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Exhibit 4.2
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE dated as of March 13, 1998, among DAY
INTERNATIONAL GROUP, INC., a Delaware corporation (the "Company"), DAY
INTERNATIONAL, INC., a Delaware corporation (the "Guarantor"), and FIRSTAR BANK
OF MINNESOTA, N.A., a Delaware corporation (as successor in interest to American
Bank National Association) as trustee (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company, the Guarantor and the Trustee have heretofore
executed and delivered a certain indenture, dated as of June 6, 1995 (the
"Indenture"), providing for the issuance of an aggregate principal amount of
$100,000,000 of 11 1/8% Senior Subordinated Notes due 2005 of the Company (the
"Notes");
WHEREAS, pursuant to the Indenture, the Guarantor has guaranteed the
obligations of the Company under the Notes and the Indenture;
WHEREAS, Section 9.02 of the Indenture provides that with the
consent of any holders of at least a majority in principal amount of the Notes
outstanding, the Company and the Trustee may amend or supplement the Indenture;
WHEREAS, the Company desires to amend or eliminate certain
provisions of the Indenture as hereinafter set forth;
WHEREAS, the Company has requested that the Trustee join in the
execution of this First Supplemental Indenture for the purpose of evidencing
such amendments;
WHEREAS, the execution and delivery of this First Supplemental
Indenture has been authorized by resolutions of the Boards of Directors of the
Company; and
WHEREAS, all conditions precedent and requirements necessary to make
this First Supplemental Indenture a valid and legally binding instrument in
accordance with its terms have been complied with, performed and fulfilled and
the execution and delivery hereof have been in all respects duly authorized;
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NOW, THEREFORE, in consideration of the premises and intending to be
legally bound hereby, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all holders of the Securities, as follows:
ARTICLE ONE
AMENDMENTS
SECTION 1.1. Modifications of Definitions. The following additions,
deletions and alterations are hereby made in Section 1.01 of the Indenture:
(a) The following definitions in Section 1.01 of the Indenture are
hereby amended to read in their entirety as follows:
"Consolidated EBITDA" means, with respect to the Company and its
Subsidiaries for any period, the sum of, without duplication, (i) the
Consolidated Net Income for such period, plus (ii) the Fixed Charges for
such period, plus (iii) provision for taxes based on income or profits for
such period (to the extent such income or profits were included in
computing Consolidated Net Income for such period), plus (iv) consolidated
depreciation, amortization and other non-cash charges of the Company and
its Subsidiaries required to be reflected as expenses on the books and
records of the Company, minus (v) cash payments with respect to any
non-recurring, non-cash charges previously added back pursuant to clause
(iv), and (vi) excluding the impact of foreign currency translations.
Notwithstanding the foregoing, the provision for taxes based on the income
or profits of, and the depreciation and amortization and other non-cash
charges of, a Subsidiary of a Person shall be added to Consolidated Net
Income to compute Consolidated EBITDA only to the extent (and in the same
proportion) that the Net Income of such Subsidiary was included in
calculating the Consolidated Net Income of such Person and, except in the
case of the Guarantor, only if a corresponding amount would be permitted
at the date of determination to be dividended to the Company by such
Subsidiary without prior approval (that has not been obtained), pursuant
to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable
to that Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income (but not loss) of any Person that is not
a Subsidiary or that is accounted for by the equity method of accounting
shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly
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Owned Subsidiary thereof that is a Guarantor, (ii) the Net Income of any
Subsidiary (other than the Guarantor) shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that Net Income is not at the date of determination
permitted without any prior governmental approval (which has not been
obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iii) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded, (iv) the cumulative effect of a change in accounting
principles shall be excluded, (v) the Net Income of, or any dividends or
other distributions from, any Unrestricted Subsidiary, to the extent
otherwise included, shall be excluded, whether or not distributed to the
Company or one of its Subsidiaries, and (vi) all other extraordinary gains
and extraordinary losses shall be excluded.
"Credit Agreement" means (i) prior to the Closing Date, that certain
Credit Agreement, dated as of the date of this Indenture, by and among the
Company and NationsBank of Texas, N.A., as agent, and the lenders parties
thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each
case as amended, modified, renewed, refunded, replaced, restated or
refinanced from time to time and (ii) on and after the Closing Date, that
certain Senior Secured Credit Agreement, dated as of January 15, 1998,
among the Company, the several lenders from time to time thereto, Societe
Generale Securities Corporation, as Arranger and Societe Generale as
Administrative Agent, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith,
and in each case as amended, modified, renewed, refunded, replaced,
restated or refinanced from time to time.
