to the extent lawful) that the Guarantor Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it shall remain bound under this Article X notwithstanding any extension or renewal of any Guarantor Obligation.

 

Each Subsidiary Guarantor waives (to the extent lawful) presentation to, demand of, payment from and protest to the Company of any of the Guarantor Obligations and also waives (to the extent lawful) notice of protest for nonpayment.  Each Subsidiary Guarantor waives (to the extent lawful) notice of any default under the Notes or the Guarantor Obligations.

 

Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a Guarantee of payment when due (and not a Guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Guarantor Obligations.

 

Except as set forth in Section 4.2, Section 10.2 and Article VIII, the obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Guarantor Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not (to the extent lawful) be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Guarantor Obligations or otherwise.  Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not (to the extent lawful) be discharged or impaired or otherwise affected by (a) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other person under this Indenture, the Notes, the Collateral Documents, the Intercreditor Agreement or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes, the Collateral Documents, the Intercreditor Agreement or any other agreement; (d) the release of any security held by any Holder or the Collateral Agent for the Guarantor Obligations or any of them; (e) the failure of any Holder to exercise any right or remedy against any other Subsidiary Guarantor; (f) any change in the ownership of the Company; (g) any default, failure or delay, willful or otherwise, in the performance of the Guarantor Obligations; or (h) any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity.

 

  

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Each Subsidiary Guarantor agrees that its Subsidiary Guarantee herein shall remain in full force and effect until payment in full of all the Guarantor Obligations or such Subsidiary Guarantor is released from its Subsidiary Guarantee in compliance with Section 4.2, Section 10.2 and Article VIII.  Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of, premium, if any, or interest on any of the Guarantor Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy or reorganization of the Company or otherwise.

 

In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against any Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay any of the Guarantor Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby promises to and shall, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Trustee or the Trustee on behalf of the Holders an amount equal to the sum of (i) the unpaid amount of such Guarantor Obligations then due and owing and (ii) accrued and unpaid interest on such Guarantor Obligations then due and owing (but only to the extent not prohibited by law) (including interest accruing after the filing of any petition in bankruptcy or the commencement of any insolvency, reorganization or like proceeding relating to the Company or any Subsidiary Guarantor whether or not a claim for post-filing or post-petition interest is allowed in such proceeding).

 

Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x) the maturity of the Guarantor Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Guarantor Obligations guaranteed hereby and (y) in the event of any such declaration of acceleration of such Guarantor Obligations, such Guarantor Obligations (whether or not due and payable) shall forthwith become due and payable by the Subsidiary Guarantor for the purposes of this Subsidiary Guarantee.

 

Each Subsidiary Guarantor also agrees to pay any and all reasonable costs and expenses (including reasonable attorneys’ fees) incurred by the Trustee or the Holders in enforcing any rights under this Section.

 

Neither the Company nor the Subsidiary Guarantors shall be required to make a notation on the Notes to reflect any Subsidiary Guarantee or any release, termination or discharge thereof and any such notation shall not be a condition to the validity of any Subsidiary Guarantee.

 

SECTION 10.2. Limitation on Liability; Termination, Release and Discharge.

 

(a)           Any term or provision of this Indenture to the contrary notwithstanding, the obligations of each Subsidiary Guarantor hereunder shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.

 

  

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(b)           A Subsidiary Guarantee by a Subsidiary Guarantor shall be automatically and unconditionally released and discharged, and each Subsidiary Guarantor and its obligations under the Subsidiary Guarantee and this Indenture shall be released and discharged:

 

(i)            upon any sale, exchange or transfer (by merger or otherwise) of the Capital Stock of such Subsidiary Guarantor following which such Subsidiary Guarantor ceases to be a direct or indirect Subsidiary of the Company if such sale or disposition does not constitute an Asset Disposition or is made in compliance with this Indenture, including Section 3.7 and Article IV);

 

(ii)           if such Subsidiary Guarantor is dissolved or liquidated in accordance with the provisions of this Indenture;

 

(iii)          the release or discharge of the guarantee by such Subsidiary Guarantor of the New Senior Secured Credit Agreement or such other guarantee or Indebtedness that resulted in the creation of such Subsidiary Guarantee, except a discharge or release (i) in connection with the repayment in full and termination of commitments under the New Senior Secured Credit Agreement without being replaced with another Debt Facility, or (ii) as a result of payment under such guarantee or Indebtedness by such Subsidiary Guarantor (it being understood that a release subject to a contingent reinstatement is still a release, and if any such Indebtedness of such Subsidiary Guarantor under the New Senior Secured Credit Agreement or other guarantee is so reinstated, such Guarantee shall also be reinstated);

 

(iv)          upon exercise of the Company’s legal defeasance option or covenant defeasance option or upon satisfaction and discharge of this Indenture, in each case, pursuant to the provisions of Article VIII hereof; and

 

(v)           if the Company designates such Subsidiary Guarantor as an Unrestricted Subsidiary and such designation complies with the other applicable provisions of this Indenture.

 

(c)           In the case of Section 10.2(b)(i) only, the Company shall deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for in this Indenture relating to such transaction have been complied with.

 

(d)           The release of a Subsidiary Guarantor from its Subsidiary Guarantee and its obligations under this Indenture in accordance with the provisions of this Section 10.2 shall not preclude the future applications of Section 3.10 to such Person.

 

  

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SECTION 10.3. Right of Contribution.  Each Subsidiary Guarantor hereby agrees that to the extent that any Subsidiary Guarantor shall have paid more than its proportionate share of any payment made on the obligations under the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek and receive contribution from and against the Company or any other Subsidiary Guarantor who has not paid its proportionate share of such payment.  The provisions of this Section 10.3 shall in no respect limit the obligations and liabilities of each Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

 

SECTION 10.4. No Subrogation.  Notwithstanding any payment or payments made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor shall be entitled to be subrogated to any of the rights of the Trustee or any Holder against the Company or any other Subsidiary Guarantor or any collateral security or guarantee or right of offset held by the Trustee or any Holder for the payment of the Guarantor Obligations, nor shall any Subsidiary Guarantor seek or be entitled to seek any contribution or reimbursement from the Company or any other Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor hereunder, until all amounts owing to the Trustee and the Holders by the Company on account of the Guarantor Obligations are paid in full.  If any amount shall be paid to any Subsidiary Guarantor on account of such subrogation rights at any time when all of the Guarantor Obligations shall not have been paid in full, such amount shall be held by such Subsidiary Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the exact form received by such Subsidiary Guarantor (duly indorsed by such Subsidiary Guarantor to the Trustee, if required), to be applied against the Guarantor Obligations.

 

ARTICLE XI

 

Collateral and Security

 

SECTION 11.1. The Collateral.

 

(a)           Subject to the provisions of the Intercreditor Agreement, the due and punctual payment of the principal of, premium, if any, and interest on the Notes and the Subsidiary Guarantees thereof when and as the same shall be due and payable, whether on an interest payment date, at maturity, by acceleration, repurchase, redemption or otherwise, interest on the overdue principal of and interest (to the extent lawful), if any, on the Notes and the Subsidiary Guarantees thereof and performance of all other obligations under this Indenture, including, without limitation, the obligations of the Company set forth in Section 7.6 and Section 8.6 herein, and the Notes and the Subsidiary Guarantees thereof and the Collateral Documents, shall be secured by Liens as provided in the Collateral Documents which the Company and the Subsidiary Guarantors, as the case may be, have entered into simultaneously with the execution of this Indenture and shall be secured by all Collateral Documents hereafter delivered as required or permitted by this Indenture.

 

  

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(b)           The Company and the Subsidiary Guarantors hereby agree that the Collateral Agent (or, with respect to Possessory Collateral (as defined in the Intercreditor Agreement), the Applicable Authorized Representative (as defined in the Intercreditor Agreement)) shall hold the Collateral for the benefit of the Secured Parties, in each case pursuant to the terms of the Collateral Documents and the Intercreditor Agreement, and the Collateral Agent is hereby authorized to execute and deliver the Collateral Documents and the Intercreditor Agreement.

 

(c)           Each Holder, by its acceptance of any Notes and the Subsidiary Guarantees thereof, consents and agrees to the terms of the Collateral Documents (including, without limitation, the provisions providing for foreclosure) and the Intercreditor Agreement, as the same may be in effect or as may be amended from time to time in accordance with their terms, and authorizes and directs the Collateral Agent to perform its obligations and exercise its rights under the Collateral Documents and the Intercreditor Agreement in accordance therewith.

 

(d)           The Trustee and each Holder, by accepting the Notes and the Subsidiary Guarantees thereof, acknowledges that, as more fully set forth in the Collateral Documents and the Intercreditor Agreement, the Collateral as now or hereafter constituted shall be for the benefit of the Secured Parties, and that the Lien of this Indenture and the Collateral Documents in respect of the Trustee, the Collateral Agent and the Holders is subject to and qualified and limited in all respects by the Collateral Documents and the Intercreditor Agreement and actions that may be taken thereunder.

 

SECTION 11.2. Further Assurances.

 

The Company shall, and shall cause each Subsidiary Guarantor to, at their sole expense, do or cause to be done all acts which may be reasonably necessary, or as requested by the Collateral Agent, to confirm that the Collateral Agent holds, for the benefit of the Secured Parties, duly created, enforceable and perfected first-priority Liens and security interests on a pari passu basis (pursuant to the Intercreditor Agreement), as applicable, in the Collateral (subject to Permitted Liens and the Intercreditor Agreement) to the extent such liens are required to be so perfected by this Indenture and the Collateral Documents. The Company shall, and shall cause the Subsidiary Guarantors to, take any and all actions and make all filings (including the filing of UCC financing statements, continuation statements and amendments thereto) reasonably required to cause the Collateral Documents to create and maintain, as security for the Obligations of the Company and the Subsidiary Guarantors to the Secured Parties under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Collateral Documents, a valid and enforceable perfected Lien and security interest in and on all of the Collateral (subject to the terms of the Intercreditor Agreement and the Collateral Documents), in favor of the Collateral Agent for the benefit of the Secured Parties subject to no Liens other than Permitted Liens.

 

  

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SECTION 11.3. Release of Liens on the Collateral.

 

(a)           The Liens on the Collateral shall automatically and without the need for any further action by any Person be released:

 

(i)            in whole or in part, as applicable, as to all or any portion of property subject to such Liens which has been taken by eminent domain, condemnation or other similar circumstances;

 

(ii)           in whole upon:

 

(1)           satisfaction and discharge of this Indenture as set forth in Section 8.1(a);

 

(2)           a legal defeasance or covenant defeasance of this Indenture as set forth in Section 8.1(b); or

 

(3)           the occurrence of a Suspension Period (but only until the Reinstatement Date, if any);

 

(iii)          in part, as to any property that (x) is sold, transferred or otherwise disposed of by the Company or any Subsidiary Guarantor (other than to the Company or another Subsidiary Guarantor) in a transaction not prohibited by this Indenture at the time of such sale, transfer or disposition or (y) is owned or at any time acquired by a Subsidiary Guarantor that has been released from its Subsidiary Guarantee in accordance with this Indenture, concurrently with the release of such Subsidiary Guarantee (including in connection with the designation of a Subsidiary Guarantor as an Unrestricted Subsidiary);

 

(iv)          pursuant to an amendment in accordance with Article IX;

 

(v)           in whole as to all Collateral that is owned by a Subsidiary Guarantor that is released from its Subsidiary Guarantee in accordance with Section 10.2;

 

(vi)          in part, in accordance with the applicable provisions of the Collateral Documents and the Intercreditor Agreement; and

 

(vii)         in whole or in part, with the consent of Holders of 662⁄3% in aggregate principal amount of the Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) then outstanding.

 

For the avoidance of doubt, the Company and the Subsidiary Guarantors will not be required to comply with all or any portion of Section 314(d) of the TIA.

 

  

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(b)           In connection with any termination or release of any Liens in all or any portion of the Collateral pursuant to this Indenture or any of the Collateral Documents, the Trustee shall, or shall cause the Collateral Agent to, promptly, at the sole expense of the Company, execute, deliver or acknowledge all documents, instruments and releases that have been requested, in writing, to release, reconvey to the Company and/or the Subsidiary Guarantors, as the case may be, such Collateral or otherwise give effect to, evidence or confirm such termination or release in accordance with the written directions of the Company and/or the Subsidiary Guarantor, as the case may be.

 

(c)           The release of any Collateral from the terms of the Collateral Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent such Collateral is released pursuant to this Indenture or upon termination of this Indenture.  The Trustee and each of the Holders each acknowledge and direct the Trustee and the Collateral Agent that a release of Collateral or a Lien in accordance with the terms of any Collateral Document and this Article XI will not be deemed for any purpose to be an impairment of the Lien on the Collateral in contravention of the terms of this Indenture.

 

(d)           As and when requested by the Company or any Subsidiary Guarantor, the Trustee shall instruct the Collateral Agent to authorize the filing of Uniform Commercial Code financing statement amendments or releases (which shall be prepared by the Company or such Subsidiary Guarantor) solely to the extent necessary to delete or release Liens on property or assets not required to be subject to a Lien under the Collateral Documents from the description of assets in any previously filed financing statements.  If requested in writing by the Company or any Subsidiary Guarantor, the Trustee shall instruct the Collateral Agent to execute, at the sole expense of the Company, such documents, instruments or statements reasonably requested of it (which shall be prepared by the Company or such Subsidiary Guarantor) and to take such other action as the Company may reasonably request to evidence or confirm that such property or assets not required to be subject to a Lien under the Collateral Documents described in the immediately preceding sentence has been released from the Liens of each of the Collateral Documents.  The Collateral Agent shall execute and deliver such documents, instruments and statements and shall take all such actions promptly upon receipt of such written instructions from the Company, any Subsidiary Guarantor or the Trustee.

 

(e)           In no event shall the Trustee or Collateral Agent be obligated to execute or deliver any document evidencing any release or reconveyance without receipt of an Opinion of Counsel and Officers’ Certificate, each stating that such release or reconveyance complies with this Indenture, the Intercreditor Agreement and the Collateral Documents.

 

SECTION 11.4. Authorization of Actions to Be Taken by the Trustee or the Collateral Agent Under the Collateral Documents.

 

(a)           Subject to the provisions of the Collateral Documents, the Intercreditor Agreement and the other provisions of this Indenture, each of the Trustee or the Collateral Agent may take all actions it deems necessary or appropriate in order to (i) upon the occurrence and during the continuance of an Event of Default, enforce any of its rights or any of the rights of the Holders under the Collateral Documents and (ii) upon the occurrence and during the continuance of an Event of Default, collect and receive any and all amounts payable in respect of the Collateral in respect of the obligations of the Company and the Subsidiary Guarantors hereunder and thereunder.  Subject to the provisions of the Collateral Documents and the Intercreditor Agreement, the Trustee or the Collateral Agent shall have the power (but not the obligation) to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any acts that may be unlawful or in violation of the Collateral Documents, the Intercreditor Agreement or this Indenture, and such suits and proceedings as the Trustee or the Collateral Agent may deem expedient to preserve or protect its interest and the interests of the Holders in the Collateral (including power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest hereunder or be prejudicial to the interests of the Holders or the Trustee).

 

  

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(b)           Neither the Trustee nor the Collateral Agent shall be responsible for the existence, genuineness or value of any of the Collateral or for the validity, perfection, priority or enforceability of the Liens in any of the Collateral, whether impaired by operation of law or by reason of any action or omission to act on its part hereunder, for the validity or sufficiency of the Collateral or any agreement or assignment contained therein, for the validity of the title of the Company to the Collateral, for insuring the Collateral or for the payment of taxes, charges, assessments or Liens upon the Collateral or otherwise as to the maintenance of the Collateral (except in its ordinary course of maintaining collateral).  Neither the Trustee nor the Collateral Agent shall have responsibility for recording, filing, re-recording or refiling any financing statement, continuation statement, document, instrument or other notice in any public office at any time or times or to otherwise take any action to perfect or maintain the perfection of any security interest granted to it under the Collateral Documents or otherwise.

 

(c)           Where any provision of the Collateral Documents requires that additional property or assets be added to the Collateral, the Company shall, or shall cause the applicable Subsidiary Guarantors to, take any and all actions reasonably required to cause such additional property or assets to be added to the Collateral and to create and maintain a valid and enforceable perfected first-priority security interest on a pari passu basis with the Liens securing any Pari Passu Lien Indebtedness in such property or assets (subject to Permitted Liens) in favor of the Collateral Agent for the benefit of the Secured Parties, in each case in accordance with and to the extent required under the Collateral Documents.

 

(d)           Except as set forth in this Indenture, the Trustee or the Collateral Agent, in taking any action under the Collateral Documents, shall be entitled to receive, if requested, as a condition to take any action, an Officers’ Certificate and Opinion of Counsel to the effect that such action does not violate this Indenture, the Collateral Documents or the Intercreditor Agreement, and the Trustee or the Collateral Agent shall be fully protected relying thereon.

 

(e)           In acting under the Collateral Documents and the Intercreditor Agreement, the Trustee and Collateral Agent shall have all the protections, rights and immunities given to them under this Indenture.

 

  

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(f)           For the avoidance of doubt, upon receipt of any payment by the Collateral Agent or the Trustee pursuant to Section 2.01(b)(ii) of the Intercreditor Agreement, the Company, Subsidiary Guarantors and Holders agree that, as among them, such payments shall be made and such funds applied in accordance with Section 6.10 of this Indenture, and in every case whatsoever, the Trustee and Collateral Agent will each be paid amounts owed them under this Indenture, the Intercreditor Agreement and the Collateral Documents prior to payments (pursuant to Article VI of this Indenture) being made to the Holders.

 

(g)           Notwithstanding any provision to the contrary contained elsewhere in this Indenture, the Collateral Documents and the Intercreditor Agreement, the duties of the Collateral Agent shall be ministerial and administrative in nature, and the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein and in the other documents to which the Collateral Agent is a party, nor shall the Collateral Agent have or be deemed to have any trust or other fiduciary relationship with the Trustee, any Holder or any Original Lien Grantor, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Indenture, the Collateral Documents and the Intercreditor Agreement or otherwise exist against the Collateral Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” in this Indenture with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(h)           The Collateral Agent shall be fully justified in failing or refusing to take any action under this Indenture, the Collateral Documents or the Intercreditor Agreement unless it shall first receive such advice or concurrence of the Trustee or the Holders of a majority in aggregate principal amount of the Notes as it determines and, if it so requests, it shall first be indemnified to its satisfaction by the Holders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Indenture, the Collateral Documents or the Intercreditor Agreement in accordance with a request, direction, instruction or consent of the Trustee or the Holders of a majority in aggregate principal amount of the then outstanding Notes and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Holders.

 

(i)           The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default, unless the Collateral Agent shall have received written notice from the Trustee or the Company referring to this Indenture, describing such Default or Event of Default and stating that such notice is a “notice of default.”  The Collateral Agent shall take such action with respect to such Default or Event of Default as may be requested by the Trustee in accordance with Article 6 hereof or the Holders of a majority in aggregate principal amount of the Notes (subject to this Section 11.4).

 

  

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(j)           The Collateral Agent may resign at any time by notice to the Trustee and the Company, such resignation to be effective upon the acceptance of a successor agent to its appointment as Collateral Agent.  If the Collateral Agent resigns under this Indenture, the Company shall appoint a successor collateral agent.  If no successor collateral agent is appointed prior to the intended effective date of the resignation of the Collateral Agent (as stated in the notice of resignation), the Collateral Agent may appoint, after consulting with the Trustee, subject to the consent of the Company (which shall not be unreasonably withheld and which shall not be required during a continuing Event of Default), a successor collateral agent.  If no successor collateral agent is appointed and consented to by the Company pursuant to the preceding sentence within thirty (30) days after the intended effective date of resignation (as stated in the notice of resignation) the Collateral Agent shall be entitled to petition a court of competent jurisdiction to appoint a successor.  Upon the acceptance of its appointment as successor collateral agent hereunder, such successor collateral agent shall succeed to all the rights, powers and duties of the retiring Collateral Agent, and the term “Collateral Agent” shall mean such successor collateral agent, and the retiring Collateral Agent’s appointment, powers and duties as the Collateral Agent shall be terminated.  After the retiring Collateral Agent’s resignation hereunder, the provisions of this Section 11.4 (and Section 7.6 hereof) shall continue to inure to its benefit and the retiring Collateral Agent shall not by reason of such resignation be deemed to be released from liability as to any actions taken or omitted to be taken by it while it was the Collateral Agent under this Indenture.

 

ARTICLE XII

 

Miscellaneous

 

SECTION 12.1.     Notices.  Notices given by publication shall be deemed given on the first date on which publication is made, notices given by first-class mail, postage prepaid, shall be deemed given five calendar days after mailing and notices given by overnight courier guaranteeing next day delivery shall be deemed given the next Business Day after timely delivery to the courier.  Any notice or communication shall be in writing and delivered in person, by facsimile, mailed by first-class mail or overnight air courier guaranteeing next day delivery, addressed as follows:

 

if to the Company or to any Subsidiary Guarantor:

 

CNO Financial Group, Inc.

11825 North Pennsylvania Street

Carmel, IN 46032

Attention: Karl W. Kindig

Facsimile: (317) 817-3772

 

if to the Trustee or Collateral Agent:

 

Wilmington Trust, National Association

Corporate Capital Markets

50 South Sixth Street/ Suite 1290

Minneapolis, MN 55402

Attention: CNO Financial Administrator

Facsimile: (612) 217-5651

 

  

-126-

  

 

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.  Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.

 

Any notice or communication mailed to a Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

 

Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders.  If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

 

Each of the Trustee and Collateral Agent agrees to accept and act upon instructions or directions pursuant to this Indenture or the Collateral Documents or Intercreditor Agreement sent by unsecured e-mail, facsimile transmission or other similar unsecured electronic methods.  If the party elects to give the Trustee or Collateral Agent e-mail or facsimile instructions (or instructions by a similar electronic method) and the Trustee or Collateral Agent in its discretion elects to act upon such instructions, the Trustee’s or Collateral Agent’s understanding of such instructions shall be deemed controlling.  Neither the Trustee nor the Collateral Agent shall be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s or Collateral Agent’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction.  The party providing electronic instructions agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Trustee or Collateral Agent, including without limitation the risk of the Trustee or Collateral Agent acting on unauthorized instructions, and the risk or interception and misuse by third parties.

 

Notwithstanding any other provision of this Indenture or any Note, where this Indenture or any Note provides for notice of any event (including any notice of redemption) to any Holder of an interest in a Global Note (whether by mail or otherwise), such notice shall be sufficiently given if given to DTC or any other applicable Depositary for such Note (or its designee) according to the applicable procedures of DTC or such Depositary.

