EXHIBIT 4.5
RESTATED SUPPLEMENTAL INDENTURE NO. 2
Restated Supplemental Indenture No. 2 (the "Restated Supplemental
Indenture"), dated as of June 30, 1998 (the "Effective Date"), between Gantos,
Inc., a Michigan corporation (the "Company"), and State Street Bank and Trust
Company, a Massachusetts trust company and successor to Fleet Bank N.A.
(successor to Shawmut Bank Connecticut, National Association, a national banking
association) (the "Trustee").
RECITALS
The Company and the Trustee are the parties to the Indenture, dated as of
April 1, 1995 between Company and Trustee, as successor trustee, as amended by
Supplemental Indenture No. 1, dated as of December 15, 1997 ("Supplemental
Indenture No. 1" and, together with the initial Indenture, the "Indenture").
NOW, THEREFORE, THIS RESTATED SUPPLEMENTAL INDENTURE WITNESSETH, for and in
consideration of the premises, it is mutually agreed and consented, for the
equal and proportionate benefit of the respective Holders from time to time of
the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used in this Restated
Supplemental Indenture No. 2 and not defined in this Restated Supplemental
Indenture No. 2 have the meanings given them in the Indenture.
2. ELIMINATION OF COVENANTS. Effective on the Effective Date, Sections
6.12(a), (c), (d) and (f) and Section 6.16 of the Indenture are eliminated from,
and shall not apply to, the Indenture or the Notes.
3. ELIMINATION OF DEFINITIONS. Effective on the Effective Date, the
definitions of the following terms are eliminated from Section 1.01 of the
Indenture and shall not apply to the Indenture or the Notes:
"Adjusted Interest Expense";
"Alternative Payment";
"Availability";
"Capital Expenditures";
"Capitalized Lease Obligation";
"Cases";
"Disclosure Statement";
"EBITDA";
"Fiscal Period";
"Interest Coverage Ratio";
"Interest Expense"; and
"Trigger Date".
4. AMENDMENT TO DEFINITION OF FREE CASH FLOW. Effective on the Effective
Date, the definition of "Free Cash Flow" in Section 1.01 of the Indenture is
amended and restated to read as follows:
"The term "Free Cash Flow" means, for any year (i) Net Income,
PLUS (ii) the sum of amortization expense and depreciation expense,
MINUS (iii) actual principal payments (including sinking fund
payments) and voluntary principal payments, but not Excess Cash Flow
payments, made with respect to indebtedness for borrowed money (which
does not include the Revolving Credit Agreement or Replacement Credit
Agreement), PLUS OR MINUS (iv) extraordinary cash items (provided that
such items are not taken into account in determining Net Income)."
5. INTENTIONALLY DELETED
6. ELIMINATION OF ELECTION TO APPLY REVISIONS TO REVOLVING CREDIT
AGREEMENT COVENANTS. Effective on the Effective Date, Section 5 of Supplemental
Indenture No. 1 is eliminated from, and shall not apply to, the Indenture or the
Notes.
7. AMENDMENT TO REDEMPTION PROVISIONS. Effective on the Effective Date,
Section 3.01(c) of the Indenture is amended and restated to read as follows:
"(c) The Notes shall be subject to special mandatory redemption
at the Redemption Price on the next succeeding Interest Payment Date
after which notice can be given following payment of an Excess Cash
Flow payment (made pursuant to Section 6.12(e) hereof) in an amount
for each Series of Notes equal to its Pro-Rata share of the Excess
Cash Flow payment. The amount of any redemptions made pursuant to
this subsection 3.01(c) shall decrease the aggregate amount of sinking
fund redemptions in the reverse order of the dates upon which such
sinking fund payments are to be made."
8. ELIMINATION OF SPECIAL MANDATORY REDEMPTION RIGHTS FOR SALES OF EQUITY
SECURITIES. Effective on the Effective Date, Section 3.01(f) of the Indenture
is deleted from the Indenture and shall no longer apply to the Indenture or the
Notes.
9. AMENDMENT TO MAINTENANCE OF PROPERTIES; COMPLIANCE WITH LAWS
PROVISIONS. Effective on the Effective Date, Section 6.05, line 6 of the
Indenture is amended by the insertion of the parenthetical, "(I.E., the sale of
women's clothing)", following the phrase "maintain and operate the same general
businesses which it is presently conducting" and before the semi-colon.
10. WAIVER OF NET WORTH COVENANT. Effective for the second fiscal quarter
of fiscal 1998, Section 6.12(b) of the Indenture is amended to read as follows:
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"(b) MINIMUM NET WORTH. Not permit the Net Worth of the Company and
its Subsidiaries, on a Consolidated basis, at the end of any fiscal quarter
of the Company specified below to be less than the respective amounts set
forth below:
Period Minimum
Second Fiscal Quarter - 1998
Through Third Fiscal Quarter - 2000 $4,500,000
Fourth Fiscal Quarter - 2000 and
Thereafter $6,000,000."