"Existing Indebtedness" means the Indebtedness of the Company and
its Subsidiaries (other than Indebtedness under the Credit Agreement) in
existence on the Closing Date (including, without limitation, Indebtedness
under the Cash Retention Notes) until such amounts are repaid.
"Senior Indebtedness" means (i) the Senior Bank Debt and (ii) any
other Indebtedness permitted to be incurred by the Company under the terms
of this Indenture, unless the instrument under which such Indebtedness is
incurred expressly provides that it is subordinated in right of payment to
the Notes. Notwithstanding anything to the contrary in the foregoing,
Senior Indebtedness shall not include (w) any liability for federal,
state, local or other taxes owed or owing by the Company,
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(x) any Indebtedness of the Company to any of its Subsidiaries, (y) any
trade payables or (z) any Indebtedness that is incurred in violation of
this Indenture.
(b) The following definitions are hereby added to Section 1.01 of
the Indenture:
"Acquisition" means GSD Acquisition Corp.'s acquisition of
approximately 93.9% of the common stock of the Company pursuant to the
terms of the Stock Purchase Agreement, dated as of December 18, 1997,
among Greenwich IV LLC, GSD Acquisition Corp. and the stockholders of the
Company, as amended.
"Closing Date" means January 16, 1998.
"GSD Senior Credit Agreement" means the Holdings Senior Credit
Agreement, dated as of January 15, 1998, among GSD Acquisition Corp., GSD
Acquisition II Corp., Societe Generale as Administrative Agent and Societe
Generale Securities Corporation as Arranger, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed,
refunded, replaced, restated or refinanced from time to time.
"Investors" means, collectively, Greenwich Street Capital Partners,
Inc. and SG Capital Partners, LLC (and their respective successors and
assigns).
"Management Agreements" means, collectively, the Consulting
Agreement, the Fee Agreement and the Indemnification Agreement, each
between the Company and Greenwich Street Capital Partners, L.P. (and its
successors and assigns thereunder), as each may be amended, supplemented,
waived or otherwise modified from time to time in accordance with the
terms thereof and of the Indenture.
"Preferred Stock" means the Preferred Stock of the Company described
in the Company's Consent Solicitation Statement, dated as of February 20,
1998, as the same may be amended from time to time.
"Senior Secured Credit Agreement" means the Senior Secured Credit
Agreement, dated as of January 15, 1998, among the Company, the several
lenders from time to time thereto, Societe Generale Securities
Corporation, as Arranger and Societe Generale as Administrative Agent,
including any related notes, guarantees, collateral documents, instruments
and agreements executed in connection therewith,
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and in each case as amended, modified, renewed, refunded, replaced,
restated or refinanced from time to time.
"Senior Subordinated Notes" means the Senior Subordinated Notes of
the Company described in the Company's Consent Solicitation Statement,
dated as of February 20, 1998, as the same may be amended from time to
time.
"Take-Out Securities" means, collectively, the Senior Subordinated
Notes and the Preferred Stock.
"Tax Sharing Agreement" means the Tax Sharing Agreement between the
Company and Holdings, as the same may be amended, supplemented, waived or
otherwise modified from time to time in accordance with the terms thereof
and of the Indenture.
SECTION 1.2. Modifications of Covenants. The following Sections of
the Indenture are hereby amended to read in their entirety as follows:
SECTION 4.09 RESTRICTED PAYMENTS
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly: (i) declare or pay any dividend or make any
distribution on account of the Company's or any of its Subsidiaries' Equity
Interests (including, without limitation, any payment in connection with any
merger or consolidation involving the Company) (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company or dividends or distributions payable to the Company or any Wholly Owned
Subsidiary of the Company); (ii) purchase, redeem or otherwise acquire or retire
for value any Equity Interests of the Company or any direct or indirect parent
of the Company or other Affiliate or Subsidiary of the Company (other than any
such Equity Interests owned by the Company or any Wholly Owned Subsidiary of the
Company that is a Guarantor); (iii) make any principal payment on, or purchase,
redeem, defease or otherwise acquire or retire for value any Indebtedness that
is subordinated to the Notes, except at final maturity, other than through the
purchase or acquisition by the Company of Indebtedness through the issuance in
exchange therefor of Equity Interests (other than Disqualified Stock); or (iv)
make any Restricted Investment (all such payments and other actions set forth in
clauses (i) through (iv) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment: (a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; (b) the Company would, at
the time of such Restricted Payment and after giving pro forma effect thereto as
if such Restricted Payment had been made at the beginning of the applicable
four-quarter
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period, have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.10 hereof; and (c) such Restricted Payment, together with
the aggregate of all other Restricted Payments made by the Company and its
Subsidiaries after the date of this Indenture (excluding Restricted Payments
permitted by clauses (ii) and (iv) of the next succeeding paragraph), is less
than the sum of (i) $5,000,000, plus (ii) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period) from the beginning
of the first fiscal quarter commencing after the date of this Indenture 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,