 

SECTION 12.2.     Certificate and Opinion as to Conditions Precedent.  Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

 

(i)            an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

 

  

-127-

  

 

(ii)           an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

 

SECTION 12.3. Statements Required in Certificate or Opinion.  Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include:

 

(i)            a statement that the individual making such certificate or opinion has read such covenant or condition;

 

(ii)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(iii)          a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(iv)          a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

 

In giving such Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

 

SECTION 12.4. Rules by Trustee, Paying Agent and Registrar.  The Trustee may make reasonable rules for action by, or a meeting of, Holders.  The Registrar and the Paying Agent may make reasonable rules for their functions.

 

SECTION 12.5. Days Other than Business Days.  If a payment date is not a Business Day, payment shall be made on the next succeeding day that is not a Business Day, and no interest shall accrue for the intervening period.  If a regular Record Date is not a Business Day, the Record Date shall not be affected.

 

SECTION 12.6. Governing Law.  This Indenture, the Notes and the Subsidiary Guarantees shall be governed by, and construed in accordance with, the laws of the State of New York.

 

SECTION 12.7. No Recourse Against Others.  No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Company or any of the Subsidiary Guarantors shall have any liability for any obligations of the Company or its Restricted Subsidiaries under the Notes, this Indenture, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement or for any claim based on, in respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release shall be part of the consideration for the issuance of the Notes and the Subsidiary Guarantees.

 

  

-128-

  

 

SECTION 12.8. Successors.  All agreements of the Company and each Subsidiary Guarantor in this Indenture and the Notes shall bind their respective successors.  All agreements of the Trustee in this Indenture shall bind its successors.

 

SECTION 12.9. Multiple Originals.  The parties may sign any number of copies of this Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  One signed copy is enough to prove this Indenture.

 

SECTION 12.10. Table of Contents; Headings.  The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

SECTION 12.11. Direction by Holders to Enter into Collateral Documents and the Intercreditor Agreement.  By accepting a Note, each Holder is deemed to have authorized and directed the Trustee and the Collateral Agent, as applicable, to enter into the Collateral Documents and the Intercreditor Agreement.

 

SECTION 12.12. Force Majeure.  In no event shall the Trustee or the Collateral Agent be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; it being understood that the Trustee and the Collateral Agent shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

 

SECTION 12.13. USA Patriot Act.  The parties hereto acknowledge that in accordance with Section 326 of the USA Patriot Act the Trustee and the Trust Officers, like all financial institutions and in order to help fight the funding of terrorism and money laundering, are required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account.  The parties to this agreement agree that they will provide the Trustee and the Trust Officers with such information as they may request in order to satisfy the requirements of the USA Patriot Act.

 

SECTION 12.14. Communication by Holders of Notes with other Holders of Notes.  Holders of the Notes may communicate with other Holders of Notes with respect to their rights under this Indenture or the Notes.

 

SECTION 12.15. Subject to Intercreditor.  By accepting a Note, each Holder is deemed to have authorized and directed the Trustee and the Collateral Agent, as applicable, to enter into the Collateral Documents and the Intercreditor Agreement and to be subject to the terms thereof.

 

[Remainder of Page Intentionally Left Blank]

 

  

-129-  

  

 

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.

 

	 	CNO FINANCIAL GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President, Treasury and	 
	 	Investor Relations	 

 

  

[Signature Page to Indenture]

  

 

	 	40|86 ADVISORS, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	40|86 MORTGAGE CAPITAL, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	AMERICAN LIFE AND CASUALTY 

MARKETING DIVISION CO.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	CDOC, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	CNO MANAGEMENT SERVICES COMPANY	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

  

[Signature Page to Indenture]

  

 

	 	CNO SERVICES, LLC	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President, Treasury and	 
	 	Investor Relations	 

 

	 	K.F. AGENCY, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	PERFORMANCE MATTERS ASSOCIATES, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

	 	PERFORMANCE MATTERS ASSOCIATES OF TEXAS, INC.	 
	 	 	 	 
	
 

	
By: 

	              /s/ Erik M. Helding 	 
	 	 	Name:   Erik M. Helding	 
	 	 	Title:     Senior Vice President and Treasurer 	 

 

  

[Signature Page to Indenture]

  

 

	 	WILMINGTON TRUST, NATIONAL ASSOCIATION, as Trustee	 
	 	 	 	 
	
 

	
By: 

	                 /s/ Jane Schweiger  	 
	 	 	Name:      Jane Schweiger	 
	 	 	Title:        Vice President 	 

 

	 	WILMINGTON TRUST, NATIONAL 

ASSOCIATION, as Collateral Agent	 
	 	 	 	 
	
 

	
By: 

	                 /s/ Jane Schweiger  	 
	 	 	Name:      Jane Schweiger	 
	 	 	Title:        Vice President 	 

 

  

[Signature Page to Indenture]

  

 

EXHIBIT A

 

[FORM OF FACE OF NOTE]

 

[Global Note Legend, if applicable]

[Private Placement Legend, if applicable]

 

  

A-1

  

 

No. [___] 

Principal Amount $[______________],

 as revised by the Schedule of Increases

or Decreases in the Global Note attached hereto

 

CUSIP NO. ____________

 

CNO FINANCIAL GROUP, INC.

 

6.375% Senior Secured Note due 2020

 

CNO Financial Group, Inc., a Delaware corporation, promises to pay to [Cede & Co.], or registered assigns, the initial principal amount set forth on the Schedule of Increases or Decreases in the Global Note attached hereto, as revised by the Schedule of Increases or Decreases in the Global Note attached hereto, on October 1, 2020.

 

Interest Payment Dates:  April 1 and October 1.

 

Record Dates:  March 15 and September 15.

 

Additional provisions of this Note are set forth on the other side of this Note.

 

  

A-2

  

 

	 	CNO FINANCIAL GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	                  	 
	 	 	Name:      	 
	 	 	Title:        	 

 

  

A-3

  

 

TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

 

WILMINGTON TRUST, NATIONAL ASSOCIATION

 

as Trustee, certifies that this is one of the

Notes referred to in the Indenture.

 

	By:	 	 
	 	Authorized Signatory	Date: 

 

  

A-4

  

 

[FORM OF REVERSE SIDE OF NOTE]

 

6.375% Senior Secured Note due 2020

 

1.             Interest

 

CNO Financial Group, Inc., a Delaware corporation (such corporation, and its successors and assigns under the Indenture hereinafter referred to, being herein called the “Company”), promises to pay interest on the principal amount of this Note at the rate per annum shown above.

 

The Company shall pay interest semiannually on April 1 and October 1 of each year, with the first interest payment to be made on April 1, 2013.  Interest on the Notes shall accrue from the most recent date to which interest has been paid on the Notes or, if no interest has been paid, from September 28, 2012.  The Company shall pay interest on overdue principal or premium, if any (plus interest on such interest to the extent lawful), at the rate borne by the Notes to the extent lawful.  Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

 

2.             Method of Payment

 

By no later than 10:00 a.m. (New York City time) on the date on which any principal of, premium, if any, or interest on any Note is due and payable, the Company shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal, premium, if any, and/or interest.  The Company shall pay interest (except Defaulted Interest) to the Persons who are registered Holders of Notes at the close of business on March 15 and September 15 next preceding the Interest Payment Date unless Notes are cancelled, repurchased or redeemed after the record date and before the Interest Payment Date.  Holders must surrender Notes to a Paying Agent to collect principal payments.  The Company shall pay principal, premium, if any, and interest in money of the United States that at the time of payment is legal tender for payment of public and private debts.  Payments in respect of Notes represented by a Global Note (including principal, premium, if any, and interest) shall be made by the transfer of immediately available funds to the accounts specified by the Depositary.  The Company shall make all payments in respect of a Definitive Note (including principal, premium, if any, and interest) by mailing a check to the registered address of each Holder thereof.

 

3.             Paying Agent and Registrar

 

Initially, Wilmington Trust, National Trust, duly organized and existing under the laws of the United States of America and having a corporate trust office at Wilmington Trust, National Association, 50 South Sixth Street/Suite 1290, Minneapolis, MN 55402, as Trustee (in such capacity the “Trustee”), shall act as Paying Agent and Registrar.  The Company may appoint and change any Paying Agent, Registrar or co-registrar without notice to any Holder.  The Company or any of its domestically incorporated Wholly-Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.

 

  

A-5

  

 

4.             Indenture

 

The Company issued the Notes under an Indenture dated as of September 28, 2012 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “Indenture”), among the Company, the Subsidiary Guarantors, the Trustee and the Collateral Agent.  The terms of the Notes include those stated in the Indenture.  Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.  The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms.  To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling.

 

The Notes are senior secured obligations of the Company.  This Note is one of the 6.375% Senior Secured Notes due 2020 referred to in the Indenture.  The Notes include (i) $275,000,000 aggregate principal amount of the Company’s 6.375% Senior Secured Notes due 2020 issued under the Indenture on September 28, 2012 (herein called “Initial Notes”), and (ii) if and when issued, additional 6.375% Senior Secured Notes due 2020 of the Company that may be issued from time to time under the Indenture subsequent to September 28, 2012 (herein called “Additional Notes”).

 

5.             Guarantee

 

To guarantee the due and punctual payment of the principal, premium, if any, and interest (including post-filing or post-petition interest under any Bankruptcy Law) on the Notes and all other amounts payable by the Company under the Indenture, the Notes, the Collateral Documents and the Intercreditor Agreement when and as the same shall be due and payable, whether at maturity, by acceleration or otherwise, according to the terms of the Notes and the Indenture, the Subsidiary Guarantors have fully and unconditionally guaranteed (and future guarantors, together with the Subsidiary Guarantors, shall fully and unconditionally Guarantee), jointly and severally, such obligations on a senior, secured basis on a pari passu basis with the Liens securing any Pari Passu Lien Indebtedness pursuant to the terms of the Indenture.

 

6.           Security

 

The Initial Notes and Additional Notes, if any, are treated as a single class of securities under the Indenture and shall be secured by first-priority Liens and security interests, subject to Permitted Liens, in the Collateral on the terms and conditions set forth in the Indenture and the Collateral Documents.  The Collateral Agent holds the Collateral for the benefit of the Secured Parties, in each case pursuant to the Collateral Documents.  Each Holder, by accepting this Note, consents and agrees to the terms of the Collateral Documents (including the provisions providing for the foreclosure and release of Collateral) as the same may be in effect or may be amended from time to time in accordance with their terms, the Indenture and the Intercreditor Agreement and authorizes and directs the Collateral Agent to enter into the Collateral Documents and the Intercreditor Agreement, and to perform its obligations and exercise its rights thereunder in accordance therewith.

 

  

A-6

  

 

7.           Redemption

 

(a)           Except as described in clauses (b) and (c) below, the Notes are not redeemable until October 1, 2015.  On and after October 1, 2015, the Company may redeem all or, from time to time, a part of the Notes, at the following redemption prices (expressed as a percentage of principal amount of the Notes to be redeemed) plus accrued and unpaid interest on the Notes, if any, to, but excluding, the applicable Redemption Date (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date), if redeemed during the twelve-month period beginning on October 1 of the years indicated below:

 

	
Year

	 	
Percentage

	 
	
2015                                                                                           

	 	 	104.781%	 
	
2016                                                                                           

	 	 	103.188%	 
	
2017

	 	 	101.594%	 
	
2018 and thereafter                                                                                           

	 	 	100.000%	 

 

(b)           At any time prior to October 1, 2015, the Company may redeem the Notes, in whole or in part, at a redemption price equal to 100% of the principal amount thereof plus the Applicable Premium plus accrued and unpaid interest, if any, to, but excluding, the date of redemption (subject to the rights of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date).

 

“Applicable Premium” means, as determined by the Company with respect to a Note on any Redemption Date, the greater of:

 

(1)           1.0% of the principal amount of such Note; and

 

(2)           the excess, if any, of (a) the present value as of such Redemption Date of (i) the redemption price of such Note on October 1, 2015 as set forth in paragraph 7(a) above, plus (ii) the remaining scheduled interest payments due on such Note through October 1, 2015 (excluding accrued but unpaid interest to the Redemption Date), computed using a discount rate equal to the Treasury Rate as of such Redemption Date plus 50 basis points, over (b) the then outstanding principal amount of such Note.

 

“Treasury Rate” means, as obtained by the Company, the yield to maturity at the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the Redemption Date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to October 1, 2015; provided, however, that if the period from the Redemption Date to October 1, 2015 is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation (calculated to the nearest one-twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given, except that if the period from the Redemption Date to October 1, 2015 is less than one year, the weekly average yield on actively traded United States Treasury securities adjusted to a constant maturity of one year shall be used.

 

  

A-7

  

 

(c)           Prior to October 1, 2015, the Company may on any one or more occasions redeem up to 35% of the original principal amount of the Notes (including any Additional Notes) with the Net Cash Proceeds of one or more Equity Offerings at a redemption price of  106.375% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but excluding, the applicable Redemption Date (subject to the right of Holders of Notes on the relevant Record Date to receive interest due on the relevant Interest Payment Date); provided that

 

(i)            at least 65% of the original principal amount of the Notes (including any Additional Notes) remains outstanding after each such redemption; and

 

(ii)           the redemption occurs within 90 days after the closing of such Equity Offering.

 

Notice of any redemption pursuant to clause (c) may, at the Company’s discretion, be subject to one or more conditions precedent, including the completion of an Equity Offering or other corporate transaction.

 

(d)           Any redemption pursuant to this paragraph 7 shall be made pursuant to the provisions of Section 5.1, and Sections 5.2 through 5.7 of the Indenture.

 

8.             Change of Control; Asset Sales

 

(a)           If a Change of Control occurs, unless the Company has exercised its right to redeem all of the Notes under Section 5.1 of the Indenture, each Holder shall have the right to require the Company to repurchase all or any part (in integral multiples of $1,000 except that no Note may be tendered in part if the remaining principal amount would be less than $2,000) of such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount of the Notes plus accrued and unpaid interest, if any, to, but excluding, the date of purchase (subject to the right of Holders of record on the relevant Record Date to receive interest due on the relevant Interest Payment Date) as provided in, and subject to the terms of, the Indenture.

 

(b)           In the event of an Asset Disposition that requires the purchase of Notes pursuant to Section 3.7(c) of the Indenture, the Company shall be required to make an offer to all Holders to purchase Notes in accordance with Section 3.7(c) of the Indenture at an offer price in cash in an amount equal to 100% of the principal amount of the Notes, plus accrued and unpaid interest to, but excluding, the date of purchase (subject to the rights of Holders of record on any Record Date to receive payments of interest on the related Interest Payment Date).  Holders of Notes that are the subject of an offer to purchase will receive an Asset Disposition Offer from the Company prior to any related purchase date and may elect to have such Note purchased pursuant to such offer by completing the form entitled “Option of Holder To Elect Purchase” attached hereto, or transferring its interest in such Note by book-entry transfer, to the Company or a Paying Agent at the address specified in the notice at least three Business Days before the Asset Disposition Purchase Date.

 

  

A-8

  

 

9.             Denominations; Transfer; Exchange

 

The Notes are in registered form without coupons in minimum denominations of principal amount of $2,000 and whole multiples of $1,000 in excess thereof.  A Holder may transfer or exchange Notes in accordance with the Indenture.  The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture.  The Registrar need not register the transfer of or exchange any Notes for a period beginning 15 Business Days before an Interest Payment Date and ending on such Interest Payment Date.

 

10.           Persons Deemed Owners

 

The registered Holder of this Note may be treated as the owner of it for all purposes.  Only registered Holders shall have rights hereunder.

 

11.           Unclaimed Money

 

If money for the payment of the principal of or premium, if any, or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person.  After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

 

12.           Discharge and Defeasance

 

Subject to certain conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal and interest on the Notes to redemption or maturity, as the case may be.

 

  

A-9

  

 

13.           Amendment, Waiver

 

Subject to certain exceptions set forth in the Indenture, (i) the Indenture, the Notes, the Subsidiary Guarantees, the Intercreditor Agreement and the Collateral Documents may be amended with the written consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for Notes) and (ii) any default (other than (x) with respect to nonpayment or (y) in respect of a provision that cannot be amended without the written consent of each Holder affected) or noncompliance with any provision may be waived with the written consent of the Holders of a majority in principal amount of the Notes then outstanding (including without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).  Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company, the Subsidiary Guarantors and the Trustee may amend the Indenture, the Notes, the Subsidiary Guarantees, the Intercreditor Agreement or the Collateral Documents to cure any ambiguity, omission, defect or inconsistency, or to comply with Article IV or Article X of the Indenture in respect of the assumption by a Successor Company of an obligation of the Company under the Indenture or by a Successor Guarantor of obligations under a Subsidiary Guarantee, or to provide for or facilitate the issuance of uncertificated Notes in addition to or in place of certificated Notes, or to comply with the rules of any applicable depositary, or to add Guarantees with respect to the Notes or to secure the Notes, or to release a Subsidiary Guarantor upon its designation as an Unrestricted Subsidiary or otherwise in accordance with the Indenture, to release Liens in favor of the Collateral Agent in the Collateral as provided under the collateral release provisions, or to add to the covenants of the Company and its Restricted Subsidiaries or Events of Default for the benefit of the Holders or to make changes that would provide additional rights to the Holders, or to surrender any right or power conferred upon the Company or any Subsidiary Guarantor, or to make any change that does not adversely affect the rights of any Holder in any material respect, or to comply with the requirement of the SEC in connection with the qualification of the Indenture under the TIA, as amended, if applicable, or to provide for the appointment of a successor trustee, or to enter into a Permitted Junior Lien Intercreditor Agreement, or to conform the text of the Indenture, the Notes, Subsidiary Guarantees, the Collateral Documents or the Intercreditor Agreement to the “Description of the Notes” section of the Offering Circular or to provide for or confirm the issuance of Additional Notes in accordance with the terms of the Indenture.

 

Without the consent of the Holders of at least 66 2/3% of the aggregate principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), no amendment, supplement or waiver may (1) modify any Collateral Document or the provisions in the Indenture dealing with Collateral Documents or application of trust moneys in any manner, taken as a whole, materially adverse to the Holders or otherwise release any Collateral other than in accordance with the Indenture, the Collateral Documents and the Intercreditor Agreement; or (2) modify the Intercreditor Agreement in any manner adverse to the Holders in any material respect other than in accordance with the terms of the Indenture, the Collateral Documents and the Intercreditor Agreement.

 

  

A-10

  

 

14.           Defaults and Remedies

 

Under the Indenture, and subject to the terms and provisions of the Indenture Events of Default include, without limitation:  (i) default in any payment of interest on any Note when the same becomes due and the default continues for 30 days; (ii) default in payment of the principal of or premium, if any, on any Note when the same becomes due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration of acceleration or otherwise; (iii) failure by the Company to comply with its obligations under Section 3.9 or Article IV of the Indenture, (iv) failure by the Company or any Subsidiary Guarantor to comply with certain other provisions or agreements in the Indenture, the Notes and the Collateral Documents, in certain cases subject to notice and lapse of time; (v) certain accelerations (including failure to pay within any grace period after final maturity) of other Indebtedness of the Company or any Restricted Subsidiary if the amount accelerated (or so unpaid) exceeds $50.0 million (or its foreign currency equivalent); (vi) certain events of bankruptcy or insolvency with respect to the Company or any Significant Subsidiary or group of Restricted Subsidiaries that, taken together would constitute a Significant Subsidiary; (vii) certain final and non-appealable judgments for the payment of money aggregating in excess of $50.0 million (or its foreign currency equivalent)(net of amounts that are covered by insurance); (viii) any Subsidiary Guarantee of a Significant Subsidiary or group of Restricted Subsidiaries that when taken together would constitute a Significant Subsidiary ceases to be in full force and effect (except as contemplated by the terms of the Indenture and the Subsidiary Guarantees) or is declared null and void in a judicial proceeding or is denied or disaffirmed by such Significant Subsidiary or group of Restricted Subsidiaries, as the case may be; and (ix) with respect to Collateral with a fair market value in excess of $30.0 million, individually or in the aggregate, a declaration or assertion of invalidity or unenforceability or the failure to be in full force and effect (except as contemplated by the Collateral Documents and the terms of the Indenture and the Intercreditor Agreement), subject to any applicable grace periods as set forth in the Indenture.

 

If an Event of Default occurs and is continuing, the Trustee or Holders of at least 25% in aggregate principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately.  Certain events of bankruptcy or insolvency with respect to the Company are Events of Default which shall result in the Notes being due and payable immediately upon the occurrence of such Events of Default.

 

Holders may not enforce the Indenture or the Notes except as provided in the Indenture.  The Trustee and the Collateral Agent may refuse to enforce the Indenture or the Notes unless each receives indemnity or security satisfactory to each of the Trustee and the Collateral Agent.  Subject to certain limitations, Holders of a majority in principal amount of the Notes may direct the Trustee in its exercise of any trust or power.  The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest) if it determines in good faith that withholding the notice is in the interests of Holders.

 

15.           Collateral

 

These Notes and any Guarantee by a Subsidiary Guarantor are secured by a security interest in the Collateral pursuant to certain Collateral Documents.

 

16.           Trustee Dealings with the Company

 

Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

 

  

A-11

  

 

17.           No Recourse Against Others

 

No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Company or any of the Subsidiary Guarantors shall have any liability for any obligations of the Company or its Restricted Subsidiaries under the Notes, the Indenture, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation.  By accepting a Note, each Holder waives and releases all such liability.  The waiver and release shall be part of the consideration for the issue of the Notes and the Subsidiary Guarantees.

 

18.           Authentication

 

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.

 

19.           Abbreviations

 

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).

 

20.           CUSIP Numbers

 

Pursuant to a recommendation promulgated by the Committee on Uniform Note Identification Procedures the Company has caused CUSIP numbers to be printed on the Notes.  No representation is made as to the accuracy of such numbers as printed on the Notes and reliance may be placed only on the other identification numbers placed thereon.

 

21.           Successor Entity

 

When a successor entity assumes, in accordance with the Indenture, all the obligations of its predecessor under the Notes and the Indenture, and immediately before and thereafter no Default or Event of Default exists and all other conditions of the Indenture are satisfied, the predecessor entity will be released from those obligations.

 

22.           Governing Law

 

This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

 

  

A-12

  

 

The Company shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture.  Requests may be made to:

 

CNO Financial Group, Inc.

11825 North Pennsylvania Street

Carmel, IN 46032

Attention: Karl W. Kindig

Facsimile No.: (317) 817-3772

 

23.           Subject to Intercreditor

 

By accepting a Note, each Holder is deemed to have authorized and directed the Trustee and the Collateral Agent, as applicable, to enter into the Collateral Documents the Intercreditor Agreement and to be subject to the terms thereof.