11. AMENDMENT TO COVENANTS REGARDING THE POLICY SECTION. Effective on the
Effective Date, the first two lines of Section 6.13 of the Indenture beginning
"The Company will," and ending "of the Company," are amended to read as follows:
"The Company will, for so long as L. Xxxxxxx Xxxxxx ("Xx.
Xxxxxx") remains an officer, director or consultant of the Company,"
12. WAIVER OF RESTRICTION REGARDING FUTURE DEBT OBLIGATIONS. Effective on
the Effective Date, Sections 6.14(b) and (c) are deleted from the Indenture and
shall no longer apply to the Indenture or the Notes. Moreover, effective on the
Effective Date, Section 6.14(a) of the Indenture is amended to read as follows:
"(a) Notwithstanding anything herein to the contrary, the Company
and its Subsidiaries may issue Senior Debt Obligations only if the
Company has fulfilled the obligations of Section 3.06 regarding
purchases of the Notes. Notwithstanding the preceding sentence or
anything herein to the contrary, and without compliance with Section
3.06, the Company and its Subsidiaries may (i) issue debt that is
secured by any assets of the Company, provided that the Company's and
its Subsidiaries' aggregate secured debt, including pursuant to the
Revolving Credit Agreement, any Replacement Credit Agreement and any
other secured debt, shall not exceed $40,000,000 in principal amount or
(ii) issue Senior Debt Obligations, provided that the aggregate amount
of the Company's and its Subsidiaries' secured debt and Senior Debt
Obligations may not exceed $40,000,000 in principal amount.
Notwithstanding the foregoing, in the event that the Company's debt
under the Foothill Facility (as hereinafter defined) exceeds $40,000,000
but is less than $42,000,000, the Company shall not be deemed to be in
breach of this Section 6.14(a) and such debt shall not constitute Senior
Debt Obligations."
13. AMENDMENT TO ADDITIONAL COVENANTS.
(a) Effective on the Effective Date, Section 6.15(c), line 7 of the
Indenture is amended by the insertion of the phrase "or any substantially
similar provision of a Replacement Credit Agreement" following the phrase
"Section 7.06 of the Revolving
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Credit Agreement" and before the semi-colon. Further, effective on the
Effective Date, Sections 6.15(d) and 6.15(e)(i) of the Indenture are
deleted in their entireties.
(b) Effective as of the Effective Date, Section 6.15(e)(ii), line 1
of the Indenture, is amended by the insertion of the phrase "or acquire"
following the phrase "The Company may form."
(c) Effective on the Effective Date, Section 6.15(g) of the Indenture
is amended and restated to read as follows:
"The Company shall not alter the nature of its business (I.E.,
the sale of women's clothing) as operated on the date of this
Indenture in any material respect."
(d) Effective on the Effective Date, Section 6.15(h) of the Indenture
is amended by the insertion of the phrase "Subject to Article XI," at the
beginning of the section and the insertion of the phrase "or any
substantially similar provision of a Replacement Credit Agreement" at the
end of the section prior to the period.
14. INTENTIONALLY OMITTED
15. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants (which representations and warranties shall survive the execution and
delivery of this Restated Supplemental Indenture) as of the date hereof that:
(a) All representations and warranties contained in the Indenture are
true and correct in all material respects as of the date of this Restated
Supplemental Indenture with the same force and effect as if made on such
date (except to the extent that any such representation or warranty relates
expressly to an earlier date).
(b) The Company has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Restated
Supplemental Indenture and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Restated
Supplemental Indenture.
(c) This Restated Supplemental Indenture has been duly executed and
delivered and constitutes the legal, valid and binding obligation of the
Company, and is enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equity principles.
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(d) No registration or filing with, consent or approval of, or other
action by, any Federal, State or other governmental agency, authority or
regulatory body is or will be required on behalf of the Company in
connection with the execution, delivery, performance, validity or
enforcement of this Restated Supplemental Indenture, other than any such
registration or filing which has been made or any such consent, approval
or other action which has been obtained and remains in full force and
effect and other than the filing of Form 10-Q or a Form 10-K with the
Securities and Exchange Commission.
(e) The execution, delivery and performance of this Restated
Supplemental Indenture by the Company will not violate any provision of the
certificate or articles of incorporation or bylaws of the Company (before
or immediately after the Effective Date) or any of its subsidiaries or any
law, statute, rule or regulation, or any order or decree of any court or
governmental instrumentality applicable to the Company or any of its
subsidiaries, or, after the Effective Date, violate, result in the breach
of or constitute a default under any indenture, agreement or other
instrument to which the Company or any of its subsidiaries or any of their
respective properties or assets are or may be bound.