if such Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (iii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of this Indenture of Equity
Interests of the Company or of debt securities of the Company that have been
converted into such Equity Interests (other than Equity Interests (or
convertible debt securities) sold to a Subsidiary or an Unrestricted Subsidiary
of the Company and other than Disqualified Stock or debt securities that have
been converted into Disqualified Stock), plus (iv) 100% of any dividends
received by the Company or a Wholly Owned Subsidiary that is a Guarantor after
the date of this Indenture from an Unrestricted Subsidiary of the Company, plus
(v) 100% of the cash proceeds realized upon the sale of any Unrestricted
Subsidiary (less the amount of any reserve established for purchase price
adjustments and less the maximum amount of any indemnification or similar
contingent obligation for the benefit of the purchaser, any of its Affiliates or
any other third party in such sale, in each case as adjusted for any permanent
reduction in any such amount on or after the date of such sale, other than by
virtue of a payment made to such person) following the date of this Indenture,
plus (vi) to the extent that any Restricted Investment that was made after the
date of this Indenture is sold for cash or otherwise liquidated or repaid for
cash, the amount of cash proceeds received with respect to such Restricted
Investment.
The foregoing provisions will not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the making of any Restricted Investment in exchange for, or out
of the proceeds of, the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided, that any net cash proceeds that are utilized for
any such Restricted Investment, and any Net Income resulting therefrom, shall be
excluded from clauses (c)(ii) and (c)(iii) of the preceding paragraph; (iii) the
redemption, repurchase, retirement or other acquisition of any Equity Interests
of the Company in exchange for, or out of the proceeds of, the substantially
concurrent sale (other than to a Subsidiary of the Company) of other Equity
Interests of the Company (other than any Disqualified Stock); provided that any
net cash proceeds that are utilized for any such redemption, repurchase,
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retirement or other acquisition, and any Net Income resulting therefrom, shall
be excluded from clause (c)(ii) and (c)(iii) of the preceding paragraph; (iv)
the defeasance, redemption or repurchase of pari passu or subordinated
Indebtedness with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness or the substantially concurrent sale (other than to a
Subsidiary of the Company) of Equity Interests of the Company (other than
Disqualified Stock); provided, that any net cash proceeds that are utilized for
any such defeasance, redemption or repurchase, and any Net Income resulting
therefrom, shall be excluded from clauses (c)(ii) and (c)(iii) of the preceding
paragraph; (v) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company or any Subsidiary of the Company
held by any member of the Company's (or any of its Subsidiaries') management
pursuant to any management agreement or stock option agreement; provided that
the aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $1,000,000 in any fiscal year or $5,000,000 in
the aggregate (net of the cash proceeds received by the Company from subsequent
reissuances of such Equity Interests to new members of management), and no
Default or Event of Default shall have occurred and be continuing immediately
after such transaction; (vi) payments of principal and interest with respect to
the Cash Retention Notes; (vii) prepayments and payments of all obligations with
respect to the GSD Senior Credit Agreement from the proceeds of any Take-Out
Securities; (viii) loans, advances, dividends or distributions by the Company to
GSD or Greenwich IV not to exceed the aggregate amount necessary to permit GSD
or Greenwich IV to (A) make payments in respect of its indemnification
obligations owing to directors, officers, employees or other Persons under its
charter or by-laws or pursuant to written agreements with any such Person, to
the extent such payments relate to the Company and its Subsidiaries, (B) pay all
reasonable fees and expenses payable by it in connection with the Acquisition,
(C) pay its other operational expenses incurred in the ordinary course of
business and not exceeding $500,000 in any fiscal year or (D) indemnify or
reimburse, or pay on behalf of, such Persons any taxes, charges or assessments
arising by reason of the liquidation of GSD Acquisition Corp., provided that the
aggregate amount of such payments under this clause (D) shall not exceed
$1,000,000; provided, however, that such loans, advances, dividends or
distributions will be excluded in subsequent calculations of the amount of
Restricted Payments; (ix) so long as no Default or Event of Default shall have
occurred and be continuing, payments by the Company or any Restricted Subsidiary
of up to $950,000 per year to the Investors plus reasonable out-of-pocket
expenses to satisfy the Company's obligations under the Management Agreements,
provided that notwithstanding the occurrence of a Default of Event of Default or
any other provision of this Indenture, all amounts under the Management
Agreements may be paid by the issuance of common stock of the Company or a
Restricted Subsidiary to the Investors; (x) payments by the Company or a
Restricted Subsidiary to satisfy its obligations under the Tax Sharing
Agreement; and (xi) the acquisition by a Receivables Subsidiary in connection
with a Qualified Receivables Transaction of Equity
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Interests of a trust or other person established by such Receivables Subsidiary
to effect such Qualified Receivables Transaction.