 

  

A-13

  

ASSIGNMENT FORM

 

To assign this Note, fill in the form below:

 

I or we assign and transfer this Note to

 

(Print or type assignee’s name, address and zip code)

 

(Insert assignee’s soc. sec. or tax I.D. No.)

 

and irrevocably appoint ___________ agent to transfer this Note on the books of the Company.  The agent may substitute another to act for him.

 

	Date:	 	 	Your Signature:  	 

 

	Signature Guarantee:	 	 
	 	(Signature must be guaranteed)	 

 

Sign exactly as your name appears on the other side of this Note.

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

 

  

A-14

  

 

[TO BE ATTACHED TO GLOBAL NOTES]

 

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

 

The initial principal amount of the Note shall be $ [______________].  The following increases or decreases in this Global Note have been made:

 

	

Date of

Exchange

	 	

Amount of 

decrease in 

Principal Amount 

of this Global 

Note

	 	

Amount of 

increase in 

Principal Amount 

of this Global 

Note

	 	

Principal Amount 

of this Global 

Note following 

such decrease or 

increase

	 	

Signature of 

authorized signatory 

of Trustee or Notes 

Custodian

 

  

A-15

  

OPTION OF HOLDER TO ELECT PURCHASE

 

If you want to elect to have this Note purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, check the box:

                                                                                                                   

 

	 o	 o
	 Section 3.7	 Section 3.9

 

                                If you want to elect to have only part of this Note purchased by the Company pursuant to Section 3.7 or 3.9 of the Indenture, state the amount in principal amount (must be in minimum denominations of $2,000 or integral multiples of $1,000 in excess thereof):  $

 

	

Date:  _______________

	
 

	
Your Signature: 

	 	 

	
  

	
                            (Sign exactly as your name appears on the other side of the Note)

 

	
Signature Guarantee: 

	 	 

	
  

	
(Signature must be guaranteed)

 

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to SEC Rule 17Ad-15.

 

  

A-16

  

 

EXHIBIT B

 

FORM OF CERTIFICATE OF TRANSFER

 

CNO Financial Group, Inc.

11825 North Pennsylvania Street

Carmel, IN 46032

Attention: Karl W. Kindig

Facsimile No.: (317) 817-3772

 

Wilmington Trust, National Association, as Trustee and Registrar

Corporate Capital Markets

50 South Sixth Street/ Suite 1290

Minneapolis, MN 55402

Attention: CNO Financial Administrator

Facsimile No.: (612) 217-5651

 

Re:  6.375% Senior Secured Notes due 2020

 

Reference is hereby made to the Indenture, dated as of September 28, 2012 (the “Indenture”), among CNO Financial Group, Inc., as issuer (the “Company”), the Subsidiary Guarantors named therein and Wilmington Trust, National Association, as trustee.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

________________ (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $____ in such Note[s] or interests (the “Transfer”), to __________ (the “Transferee”), as further specified in Annex A hereto.  In connection with the Transfer, the Transferor hereby certifies that:

 

[CHECK ALL THAT APPLY]

 

	
1.             o

	
Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note pursuant to Rule 144A.  The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

  

B-1

  

 

	
2.             o

	
Check if Transferee will take delivery of a beneficial interest in the Regulation S Global Note or a Restricted Definitive Note pursuant to Regulation S.  The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a Person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the  facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser).  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

 

	

3.

  

	
o

 	
Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S.  The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

 

	
  

	
(a)          o

	

such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

 

or

 

	
  

	
(b)          o

	
such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

 

or

 

  

B-2

  

 

	
  

	
(c)           o

	

such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act.  Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

 

	
4.             o

	
Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

 

	
  

	
(a)           o

	
Check if Transfer is pursuant to Rule 144.  (i)  The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

	
  

	
(b)           o

	
Check if Transfer is pursuant to Regulation S.  (i)  The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

 

  

B-3

  

 

	
  

	
  (c)         o

	
Check if Transfer is pursuant to other exemption.  (i)  The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act.  Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

 

 

	 	 [Insert Name of Transferor]

 

	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	Dated: ____________________	 	 	 

 

  

B-4

  

ANNEX A TO CERTIFICATE OF TRANSFER

 

	1. 	The Transferor owns and proposes to transfer the following:
	 	 
	  [CHECK ONE OF (a) OR (b)]
	 
	 	(a)	o	a beneficial interest in the:
	 	 	 	 	 
	 	 	(i)	o	144A Global Note (CUSIP 12621E AG8), or
	 	 	 	 	 
	 	 	(ii)	o	Regulation S Global Note (CUSIP U1746E AB9), or
	 	 	 	 	 
	 	 	(iii)	o	IAI Global Note (CUSIP 12621E AH6), or
	 	 	 	 	 
	 	(b)	o	a Restricted Definitive Note. 
	 	 	 	 	 
	2.	After the Transfer the Transferee will hold:
	 	 	 	 	 
	 [CHECK ONE]
	 	 	 	 	 
	 	(a)	o	a beneficial interest in the:
	 	 	 	 	 
	 	 	(i)	o	144A Global Note  (CUSIP 12621E AG8), or
	 	 	 	 	 
	 	 	(ii)	o	Regulation S Global Note (CUSIP U1746E AB9), or
	 	 	 	 	 
	 	 	(iii)	o	IAI Global Note (CUSIP 12621E AH6), or
	 	 	 	 	 
	 	 	(iv)	o	Unrestricted Global Note  CUSIP [               ],  or
	 	 	 	 	 
	 	(b)	o	a Restricted Definitive Note; or
	 	 	 	 	 
	 	(c)	o	an Unrestricted Definitive Note,
	 	 	 	 
	 	in accordance with the terms of the Indenture.

 

  

B-5

  

EXHIBIT C

 

FORM OF CERTIFICATE OF EXCHANGE

 

CNO Financial Group, Inc.

11825 North Pennsylvania Street

Carmel, IN 46032

Attention: Karl Kindig

Facsimile No.: (317) 817-3772

 

Wilmington Trust, National Association, as Trustee and Registrar

Corporate Capital Markets

50 South Sixth Street/ Suite 1290

Minneapolis, MN 55402

Attention: CNO Financial Administrator

Facsimile No.: (612) 217-5651

 

Re:  6.375% Senior Secured Notes due 2020

 

Reference is hereby made to the Indenture, dated as of September 28, 2012 (the “Indenture”), among CNO Financial Group, Inc., as issuer (the “Company”), the Subsidiary Guarantors named therein and Wilmington Trust, National Association, as trustee.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

_______________ (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $________ in such Note[s] or interests (the “Exchange”).  In connection with the Exchange, the Owner hereby certifies that:

 

1.           Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note.

 

(a)         o          Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

  

C-1

  

 

(b)         o         Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(c)         o          Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note.  In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

(d)         o         Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note.  In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

2.           Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes.

 

(a)         o          Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note.  In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

 

  

C-2

  

 

(b)         o         Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note.  In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] o 144A Global Note, o Regulation S Global Note,  o IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States.  Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

  

C-3

  

 

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

 

 

	 	 [Insert Name of Transferor]

 

	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	Dated: ____________________	 	 	 

 

  

C-4

  

 

EXHIBIT D

 

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

 

CNO Financial Group, Inc.

11825 North Pennsylvania Street

Carmel, IN 46032

Attention: Karl W. Kindig

Facsimile No.: (317) 817-3772

 

Wilmington Trust, National Association, as Trustee and Registrar

Corporate Capital Markets

50 South Sixth Street/ Suite 1290

Minneapolis, MN 55402

Attention: CNO Financial Administrator

Facsimile No.: (612) 217-5651

 

Re:  6.375% Senior Secured Notes due 2020

 

Reference is hereby made to the Indenture, dated as of September 28, 2012 (the “Indenture”), among CNO Financial Group, Inc., as issuer (the “Company”), the Subsidiary Guarantors named therein and Wilmington Trust, National Association, as trustee and as collateral agent.  Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

 

In connection with our proposed purchase of $____________ aggregate principal amount of:

 

(a) o  a beneficial interest in a Global Note, or

 

(b) o  a Definitive Note,

 

we confirm that:

 

1.           We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

 

  

D-1

  

 

2.           We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence.  We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144 under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any Person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

 

3.           We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions.  We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

 

4.           We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

 

5.           We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

 

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

 

 

	 	 [Insert Name of Accredited Investor]

 

	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	Dated: ____________________	 	 	 

 

  

D-2

  

 

EXHIBIT E

 

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT SUBSIDIARY GUARANTORS

 

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of ________________, among __________________ (the “Guaranteeing Subsidiary”), a subsidiary of CNO FINANCIAL GROUP, INC. (or its permitted successor), a Delaware corporation (the “Company”), and WILMINGTON TRUST, NATIONAL ASSOCIATION, a national banking association, as trustee (together with its successors and assigns, in such capacity, the “Trustee”) and as collateral agent (together with its successors and assigns in such capacity, the “Collateral Agent”) under the Indenture referred to below.

 

WHEREAS, the Company and the Subsidiary Guarantors have heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of September 28, 2012 providing for the issuance of 6.375% Senior Secured Notes due 2020 (the “Notes”);

 

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

 

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

 

1.           Capitalized Terms.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

 

2.           Agreement to Guarantee.  The Guaranteeing Subsidiary acknowledges that it has received and reviewed a copy of the Indenture and all other documents it deems necessary to review in order to enter into this Supplemental Indenture, and acknowledges and agrees to (i) join and become a party to the Indenture as indicated by its signature below; (ii) be bound by the Indenture, as of the date hereof, as if made by, and with respect to, each signatory hereto; and (iii) perform all obligations and duties required of a Guarantor pursuant to the Indenture. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Subsidiary Guarantee on the terms and subject to the conditions set forth in the Indenture, including, but not limited to, Article X thereof.

 

3.           Execution and Delivery.  The Guaranteeing Subsidiary agrees that the Subsidiary Guarantee shall remain in full force and effect notwithstanding the absence of the endorsement of any notation of such Subsidiary Guarantee on the Notes.

 

  

E-1

  

 

4.           No Recourse Against Others.  No past, present or future director, officer, employee, incorporator, member, partner or stockholder of the Company or any of the Subsidiary Guarantors shall have any liability for any obligations of the Company or its Restricted Subsidiaries under the Notes, the Indenture, this Supplemental Indenture, the Subsidiary Guarantees, the Collateral Documents, the Intercreditor Agreement or for any claim based on, in respect of, or by reason of such obligations or their creation.  Each Holder by accepting a Note waives and releases all such liability.  The waiver and release shall be part of the consideration for the issuance of the Notes and the Subsidiary Guarantees.

 

5.           Governing Law.  THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

6.           Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.  This Supplemental Indenture may be executed in multiple counterparts which, when taken together, shall constitute one instrument.  The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmissions shall constitute effective execution and delivery of this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

 

7.           Effect of Headings.  The Section headings herein have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

 

8.           The Trustee.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

 

9.           Benefits Acknowledged.  The Guaranteeing Subsidiary’s Subsidiary Guarantee is subject to the terms and conditions set forth in the Indenture.  The Guaranteeing Subsidiary acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by the Indenture and this Supplemental Indenture and that the guarantee and waivers made by it pursuant to its Subsidiary Guarantee are knowingly made in contemplation of such benefits.

 

10.           Successors.  All agreements of the Guaranteeing Subsidiary in this Supplemental Indenture shall bind its successors, except as otherwise provided in this Supplemental Indenture.  All agreements of the Trustee and the Collateral Agent in this Supplemental Indenture shall bind their respective successors.

 

[Remainder of Page Intentionally Left Blank]

 

  

E-2

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first above written.

 

	 	 CNO FINANCIAL GROUP, INC.	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	 [Guaranteeing Subsidiary]	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 

 

  

E-3

  

 

	 	WILMINGTON TRUST, NATIONAL 

ASSOCIATION, as Trustee	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 

 

	 	WILMINGTON TRUST, NATIONAL 

ASSOCIATION, as Collateral Agent	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 
	 	 	Title:	 

 

 

E-4ex10-1.htm

Exhibit 10.1

 

SECURITY AGREEMENT

 

Dated as of September 28, 2012

 

among

 

CNO FINANCIAL GROUP, INC.,

 

and

 

the SUBSIDIARY GUARANTORS

Party Hereto

 

and

 

WILMINGTON TRUST, NATIONAL ASSOCIATION,

as Collateral Agent

 

THIS SECURITY AGREEMENT IS SUBJECT TO THE PROVISIONS OF THE PARI PASSU INTERCREDITOR AGREEMENT, DATED AS OF SEPTEMBER 28, 2012 (AS AMENDED, RESTATED, AMENDED AND RESTATED, REPLACED, REFINANCED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), AMONG JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, AND WILMINGTON TRUST, NATIONAL ASSOCIATION, AS 2020 NOTES COLLATERAL AGENT, AND AS 2020 NOTES AUTHORIZED REPRESENTATIVE.

 

  

  

  

TABLE OF CONTENTS

 

	  	  	
Page

	  	  	  
	
Section 1.

	
Definitions

	
2

	  	  	  
	
Section 2.

	
[Reserved]

	
9

	  	  	  
	
Section 3.

	
Grant of Transaction Liens

	
9

	  	  	  
	
Section 4.

	
General Representations and Warranties

	
12

	  	  	  
	
Section 5.

	
Further Assurances; General Covenants

	
14

	  	  	  
	
Section 6.

	
Reserved

	
16

	  	  	  
	
Section 7.

	
Chattel Paper and Instruments

	
16

	  	  	  
	
Section 8.

	
Commercial Tort Claims

	
17

	  	  	  
	
Section 9.

	
Recordable Intellectual Property

	
18

	  	  	  
	
Section 10.

	
Proceeds of Letters of Credit

	
18

	  	  	  
	
Section 11.

	
Investment Property

	
19

	  	  	  
	
Section 12.

	
Deposit Accounts

	
21

	  	  	  
	
Section 13.

	
Payments upon an Event of Default

	
22

	  	  	  
	
Section 14.

	
Transfer of Record Ownership

	
22

	  	  	  
	
Section 15.

	
Right to Vote Securities

	
23

	  	  	  
	
Section 16.

	
Remedies upon Event of Default

	
23

	  	  	  
	
Section 17.

	
Application of Proceeds

	
25

	  	  	  
	
Section 18.

	
Fees and Expenses; Indemnification

	
25

	  	  	  
	
Section 19.

	
Authority to Administer Collateral

	
26

	  	  	  
	
Section 20.

	
Limitation on Duty in Respect of Collateral

	
26

	  	  	  
	
Section 21.

	
General Provisions Concerning the Collateral Agent

	
27

	  	  	  
	
Section 22.

	
Termination of Transaction Liens; Release of Collateral

	
29

	  	  	  
	
Section 23.

	
Additional Subsidiary Guarantors and Lien Grantors

	
30

	  	  	  
	
Section 24.

	
Notices

	
30

 

  

  

  

	
Section 25.

	
No Implied Waivers; Remedies Not Exclusive

	
31

	  	  	  
	
Section 26.

	
Successors and Assigns

	
31

	  	  	  
	
Section 27.

	
Amendments and Waivers

	
31

	  	  	  
	
Section 28.

	
Choice of Law

	
32

	  	  	  
	
Section 29.

	
Waiver of Jury Trial

	
32

	  	  	  
	
Section 30.

	
Severability

	
32

	  	  	  
	
Section 31.

	
Pari Passu Intercreditor Agreement; Indenture

	
32

	  	  	  
	
Exhibit A

	
Form of Security Agreement Supplement

	  
	
Exhibit B

	
Form of Copyright Security Agreement

	  
	
Exhibit C

	
Form of Patent Security Agreement

	  
	
Exhibit D

	
Form of Trademark Security Agreement

	  
	
Exhibit E

	
Form of Perfection Certificate

	  
	
Exhibit F

	
Form of Issuer Control Agreement

	  
	  	  	  
	
Schedule 1

	
Equity Interests

	  
	
Schedule 2

	
Other Securities

	  
	
Schedule 3

	
Deposit Accounts, Securities Accounts and Commodities Accounts

	  
	
Schedule 4

	
Commercial Tort Claims

	  
	
Schedule 5

	
Pledged Instruments

	  

 

  

  

  

 

SECURITY AGREEMENT

 

This SECURITY AGREEMENT (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, this “Agreement”), dated as of September 28, 2012, is entered into by and among CNO FINANCIAL GROUP, INC., a Delaware corporation (the “Company”), the SUBSIDIARY GUARANTORS party hereto and WILMINGTON TRUST, NATIONAL ASSOCIATION, as Collateral Agent.

 

WHEREAS, the Company will on the date hereof issue $275,000,000 of Notes, pursuant to the Indenture (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Indenture”), dated as of September 28, 2012, among the Company, the Subsidiary Guarantors, the Trustee and the Collateral Agent, the proceeds of which will be used, together with the proceeds from the Credit Agreement, (i) to repay all amounts outstanding under the Company’s existing credit agreement, (ii) to fund an offer to purchase up to all of the Company’s Existing Senior Secured Notes and a concurrent solicitation of consents, and, to the extent any Existing Senior Secured Notes are not repurchased pursuant to such offer, to redeem such remaining Existing Senior Secured Notes and satisfy and discharge the indenture relating thereto, (iii) to fund the purchase of approximately $200 million aggregate principal amount of the Company’s outstanding Existing Convertible Debentures, (iv) to pay fees and expenses incurred in connection with the foregoing and (v) for the working capital and general corporate purposes of the Company;

 

WHEREAS, the Company is willing to secure its obligations under the Indenture and the Notes by granting Liens on substantially all of its assets to the Collateral Agent, for the benefit of the Secured Parties, as provided in the Collateral Documents;

 

WHEREAS, the Company is willing to cause each of its current and future domestic Subsidiaries (other than Insurance Subsidiaries, Subsidiaries of Insurance Subsidiaries, Unrestricted Subsidiaries and Immaterial Subsidiaries) to (i) guarantee the foregoing obligations of the Company and (ii) secure such guarantee thereof by granting Liens on substantially all of the assets of such Subsidiaries to the Collateral Agent, for the benefit of the Secured Parties, as provided herein and in the other Collateral Documents;

 

WHEREAS, it is a condition precedent to the issuance of the Notes that (i) the foregoing obligations of the Company be secured and guaranteed as described above and (ii) each guarantee thereof be secured by Liens on substantially all of the assets of the relevant Lien Grantor as provided herein and in the other Collateral Documents;

 

WHEREAS, in order to secure the obligations under the Credit Agreement, the Lien Grantors are concurrently granting to the collateral agent under the Credit Agreement, for the benefit of the lenders under the Credit Agreement and certain other secured parties, a security interest in the Collateral ranking pari passu with the Transaction Liens, it being understood that the relative rights of the grantees in respect of the Collateral are governed by the Intercreditor Agreement; and

 

WHEREAS, upon any foreclosure or other enforcement of the Collateral Documents, the net proceeds of, or other collections on, the relevant Collateral are, subject to the terms of the Intercreditor Agreement, to be received by or paid over to the Collateral Agent and applied as provided herein;

 

  

  

  

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.     Definitions.

 

(a)           Terms Defined in Indenture.  Terms defined in the Indenture and not otherwise defined in subsection (b) or (c) of this Section have, as used herein, the respective meanings provided for therein.

 

(b)           Terms Defined in UCC.  As used herein, each of the following terms has the meaning specified in the UCC:

 

	

Term

	 	

UCC

	
Account

	 	
9-102

	
Authenticate

	 	
9-102

	
Certificated Security

	 	
8-102

	
Chattel Paper

	 	
9-102

	
Commercial Tort Claim

	 	
9-102

	
Commodity Account

	 	
9-102

	
Commodity Contract

	 	
9-102

	
Commodity Customer

	 	
9-102

	
Commodity Intermediary

	 	
9-102

	
Deposit Account

	 	
9-102

	
Document

	 	
9-102

	
Electronic Chattel Paper

	 	
9-102

	
Entitlement Holder

	 	
8-102

	
Equipment

	 	
9-102

	
Financial Asset

	 	
8-102 & 103

	
General Intangibles

	 	
9-102

	
Instrument

	 	
9-102

	
Inventory

	 	
9-102

	
Investment Property

	 	
9-102

	
Letter-of-Credit Right

	 	
9-102

	
record

	 	
9-102

	
Securities Account

	 	
8-501

	
Securities Intermediary

	 	
8-102

	
Security

	 	
8-102 & 103

	
Security Entitlement

	 	
8-102

	
Supporting Obligation

	 	
9-102

	
Tangible Chattel Paper

	 	
9-102

	
Uncertificated Security

	 	
8-102

(c)           Additional Definitions.  The following additional terms, as used herein, have the following meanings:

 

“Article 9” means Article 9 of the UCC.

 

  

2

  

 

“Collateral” means all property, whether now owned or hereafter acquired, on which a Lien is granted or purports to be granted to the Collateral Agent pursuant to the Collateral Documents.  When used with respect to a specific Lien Grantor, the term “Collateral” means all its property on which such a Lien is granted, or purports to be granted, pursuant to the Collateral Documents.

 

“Collateral Account” means an account established following the occurrence of an Event of Default by the Collateral Agent or any other account identified by the Collateral Agent to the Company from time to time.

 

“Collateral Agent” means Wilmington Trust, National Association, in its capacity as collateral agent under the Notes Documents, and its successors and assigns in such capacity.

 

“Company” has the meaning specified in the recitals hereto.

 

“Control” has the following meanings:

 

(a)           when used with respect to any Security or Security Entitlement, the meaning specified in UCC Section 8-106;

 

(b)           when used with respect to any Deposit Account, the meaning specified in UCC Section 9-104;

 

(c)           when used with respect to any Electronic Chattel Paper, the meaning specified in UCC Section 9-105;

 

(d)           when used with respect to any Commodity Account or Commodity Contract, the meaning specified in UCC Section 9-106(b); and

 

(e)           when used with respect to any right to payment or performance by the issuer or a Nominated Person in respect of a letter of credit, the meaning specified in UCC Section 9-107.

 

“Copyright License” means any agreement now or hereafter in existence granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to any other Person, any right to use, copy, reproduce, distribute, prepare derivative works of, display or publish any works of authorship on which a Copyright is in existence or may come into existence, including any agreement identified in Schedule 1 to any Copyright Security Agreement.

 

“Copyright Security Agreement” means a Copyright Security Agreement, substantially in the form of Exhibit B, executed and delivered by a Lien Grantor in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Copyrights” means all the following: (i) all copyrights under the laws of the United States (whether or not the underlying works of authorship have been published), all registrations and recordings thereof, all copyrightable works of authorship (whether or not published), and all applications for copyrights under the laws of the United States, including registrations, recordings and applications in the United States Copyright Office or in any similar office or agency of the United States or any State thereof, including those described in Schedule 1 to any Copyright Security Agreement, (ii) all renewals of any of the foregoing, (iii) all claims for, and rights to sue for, past, present or future infringements of any of the foregoing and (iv) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including damages and payments for past, present or future infringements thereof.