(f) After giving effect to this Restated Supplemental Indenture after
the Effective Date, the Company is in compliance with all of the various
covenants and agreements applicable to it set forth in the Indenture.
(g) After giving effect to this Restated Supplemental Indenture after
the Effective Date, no event has occurred and is continuing which
constitutes or would constitute, with the giving of notice or the lapse of
time or both, an Event of Default under the Indenture.
(h) The Company has no defense to or setoff, counterclaim or claim
against payment of the Notes or enforcement of the Indenture or the Notes
based upon a fact or circumstance existing or occurring on or prior to the
date of this Restated Supplemental Indenture.
16. CONDITIONS PRECEDENT. Notwithstanding any term or provision of this
Restated Supplemental Indenture to the contrary, no amendment set forth in this
Restated Supplemental Indenture shall become effective until the Trustee shall
have determined that each of the following conditions precedent shall have been
satisfied, such determination to be conclusively evidenced by the Trustee's
execution and delivery of this Restated Supplemental Indenture:
(a) The Company shall have delivered to the Trustee a copy of the
resolution of the Company, certified by the Secretary or an Assistant
Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification, that this Restated Supplemental Indenture has been
authorized by the Company. The Company shall have also delivered to the
Trustee a certification of an officer of the Company that all of the
conditions precedent to the effectiveness of this
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Indenture Supplement shall have been met as of the date of such
certificate and that the representations and warranties set forth in
Section 15 of this Restated Supplemental Indenture are true as of the
Effective Date.
(b) The Trustee shall have received an Opinion of Counsel stating
that the execution of this Restated Supplemental Indenture is authorized or
permitted by the Indenture.
(c) Counterparts of the separate letter agreements, dated the date of
this Restated Supplemental Indenture, between the Company and holders
representing a majority of the Outstanding Notes, pursuant to which each
such holder has consented to the amendments contained in this Restated
Supplemental Indenture, shall have been duly executed and delivered on
behalf of the Company and each such holder, and such agreements shall be in
full force and effect.
(d) Counterparts of this Restated Supplemental Indenture shall have
been duly executed and delivered on behalf of the Company and the Trustee.
(e) The Company shall have obtained the consent of Fleet Bank, N.A.
under the Revolving Credit Agreement to this Restated Supplemental
Indenture.
17. CONDITION SUBSEQUENT. In the event that the refinancing of the
Company's current working capital facility with Fleet Bank, N.A. into a $40
million facility with Foothill Capital Corporation (the "Foothill Facility") is
not consummated on or before November 30, 1998, no amendment set forth in this
Restated Supplemental Indenture shall be effective and the terms of the
Indenture shall be enforced without giving effect to the terms of this Restated
Supplemental Indenture. Unless the Trustee is required to execute a
subordination agreement which is not in form and substance acceptable to the
Trustee as a condition to the consummation of the Foothill Facility, the Trustee
hereby consents to the Company consummating the transactions contemplated by the
Foothill Facility. Subject to the immediately preceding sentence, the Foothill
Facility, once consummated, shall be deemed to be a Replacement Credit Facility
for purposes of the Indenture.
18. ADDITIONAL EVENT OF DEFAULT. It shall constitute an Event of Default
under the Indenture if any of the representations and warranties of the Company
under this Restated Supplemental Indenture shall prove to have been incorrect in
any material respect when made.
19. NO OTHER CHANGE. Except as modified by this Restated Supplemental
Indenture, the Indenture shall continue in full force according to its terms and
is hereby ratified. The Restated Supplemental Indenture supersedes in all
respects the Supplemental Indenture No. 2, dated as of June 30, 1998, between
the Company and the Trustee and the letter agreement, dated September 25, 1998,
between the Company and the Trustee relating to such Supplemental Indenture No.
2.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first above written.
GANTOS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------
Its: President & CEO
-------------------------------
Attest:
/s/ M.A. Xxxxx
----------------------------
Name: M.A. Xxxxx
----------------------
Title: Admin. Assistant
---------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Its: Vice President
-------------------------------
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STATE OF )
) ss.:
COUNTY OF )
Before me, a Notary Public, in and for said State and County, duly
commissioned and qualified, personally appeared ___________________________,
with whom I am personally acquainted and who, upon oath, acknowledged
him/herself to be the ______________________________ of Gantos, Inc., and
that as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by him/herself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand on this ________
day of ________________, 199__.