The Board of Directors may designate any Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Subsidiaries (except to the extent repaid in cash) in the
Subsidiary so designated will be deemed to be Restricted Payments at the time of
such designation and will reduce the amount available for Restricted Payments
under the first paragraph of this covenant. All such outstanding Investments
will be deemed to constitute Investments in an amount equal to the greatest of
(x) the net book value of such Investments at the time of such designation, (y)
the fair market value of such Investments at the time of such designation and
(z) the original fair market value of such Investments at the time they were
made. Such designation will only be permitted if such Restricted Payment would
be permitted at such time and if such Subsidiary otherwise meets the definition
of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value (evidenced by a resolution of the Board of Directors set forth
in an Officers' Certificate delivered to the Trustee) on the date of the
Restricted Payment of the asset(s) proposed to be transferred by the Company or
such Subsidiary, as the case may be, pursuant to the Restricted Payment. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
this Section 4.09 were computed, which calculations may be based upon the
Company's latest available financial statements.
SECTION 4.10 INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK
The Company shall not, and shall not permit any of its Subsidiaries
and Unrestricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guaranty or otherwise become directly or indirectly liable, contingently
or otherwise, with respect to (collectively, "incur") any Indebtedness
(including Acquired Indebtedness) and that the Company will not issue any
Disqualified Stock and will not permit any of its Subsidiaries and Unrestricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may incur Indebtedness (including Acquired Indebtedness) or issue shares
of Disqualified Stock and the Company's Subsidiaries that are Guarantors may
incur Indebtedness and issue preferred stock if: (i) the Fixed Charge Coverage
Ratio for the Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding the date on
which such additional
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Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2 to 1, determined on a pro forma basis (including a pro forma application
of the net proceeds therefrom), as if the additional Indebtedness had been
incurred, or the Disqualified Stock had been issued, as the case may be, at the
beginning of such four-quarter period; and (ii) no Default or Event of Default
shall have occurred and be continuing or would occur as a consequence thereof;
provided, that no Guarantee may be incurred pursuant to this paragraph, unless
the guaranteed Indebtedness is incurred by the Company or a Subsidiary pursuant
to this paragraph.
The foregoing provisions will not apply to: (i) the incurrence by
the Company of Senior Term Debt and Senior Revolving Debt and letters of credit
(and Guarantees thereof by Subsidiaries that are Guarantors) in an aggregate
principal amount at any time outstanding (with letters of credit being deemed to
have a principal amount equal to the maximum potential liability of the Company
and its Subsidiaries thereunder) not to exceed an amount equal to $60,000,000,
less the aggregate amount of all Net Proceeds of Asset Sales applied to
permanently reduce the outstanding amount or the commitments with respect to
such Indebtedness pursuant to Section 4.08 hereof; (ii) the incurrence by the
Company and its Subsidiaries of the Existing Indebtedness; (iii) the incurrence
by the Company of Indebtedness represented by the Notes and by the Subsidiaries
of Indebtedness represented by the Subsidiary Guarantees; (iv) the incurrence by
the Company or any of its Subsidiaries of Indebtedness represented by Capital
Lease Obligations, mortgage financings or Purchase Money Obligations, in each
case incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvement of property used in the business of the
Company or such Subsidiary, in an aggregate principal amount not to exceed
$10,000,000 at any time outstanding; (v) the incurrence by the Company or any of
its Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund, Indebtedness that was permitted by this Indenture to be incurred; (vi)
the incurrence by the Company or any of its Subsidiaries of intercompany
Indebtedness between or among the Company and any of its Wholly Owned
Subsidiaries or between or among any Wholly Owned Subsidiaries; provided,
however, that (i) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than a Wholly
Owned Subsidiary and (ii) any sale or other transfer of any such Indebtedness to
a Person that is not either the Company or a Wholly Owned Subsidiary shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by the
Company or such Subsidiary, as the case may be; (vii) the incurrence by the
Company or any of its Subsidiaries that are Guarantors of Hedging Obligations
that are incurred for the purpose of fixing or hedging interest rate risk with
respect to any floating rate Indebtedness that is permitted by this Indenture to
be incurred; (viii) the incurrence by the Company or any of its Subsidiaries
that are Guarantors of Indebtedness (in addition to Indebtedness permitted by
any other clause of this paragraph)
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in an aggregate principal amount at any time outstanding not to exceed the sum