 

  

3

  

 

“Credit Agreement” means the Credit Agreement dated as of the date hereof among the Company, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Agent.

 

“Environment” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and subsurface strata, and natural resources such as wetlands, flora and fauna.

 

“Environmental Laws” means all requirements of law relating to pollution or protection of the Environment, health and safety.

 

“Equity Interest” means (i) in the case of a corporation, any shares of its capital stock, (ii) in the case of a limited liability company, any membership interest therein, (iii) in the case of a partnership, any partnership interest (whether general or limited) therein, (iv) in the case of any other business entity, any participation or other interest in the equity or profits thereof, (v) any warrant, option or other right to acquire any Equity Interest described in this definition or (vi) any Security Entitlement in respect of any Equity Interest described in this definition.

 

“FINRA” means the Financial Industry Regulatory Authority, Inc.

 

“Intellectual Property” means all rights, priorities and privileges relating to intellectual property, including Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark Licenses and trade secrets, arising under the laws of the United States, which intellectual property is owned by the Lien Grantors, together with all claims for, and rights to sue for, past, present or future infringements, misappropriations, dilutions or other violations of any of the foregoing, and all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including damages and payments for past, present or future infringements, misappropriations, dilutions and violations thereof.

 

“Intellectual Property Filing” means (i) with respect to any Patent, Patent License, Trademark or Trademark License, the filing of the applicable Patent Security Agreement or Trademark Security Agreement with the United States Patent and Trademark Office, together with an appropriately completed recordation form and (ii) with respect to any Copyright or Copyright License, the filing of the applicable Copyright Security Agreement with the United States Copyright Office, together with an appropriately completed recordation form, in each case sufficient to record the Transaction Lien granted to the Collateral Agent in such Recordable Intellectual Property.

 

“Intellectual Property Security Agreement” means a Copyright Security Agreement, a Patent Security Agreement or a Trademark Security Agreement.

 

“Intercreditor Agreement” has the meaning specified on the cover page hereto.

 

  

4

  

 

“Issuer Control Agreement” means an Issuer Control Agreement substantially in the form of Exhibit F.

 

“Lien Grantors” means the Company and the Subsidiary Guarantors.

 

“LLC Interest” means a membership interest or similar interest in a limited liability company.

 

“Margin Stock” means “margin stock” as such term is defined in Regulation U of the FRB.

 

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the business, properties or condition (financial or otherwise) of the Company or the Company and its Subsidiaries taken as a whole; (b) a material impairment of the ability of any Lien Grantor to perform under any Notes Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Lien Grantor of any Notes Document to which it is a party.

 

“Material Commercial Tort Claim” means a Commercial Tort Claim involving a claim for more than $5,000,000.

 

“Material Real Property” means real property owned in fee by a Lien Grantor with a fair market value in excess of $5,000,000.

 

“Mortgage” means a deed of trust, trust deed, deed to secure debt or mortgage, as applicable, made by a Lien Grantor in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties in respect of Material Real Property.

 

“Mortgage Requirement” means, with respect to any Material Real Property owned by a Lien Grantor, (i) provision of (a) a Mortgage encumbering such Material Real Property in favor or for the benefit of the Collateral Agent on behalf of the Secured Parties, duly executed and acknowledged by each Lien Grantor that is the owner of or holder of any interest in such Material Real Property, and otherwise in form for recording in the recording office of each applicable political subdivision where each such Material Real Property is situated, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof to create a lien under applicable requirements of law, and such financing statements and any other instruments necessary to grant a mortgage lien under the laws of any applicable jurisdiction; (b) fully paid American Land Title Association Lender’s Extended Coverage title insurance policies, with endorsements and in amounts reasonably determined by the Company, issued, coinsured and reinsured by title insurers reasonably acceptable to the Collateral Agent, insuring such Mortgage to be a valid first and subsisting Lien on the property described therein, free and clear of all defects (including, but not limited to, mechanics’ and materialmen’s Liens) and encumbrances, excepting only Permitted Liens, and providing for such other affirmative insurance and such coinsurance and direct access reinsurance as may be reasonably necessary or desirable; (c) an ALTA survey (provided that the Company shall not be required to comply with the requirement of this clause (c) if, in the reasonable discretion of the Company as certified by an officer of the Company, the burden, cost or consequences of obtaining such survey is excessive in relation to the benefits to be obtained therefrom by the Secured Parties); (d) a completed “Life-of-Loan” Federal Emergency Management Agency Standard Flood Hazard Determination with respect to such Material Real Property (and if any building located on such Material Real Property is determined to be in a special flood hazard area, delivery of (x) a notice about special flood hazard area status and flood disaster assistance duly executed by the Company and each other applicable Lien Grantor relating thereto and (y) evidence of flood insurance; (e) a local counsel opinion as to the due authorization, execution and delivery and enforceability of such Mortgage in the state in which the Material Real Property described in such Mortgage is located and other matters customarily covered in real estate enforceability opinions and (f) any other documents reasonably requested by the Collateral Agent or the Holders of a majority in aggregate principal amount outstanding of the Notes; and (ii) recording of such Mortgage in the land records of the county in which such Material Real Property to be so encumbered is located.

 

  

5

  

 

“Nominated Person” means a Person whom the issuer of a letter of credit (i) designates or authorizes to pay, accept, negotiate or otherwise give value under such letter of credit and (ii) undertakes by agreement or custom and practice to reimburse.

 

“Notes Documents” means the Indenture, the Notes issued thereunder, this Agreement, the Collateral Documents and any security documents and other operative agreements evidencing or governing the Indebtedness thereunder, and the liens securing such Indebtedness, including any agreement entered into for the purpose of securing the Secured Obligations.

 

“Original Lien Grantor” means any Lien Grantor that grants a Lien on any of its assets hereunder on the Issue Date.

 

“own” refers to (i) in the case of personal property, the possession of sufficient rights in property to grant a security interest therein as contemplated by UCC Section 9-203 and (ii) in the case of real property, possession of fee simple interest, and “acquire” refers to the acquisition of any such rights.

 

“Partnership Interest” means a partnership interest, whether general or limited.

 

“Patent License” means any agreement now or hereafter in existence granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to any other Person, any right with respect to any Patent or any invention now or hereafter in existence, whether patentable or not, whether a patent or application for patent is in existence on such invention or not, and whether a patent or application for patent on such invention may come into existence or not, including any agreement identified in Schedule 1 to any Patent Security Agreement.

 

“Patent Security Agreement” means a Patent Security Agreement, substantially in the form of Exhibit C, executed and delivered by a Lien Grantor in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Patents” means (i) all letters patent and design letters patent of the United States and all applications for letters patent or design letters patent of the United States, including applications in the United States Patent and Trademark Office or in any similar office or agency of the United States or any State thereof, including those described in Schedule 1 to any Patent Security Agreement, (ii) all reissues, divisions, continuations, continuations in part, revisions and extensions of any of the foregoing, (iii) all claims for, and rights to sue for, past, present or future infringements of any of the foregoing and (iv) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including damages and payments for past, present or future infringements thereof.

 

  

6

  

 

“Perfection Certificate” means, with respect to any Lien Grantor, a certificate substantially in the form of Exhibit E, completed and supplemented with the schedules contemplated thereby, and signed by an officer of such Lien Grantor.

 

“Permitted Liens” means Liens on the Collateral permitted to be created or assumed or to exist pursuant to Section 3.5 of the Indenture.

 

“Permitted Priority Liens” means inchoate tax Liens arising by operation of law.

 

“Pledged,” when used in conjunction with any type of asset, means at any time an asset of such type that is included (or that creates rights that are included) in the Collateral at such time.  For example, “Pledged Equity Interest” means an Equity Interest that is included in the Collateral at such time and “Pledged letter of credit” means a letter of credit that creates rights to payment or performance that are included in the Collateral at such time.

 

“Proceeds” means all Proceeds (as defined in the UCC) and, to the extent not included therein, shall also include all proceeds of, and all other profits, products, rents or receipts, in whatever form, arising from the collection, sale, lease, exchange, assignment, licensing or other disposition of, or other realization upon, any Collateral, including all claims of the relevant Lien Grantor against third parties for loss of, damage to or destruction of, or for proceeds payable under, or unearned premiums with respect to, policies of insurance in respect of, any Collateral, and any condemnation or requisition payments with respect to any Collateral.

 

“Recordable Intellectual Property” means (i) Patents, (ii) Patent Licenses, (iii) Trademarks, (iv) Trademark Licenses, (v) Copyrights and (vi) Copyright Licenses, and all rights in or under any of the foregoing.

 

“Regulated Subsidiary” means a Subsidiary as to which the consent of a governmental body or official is required for any acquisition of control or change of control thereof.

 

“Secured Agreement,” when used with respect to any Secured Obligation, refers collectively to each instrument, agreement or other document that sets forth obligations of the Company, obligations of a Subsidiary Guarantor and/or rights of the holder with respect to such Secured Obligation.

 

“Secured Guarantee” means, with respect to each Subsidiary Guarantor, its guarantee of the Secured Obligations under Article X of the Indenture.

 

“Secured Obligations” means the Obligations (as defined in the Indenture) under the Notes, the Indenture and any Notes Document.

 

“Secured Party” shall have the meaning assigned to such term in the Indenture.

 

  

7

  

 

“Secured Party Requesting Notice” means, at any time, a Secured Party that has, at least five Business Days prior thereto, delivered to the Collateral Agent a written notice (i) stating that it holds one or more Secured Obligations and wishes to receive copies of the notices referred to in Section 21(h) and (ii) setting forth its address, facsimile number and electronic mail address to which copies of such notices should be sent.

 

“Security Agreement Supplement” means a Security Agreement Supplement, substantially in the form of Exhibit A, signed and delivered to the Collateral Agent for the purpose of adding a Subsidiary as a party hereto pursuant to Section 23 and/or adding additional property to the Collateral.

 

“Subsidiary Guarantor” means each Subsidiary listed on the signature pages hereof under the caption “Subsidiary Guarantors” and each Subsidiary that shall, at any time after the date hereof, become a “Subsidiary Guarantor” pursuant to Section 23.

 

“Supporting Letter of Credit” means a letter of credit that supports the payment or performance of one or more items included in the Collateral.

 

“Trademark License” means any agreement now or hereafter in existence granting to any Lien Grantor, or pursuant to which any Lien Grantor grants to any other Person, any right to use any Trademark, including any agreement identified in Schedule 1 to any Trademark Security Agreement.

 

“Trademark Security Agreement” means a Trademark Security Agreement, substantially in the form of Exhibit D, executed and delivered by a Lien Grantor in favor of the Collateral Agent for the benefit of the Secured Parties.

 

“Trademarks” means: (i) all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade styles, service marks, logos, brand names, slogans, trade dress, prints and labels on which any of the foregoing have appeared or appear, package and other designs, and all other source or business identifiers, and all general intangibles of like nature, and the rights in any of the foregoing which arise under applicable law, (ii) the goodwill of the business connected with the use thereof and symbolized thereby, (iii) all registrations and applications in connection therewith, including registrations and applications in the United States Patent and Trademark Office or in any similar office or agency of the United States or any State thereof, including those described in Schedule 1 to any Trademark Security Agreement, (iv) all renewals of any of the foregoing, (v) all claims for, and rights to sue for, past, present or future infringements and dilutions of any of the foregoing, or for unfair competition or for injury to the related goodwill associated therewith and (vi) all income, royalties, damages and payments now or hereafter due or payable with respect to any of the foregoing, including damages and payments for past, present or future infringements and dilutions thereof.

 

“Transaction Liens” means the Liens granted by the Lien Grantors under the Collateral Documents.

 

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any Transaction Lien on any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non-perfection or priority.

 

  

8

  

 

(d)           Terms Generally.  The definitions of terms herein (including those incorporated by reference to the UCC or to another document) apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof’ and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (iv) all references herein to Sections, Exhibits and Schedules shall be construed to refer to Sections of, and Exhibits and Schedules to, this Agreement and (v) the word “property” shall be construed to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

 

Section 2.             [Reserved].

 

Section 3.             Grant of Transaction Liens.

 

(a)           The Company, in order to secure the Secured Obligations, and each Subsidiary Guarantor listed on the signature pages hereof, in order to secure its Secured Obligations, grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in all right, title and interest of the Company or such Subsidiary Guarantor, as the case may be, in, to and under the following property of the Company or such Subsidiary Guarantor, as the case may be, whether now owned or existing or hereafter acquired or arising and regardless of where located:

 

(i)          all Accounts;

 

(ii)         all Chattel Paper;

 

(iii)        the Commercial Tort Claims described in Schedule 4;

 

(iv)       all Deposit Accounts;

 

(v)        all Documents;

 

(vi)       all Equipment;

 

(vii)      all General Intangibles (including any Equity Interests in other Persons that do not constitute Investment Property);

 

  

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(viii)     all Instruments;

 

(ix)        all Inventory;

 

(x)         all Investment Property;

 

(xi)        all Letter-of-Credit Rights with respect to Specified Letters of Credit;

 

(xii)       all Intellectual Property;

 

(xiii)      all books and records (including customer lists, credit files, computer programs, printouts and other computer materials and records) of such Original Lien Grantor pertaining to any of its Collateral;

 

(xiv)      such Original Lien Grantor’s ownership interest in (1) its Commodity Accounts, Deposit Accounts and Securities Accounts, (2) all Financial Assets credited to such accounts from time to time and all Security Entitlements in respect thereof, (3) all cash held in its such accounts from time to time and (4) all other money in the possession of the Collateral Agent; and

 

(xv)       all Supporting Obligations and Proceeds of the Collateral described in the foregoing clauses (i) through (xiv);

 

provided that the following property is excluded from the foregoing security interests (“Excluded Property”): (A) motor vehicles and other assets subject to certificates of title, (B) voting Equity Interests in any first-tier Foreign Subsidiary, to the extent (but only to the extent) required to prevent the Collateral from including more than 65% of all voting Equity Interests in such first-tier Foreign Subsidiary, (C) Capital Stock of any Foreign Subsidiary that is not a first-tier Foreign Subsidiary, (D) Equipment leased by an Original Lien Grantor under a lease that prohibits the granting of a Lien on such Equipment, (E) cash and Cash Equivalents maintained in any trust or payroll account, so long as such account are maintained as a trust or payroll account respectively, (F) Cash and Cash Equivalents maintained in any account of any Lien Grantor that is an investment adviser registered under the Investment Advisers Act of 1940, as amended, so long as (x) such account is maintained to satisfy qualified professional asset manager requirements under ERISA and (y) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $2,000,000 at any time, (G) cash and Cash Equivalents maintained in any account of any Lien Grantor that is a broker-dealer registered under the Exchange Act and a member of FINRA so long as (x) such account is maintained to satisfy minimum net regulatory capital requirements imposed by FINRA regulations pursuant to the Exchange Act and (y) the aggregate amount of cash and Cash Equivalents in all such accounts does not exceed $10,000,000 at any time, (H) intent-to-use Trademark applications solely to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent to use Trademark applications or any registrations that issue therefrom under applicable United States federal law, (I) any contract, permit, lease, license or other agreement to the extent that the grant of a security interest therein would result in a breach or default under such contract, permit, lease, license or other agreement (in each case, after giving effect to applicable provisions of the UCC), (J) any leasehold improvements to the extent that the grant of a security interest therein would violate the related lease, (K) assets located outside the United States to the extent a Lien on such assets cannot be perfected by the filing of UCC financing statements (or Personal Property Security Act (PPSA) statements), (L) assets subject to a purchase money lien, capitalized lease obligation or similar arrangement, in each case as permitted by the Indenture and the Credit Agreement, to the extent that the contract or other agreement in which such Lien is granted (or the documentation providing for such capitalized lease obligation or similar arrangement) prohibits such assets from being Collateral and only for so long as such Lien remains outstanding, (M) any real property or real property interests (including leasehold interests) other than Material Real Property, (N) Margin Stock and Equity Interests in any Person other than Wholly-Owned Subsidiaries to the extent not permitted by the terms of such Person’s organizational or joint venture documents, (O) any assets to the extent a security interest in such assets would result in material adverse tax consequences as reasonably determined by the Company, (P) pledges and security interests prohibited or restricted by applicable law (including any requirement to obtain the consent of any governmental authority or third party), in each case, after giving effect to applicable provisions of the UCC and (Q) proceeds and products of any and all of the foregoing excluded assets described in clauses (A) through (P) above only to the extent such proceeds and products would constitute property or assets of the type described in clauses (A) through (P) above.  Each Original Lien Grantor shall use commercially reasonable efforts to obtain any consent that is reasonably obtainable and required for any property described in clause (D), (I), (J) or (L) above to cease to constitute Excluded Property.  Notwithstanding the foregoing, (i) property in which a security interest is granted pursuant to Section 5(g) shall not constitute Excluded Property for so long as the Other First Lien Obligations are secured by such property and (ii) all assets of Insurance Subsidiaries (including cash and Cash Equivalents temporarily held by Lien Grantors on behalf of, and for the benefit of, Insurance Subsidiaries) shall be Excluded Property.  In addition, (a) no actions in any non-U.S. jurisdiction shall be required in order to create any security interests in assets located outside the United States or to perfect any security interests (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction), (b) no control agreements shall be required with respect to Deposit Accounts, Securities Accounts or Commodity Accounts, (c) the Company and the Subsidiary Guarantors shall not be required to seek any landlord lien waiver, estoppel, warehouseman waiver or other collateral access or similar agreement and (d) assets will be excluded from the Collateral in circumstances where the cost of obtaining a security interest in such assets exceed the practical benefit to the Secured Parties afforded thereby (as reasonably determined by the Company).

 

  

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(b)           With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

 

(c)           The Transaction Liens are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of any Lien Grantor with respect to any of the Collateral or any transaction in connection therewith.

 

(d)           Notwithstanding anything to the contrary in this Agreement or any other Notes Document, if the governmental body or official having jurisdiction over any Regulated Subsidiary determines that the pledge of the shares of capital stock of such Regulated Subsidiary hereunder constitutes the acquisition of or a change of control with respect to such Regulated Subsidiary as to which the prior approval of such governmental body or official was required, then, immediately upon the relevant Lien Grantor’s (1) written memorialization of oral notice or (2) receipt of written notice from such governmental body or official of such determination and without any action on the part of the Collateral Agent or any other Person, such pledge shall be rendered void ab initio and of no effect.  Upon any such occurrence, (i) the Collateral Agent shall, at such Lien Grantor’s written request and expense, return all certificates representing such capital stock to such Lien Grantor and execute and deliver such documents as such Lien Grantor shall reasonably request to evidence such Lien Grantor’s retention of all rights in such capital stock and (ii) such Lien Grantor shall, if requested by the Collateral Agent or the Holders of a majority in aggregate principal amount of the Notes, promptly submit a request to the relevant governmental body or official for approval of the pledge of such shares to the Collateral Agent hereunder and, upon receipt of such approval, shall forthwith deliver to the Collateral Agent certificates representing all the outstanding shares of capital stock of such Regulated Subsidiary (subject to the limitation in Section 11(m) if such Regulated Subsidiary is a Foreign Subsidiary) to be held as Collateral hereunder.

 

  

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Section 4.               General Representations and Warranties.  Each Original Lien Grantor represents and warrants that:

 

(a)           Such Lien Grantor is duly organized, validly existing and in good standing under the laws of the jurisdiction identified as its jurisdiction of organization in its Perfection Certificate.

 

(b)           Schedule 1 lists all Equity Interests in Subsidiaries and Affiliates owned by such Lien Grantor as of the Issue Date.  Such Lien Grantor holds all such Equity Interests directly (i.e., not through a Subsidiary, a Securities Intermediary or any other Person).

 

(c)           Schedule 2 lists, as of the Issue Date, all Securities owned by such Lien Grantor (except Securities evidencing Equity Interests in Subsidiaries and Affiliates).

 

(d)           Schedule 3 lists, as of the Issue Date, (i) all Securities Accounts to which Financial Assets are credited in respect of which such Lien Grantor owns Security Entitlements, (ii) all Commodity Accounts in respect of which such Lien Grantor is the Commodity Customer and (iii) all Deposit Accounts in the name of such Lien Grantor.

 

(e)           All Pledged Equity Interests owned by such Lien Grantor are owned by it free and clear of any Lien other than Permitted Liens.  All shares of capital stock included in such Pledged Equity Interests (including shares of capital stock in respect of which such Lien Grantor owns a Security Entitlement) have been duly authorized and validly issued and are fully paid and non-assessable.  None of such Pledged Equity Interests is subject to any option to purchase or similar right of any Person.  Such Lien Grantor is not and will not become a party to or otherwise bound by any agreement (except as permitted by the Indenture) which restricts in any manner the rights of any present or future holder of any Pledged Equity Interest with respect thereto.

 

  

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(f)            Such Lien Grantor has good and marketable title to, a right to use, or a valid leasehold interest in, all its Collateral, except for such defects in title or interests as could not, individually or in the aggregate with respect to all Lien Grantors, reasonably be expected to have a Material Adverse Effect.  The property of such Lien Grantor is subject to no Liens, other than Permitted Liens.

 

(g)           Such Lien Grantor has not performed any acts that could reasonably be expected to prevent the Collateral Agent from enforcing any of the provisions of the Collateral Documents or that would limit the Collateral Agent in any such enforcement.  No authorized financing statement, security agreement, mortgage or similar or equivalent document or instrument covering all or part of the Collateral owned by such Lien Grantor is on file or of record in any jurisdiction in which such filing or recording would be effective to perfect or record a Lien on such Collateral, except financing statements, mortgages or other similar or equivalent documents with respect to Permitted Liens.  After the Issue Date, no Collateral owned by such Lien Grantor will be in the possession or under the Control of any other Person having a claim thereto or security interest therein, other than a Permitted Lien.

 

(h)           The Transaction Liens on all Collateral owned by such Lien Grantor (i) have been validly created, (ii) will attach to each item of such Collateral on the Issue Date (or, if such Lien Grantor first obtains rights thereto on a later date, on such later date) and (iii) when so attached, will secure all the Secured Obligations or such Lien Grantor’s Secured Guarantee, as the case may be.

 

(i)            Such Lien Grantor has delivered a Perfection Certificate to the Collateral Agent.  The information set forth therein is correct and complete as of the Issue Date.  Within 60 days after the Issue Date, such Lien Grantor will furnish (or cause to be furnished) to the Collateral Agent a file search report from each UCC filing office listed in its Perfection Certificate, showing the filing made at such filing office to perfect the Transaction Liens on its Collateral.