----------------------------------------
Notary Public
My Commission Expires:
STATE OF MASSACHUSETTS )
) ss.: BOSTON
COUNTY OF SUFFOLK )
Before me, a Notary Public, in and for said State and County, duly
commissioned and qualified, personally appeared XXXXXX X. XXXXXXX, with whom I
am personally acquainted and who, upon oath, acknowledged him/herself to be the
VICE PRESIDENT of State Street Bank and Trust Co., and that such officer, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by him/herself as such officer.
IN WITNESS WHEREOF, I have hereunto set my hand on this 13th day of
November, 1998.
/s/ Xxxxx X. Xxxxx
-----------------------------------------
Notary Public
My Commission Expires: Xxxxx X. Xxxxx
[SEAL] Notary Public
My Commission Expires Xxxx 12, 2002
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XXXXXXX ASSOCIATES, L.P.
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
As of June 30, 1998
Gantos, Inc.
0000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
State Street Bank and Trust Company
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
This letter hereby confirms the consent of the undersigned, in accordance
with Section 10.02 of the Indenture, dated as of April 1, 1995 between Company
and Trustee, as successor trustee, as amended by Supplemental Indenture No. 1,
dated as of December 15, 1997 ("Supplemental Indenture No. 1" and, together with
the Indenture, the "Indenture"), to the terms of Restated Supplemental Indenture
No. 2, dated as of the date hereof ("Restated Supplemental Indenture No. 2").
The Company hereby reprices the warrants previously issued to the
undersigned to reflect an exercise price of $0.75 per Gantos Common Share, and,
prior to November 6, 1998, shall deliver to the undersigned amended warrants
reflecting such change. All other terms of the warrants shall remain the same.
The Company shall register the Gantos Common Shares underlying the warrants
previously issued to the undersigned on or prior to January 15, 1999. The
Company shall use its best efforts to keep the registration statement
registering such Gantos Common Shares (the "Registration Statement")
continuously effective until the earlier of (x) the date when all shares covered
by the Registration Statement have been sold or (y) the date the warrants cease
to be exercisable. The Company shall use its best efforts to list the Gantos
Common Shares underlying the warrants on any national securities exchange or
Nasdaq market, if any, on which the Gantos Common Shares are then listed or
quoted. The Company shall use its best efforts to register or qualify, no later
than the effective date of the Registration Statement under the Securities Act
of 1933, all shares covered by the Registration Statement under the blue sky
laws of such jurisdictions as any holder of the warrants shall reasonably
request, and do any and all other acts and things which may be necessary or
advisable to enable such holder to consummate the disposition of the shares
owned by such holder in such jurisdictions, provided that the Company will not
be required to register or qualify any shares in any jurisdiction where such
registration or qualification would (i) require it to qualify generally to do
business in such jurisdiction, (ii) subject it to taxation in such jurisdiction,
(iii) require it to consent to service of
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process in any such jurisdiction, provided it has not already so consented,
or (iv) require it to amend the terms of the warrants or of any other class
of the Company's securities. In the event that there is an event which causes
the undersigned not to have the full benefit of its registration rights
(including, without limitation, if the Company does not timely file the
Registration Statement or respond to comments from the Securities and
Exchange Commission, unless such failure is the result of the undersigned's
actions or inactions), the Company shall pay the undersigned the sum of
$15,000 in cash for each 30 day period during which the undersigned does not
have the full benefit of its registration rights. The Company shall in good
faith negotiate the terms of a Registration Rights Agreement incorporating
the foregoing terms with the undersigned.
In addition, as additional consideration for postponing the July 1, 1998
payment of principal under the Notes, the Company shall pay the legal fees and
expenses of Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C. on behalf of the undersigned
incurred in connection with (i) the negotiation of Restated Supplemental
Indenture No. 2 and this letter, (ii) any waivers or agreements with the Company
related thereto, (iii) any related due diligence, (iv) the preparation and
negotiation of the terms of the Registration Rights Agreement referenced above
and (v) the negotiation of the terms of the subordination agreement referenced
in Restated Supplemental Indenture No. 2.
The undersigned shall, at its request, be provided with true and accurate
copies (or then-current drafts) of the documents evidencing the Foothill
Facility and such other documents relating to the Foothill Facility or the
Company as the undersigned may reasonably request from the Company.
This letter shall supersede the letter dated as of June 30, 1998 by and
among the parties hereto with respect to Supplemental Indenture No. 2, dated as
of the date hereof, between the Company and Trustee.
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If this letter is acceptable, please so indicate by countersigning this
letter in the places indicated.
XXXXXXX ASSOCIATES, L.P.
By: Xxxxxxx Associates, L.P., as general partner
By: Xxxxxxx Associates, Inc., as general
partner
By: /s/ Xxxx Xxxxxx
-----------------------------------
An Authorized Signator
Accepted:
GANTOS, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------------------
Its: President & CEO
-------------------------
Accepted:
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Its: Vice President
-------------------------
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