 

(j)            When UCC financing statements describing the Collateral as set forth in the Perfection Certificate have been filed in the offices specified in such Perfection Certificate, the Transaction Liens will constitute perfected security interests in the Collateral owned by such Lien Grantor to the extent that a security interest therein may be perfected by filing pursuant to the UCC, prior to all Liens and rights of others therein except Permitted Liens that have priority over the Transaction Liens by operation of law.  When, in addition to the filing of such UCC financing statements, the applicable Intellectual Property Filings have been made with respect to such Lien Grantor’s Recordable Intellectual Property (including any future filings required pursuant to Sections 5(a) and 9(a)), the Transaction Liens will constitute perfected security interests in all right, title and interest of such Lien Grantor in its Recordable Intellectual Property to the extent that security interests therein may be perfected by such filings, prior to all Liens and rights of others therein except Permitted Liens.  Except for (i) the filing of such UCC financing statements and (ii) such Intellectual Property Filings, no registration, recordation or filing with, and no authorization or approval or other action by, any governmental body, agency or official is required in connection with the execution or delivery of the Security Agreement or is necessary for the validity or enforceability thereof or for the perfection or due recordation of the Transaction Liens or (except with respect to the capital stock of any Regulated Subsidiary) for the enforcement of the Transaction Liens.

 

  

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(k)           If such Lien Grantor is also a Subsidiary Guarantor, in executing and delivering this Agreement (including providing its Secured Guarantee), such Lien Grantor has (i) without reliance on the Collateral Agent or any other Secured Party or any information received from the Collateral Agent or any other Secured Party and based upon such documents and information it deems appropriate, made an independent investigation of the transactions contemplated by the Notes Documents and the Company, the Company’s business, assets, operations, prospects and condition, financial or otherwise, and any circumstances which may bear upon such transactions, the Company or the obligations and risks undertaken herein with respect to the Secured Obligations, (ii) adequate means to obtain from the Company on a continuing basis information concerning the Company, (iii) full and complete access to the Notes Documents and any other documents executed in connection with the Notes Documents and (iv) not relied and will not rely upon any representations or warranties of the Collateral Agent or any other Secured Party not embodied herein or any acts heretofore or hereafter taken by the Collateral Agent or any other Secured Party (including any review by the Collateral Agent or any other Secured Party of the affairs of the Company).

 

Section 5.               Further Assurances; General Covenants.  Each Lien Grantor covenants as follows:

 

(a)           Such Lien Grantor will at the Company’s expense, execute, deliver, file and record any statement, assignment, instrument, document, agreement or other paper and take any other action (including any Intellectual Property Filing and any filing of financing or continuation statements under the UCC) that from time to time may be necessary in order to:

 

(i)           create, preserve, perfect or confirm the Transaction Liens on such Lien Grantor’s Collateral;

 

(ii)           in the case of Pledged Letter-of-Credit Rights, Pledged Electronic Chattel Paper and Pledged Investment Property, cause the Collateral Agent to have Control thereof; or

 

(iii)         enable the Collateral Agent to exercise and enforce any of its rights, powers and remedies with respect to any of such Lien Grantor’s Collateral.

 

In furtherance of the foregoing, in respect of the insurance policies required by Section 6.05 of the Credit Agreement relating to any property or business of such Lien Grantor, such Lien Grantor shall deliver to the Collateral Agent, on the Issue Date (with respect to existing polices) and promptly following the entry into new policies or the renewal, extension or modification of existing policies, a copy of, or a certificate as to coverage under such policies, each of which shall (i) within 30 days of the date of such delivery, be endorsed or otherwise amended to include a “standard” or “New York” lender’s loss payable or mortgagee endorsement (as applicable) naming the Collateral Agent as mortgagee or loss payee (in the case of property insurance) or additional insured on behalf of the Secured Parties (in the case of liability insurance), as applicable and (ii) to the extent available, provide that no cancellation, material addition in amount or material change in coverage shall be effective until after 30 days’ notice thereof to the Collateral Agent.

 

  

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To the extent permitted by applicable law, such Lien Grantor authorizes the Collateral Agent to execute and file such financing statements or continuation statements, and amendments thereto, including, without limitation, one or more financing statements indicating that such financing statements cover all assets or all personal property (or words of similar effect) of such Lien Grantor, in each case without such Lien Grantor’s signature appearing thereon, and regardless of whether any particular asset described in such financing statement falls within the scope of the UCC or the granting clause of this Agreement.  A photographic, photostatic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for filing or recording in any jurisdiction.  Such Lien Grantor constitutes the Collateral Agent its attorney-in-fact to execute and file, in the event such Lien Grantor fails to do so promptly, all Intellectual Property Filings and other filings required or so requested for the foregoing purposes, all such acts of such attorney being hereby ratified and confirmed; and such power, being coupled with an interest, shall be irrevocable until all the Transaction Liens granted by such Lien Grantor terminate pursuant to Section 22.  The Company will pay the reasonable costs of, or incidental to, any Intellectual Property Filings and any recording or filing of any financing or continuation statements or other documents recorded or filed pursuant hereto.

 

(b)           Such Lien Grantor will (x) furnish to the Collateral Agent prompt written notice of any (i) change of its name or corporate structure or (ii) change of its location (determined as provided in UCC Section 9-307) and (y) take all actions that are necessary or required by the Collateral Agent for the purpose of perfecting or protecting the security interest granted by this Agreement.

 

(c)           Such Lien Grantor will not sell, lease, license, exchange, assign or otherwise dispose of, or grant any option with respect to, any of its Collateral; provided that such Lien Grantor may do any of the foregoing unless (i) doing so would violate a covenant in the Indenture or (ii) an Event of Default shall have occurred and be continuing and the Collateral Agent shall have notified such Lien Grantor that its right to do so is terminated, suspended or otherwise limited.

 

(d)           Such Lien Grantor will, promptly upon request, provide to the Collateral Agent all information and evidence concerning such Lien Grantor’s Collateral that the Collateral Agent may reasonably request to enable it to enforce the provisions of the Collateral Documents.

 

(e)           Upon the acquisition of any Material Real Property by any Lien Grantor or any real property owned by any Lien Grantor becoming Material Real Property (as of the end of any fiscal quarter), such Lien Grantor will cause such Material Real Property to be subjected to a Lien securing the Secured Obligations and will take such actions as shall be necessary or reasonably requested by the Collateral Agent to grant and perfect or record such Lien in accordance with the Mortgage Requirement and to satisfy the other conditions of the Mortgage Requirement within 120 days of the requirement becoming applicable.

 

  

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(f)            Such Lien Grantor shall not incur or suffer to exist any Lien (the “Initial Lien”) on any property (including any property that would otherwise be Excluded Property) to secure any Other First Lien Obligations (as defined in the Intercreditor Agreement) or take any action to perfect any such security interest, unless such Lien Grantor concurrently grants a Lien to the Collateral Agent to secure the Secured Obligations ranking pari passu with such Initial Lien securing such Other First Lien Obligations and takes such action to perfect such Lien; provided that any such Lien on property that would otherwise be Excluded Property created to secure the Secured Obligations pursuant to this clause (f) shall provide by its terms that upon the release and discharge of the Initial Lien on such property by the Collateral Agent (as defined in the Intercreditor Agreement) for such Other First Lien Obligations, the Lien on such property securing the Secured Obligations shall be automatically and unconditionally released and discharged and such Lien Grantor may take any action necessary to memorialize such release or discharge.

 

Section 6.               Reserved.

 

Section 7.               Chattel Paper and Instruments.  Except as to actions to be taken by the Collateral Agent, each Lien Grantor represents, warrants and covenants as follows:

 

(a)           On the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will deliver to the Collateral Agent as Collateral hereunder (i) all Pledged Tangible Chattel Paper, provided that delivery of the Pledged Tangible Chattel Paper shall be required pursuant to this paragraph only to the extent that the aggregate value of all Pledged Tangible Chattel Paper that has not been delivered would exceed $5,000,000 and (ii) each Pledged Instrument having a value in excess of $2,000,000 then owned by such Lien Grantor.  Thereafter, whenever such Lien Grantor acquires any other Pledged Tangible Chattel Paper or Pledged Instrument having a value in excess of $2,000,000, such Lien Grantor will immediately deliver such Pledged Tangible Chattel Paper or Pledged Instrument to the Collateral Agent as Collateral hereunder.  Notwithstanding the foregoing, all debt owing by the Company or any of its Subsidiaries to a Lien Grantor (regardless of the value thereof) shall be pledged by delivery to the Collateral Agent of an intercompany note.

 

(b)           So long as no Event of Default shall have occurred and be continuing, the Collateral Agent will, promptly upon request by the relevant Lien Grantor, make appropriate arrangements for making any Pledged Tangible Chattel Paper or Pledged Instrument available to it for purposes of presentation, collection or renewal (any such arrangement to be effected against trust receipt or like document).

 

  

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(c)            Schedule 5 lists, as of the Issue Date, all Pledged Instruments.

 

(d)           All Pledged Tangible Chattel Paper and Pledged Instruments owned by such Lien Grantor, when delivered to the Collateral Agent (to the extent such delivery is required), will be indorsed to the order of the Collateral Agent, or accompanied by duly executed instruments of assignment.

 

(e)           Upon the delivery of any Pledged Tangible Chattel Paper or Pledged Instrument owned by such Lien Grantor to the Collateral Agent, the Transaction Lien on such Collateral will be perfected, subject to no prior Liens or rights of others.

 

(f)            Each Lien Grantor will take (or cause others to take) all actions required under UCC Section 9-105 to cause the Collateral Agent to obtain and maintain Control of any and all Electronic Chattel Paper owned by such Lien Grantor from time to time, provided that such Lien Grantor’s actions to cause the Collateral Agent to obtain and maintain Control of such Electronic Chattel shall be required pursuant to this paragraph only to the extent that the aggregate value of all Electronic Chattel Paper then owned by such Lien Grantor and not subject to the Collateral Agent’s Control would exceed $5,000,000.

 

Section 8.               Commercial Tort Claims.  Each Lien Grantor represents, warrants and covenants as follows:

 

(a)           In the case of an Original Lien Grantor, Schedule 4 accurately describes, with the specificity required to satisfy Official Comment 5 to UCC Section 9-108, each Material Commercial Tort Claim with respect to which such Original Lien Grantor is the claimant as of the Issue Date.  In the case of any other Lien Grantor, Schedule 4 to its first Security Agreement Supplement will accurately describe, with the specificity required to satisfy said Official Comment 5, each Material Commercial Tort Claim with respect to which such Lien Grantor is the claimant as of the date on which it signs and delivers such Security Agreement Supplement.

 

(b)           If any Lien Grantor acquires a Material Commercial Tort Claim after the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will promptly sign and deliver to the Collateral Agent a Security Agreement Supplement granting a security interest in such Commercial Tort Claim (which shall be described therein with the specificity required to satisfy said Official Comment 5) to the Collateral Agent for the benefit of the Secured Parties.

 

(c)           Upon the filing of a UCC financing statement in the jurisdiction under the laws of which the relevant Lien Grantor is organized, the Transaction Lien on each Commercial Tort Claim described pursuant to subsection (a) or (b) above will be perfected, subject to no prior Liens or rights of others, except for Permitted Liens that have priority over the Transaction Liens by operation of law.

 

  

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Section 9.              Recordable Intellectual Property.  Each Lien Grantor covenants as follows:

 

(a)           On the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will sign and deliver to the Collateral Agent Intellectual Property Security Agreements with respect to all Recordable Intellectual Property then owned by it.  Concurrently with (or prior to) each delivery of annual financial statements pursuant to Section 3.2 of the Indenture, it will sign and deliver to the Collateral Agent any Intellectual Property Security Agreement necessary to grant Transaction Liens on all Recordable Intellectual Property owned by it on December 31st of the most recently ended year covered by such financial statements that is not covered by any previous Intellectual Property Security Agreement so signed and delivered by it.  In each case, it will promptly make all Intellectual Property Filings necessary to record the Transaction Liens on such Recordable Intellectual Property.

 

(b)          Such Lien Grantor will notify the Collateral Agent promptly if it knows that any application or registration relating to any Recordable Intellectual Property owned or licensed by it may become abandoned or dedicated to the public, or of any adverse determination or development (including the institution of, or any adverse determination or development in, any proceeding in the United States Copyright Office, the United States Patent and Trademark Office or any court) regarding such Lien Grantor’s ownership of such Recordable Intellectual Property, its right to register or patent the same, or its right to keep and maintain the same; provided that the foregoing shall not apply to the extent that any such event, individually or together with all such events, could not reasonably be expected to have a Material Adverse Effect.

 

Section 10.             Proceeds of Letters of Credit.  Except as to actions to be taken by the Collateral Agent, each Lien Grantor represents, warrants and covenants as follows:

 

(a)           On the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will deliver to the Collateral Agent each letter of credit having a face amount in excess of $2,500,000 (the “Specified Letters of Credit”).

 

(b)          Notwithstanding the foregoing, so long as no Event of Default shall have occurred and be continuing, the Collateral Agent will, promptly upon request by any Lien Grantor, make appropriate arrangements for making any Specified Letter of Credit delivered to the Collateral Agent pursuant to subsection (a) above available to such Lien Grantor to facilitate the administration thereof or the exercise of its rights thereunder (any such arrangement to be effected against trust receipt or like document).

 

(c)           Such Lien Grantor, by granting a security interest in its Letter-of-Credit Rights to the Collateral Agent, intends to (and hereby does) assign to the Collateral Agent its rights (including its contingent rights) to the proceeds of all letters of credit of which it is or hereafter becomes a beneficiary.  If any such letter of credit is not a Supporting Letter of Credit, such Lien Grantor will (i) use commercially reasonable efforts to cause the issuer of such letter of credit and each Nominated Person (if any) with respect thereto to consent to such assignment of the proceeds thereof and (ii) deliver written evidence of any such consent obtained to the Collateral Agent.

 

  

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(d)           The Transaction Lien on the relevant Lien Grantor’s rights to the proceeds of each letter of credit under which such Lien Grantor is a beneficiary will be perfected, subject to no prior Liens or rights of others, if either (i) such letter of credit is a Supporting Letter of Credit and the Transaction Lien on the item of Collateral supported thereby has been perfected or (ii) the relevant issuing bank and each relevant Nominated Person (if any) shall have consented to the assignment of the proceeds thereof set forth in subsection (c) above.

 

(e)           If an Event of Default shall have occurred and be continuing, such Lien Grantor will, promptly upon request by the Collateral Agent, notify (and in the event such Lien Grantor fails to do so promptly, such Lien Grantor authorizes the Collateral Agent to notify) the issuer and each Nominated Person with respect to each of its Pledged letters of credit that (i) the proceeds thereof have been assigned to the Collateral Agent hereunder and (ii) any payments due or to become due in respect thereof are to be made directly to the Collateral Agent or its designee for the period during which such Event of Default is continuing.

 

Section 11.            Investment Property.  Each Lien Grantor represents, warrants and covenants as follows:

 

(a)           Certificated Securities.  On the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will deliver to the Collateral Agent as Collateral hereunder all certificates representing Pledged Certificated Securities then owned by such Lien Grantor.  Thereafter, whenever such Lien Grantor acquires any other certificate representing a Pledged Certificated Security, such Lien Grantor will promptly deliver such certificate to the Collateral Agent as Collateral hereunder.  The provisions of this subsection are subject to the limitation in Section 11(m) in the case of voting Equity Interests in a Foreign Subsidiary.

 

(b)           Uncertificated Securities.

 

(i)           On the Issue Date (in the case of an Original Lien Grantor) or the date on which it signs and delivers its first Security Agreement Supplement (in the case of any other Lien Grantor), such Lien Grantor will enter into (and, if the relevant issuer is a Subsidiary, cause, or if the relevant issuer is not a Subsidiary, use commercially reasonable efforts to cause, the relevant issuer to enter into) an Issuer Control Agreement in respect of each Pledged Uncertificated Security then owned by such Lien Grantor and deliver such Issuer Control Agreement to the Collateral Agent (which shall enter into the same).  Thereafter, whenever such Lien Grantor acquires any other Pledged Uncertificated Security, such Lien Grantor will enter into (and, if the relevant issuer is a Subsidiary, cause, or if the relevant issuer is not a Subsidiary, use commercially reasonable efforts to cause, the relevant issuer to enter into) an Issuer Control Agreement in respect of such Pledged Uncertificated Security and deliver such Issuer Control Agreement, if any, to the Collateral Agent (which shall enter into the same).  The provisions of this subsection are subject to (i) the limitation in Section 11(m) in the case of voting Equity Interests in a Foreign Subsidiary and (ii) Section 14(c).

 

  

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(ii)           If any Pledged Uncertificated Partnership Interest or any Pledged Uncertificated LLC Interest that was not considered a security under the UCC as of the Issue Date becomes a security under the UCC thereafter, the Lien Grantor that originally pledged such interest shall promptly after the date on which such interest becomes an uncertificated security enter into (and, if the relevant issuer is a Subsidiary, cause, or if the relevant issuer is not a Subsidiary, use commercially reasonable efforts to cause, the relevant issuer to enter into) an Issuer Control Agreement in respect of each such Pledged Uncertificated Security then owned by such Lien Grantor and deliver such Issuer Control Agreement to the Collateral Agent (which shall enter into the same).

 

(c)           Security Entitlements.  Each Lien Grantor agrees that it will provide the Collateral Agent with prompt written notice (and in any case within 20 days) of the opening of any new Securities Accounts and any such notice shall be deemed to be an automatic amendment to Schedule 3 hereto to include such account.

 

(d)           Commodity Accounts.  Each Lien Grantor agrees that it will provide the Collateral Agent with prompt written notice (and in any case within 20 days) of the opening of any new Commodity Accounts and any such notice shall be deemed to be an automatic amendment to Schedule 3 hereto to include such account.

 

(e)           Regulated Subsidiaries.  If the Collateral includes any capital stock of a Regulated Subsidiary that is not represented by certificates, the relevant Lien Grantor shall exercise its commercially reasonable efforts to cause such capital stock to be represented by certificates and, promptly upon receipt thereof, comply with Section 11(a) with respect thereto.  No Lien Grantor shall hold any capital stock of a Regulated Subsidiary in a Securities Account.

 

(f)           Perfection as to Certificated Securities.  When such Lien Grantor delivers the certificate representing any Pledged Certificated Security owned by it to the Collateral Agent and complies with Section 11(k) in connection with such delivery, (i) the Transaction Lien on such Pledged Certificated Security will be perfected, subject to no prior Liens or rights of others, (ii) the Collateral Agent will have Control of such Pledged Certificated Security and (iii) the Collateral Agent will be a protected purchaser (within the meaning of UCC Section 8-303) thereof.

 

(g)           Perfection as to Uncertificated Securities.  When such Lien Grantor, the Collateral Agent and the issuer of any Pledged Uncertificated Security owned by such Lien Grantor enter into an Issuer Control Agreement with respect thereto, (i) the Transaction Lien on such Pledged Uncertificated Security will be perfected, subject to no prior Liens or rights of others (except Permitted Priority Liens), (ii) the Collateral Agent will have Control of such Pledged Uncertificated Security and (iii) the Collateral Agent will be a protected purchaser (within the meaning of UCC Section 8-303) thereof.

 

  

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(h)           Negative Pledge as to Security Entitlements.  The Transaction Lien on any Security Entitlement will be subject to no prior Liens or rights of others (except (x) Liens and rights of the relevant Securities Intermediary that are Permitted Liens and (y) Permitted Priority Liens) and (ii) no action based on an adverse claim to such Security Entitlement or such Financial Asset, whether framed in conversion, replevin, constructive trust, equitable lien or other theory, may be asserted against the Collateral Agent or any other Secured Party.

 

(i)           Negative Pledge as to Commodity Accounts.  The Transaction Liens on each Commodity Account and all Commodity Contracts carried therein will be subject to no prior Liens or rights of others (except (x) Liens and rights of the relevant Commodity Intermediary permitted by the Indenture or any Collateral Document and (y) Permitted Priority Liens).

 

(j)           Agreement as to Applicable Jurisdiction.  In respect of all Security Entitlements owned by such Lien Grantor, and all Securities Accounts to which the related Financial Assets are credited, the Securities Intermediary’s jurisdiction (determined as provided in UCC Section 8-110(e)) will at all times be located in the United States.  In respect of all Commodity Contracts owned by such Lien Grantor and all Commodity Accounts in which such Commodity Contracts are carried, the Commodity Intermediary’s jurisdiction (determined as provided in UCC Section 9-305(b)) will at all times be located in the United States.

 

(k)           Delivery of Pledged Certificates.  All Pledged Certificates, when delivered to the Collateral Agent, will be in suitable form for transfer by delivery, or accompanied by duly executed instruments of transfer or assignment in blank.

 

(l)            Communications.  Each Lien Grantor will promptly give to the Collateral Agent copies of any notices and other communications received by it with respect to (i) Pledged Securities registered in the name of such Lien Grantor or its nominee and (ii) Pledged Security Entitlements as to which such Lien Grantor is the Entitlement Holder, in each case (x) while an Event of Default has occurred and is continuing or (y) relating to any matter that could reasonably be expected to have a Material Adverse Effect.

 

(m)          Foreign Subsidiaries.  A Lien Grantor will not be obligated to comply with the provisions of this Section at any time with respect to any voting Equity Interest in a Foreign Subsidiary if and to the extent (but only to the extent) that such voting Equity Interest is excluded from the Transaction Liens at such time pursuant to clause (B) of the proviso at the end of Section 3(a) and/or the comparable provisions of one or more Security Agreement Supplements.

 

Section 12.            Deposit Accounts.  Each Lien Grantor represents, warrants and covenants that (i) all cash owned by each Lien Grantor shall be deposited, upon or promptly after the receipt thereof, in one or more Deposit Accounts, (ii) the Transaction Liens on each Deposit Account will be subject to no prior Liens or rights of others (except (x) Liens and rights of the relevant financial institution at which such Deposit Account is maintained that are permitted by the Indenture or any Collateral Document and (y) Permitted Priority Liens) and (iii) each Lien Grantor will provide the Collateral Agent with prompt written notice (and in any case within 20 days) of the opening of any new Deposit Account and any such notice shall be deemed to be an automatic amendment to Schedule 3 hereto.

 

  

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Section 13.            Payments upon an Event of Default.  Each Lien Grantor represents, warrants and covenants that if an Event of Default shall have occurred and be continuing, such Lien Grantor will, if requested to do so by the Collateral Agent, promptly notify (and to the extent it fails to do so promptly, such Lien Grantor authorizes the Collateral Agent so to notify) and instruct each Person obligated at any time to make any payment to such Lien Grantor for any reason (including each account debtor in respect of any of its Accounts) that any payments due or to become due are to be made directly to the Collateral Account for the period during which such Event of Default is continuing.

 

Section 14.            Transfer of Record Ownership.

 

(a)           At any time when an Event of Default shall have occurred and be continuing, the Collateral Agent may (and to the extent that action by it is required, the relevant Lien Grantor, if directed to do so by the Collateral Agent, will as promptly as practicable) cause each of the Pledged Securities (or any portion thereof specified in such direction) to be (x) transferred of record into the name of the Collateral Agent or its nominee or (y) credited to the Collateral Account; provided that no such action shall be taken with respect to any capital stock of any Regulated Subsidiary unless any and all regulatory approvals required under applicable law shall have been obtained; and provided further that (i) to the extent any of the Pledged Securities (or a portion thereof) have been transferred of record into the name of the Collateral Agent or its nominee and (ii) no Event of Default is continuing, the Collateral Agent will cooperate reasonably with the relevant Lien Grantor to cause such Pledged Security (or a portion thereof) to be re-registered (as promptly as practicable) in the name of such Lien Grantor.  Each Lien Grantor will take any and all actions reasonably necessary or as requested by the Collateral Agent to facilitate compliance with this subsection.

 

(b)           Ownership upon Transfer of Record Ownership.  If and when any Pledged Security (whether certificated or uncertificated) owned by such Lien Grantor is transferred of record into the name of the Collateral Agent or its nominee pursuant to Section 14(a), (i) the Collateral Agent shall be the holder of record with respect to such Pledged Security, (ii) the Collateral Agent will have Control of such Pledged Security and (iii) the Collateral Agent will be a protected purchaser (within the meaning of UCC Section 8-303) thereof.

 

(c)           Provisions Inapplicable after Transfer of Record Ownership.  If the provisions of Section 14(a) are implemented, Sections 11(b) and 11(c) shall not thereafter apply to (i) any Pledged Security that is registered in the name of the Collateral Agent or its nominee or (ii) any Security Entitlement in respect of which the Collateral Agent or its nominee is the Entitlement Holder.

 

  

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(d)           Communications after Transfer of Record Ownership.  The Collateral Agent will promptly give to the relevant Lien Grantor copies of any notices and other communications received by the Collateral Agent with respect to (i) Pledged Securities registered in the name of the Collateral Agent or its nominee and (ii) Pledged Security Entitlements as to which the Collateral Agent or its nominee is the Entitlement Holder.

 

Section 15.            Right to Vote Securities.

 

(a)           Unless an Event of Default shall have occurred and be continuing, each Lien Grantor will have the right, from time to time, to vote and to give consents, ratifications and waivers with respect to any Pledged Security owned by it and the Financial Asset underlying any Pledged Security Entitlement owned by it, and the Collateral Agent will, upon receiving a written request from such Lien Grantor, promptly deliver (or cause to be delivered) to such Lien Grantor or as specified in such request such proxies, powers of attorney, consents, ratifications and waivers in respect of any such Pledged Security that is registered in the name of the Collateral Agent or its nominee or any such Pledged Security Entitlement as to which the Collateral Agent or its nominee is the Entitlement Holder, in each case as shall be specified in such request and be in form and substance reasonably acceptable to the Collateral Agent.  Unless an Event of Default shall have occurred and be continuing, the Collateral Agent will have no right to take any action which the owner of a Pledged Partnership Interest or Pledged LLC Interest is entitled to take with respect thereto, except the right to receive payments and other distributions to the extent provided herein.

 

(b)           If an Event of Default shall have occurred and be continuing, and after written notice from the Collateral Agent to such Lien Grantor, the Collateral Agent will have the right to the extent permitted by law (and, in the case of a Pledged Partnership Interest or Pledged LLC Interest, by the relevant partnership agreement, limited liability company agreement, operating agreement or other governing document) to vote, to give consents, ratifications and waivers and to take any other action with respect to the Pledged Investment Property, the other Pledged Equity Interests (if any) and the Financial Assets underlying the Pledged Security Entitlements, with the same force and effect as if the Collateral Agent were the absolute and sole owner thereof, and each Lien Grantor will take all such action as the Collateral Agent may reasonably request from time to time to give effect to such right; provided that the Collateral Agent will not have the right to vote, to give consents, ratifications or waivers or to take any other action with respect to the capital stock of any Regulated Subsidiary, in each case to the extent that such action would require prior regulatory approval under applicable law, unless such approval shall have been granted.

 

Section 16.            Remedies upon Event of Default.

 

(a)           If an Event of Default shall have occurred and be continuing, the Collateral Agent may exercise (or cause its sub-agents to exercise) any or all of the remedies available to it (or to such sub-agents) under the Collateral Documents.

 

  

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(b)           Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing, the Collateral Agent may exercise on behalf of the Secured Parties all the rights of a secured party under the UCC (whether or not in effect in the jurisdiction where such rights are exercised) with respect to any Collateral and, in addition, the Collateral Agent may, without being required to give any notice, except as herein provided or as may be required by mandatory provisions of law, withdraw all cash held in the Collateral Account and apply such cash as provided in Section 17 and, if there shall be no such cash or if such cash shall be insufficient to pay all the Secured Obligations in full, sell, lease, license or otherwise dispose of the Collateral or any part thereof; provided that the right of the Collateral Agent to sell or otherwise dispose of the capital stock of any Regulated Subsidiary shall be subject to the Collateral Agent or the relevant Lien Grantor obtaining, to the extent necessary under applicable law, the prior approval of such sale or other disposition by the governmental body or official having jurisdiction with respect to such Regulated Subsidiary.  Notice of any such sale or other disposition shall be given to the relevant Lien Grantor(s) as required by Section 19.

 

(c)           Without limiting the generality of the foregoing, if an Event of Default shall have occurred and be continuing:

 

(i)           the Collateral Agent may license or sublicense, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any Pledged Intellectual Property (including any Pledged Recordable Intellectual Property) for such term or terms, on such conditions and in such manner as the Collateral Agent shall in its reasonable discretion determine; provided that such licenses or sublicenses do not conflict with any existing license of which the Collateral Agent shall have received a copy;

 

(ii)           the Collateral Agent may (without assuming any obligation or liability thereunder), at any time and from time to time, in its sole and reasonable discretion, enforce (and shall have the exclusive right to enforce) against any licensee or sublicensee all rights and remedies of any Lien Grantor in, to and under any of its Pledged Intellectual Property and take or refrain from taking any action under any thereof, and each Lien Grantor releases the Collateral Agent and each other Secured Party from liability for, and agrees to hold the Collateral Agent and each other Secured Party free and harmless from and against any claims and expenses arising out of, any lawful action so taken or omitted to be taken with respect thereto, except for claims and expenses arising from the Collateral Agent’s or such Secured Party’s gross negligence or willful misconduct as determined by a court of competent jurisdiction in a final and non-appealable judgment; and

 

(iii)          upon request by the Collateral Agent (which shall not be construed as implying any limitation on its rights or powers), each Lien Grantor will execute and deliver to the Collateral Agent a power of attorney, in form and substance reasonably satisfactory to the Collateral Agent, for the implementation of any sale, lease, license or other disposition of any of such Lien Grantor’s Pledged Intellectual Property or any action related thereto.  In connection with any such disposition, but subject to any confidentiality restrictions imposed on such Lien Grantor in any license or similar agreement, such Lien Grantor will supply to the Collateral Agent its know-how and expertise relating to the relevant Intellectual Property or the products or services made or rendered in connection with such Intellectual Property, and its customer lists and other records relating to such Intellectual Property and to the manufacture, distribution, advertising and sale of said products or services.

 

  

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(d)           For the purpose of enabling the Collateral Agent to exercise rights and remedies under this Section 16 (including in order to take possession of, collect, receive, assemble, process, appropriate, remove, realize upon, sell, assign, license out, convey, transfer or grant options to purchase any Collateral) at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, each Lien Grantor hereby grants to the Collateral Agent, for the benefit of the Secured Parties, (i) a nonexclusive license (exercisable without payment of royalty or other compensation to such Lien Grantor), subject, in the case of Trademarks, to sufficient rights to quality control and inspection in favor of such Lien Grantor to avoid the risk of invalidation of such Trademarks, to use, practice, sublicense and otherwise exploit any and all Intellectual Property now owned or held or hereafter acquired or held by such Lien Grantor (which license shall include access to all media in which any of the licensed items may be recorded or stored and to all software and programs used for the compilation or printout thereof).

 

Section 17.             Application of Proceeds.  Subject to the Intercreditor Agreement, if an Event of Default shall have occurred and be continuing, the Collateral Agent shall apply (i) any cash held in the Collateral Account and (ii) the proceeds of any sale or other disposition of, or any collections (including in the form of interest, dividends, redemption payments and other distributions in respect of any Equity Interests) on, all or any part of the Collateral, in accordance with Section 6.10 of the Indenture.

 

Section 18.             Fees and Expenses; Indemnification.

 

(a)           The Company will within 10 Business Days following written demand (together with, in the case of clauses (i) and (ii) below, if requested by the Company, backup documentation supporting such written demand) pay to the Collateral Agent:

 

(i)           the amount of any taxes that the Collateral Agent may have been required to pay by reason of the Transaction Liens or to free any Collateral from any other Lien thereon;

 

(ii)          the amount of any and all reasonable out-of-pocket expenses, including transfer taxes and reasonable fees and expenses of counsel and other outside experts, that the Collateral Agent may incur in connection with (x) the administration or enforcement of the Collateral Documents, including such expenses as are incurred to preserve the value of the Collateral or the validity, perfection, rank or value of any Transaction Lien, (y) the collection, sale or other disposition of any Collateral or (z) the exercise by the Collateral Agent of any of its rights or powers under the Collateral Documents; and

 

(iii)         the amount of any fees that the Company shall have agreed in writing to pay to the Collateral Agent and that shall have become due and payable in accordance with such written agreement.

 

(b)           If any transfer tax, documentary stamp tax or other tax is payable in connection with any transfer or other transaction provided for in the Collateral Documents, the Company will pay such tax and provide any required tax stamps to the Collateral Agent or as otherwise required by law.

 

  

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(c)           Each Lien Grantor waives all rights for contribution and all other rights of recovery with respect to liabilities, losses, damages, costs and expenses arising under or related to Environmental Laws that it might have by statute or otherwise against any Indemnified Person.

 

Section 19.             Authority to Administer Collateral.  Each Lien Grantor irrevocably appoints the Collateral Agent its true and lawful attorney, with full power of substitution, in the name of such Lien Grantor, any Secured Party or otherwise, for the sole use and benefit of the Secured Parties, but at the Company’s expense, to the extent permitted by law to exercise, at any time and from time to time while an Event of Default shall have occurred and be continuing, all or any of the following powers with respect to all or any of such Lien Grantor’s Collateral:

 

(a)           to demand, sue for, collect, receive and give acquittance for any and all monies due or to become due upon or by virtue thereof,

 

(b)           to settle, compromise, compound, prosecute or defend any action or proceeding with respect thereto,

 

(c)           to sell, lease, license or otherwise dispose of the same or the proceeds or avails thereof, as fully and effectually as if the Collateral Agent were the absolute owner thereof, and

 

(d)           to extend the time of payment of any or all thereof and to make any allowance or other adjustment with reference thereto;

 

provided that, except in the case of Collateral that is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, the Collateral Agent will give the relevant Lien Grantor at least 10 days’ prior written notice of the time and place of any public sale thereof or the time after which any private sale or other intended disposition thereof will be made.  Any such notice shall (i) contain the information specified in UCC Section 9-613, (ii) be Authenticated and (iii) be sent to the parties required to be notified pursuant to UCC Section 9-611(c); provided that, if the Collateral Agent fails to comply with this sentence in any respect, its liability for such failure shall be limited to the liability (if any) imposed on it as a matter of law under the UCC.

 

Section 20.             Limitation on Duty in Respect of Collateral.  Beyond the exercise of reasonable care in the custody and preservation thereof and accounting for monies received therefrom, the Collateral Agent will have no duty as to any Collateral in its possession or control or in the possession or control of any subagent or bailee or any income therefrom or as to the preservation of rights against prior parties or any other rights pertaining thereto.  The Collateral Agent will be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equal to that which it accords its own property, and will not be liable or responsible for any loss or damage to any Collateral, or for any diminution in the value thereof, by reason of any act or omission of any sub-agent or bailee selected by the Collateral Agent in good faith, except to the extent that such liability arises from the Collateral Agent’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment.

 

  

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Section 21.            General Provisions Concerning the Collateral Agent.

 

(a)           Appointment and Authorization; “Collateral Agent.”  The provisions of Article XI of the Indenture shall inure to the benefit of the Collateral Agent, and shall be binding upon all Lien Grantors and all Secured Parties, in connection with this Agreement and the other Collateral Documents.  The Collateral Agent is hereby irrevocably appointed, designated and authorized to take such actions under the provisions of this Agreement and each other Collateral Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Collateral Document, together with such actions and powers as are reasonably incidental thereto.  In furtherance of the foregoing, the Collateral Agent is hereby authorized to serve as Applicable Authorized Representative and Applicable Collateral Agent (each as defined in the Intercreditor Agreement) in accordance with the terms of the Intercreditor Agreement and to exercise such powers and perform such duties as are expressly delegated to it by the terms of the Intercreditor Agreement, together with such actions and powers as are reasonably incidental thereto.  Notwithstanding any provision to the contrary contained elsewhere herein or in any other Collateral Document, the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein, nor shall the Collateral Agent have or be deemed to have any fiduciary relationship with any Secured Party, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Collateral Document or otherwise exist against the Collateral Agent.  Without limiting the generality of the foregoing sentence, the use of the term “agent” herein and in the other Collateral Documents with reference to the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable law.  Instead, such term is used merely as a matter of market custom, and is intended to create or reflect only an administrative relationship between independent contracting parties.

 

(b)           Delegation of Duties.  The Collateral Agent may execute any of its duties under this Agreement or any other Collateral Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel and other consultants or experts concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence or willful misconduct.  The exculpatory provisions of Section 20 and this Section shall apply to any such agent, employee or attorney-in-fact.

 

(c)           Liability of Collateral Agent.  Neither the Collateral Agent nor any sub-agent appointed by the Collateral Agent to carry out the functions under this Agreement shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Collateral Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct in connection with its duties expressly set forth herein or required by applicable law) or (ii) be responsible in any manner to any Secured Party for any recital, statement, representation or warranty made by the Company or any Subsidiary or Affiliate thereof, or any officer thereof, contained herein or in any other Collateral Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Collateral Agent under or in connection with, this Agreement or any other Collateral Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Collateral Document, or for any failure of the Company or any Subsidiary or Affiliate thereof or any other party to any Collateral Document to perform its obligations hereunder or thereunder.  Neither the Collateral Agent nor any sub-agent appointed by the Collateral Agent to carry out the functions under this Agreement shall be under any obligation to any Secured Party to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Collateral Document, or to inspect the properties, books or records of the Company or any Subsidiary or Affiliate thereof.  The Collateral Agent shall not be responsible for the existence, genuineness or value of any Collateral or for the validity, perfection, priority or enforceability of any Transaction Lien, including, without limitation, the filing, form, content or renewal of UCC financing statements, Mortgages or similar documents or instruments, whether impaired by operation of law or by reason of any action or omission to act on its part under the Collateral Documents.

 

  

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(d)           Reliance by Collateral Agent.  The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution, representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Company or any Subsidiary), independent accountants and other experts selected by the Collateral Agent.  The Collateral Agent shall be fully justified in failing or refusing to take any action under any Collateral Document unless it shall first receive such advice or concurrence of the Holders of a majority in aggregate principal amount of the Notes as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Secured Parties (other than the Trustee and Collateral Agent) against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action.  The Collateral Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Collateral Document in accordance with a request or consent of the requisite number of Holders required by the Indenture and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Secured Parties.

 

(e)           Notice of Default.  The Collateral Agent shall not be deemed to have knowledge or notice of the occurrence of any Default, unless the Collateral Agent shall have received written notice from a Secured Party or the Company referring to the Indenture, describing such Default and stating that such notice is a “notice of default.” The Collateral Agent will notify the Secured Parties of its receipt of any such notice.  The Collateral Agent shall take such action with respect to such Default as may be directed by the requisite number of Holders required by the Indenture; provided, however, that unless and until the Collateral Agent has received any such direction, the Collateral Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable or in the interest of the Secured Parties.

 

(f)           [Reserved].

 

  

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(g)           Information as to Secured Obligations and Actions by Secured Parties.  For all purposes of the Collateral Documents, including determining the amounts of the Secured Obligations or whether any action has been taken under any Secured Agreement, the Collateral Agent will be entitled to rely on information from (i) its own records for information as to the Holders, their Secured Obligations and actions taken by them; (ii) any Secured Party for information as to its Secured Obligations and actions taken by it, to the extent that the Collateral Agent has not obtained such information from the foregoing sources; and (iii) the Company, to the extent that the Collateral Agent has not obtained information from the foregoing sources.

 

(h)           Within two Business Days after it receives or sends any notice referred to in this subsection, the Collateral Agent shall send to each Secured Party Requesting Notice, copies of any notice given by the Collateral Agent to any Lien Grantor, or received by it from any Lien Grantor, pursuant to Sections 16, 17, 19 or 22.

 

(i)           The Collateral Agent may refuse to act on any notice, consent, direction or instruction from any Secured Parties or any agent, trustee or similar representative thereof that, in the Collateral Agent’s opinion, (i) is contrary to law or the provisions of any Collateral Document, (ii) may expose the Collateral Agent to liability (unless the Collateral Agent shall have been indemnified, to its satisfaction, for such liability by the Secured Parties (other than the Trustee and Collateral Agent) that gave such notice, consent, direction or instruction) or (iii) is unduly prejudicial to Secured Parties not joining in such notice, consent, direction or instruction.

 

Section 22.            Termination of Transaction Liens; Release of Collateral.

 

(a)           The Transaction Liens granted by each Subsidiary Guarantor shall terminate when its Secured Guarantee is released pursuant to the Indenture.

 

(b)           The Transaction Liens granted by the Company shall terminate in accordance with Section 11.3 of the Indenture.

 

(c)           Concurrently with any sale, lease or other disposition (except a sale or disposition to another Lien Grantor or a lease) permitted by the proviso to Section 5(c) or release of any Transaction Lien in accordance with the Indenture, the Transaction Liens on the assets sold or disposed of (but not in any Proceeds arising from such sale or disposition) or so released will cease immediately without any action by the Collateral Agent or any other Secured Party.

 

(d)           Upon any termination of a Transaction Lien or release of Collateral, the Collateral Agent will, upon written request certifying that such termination of release is permitted under the Notes Documents and at the expense of the relevant Lien Grantor, execute and deliver to such Lien Grantor such documents as such Lien Grantor shall reasonably request to evidence the termination of such Transaction Lien or the release of such Collateral, as the case may be.

 

  

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Section 23.            Additional Subsidiary Guarantors and Lien Grantors.  Any Subsidiary may become a party hereto by signing and delivering to the Collateral Agent a Security Agreement Supplement, whereupon such Subsidiary shall become a “Subsidiary Guarantor” and a “Lien Grantor” as defined herein.

 

Section 24.            Notices.

 

(a)           Unless otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including by facsimile transmission).  All such written notices shall be mailed, faxed or delivered to the applicable address, facsimile number (provided that any matter transmitted by the Company by facsimile (1) shall be immediately confirmed by a telephone call to the recipient at the number specified below and (2) shall be followed promptly by delivery of a hard copy original thereof) or (subject to subsection (c) below) electronic mail address, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

 

(i)            if to the Company or the Collateral Agent, to the address, facsimile number, electronic mail address or telephone number specified for such Person in the Indenture or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties;

 

(ii)           if to any Subsidiary Guarantor listed on the signature pages hereof, to the Company as set forth above to be forwarded to such Subsidiary Guarantor at its address, facsimile number, electronic mail address or telephone number designated by such party in a notice to the Company;

 

(iii)          if to any other Subsidiary Guarantor, to the address, facsimile number, electronic mail address or telephone number specified for such Person in its first Security Agreement Supplement or to such other address, facsimile number, electronic mail address or telephone number as shall be designated by such party in a notice to the other parties; and

 

(iv)         if to any Secured Party Requesting Notice, to such address, facsimile number, electronic mail address or telephone number as such party may hereafter specify for the purpose by notice to the Collateral Agent.

 

All such notices and other communications shall be deemed to be given or made upon the earlier to occur of (i) actual receipt by the relevant party hereto and (ii) (A) if delivered by hand or by courier, when signed for by or on behalf of the relevant party hereto; (B) if delivered by mail, four Business Days after deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent and receipt has been confirmed by telephone; and (D) if delivered by electronic mail (which form of delivery is subject to the provisions of subsection (c) below), when delivered.  In no event shall a voicemail message be effective as a notice, communication or confirmation hereunder.

 

(b)           This Agreement and the other Collateral Documents may be transmitted and/or signed by facsimile or PDF delivered by electronic mail.  The effectiveness of any such documents and signatures shall, subject to applicable law, have the same force and effect as manually-signed originals and shall be binding on the Company, all Subsidiary Guarantors, the Secured Parties and the Collateral Agent.  The Collateral Agent may also require that any such documents and signatures be confirmed by a manually-signed original thereof; provided, that the failure to request or deliver the same shall not limit the effectiveness of any facsimile document or signature.

 

  

30

  

 

(c)           Electronic mail and Internet and intranet websites may be used only to distribute routine communications and to distribute this Agreement and other Collateral Documents for execution by the parties thereto, and may not be used for any other purpose.

 

(d)           The Collateral Agent and the other Secured Parties shall be entitled to rely and act upon any notices purportedly given by or on behalf of the Company or any Subsidiary Guarantor even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Company and the Subsidiary Guarantors shall jointly and severally indemnify the Collateral Agent, any sub-agent appointed by the Collateral Agent to carry out the functions under this Agreement and each Secured Party from all losses, costs, out-of-pocket expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Company or any Subsidiary Guarantor; provided that such indemnity shall not, as to any Person, be available to the extent that such losses, costs, out-of-pocket expenses or liabilities are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Person.  All telephonic notices to and other communications with the Collateral Agent may be recorded by the Collateral Agent, and each of the parties hereto hereby consents to such recording.

 

Section 25.            No Implied Waivers; Remedies Not Exclusive.  No failure by the Collateral Agent or any Secured Party to exercise, and no delay in exercising and no course of dealing with respect to, any right or remedy under any Collateral Document shall operate as a waiver thereof; nor shall any single or partial exercise by the Collateral Agent or any Secured Party of any right or remedy under any Notes Document preclude any other or further exercise thereof or the exercise of any other right or remedy.  The rights and remedies specified in the Notes Documents are cumulative and are not exclusive of any other rights or remedies provided by law.

 

Section 26.            Successors and Assigns.  This Agreement is for the benefit of the Collateral Agent and the Secured Parties.  If all or any part of any Secured Party’s interest in any Secured Obligation is assigned or otherwise transferred, the transferor’s rights hereunder, to the extent applicable to the obligation so transferred, shall be automatically transferred with such obligation.  This Agreement shall be binding on the Lien Grantors and their respective successors and assigns.

 

Section 27.            Amendments and Waivers.  Neither this Agreement nor any provision hereof may be waived, amended, modified or terminated except pursuant to an agreement or agreements in writing entered into by the parties hereto, with the consent of such Holders as are required to consent thereto under Article IX of the Indenture.

 

  

31

  

 

Section 28.            Choice of Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of New York.

 

Section 29.            Waiver of Jury Trial.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY COLLATERAL DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY COLLATERAL DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.  THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER COLLATERAL DOCUMENTS.

 

Section 30.            Severability.  If any provision of any Collateral Document is invalid or unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions of the Collateral Documents shall remain in full force and effect in such jurisdiction and shall be liberally construed in favor of the Collateral Agent and the Secured Parties in order to carry out the intentions of the parties thereto as nearly as may be possible and (ii) the invalidity or unenforceability of such provision in such jurisdiction shall not affect the validity or enforceability thereof in any other jurisdiction.

 

Section 31.            Pari Passu Intercreditor Agreement; Indenture.  Notwithstanding anything herein to the contrary, the Liens and security interests granted to the Collateral Agent pursuant to this Agreement, the exercise of any right or remedy by the Collateral Agent hereunder and the obligations of the Lien Grantors hereunder, in each case, with respect to the Collateral are subject to the limitations and provisions of the Intercreditor Agreement.  In the event of any conflict between the terms of the Intercreditor Agreement and the terms of this Agreement with respect to the Collateral, the terms of the Intercreditor Agreement shall govern and control.  For the avoidance of doubt, at any time that the Collateral Agent is not the Applicable Collateral Agent (as defined in the Intercreditor Agreement), the Lien Grantors shall be deemed to have complied with any obligation hereunder to deliver any possessory collateral (or other Collateral that can be held by only one person) to the Collateral Agent by delivering such possessory collateral to the Applicable Collateral Agent (as defined in the Intercreditor Agreement).  In the event of any conflict between this Agreement and the Indenture, the terms of the Indenture shall control.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

32

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	  	
CNO FINANCIAL GROUP, INC.

	  	  	  	  	  
	 	By: 	 	 /s/ Erik M. Helding	 
	 	Name:	Erik M. Helding	 
	 	Title:	Senior Vice President, Treasury and Investor Relations	 

 

	  	

Subsidiary Guarantors:

	  	  	  	  	  
	 	
40|86 ADVISORS, INC.

	 
	 	
40|86 MORTGAGE CAPITAL, INC.

	 
	 	
AMERICAN LIFE AND CASUALTY

	 
	 	 	
MARKETING DIVISION CO.

	 
	 	
CDOC, INC.

	 
	 	
CNO MANAGEMENT SERVICES

	 
	 	 	
COMPANY

	 
	 	
K.F. AGENCY, INC.

	 
	 	 PERFORMANCE MATTERS ASSOCIATES,	 
	 	 	
 INC.

	 
	 	
PERFORMANCE MATTERS ASSOCIATES OF 

	 
	 	 	TEXAS, INC.	 

 

	 	By: 	 	 /s/ Erik M. Helding	 
	 	Name:	Erik M. Helding	 
	 	Title:	Senior Vice President and Treasurer

 

	 	

CNO SERVICES, LLC

	  	  	  	  	  
	 	By: 	 	 /s/ Erik M. Helding	 
	 	Name:	Erik M. Helding	 
	 	Title:	Senior Vice President, Treasury and Investor Relations

 

[Signature Page to the Security Agreement]

 

 

33

 

 

	 	

WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 	as Collateral Agent
	  	  	  	  	  
	 	By: 	 	 /s/ Jane Schweiger	 
	 	Name:	Jane Schweigher	 
	 	Title:	Vice President

 

  

34

  

 

Exhibit A to

Security Agreement

SECURITY AGREEMENT SUPPLEMENT

 

This SECURITY AGREEMENT SUPPLEMENT dated as of _______________ is entered into by and between [NAME OF LIEN GRANTOR] (the “Lien Grantor”) and Wilmington Trust, National Association, as Collateral Agent (together with its successors and assigns, the “Collateral Agent”).

 

WHEREAS, CNO Financial Group, Inc., the Subsidiary Guarantors party thereto and the Collateral Agent are parties to the Security Agreement dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Security Agreement”) under which CNO Financial Group, Inc. secures certain of its obligations (the “Secured Obligations”) and the Subsidiary Guarantors secure their respective guarantees thereof;

 

WHEREAS, [name of Lien Grantor] [desires to become][is] a party to the Security Agreement as a Lien Grantor thereunder1; and

 

WHEREAS, terms defined in the Security Agreement (or whose definitions are incorporated by reference in Section 1 of the Security Agreement) and not otherwise defined herein have, as used herein, the respective meanings provided for therein;

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.            Grant of Transaction Liens.  (a) In order to secure [its Secured Guarantee]2 [the Secured Obligations]3, the Lien Grantor grants to the Collateral Agent for the benefit of the Secured Parties a continuing security interest in all the following property of the Lien Grantor, whether now or owned or existing or hereafter acquired or arising and regardless of where located (the “New Collateral”):

 

If the Lien Grantor is the Company, delete this recital and Section 1 hereof.

 

[describe property being added to the Collateral]4

 

(b)           With respect to each right to payment or performance included in the Collateral from time to time, the Transaction Lien granted therein includes a continuing security interest in (i) any Supporting Obligation that supports such payment or performance and (ii) any Lien that (x) secures such right to payment or performance or (y) secures any such Supporting Obligation.

 

1 If the Lien Grantor is the Company, delete this recital and Section 1 hereof.

 

2 Delete bracketed words if the Lien Grantor is the Company.

 

3 Delete bracketed words if the Lien Grantor is a Subsidiary Guarantor.

 

4 If the Lien Grantor is not already a party to the Security Agreement, clauses (i) through (xv) of, and the proviso to, Section 3(a) of the Security Agreement may be appropriate.

 

  

  

  

 

(c)           The foregoing Transaction Liens are granted as security only and shall not subject the Collateral Agent or any other Secured Party to, or transfer or in any way affect or modify, any obligation or liability of the Lien Grantor with respect to any of the New Collateral or any transaction in connection therewith.

 

2.            Delivery of Collateral.  Concurrently with delivering this Security Agreement Supplement to the Collateral Agent, the Lien Grantor is complying with the provisions of Section 7 of the Security Agreement with respect to Chattel Paper and Instruments, Section 10 of the Security Agreement with respect to rights to the proceeds of letters of credit, and either Section 11 or Section 14(a) (whichever is applicable) of the Security Agreement with respect to Investment Property, in each case if and, to the extent included in the New Collateral at such time.

 

3.            Party to Security Agreement.  Upon delivering this Security Agreement Supplement to the Collateral Agent, the Lien Grantor will become a party to the Security Agreement and will thereafter have all the rights and obligations of a Subsidiary Guarantor and a Lien Grantor thereunder and be bound by all the provisions thereof as fully as if the Lien Grantor were one of the original parties thereto.5

 

4.             Address of Lien Grantor.  The address, facsimile number, electronic mail address and telephone number of the Lien Grantor for purposes of Section 29 of the Security Agreement are:

 

[address]

 

[facsimile number]

 

[e-mail address]

 

[telephone number]

 

5.            Representations and Warranties.  (a) The Lien Grantor is a corporation6 duly organized, validly existing and in good standing under the laws of [jurisdiction of organization].

 

(b)           The Lien Grantor has delivered a Perfection Certificate to the Collateral Agent.  The information set forth therein is correct and complete as of the date hereof.  Within 60 days after the date hereof, the Lien Grantor will furnish (or cause to be furnished) to the Collateral Agent a file search report from each UCC filing office listed in such Perfection Certificate, showing the filing made at such filing office to perfect the Transaction Liens on the New Collateral.

 

5 Delete Sections 4 and 5 if the Lien Grantor is already a party to the Security Agreement.

 

6 Modify as needed if not a corporation.

 

  

A-2

  

 

(c)           The execution and delivery of this Security Agreement Supplement by the Lien Grantor and the performance by it of its obligations under the Security Agreement as supplemented hereby are within its corporate or other powers, have been duly authorized by all necessary corporate or other action, require no action by or in respect of, or filing with, any governmental body, agency or official (except (i) such as have been obtained on or prior to the date hereof and (ii) filings necessary to perfect the Transactions Liens) and do not contravene, or constitute a default under, any provision of applicable law or regulation (except to the extent that such contraventions or defaults, in the aggregate, could not reasonably be expected to have a Material Adverse Effect) or of its Organization Documents, or of any material agreement, judgment, injunction, order, decree or other instrument binding upon it or result in the creation or imposition of any Lien (except a Transaction Lien) on any of its assets.

 

(d)           The Security Agreement as supplemented hereby constitutes a valid and binding agreement of the Lien Grantor, enforceable in accordance with its terms, except as limited by (i) applicable bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’ rights generally and (ii) general principles of equity.

 

(e)           Each of the representations and warranties set forth in the Security Agreement is true as applied to the Lien Grantor and the New Collateral.  For purposes of the foregoing sentence, references in said Sections to a “Lien Grantor” shall be deemed to refer to the Lien Grantor, references to Schedules to the Security Agreement shall be deemed to refer to the corresponding Schedules to this Security Agreement Supplement, references to “Collateral” shall be deemed to refer to the New Collateral, and references to the “Issue Date” shall be deemed to refer to the date on which the Lien Grantor signs and delivers this Security Agreement Supplement.

 

6.            Governing Law.  This Security Agreement Supplement shall be construed in accordance with and governed by the laws of the State of New York.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

A-3

  

 

IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement Supplement to be duly executed by their respective authorized officers as of the day and year first above written.

 

	 	
[NAME OF LIEN GRANTOR]

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 Name: 	 
	 	 	 Title:	 

 

	 	

WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 
	 	
as Collateral Agent

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 Name: 	 
	 	 	 Title:

 

  

A-4

  

 

Schedule 1

to Security Agreement

Supplement

 

EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES

OWNED BY LIEN GRANTOR

 

	
Current Legal

Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent Pledged

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

  

A-5

  

 

Schedule 2

to Security Agreement

Supplement

OTHER SECURITIES

(OTHER THAN EQUITY INTERESTS IN SUBSIDIARIES AND AFFILIATES)

 

	
Current Legal 

Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent Pledged

	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  
	  	  	  	  	  

 

  

A-6

  

 

Schedule 3

                                                                                                                                          to Security Agreement

Supplement

 

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS

 

PART 1 — Securities Accounts

 

The Lien Grantor owns Security Entitlements with respect to Financial Assets credited to the following Securities Accounts:

 

	

Owner

	 	

Type Of

Account

	 	

Intermediary

	 	

Account

Numbers

	  	 	  	 	  	 	  

 

 

 

PART 2 — Commodity Accounts

 

The Lien Grantor is the Commodity Customer with respect to the following Commodity Accounts:

 

	

Owner

	 	

Type Of

Account

	 	

Intermediary

	 	

Account

Numbers

	  	 	  	 	  	 	  

 

 

 

PART 3 — Deposit Accounts

 

The Lien Grantor is the Customer with respect to the following Deposit Accounts:

 

	

Owner

	 	

Type Of

Account

	 	

Intermediary

	 	

Account

Numbers

	  	 	  	 	  	 	  

 

 

 

  

A-7

  

 

Schedule 4

                                                                                                                                          to the Security Agreement

Supplement

 

COMMERCIAL TORT CLAIMS

 

	 	
Description

 

 

	 	 	
Pledged

(Yes/No)

	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

  

A-8

  

 

Schedule 5

                                                                                                                                          to Security Agreement

Supplement

 

PLEDGED INSTRUMENTS

 

1.           Promissory Notes:

 

	
Entity

	
Principal

Amount

 

	
Date of

Issuance

	
Interest Rate

	
Maturity Date

	
Pledged

(Yes/No)

	  	  	  	  	  	  
	  	  	  	  	  	  
	  	  	  	  	  	  

2.           Chattel Paper:

 

	 	
Description

 

 

	 	 	
Pledged

(Yes/No)

	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 

 

  

A-9

  

 

EXHIBIT B

to Security Agreement

 

COPYRIGHT SECURITY AGREEMENT

 

(Copyrights, Copyright Registrations, Copyright

Applications and Copyright Licenses)

 

WHEREAS, [name of Lien Grantor], a [_____] corporation7 (herein referred to as the “Lien Grantor”) owns, or in the case of licenses is a party to, the Copyright Collateral (as defined below);

 

WHEREAS, CNO Financial Group, Inc. (the “Company”) and Wilmington Trust, National Association, as collateral agent (together with its successors and assigns, the “Collateral Agent”) and trustee, are parties to the Indenture dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Indenture”);

 

WHEREAS, pursuant to (i) the Security Agreement dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Security Agreement”) among the Company, the Subsidiary Guarantors party thereto and the Collateral Agent for the Secured Parties referred to therein (in such capacity, together with its successors and assigns in such capacity, the “Grantee”), and (ii) certain other Collateral Documents (including this Copyright Security Agreement) and the Indenture, the Lien Grantor has [secured certain of its obligations (the “Secured Obligations”)]8 [guaranteed certain obligations of the Company and secured such guarantee (the “Lien Grantor’s Secured Guarantee of the Secured Obligations”)]9 by granting to the Grantee for the benefit of the Secured Parties a continuing security interest in personal property of the Lien Grantor, including all right, title and interest of the Lien Grantor in, to and under the Copyright Collateral (as defined below); and

 

WHEREAS, capitalized terms used but not defined herein shall have the meanings given to them in the Security Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lien Grantor grants to the Grantee for the benefit of the Secured Parties, to secure the [Secured Obligations] [Lien Grantor’s Secured Guarantee of the Secured Obligations], a continuing security interest in all of the Lien Grantor’s right, title and interest in, to and under the following (all of the following items or types of property being herein collectively referred to as the “Copyright Collateral”), whether now owned or existing or hereafter acquired or arising:

 

(i)           each Copyright (as defined in the Security Agreement) owned by the Lien Grantor, including, without limitation, each Copyright registration or application therefor referred to in Schedule 1 hereto;

 

7 Modify as needed if the Lien Grantor is not a corporation.

 

8 Delete these bracketed words if the Lien Grantor is a Subsidiary Guarantor.

 

9 Delete these bracketed words if the Lien Grantor is the Company.

 

  

  

  

 

(ii)          each Copyright License (as defined in the Security Agreement) to which the Lien Grantor is a party, including, without limitation, each Copyright License identified in Schedule 1 hereto; and

 

(iii)         all proceeds of, revenues from, and accounts and general intangibles arising out of, the foregoing, including, without limitation, all proceeds of and revenues from any claim by the Lien Grantor against third parties for past, present or future infringement of any Copyright (including, without limitation, any Copyright owned by the Lien Grantor and identified in Schedule 1 hereto), and all rights and benefits of the Lien Grantor under any Copyright License (including, without limitation, any Copyright License identified in Schedule 1 hereto).

 

The Lien Grantor irrevocably constitutes and appoints the Grantee and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of the Lien Grantor or in the Grantee’s name, from time to time, in the Grantee’s reasonable discretion, so long as any Event of Default (as defined in the Indenture) shall have occurred and be continuing, to take with respect to the Copyright Collateral, in accordance with the Security Agreement, any and all appropriate action which the Lien Grantor might take with respect to the Copyright Collateral and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Copyright Security Agreement and to accomplish the purposes hereof.

 

Except to the extent expressly permitted in the Security Agreement or the Indenture, the Lien Grantor agrees not to sell, license, exchange, assign or otherwise transfer or dispose of, or grant any rights with respect to, or mortgage or otherwise encumber, any of the Copyright Collateral.

 

The foregoing security interest is granted in conjunction with the security interests granted by the Lien Grantor to the Grantee pursuant to the Security Agreement.  The Lien Grantor acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Copyright Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.  In the event that any provision of this Copyright Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

B-2

  

 

IN WITNESS WHEREOF, the Lien Grantor has caused this Copyright Security Agreement to be duly executed by its officer thereunto duly authorized as of the  _____ day of _____________.

 

	 	

[NAME OF LIEN GRANTOR]

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	  Name: 	 
	 	 	  Title:

 

	
Acknowledged

	 
	 	 
	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 
	
as Collateral Agent

	 
	 	 
	By:	
 

	 
	 	
Name:

	 
	 	
Title: 

	 

 

  

  

  

STATE OF ___________________                                          

) ss.:

COUNTY OF __________________                                          

 

I, ____________________ , a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY, that ___________________________________, of [NAME OF LIEN GRANTOR] (the “Lien Grantor”), personally known to me to be the same person whose name is subscribed to the foregoing instrument as such _______________, appeared before me this day in person and acknowledged that (s)he signed, executed and delivered said instrument as her/his own free and voluntary act and as the free and voluntary act of said Lien Grantor, for the uses and purposes therein set forth being duly authorized so to do.

 

GIVEN under my hand and Notarial Seal this _____day of _______________

 

 

 

[Seal]

 

__________________________________________ Signature of notary public

 

My Commission expires ______________

 

  

  

  

 

Schedule 1

to Copyright

Security Agreement

 

[NAME OF LIEN GRANTOR]

 

COPYRIGHT REGISTRATIONS

 

	

Registration. No

	 	

Registration Date

	 	

Title

 

 

 

COPYRIGHT APPLICATIONS

 

	
Case No.

	 	
Filing Date

	 	
Filing Title

 

 

 

COPYRIGHT LICENSES

 

	

Name of

Agreement

	 	

Parties

Licensor/Licensee

	 	

Date of

Agreement

	 	

Subject

Matter

  

  

  

 

EXHIBIT C

Security Agreement

 

PATENT SECURITY AGREEMENT

 

(Patents, Patent Applications and Patent Licenses)

 

WHEREAS, [name of Lien Grantor], a [_______] corporation10 (herein referred to as the “Lien Grantor”) owns, or in the case of licenses is a party to, the Patent Collateral (as defined below);

 

WHEREAS, CNO Financial Group, Inc. (the “Company”) and Wilmington Trust, National Association, as collateral agent (together with its successors and assigns, the “Collateral Agent”) and trustee, are parties to the Indenture dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Indenture”);

 

WHEREAS, pursuant to (i) the Security Agreement dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Security Agreement”) among the Company, the Subsidiary Guarantors party thereto and the Collateral Agent for the Secured Parties referred to therein (in such capacity, together with its successors and assigns in such capacity, the “Grantee”), and (ii) certain other Collateral Documents (including this Patent Security Agreement) and the Indenture, the Lien Grantor has [secured certain of its obligations (the “Secured Obligations”)]11 [guaranteed certain obligations of the Company and secured such guarantee (the “Lien Grantor’s Secured Guarantee of the Secured Obligations”)]12 by granting to the Grantee for the benefit of the Secured Parties a continuing security interest in personal property of the Lien Grantor, including all right, title and interest of the Lien Grantor in, to and under the Patent Collateral (as defined below); and

 

WHEREAS, capitalized terms used but not defined herein shall have the meanings given to them in the Security Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lien Grantor grants to the Grantee for the benefit of the Secured Parties, to secure the [Secured Obligations] [Lien Grantor’s Secured Guarantee of the Secured Obligations], a continuing security interest in all of the Lien Grantor’s right, title and interest in, to and under the following (all of the following items or types of property being herein collectively referred to as the “Patent Collateral”), whether now owned or existing or hereafter acquired or arising:

 

(i)           each Patent (as defined in the Security Agreement) owned by the Lien Grantor, including, without limitation, each Patent referred to in Schedule 1 hereto;

 

 

 

10 Modify as needed if the Lien Grantor is not a corporation.

 

11 Delete these bracketed words if the Lien Grantor is a Subsidiary Guarantor.

 

12 Delete these bracketed words if the Lien Grantor is the Company.

 

  

 

  

 

(ii)          each Patent License (as defined in the Security Agreement) to which the Lien Grantor is a party, including, without limitation, each Patent License identified in Schedule 1 hereto; and

 

(iii)         all proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the Lien Grantor against third parties for past, present or future infringement of any Patent owned by the Lien Grantor (including, without limitation, any Patent identified in Schedule 1 hereto) and all rights and benefits of the Lien Grantor under any Patent License (including, without limitation, any Patent License identified in Schedule 1 hereto).

 

The Lien Grantor irrevocably constitutes and appoints the Grantee and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of the Lien Grantor or in the Grantee’s name, from time to time, in the Grantee’s reasonable discretion, so long as any Event of Default (as defined in the Indenture) shall have occurred and be continuing, to take with respect to the Patent Collateral, in accordance with the Security Agreement, any and all appropriate action which the Lien Grantor might take with respect to the Patent Collateral and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Patent Security Agreement and to accomplish the purposes hereof.

 

Except to the extent expressly permitted in the Security Agreement or the Indenture, the Lien Grantor agrees not to sell, license, exchange, assign or otherwise transfer or dispose of, or grant any rights with respect to, or mortgage or otherwise encumber, any of the Patent Collateral.

 

The foregoing security interest is granted in conjunction with the security interests granted by the Lien Grantor to the Grantee pursuant to the Security Agreement.  The Lien Grantor acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Patent Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.  In the event that any provision of this Patent Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

C-2

  

IN WITNESS WHEREOF, the Lien Grantor has caused this Patent Security Agreement to be duly executed by its officer thereunto duly authorized as of the _____ day of _______________.

 

	 	

[NAME OF LIEN GRANTOR]

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	  Name: 	 
	 	 	  Title:

 

	
Acknowledged:

	 
	 	 
	

WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 
	
as Collateral Agent

	 
	 	 
	By:	
 

	 
	 	
Name:

	 
	 	
Title: 

 

  

C-3

  

 

STATE OF ____________________                                         

) ss.:

COUNTY OF ___________________                                          

 

I, _______________________ , a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY, that ___________________________________, of [NAME OF LIEN GRANTOR] (the “Lien Grantor”), personally known to me to be the same person whose name is subscribed to the foregoing instrument as such _______________, appeared before me this day in person and acknowledged that (s)he signed, executed and delivered said instrument as her/his own free and voluntary act and as the free and voluntary act of said Lien Grantor, for the uses and purposes therein set forth being duly authorized so to do.

 

GIVEN under my hand and Notarial Seal this _____day of _______________

 

 

 

[Seal]

 

________________________________________________  Signature of notary public

 

My Commission expires ______________

 

  

C-4

  

 

Schedule 1

to Patent

Security Agreement

 

[NAME OF LIEN GRANTOR]

 

PATENTS AND DESIGN PATENTS

 

	

Patent No.

	
Issued   

	
 Expiration 

	
Title

 

 

 

PATENT APPLICATIONS

 

	
Case No.

	
Serial No.

	
Filing Date

	
Filing Title

 

 

 

PATENT LICENSES

 

	

Name of

Agreement

	 	

Parties

Licensor/Licensee

	 	

Date of

Agreement

	 	

Subject

Matter

 

 

 

  

C-5

  

 

EXHIBIT D

to Security Agreement

 

TRADEMARK SECURITY AGREEMENT

 

(Trademarks, Trademark Registrations, Trademark

 

Applications and Trademark Licenses)

 

WHEREAS, [name of Lien Grantor], a [_______] corporation13 (herein referred to as the “Lien Grantor”) owns, or in the case of licenses is a party to, the Trademark Collateral (as defined below);

 

WHEREAS, CNO Financial Group, Inc. (the “Company”) and Wilmington Trust, National Association, as collateral agent (together with its successors and assigns, the “Collateral Agent”) and trustee, are parties to the Indenture dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Indenture”);

 

WHEREAS, pursuant to (i) the Security Agreement dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Security Agreement”) among the Company, the Subsidiary Guarantors party thereto and the Collateral Agent for the Secured Parties referred to therein (in such capacity, together with its successors and assigns in such capacity, the “Grantee”), and (ii) certain other Collateral Documents (including this Trademark Security Agreement) and the Indenture, the Lien Grantor has [secured certain of its obligations (the “Secured Obligations” )]14 [guaranteed certain obligations of the Company and secured such guarantee (the “Lien Grantor’s Secured Guarantee of the Secured Obligations”)]15 by granting to the Grantee for the benefit of the Secured Parties a continuing security interest in personal property of the Lien Grantor, including all right, title and interest of the Lien Grantor in, to and under the Trademark Collateral (as defined below); and

 

WHEREAS, capitalized terms used but not defined herein shall have the meanings given to them in the Security Agreement.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Lien Grantor grants to the Grantee for the benefit of the Secured Parties, to secure the [Secured Obligations] [Lien Grantor’s Secured Guarantee of the Secured Obligations (as defined in the Security Agreement)], a continuing security interest in all of the Lien Grantor’s right, title and interest in, to and under the following (all of the following items or types of property being herein collectively referred to as the “Trademark Collateral”), whether now owned or existing or hereafter acquired or arising:

 

(i)           each Trademark (as defined in the Security Agreement) owned by the Lien Grantor, including, without limitation, each Trademark registration and application referred to in Schedule 1 hereto, and all of the goodwill of the business connected with the use of, and symbolized by, each Trademark;

 

13 Modify as needed if the Lien Grantor is not a corporation.

 

14 Delete these bracketed words if the Lien Grantor is a Subsidiary Guarantor.

 

15 Delete these bracketed words if the Lien Grantor is the Company.

 

  

  

  

 

(ii)          each Trademark License (as defined in the Security Agreement) to which the Lien Grantor is a party, including, without limitation, each Trademark License identified in Schedule 1 hereto, and all of the goodwill of the business connected with the use of, and symbolized by, each Trademark licensed pursuant thereto; and

 

(iii)         all proceeds of and revenues from the foregoing, including, without limitation, all proceeds of and revenues from any claim by the Lien Grantor against third parties for past, present or future unfair competition with, or violation of intellectual property rights in connection with or injury to, or infringement or dilution of, any Trademark owned by the Lien Grantor (including, without limitation, any Trademark identified in Schedule 1 hereto), and all rights and benefits of the Lien Grantor under any Trademark License (including, without limitation, any Trademark License identified in Schedule 1 hereto), or for injury to the goodwill associated with any of the foregoing;

 

provided that intent-to-use Trademark applications are excluded from the Trademarks Collateral solely to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use Trademark applications or any registrations that issue therefrom under applicable United States federal law.

 

The Lien Grantor irrevocably constitutes and appoints the Grantee and any officer or agent thereof, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of the Lien Grantor or in the Grantee’s name, from time to time, in the Grantee’s reasonable discretion, so long as any Event of Default (as defined in the Indenture) shall have occurred and be continuing, to take with respect to the Trademark Collateral, in accordance with the Security Agreement, any and all appropriate action which the Lien Grantor might take with respect to the Trademark Collateral and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Trademark Security Agreement and to accomplish the purposes hereof.

 

Except to the extent expressly permitted in the Security Agreement or the Indenture, the Lien Grantor agrees not to sell, license, exchange, assign or otherwise transfer or dispose of, or grant any rights with respect to, or mortgage or otherwise encumber, any of the Trademark Collateral.

 

The foregoing security interest is granted in conjunction with the security interests granted by the Lien Grantor to the Grantee pursuant to the Security Agreement.  The Lien Grantor acknowledges and affirms that the rights and remedies of the Grantee with respect to the security interest in the Trademark Collateral granted hereby are more fully set forth in the Security Agreement, the terms and provisions of which are incorporated by reference herein as if fully set forth herein.  In the event that any provision of this Trademark Security Agreement is deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall control.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

D-2

  

IN WITNESS WHEREOF, the Lien Grantor has caused this Trademark Security Agreement to be duly executed by its officer thereunto duly authorized as of the ____ day of _____________.

 

	 	

 [NAME OF LIEN GRANTOR]

	 
	 	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	  Name: 	 
	 	 	  Title:

 

	

Acknowledged:

	 
	 	 
	

WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 
	

as Collateral Agent

	 
	 	 
	By:	
 

	 
	 	
Name:

	 
	 	
Title: 

 

  

D-3

  

 

STATE OF  ____________________                                        

) ss.:

COUNTY OF  ___________________                                         

 

I, __________________________, a Notary Public in and for said County, in the State aforesaid, DO HEREBY CERTIFY, that ________________________________, of [NAME OF LIEN GRANTOR] (the “Lien Grantor”), personally known to me to be the same person whose name is subscribed to the foregoing instrument as such _______________, appeared before me this day in person and acknowledged that (s)he signed, executed and delivered said instrument as her/his own free and voluntary act and as the free and voluntary act of said Lien Grantor, for the uses and purposes therein set forth being duly authorized so to do.

 

GIVEN under my hand and Notarial Seal this _____day of _______________

 

[Seal]

 

__________________________________ Signature of notary public

 

My Commission expires ______________

 

  

D-4

  

 

Schedule 1

to Trademark

Security Agreement

[NAME OF LIEN GRANTOR]

 

U.S. TRADEMARK REGISTRATIONS

 

	

TRADEMARK

	 	

REG. NO.

	 	

REG. DATE

 

 

 

U.S. TRADEMARK APPLICATIONS

 

	

TRADEMARK

	 	

SERIAL NO.

	 	

FILING DATE

 

 

 

TRADEMARK LICENSES

 

	

Name of

Applicant

	 	

Parties

Licensor/Licensee

	 	

Date of

Agreement

	 	

Subject

Matter

 

 

 

  

D-5

  

 

EXHIBIT E

to Security Agreement

 

PERFECTION CERTIFICATE

[SEE ATTACHED]

 

  

D-6

  

 

EXHIBIT F

to Security Agreement

 

ISSUER CONTROL AGREEMENT

 

ISSUER CONTROL AGREEMENT dated as of _______________among [name of Lien Grantor] (the “Lien Grantor”), Wilmington Trust, National Association, as Collateral Agent (the “Secured Party”), and CNO Financial Group, Inc. (the “Issuer”).  All references herein to the “UCC” refer to the Uniform Commercial Code as in effect from time to time in [Issuer’s jurisdiction of incorporation].

 

WITNESSETH:

 

WHEREAS, the Lien Grantor is the registered holder of [specify Pledged Uncertificated Securities issued by the Issuer] issued by the Issuer (the “Securities”);

 

WHEREAS, pursuant to the Security Agreement dated as of September 28, 2012 (as amended, restated, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time, the “Security Agreement”), the Lien Grantor has granted to the Secured Party a continuing security interest (the “Transaction Lien”) in all right, title and interest of the Lien Grantor in, to and under the Securities, whether now existing or hereafter arising; and

 

WHEREAS, the parties hereto are entering into this Agreement in order to perfect the Transaction Lien on the Securities;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

Section 1.     Nature of Securities.  The Issuer confirms that (i) the Securities are “uncertificated securities” (as defined in Section 8-102 of the UCC) and (ii) the Lien Grantor is registered on the books of the Issuer as the registered holder of the Securities.

 

Section 2.     Instructions.  The Issuer agrees to comply with any “instruction” (as defined in Section 8-102 of the UCC) originated by the Secured Party and relating to the Securities without further consent by the Lien Grantor or any other person.  The Lien Grantor consents to the foregoing agreement by the Issuer.

 

Section 3.     Waiver of Lien; Waiver of Set-off.  The Issuer waives any security interest, lien or right of set-off that it may now have or hereafter acquire in or with respect to the Securities.  The Issuer’s obligations in respect of the Securities will not be subject to deduction, set-off or any other right in favor of any person other than the Secured Party.

 

Section 4.      Choice of Law.  This Agreement shall be governed by the laws of [Issuer’s jurisdiction of incorporation].

 

Section 5.      Conflict with Other Agreements.  There is no agreement (except this Agreement) between the Issuer and the Lien Grantor with respect to the Securities [except for [identify any existing other agreements] (the “Existing Other Agreements”)].  In the event of any conflict between this Agreement (or any portion hereof) and any other agreement [(including any Existing Other Agreement)] between the Issuer and the Lien Grantor with respect to the Securities, whether now existing or hereafter entered into, the terms of this Agreement shall prevail.

 

  

D-7

  

 

Section 6.       Amendments.  No amendment or modification of this Agreement or waiver of any right hereunder shall be binding on any party hereto unless it is in writing and is signed by all the parties hereto.

 

Section 7.       Notice of Adverse Claims.  As of the date hereof, except for the claims and interests of the Secured Party and the Lien Grantor in the Securities, the Issuer does not know of any claim to, or interest in, the Securities.  When the Issuer knows of any person asserting any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, attachment, execution or similar process) against the Securities, the Issuer will promptly notify the Secured Party and the Lien Grantor thereof.

 

Section 8.       Maintenance of Securities.  In addition to, and not in lieu of, the obligation of the Issuer to honor instructions as agreed in Section 2 hereof, the Issuer agrees as follows:

 

(i)          Lien Grantor Instructions; Notice of Exclusive Control.  So long as the Issuer has not received a Notice of Exclusive Control (as defined below), the Issuer may comply with instructions of the Lien Grantor or any duly authorized agent of the Lien Grantor in respect of the Securities.  After the Issuer receives a written notice from the Secured Party that it is exercising exclusive control over the Securities (a “Notice of Exclusive Control”) and until such Notice of Exclusive Control is rescinded by the Secured Party, the Issuer will cease complying with instructions of the Lien Grantor or any of its agents.

 

(ii)         Dividends and Distributions.  So long as the Issuer has not received a Notice of Exclusive Control, the Issuer shall deliver to the Lien Grantor all dividends, interest and other distributions paid or made upon or with respect to the Securities.  After the Issuer receives a Notice of Exclusive Control (and until such Notice of Exclusive Control is rescinded by the Secured Party), the Issuer shall deliver to the Secured Party all dividends, interest and other distributions paid or made upon or with respect to the Securities.

 

(iii)       Voting Rights.  Until the Issuer receives a Notice of Exclusive Control, the Lien Grantor shall be entitled to direct the Issuer with respect to voting the Securities.

 

(iv)        Statements and Confirmations.  The Issuer will promptly send copies of all statements and other correspondence concerning the Securities simultaneously to each of the Lien Grantor and the Secured Party at their respective addresses specified in Section 11 hereof.

 

(v)         Tax Reporting.  All items of income, gain, expense and loss recognized in respect of the Securities shall be reported to the Internal Revenue Service and all state and local taxing authorities under the name and taxpayer identification number of the Lien Grantor.

 

  

D-8

  

 

Section 9.     Representations, Warranties and Covenants of the Issuer.  The Issuer makes the following representations, warranties and covenants:

 

(i)          This Agreement is a valid and binding agreement of the Issuer enforceable in accordance with its terms, except as limited by (A) applicable bankruptcy, insolvency, fraudulent conveyance or other similar laws affecting creditors’ rights generally and (B) general principles of equity.

 

(ii)         The Issuer has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other person relating to the Securities pursuant to which it has agreed, or will agree, to comply with instructions (as defined in Section 8-102 of the UCC) of such person.

 

(iii)        The Issuer has not entered into any other agreement with the Lien Grantor or the Secured Party purporting to limit or condition the obligation of the Issuer to comply with instructions as agreed in Section 2 hereof.

 

Section 10.     Successors.  This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

 

Section 11.    Notices.  Each notice, request or other communication given to any party hereunder shall be in writing (which term includes facsimile or other electronic transmission) and shall be effective (i) when delivered to such party at its address specified below, (ii) when sent to such party by facsimile or other electronic transmission, addressed to it at its facsimile number or electronic mail address specified below, and such party sends back an electronic confirmation of receipt or (iv) 10 days after being sent to such party by certified or registered United States mail, addressed to it at its address specified below, with first class or airmail postage prepaid:

 

Lien Grantor:  [INSERT NOTICE ADDRESS]

 

Secured Party:  [INSERT NOTICE ADDRESS]

 

Issuer:  [INSERT NOTICE ADDRESS]

 

Any party may change its address, facsimile number and/or electronic mail address for purposes of this Section by giving notice of such change to the other parties in the manner specified above.

 

Section 12.     Termination.  The rights and powers granted herein to the Secured Party (i) have been granted in order to perfect the Transaction Lien, (ii) are powers coupled with an interest and (iii) will not be affected by any bankruptcy of the Lien Grantor or any lapse of time.  The obligations of the Issuer hereunder shall continue in effect until the Secured Party has notified the Issuer in writing that the Transaction Lien has been terminated pursuant to the Security Agreement.

 

Section 13.     Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall constitute one and the same instrument, and any party hereto may execute this Agreement by signing and delivering one or more counterparts.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile shall be effective as delivery of an original executed counterpart of this Agreement.

 

[SIGNATURE PAGES FOLLOW ON NEXT PAGE]

 

  

D-9

  

 

IN WITNESS WHEREOF, the parties hereto have each caused this Issuer Control Agreement to be duly executed by its officer thereunto duly authorized as of the date hereof.

 

	 	

[NAME OF LIEN GRANTOR]

	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	  Name: 	 
	 	 	  Title:
	 	 	 
	 	
WILMINGTON TRUST, NATIONAL ASSOCIATION,

	 	
as Collateral Agent

	 	 	 
	 	By: 	 
	 	 	 Name:
	 	 	 Title:
	 	 	 
	 	
CNO FINANCIAL GROUP, INC.

	 	 	 
	 	By: 	 
	 	 	
 Name:

	 	 	 Title:

 

  

D-10

 

Schedule 1

EQUITY INTERESTS

 

	
Current Legal

Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent

Pledged

	
40|86 Advisors, Inc.

	
CNO Financial Group, Inc.

	
5

	
100

	
100

	
40|86 Mortgage Capital, Inc.

	
CDOC, Inc.

	
4

	
100

	
100

	
American Life and Casualty Marketing Division Co.   

	
CDOC, Inc.

	
5

	
1,000

	
100

	
CDOC, Inc.

	
CNO Financial Group, Inc.

	
5

4

	
100

900

	
100

100

	
CNO Management Services Company

	
CDOC, Inc.

	
30

	
48,150

	
100

	
CNO Services, LLC

	
CNO Financial Group, Inc.

	
n/a

	
9.9%

	
100

	
CNO Services, LLC

	
CDOC, Inc.

	
n/a

	
89.1%

	
100

	
CNO Services, LLC

	
CNO Management Services Company   

	
n/a

	
1%

	
100

	
Performance Matters Associates, Inc.

	
CDOC, Inc.

	
008

	
1,000

	
100

	
Performance Matters Associates of Texas, Inc.

	
Performance Matters Associates, Inc.

	
007

	
1,000

	
100

	
CNO IT Services (India) Private Limited

	
CDOC, Inc.

	
8

	
324,987

	
100

	
CNO IT Services (India) Private Limited

	
CNO Financial Group, Inc.

	
10

	
13

	
100

	
CNO IT Services (India) Private Limited

	
CDOC, Inc.

	
7

	
174,793

	
0

	
CNO IT Services (India) Private Limited

	
CNO Financial Group, Inc.

	
9

	
7

	
0

	
Conseco Life Insurance Company of Texas

	
CDOC, Inc.

	
3

	
700,000

	
100

	
Conseco Health Services, Inc.

	
CDOC, Inc.

	
6

	
100

	
100

  

  

  

	
Current Legal

Entities Owned

	
Record Owner

	
Certificate No.

	
No. Shares/Interest

	
Percent

Pledged

	
Conseco Securities, Inc.

	
CDOC, Inc.

	
4

	
1,500

	
100

	
Hawthorne Advertising Agency Incorporated   

	
CDOC, Inc.

	
3

	
1,000

	
100

	
K.F. Agency, Inc.

	
CDOC, Inc.

	
3

	
500

	
100

	
K.F. Insurance Agency of Massachusetts, Inc.

	
CDOC, Inc.

	
3

	
1,000

	
100

	
Resortport Holding of Delaware, Inc.

	
CDOC, Inc.

	
2

	
100

	
100

	
Design Benefit Plans, Inc.

	
CNO Financial Group, Inc.

	
9

	
1,000,000

	
100

	
Washington National Insurance Company

	
CDOC, Inc.

	
C25881

	
5,007,370

	
100

	
Association Management Corporation

	
CDOC, Inc.

	
5

	
1,000

	
100

	
Conseco Life Insurance Company

	
CDOC, Inc.

	
U36846

	
4,178,222

	
100

	
Conseco Marketing, L.L.C.

	
CNO Financial Group, Inc.

	
n/a

	
9%

	
100

	
Conseco Marketing, L.L.C.

	
CNO Services, LLC

	
n/a

	
90%

	
100

	
Conseco Marketing, L.L.C.

	
CNO Management Services Company   

	
n/a

	
1%

	
100

 

  

  

  

 

Schedule 2

 

OTHER SECURITIES

 

None.

 

  

  

  

 

Schedule 3

 

DEPOSIT ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS

 

PART 1— Securities Accounts

 

The following Lien Grantors own Security Entitlements with respect to Financial Assets credited to the following Securities Accounts:

 

	
Owner

	
Intermediary

	
Description of Account

	
Account Numbers

	
40|86 Advisors, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]   

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Custody - Origination

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Custody - Rep. Reserves   

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Custody - Comm. Fees

	
[Intentionally Omitted]

	
American Life & Casualty Marketing Division Co.   

	
Bank of New York Mellon   

	
Custody

	
[Intentionally Omitted]

	
CDOC, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Custody

	
[Intentionally Omitted]

 

PART 2 — Commodity Accounts

 

The following Lien Grantors are the Commodity Customers with respect to the following Commodity Accounts:

 

None.

 

  

  

  

PART 3 — Deposit Accounts

 

	
Owner

	
Intermediary

	
Description of Account

	
Account Numbers

	
40|86 Advisors, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]   

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Checking - Escrow

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
Bank of New York Mellon

	
Lockbox

	
[Intentionally Omitted]

	
40|86 Mortgage Capital, Inc.

	
JP Morgan Chase

	
ACH Business

	
[Intentionally Omitted]

	
American Life & Casualty Marketing Division Co.   

	
Bank of New York Mellon   

	
Checking

	
[Intentionally Omitted]

	
CDOC, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CDOC, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Bank of New York Mellon

	
Lockbox

	
[Intentionally Omitted]

	
CNO Services, LLC

	
Huntington Bank

	
Checking - Payroll   

	
[Intentionally Omitted]

	
CNO Services, LLC

	
JP Morgan Chase

	
Checking

	
[Intentionally Omitted]

	
CNO Services, LLC

	
JP Morgan Chase

	
ACH Business

	
[Intentionally Omitted]

	
CNO Services, LLC

	
JP Morgan Chase

	
ACH Business

	
[Intentionally Omitted]

	
CNO Services, LLC

	
State Street Bank

	
Retained Assets

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
CNO Financial Group, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
Performance Matters Associates of Texas, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
Performance Matters Associates of Texas, Inc.

	
Bank of New York Mellon

	
Checking

	
[Intentionally Omitted]

	
Performance Matters Associates of Texas, Inc.

	
Compass Bank

	
Checking

	
[Intentionally Omitted]

	
Performance Matters Associates of Texas, Inc.

	
Compass Bank

	
Money Market   

	
[Intentionally Omitted]

 

  

  

  

 

Schedule 4

 

COMMERCIAL TORT CLAIMS

 

None.

 

  

  

  

 

Schedule 5

 

PLEDGED INSTRUMENTS

 

1.            Promissory Notes:

 

	
  

	
(a)

	
Global Intercompany Note, dated September 28, 2012 which will be pledged hereunder.

 

(b)

 

	
No.

	
Entity

	
Principal Amount

	
Date of Issuance

	
Interest Rate

	
Maturity Date Pledged

	
[Yes/No]

	
Surplus Debenture No. 2009-1

	
CDOC, Inc.

	
$50,000,000

	
July 1, 2009

	
Offshore Rate + 4%

	
December 31, 2030

	
Yes

	
Surplus Debenture No. 2009-2

	
CDOC, Inc.

	
$58,250,000

	
July 1, 2009

	
Offshore Rate + 4%

	
December 31, 2030

	
Yes

	
Surplus Debenture No. 2009-3

	
CDOC, Inc.

	
$305,000,000

	
July 1, 2009

	
Offshore Rate + 4%

	
December 31, 2030

	
Yes

	
Surplus Debenture No. 2009-4

	
CDOC, Inc.

	
$336,300,000

	
July 1, 2009

	
Offshore Rate + 4%

	
December 31, 2030

	
Yes

	
Surplus Note No. 2006-2

	
CDOC, Inc.

	
$160,000,000

	
October 31, 2006

	
Offshore Rate + 4%

	
December 31, 2036

	
Yes

 

Offshore Rate = Eurodollar Base Rate ÷ (1.00 — Eurodollar Reserve Percentage)

 

2.            Chattel Paper:

 

None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00208-of-00352.parquet"}]]