of $10,000,000; (ix) the incurrence by Subsidiaries that are not Guarantors of
(i) Indebtedness in an aggregate amount not to exceed $20,000,000 (in addition
to Indebtedness permitted by any other clause of this paragraph); provided, that
(A) after giving pro forma effect to the incurrence thereof, the Company could
incur $1.00 of Indebtedness under the first paragraph of this Section 4.10, and
(B) such Indebtedness is not subordinated in right of payment to any other
Indebtedness and that such Indebtedness is secured by a Lien on property of the
Subsidiary that incurs such Indebtedness; and (ii) other Indebtedness in an
aggregate amount not to exceed $12,500,000; (x) the incurrence by the Company's
Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any
such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary,
such event shall be deemed to constitute an incurrence of Indebtedness by a
Subsidiary of the Company; (xi) Indebtedness incurred by the Company or any of
its Subsidiaries that is a Guarantor arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or from
guarantees of letters of credit, surety bonds or performance bonds securing the
performance of the Company or any of its Subsidiaries incurred by any person
acquiring all or a portion of such business, assets of a Subsidiary of the
Company for the purpose of financing such acquisition, in a principal amount not
to exceed 25% of the gross proceeds (with proceeds other than cash or Cash
Equivalents being valued at the fair market value thereof as determined by the
Board of Directors of the Company in good faith) actually received by the
Company or any of its Subsidiaries in connection with such disposition; (xii)
the incurrence by a Receivables Subsidiary of Indebtedness in a Qualified
Receivables Transaction that is without recourse to the Company or to any
Subsidiary of the Company or their assets (other than such Receivables
Subsidiary and its assets), and is not guaranteed by any such person; (xiii) the
assumption by the Company and the incurrence of all of GSD's obligations under
the GSD Senior Credit Agreement; and (xiv) the incurrence of Indebtedness and
other obligations with respect to the Take-Out Securities (and Guarantees
thereof by Subsidiaries that are Guarantors).
Notwithstanding any other provision of this covenant, a Guarantee of
Indebtedness permitted by the terms of this Indenture at the time such
indebtedness was incurred will not constitute a separate incurrence of
Indebtedness.
SECTION 4.12 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES
The Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any Subsidiary
to (i) (a) pay dividends or make any other distributions to the Company or any
of its Subsidiaries (1) on its Capital Stock or
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(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any indebtedness owed to the Company or any of its
Subsidiaries, (ii) make loans or advances to the Company or any of its
Subsidiaries or (iii) transfer any of its properties or assets to the Company or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (a) Existing Indebtedness as in effect on the Closing
Date, (b) the Credit Agreement as in effect as of the Closing Date, and any
amendments, modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive with respect to such
dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the Closing Date, (c) this Indenture and the Notes,
(d) applicable law, (e) any instrument governing Acquired Indebtedness or
Capital Stock of a Person acquired by the Company or any of its Subsidiaries as
in effect at the time of such acquisition (except to the extent such Acquired
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that the Consolidated
EBITDA of such Person is not taken into account in determining whether such
acquisition was permitted by the terms of this Indenture, (f) by reason of
customary non-assignment provisions in leases and licenses entered into in the
ordinary course of business and consistent with past practices, (g) purchase
money obligations for property acquired in the ordinary course of business that
impose restrictions of the nature described in clause (iii) above on the
property so acquired, (h) agreements relating to the financing of the
acquisition of real or tangible personal property acquired after the date of
this Indenture, provided, that such encumbrance or restriction relates only to
the property which is acquired and in the case of any encumbrance or restriction
that constitutes a Lien, such Lien constitutes a Permitted Lien as set forth in
clause (xi) of the definition of "Permitted Lien," (i) Indebtedness or other
contractual requirements of a Receivables Subsidiary in connection with a
Qualified Receivables Transaction, provided that such restrictions apply only to
such Receivables Subsidiary, (j) any restriction or encumbrance contained in
contracts for sale of assets permitted by this Indenture in respect of the
assets being sold pursuant to such contract, (k) Senior Indebtedness permitted
to be incurred under this Indenture and incurred after the date of this
Indenture, provided, that such encumbrances or restrictions in such Indebtedness
are no more onerous than the restrictions contained in the Credit Agreement on
the Closing Date, (l) Indebtedness of Subsidiaries that are not Guarantors
incurred under clause (x) of Section 4.10 hereof or (m) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness being refinanced.
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SECTION 4.14 TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease, transfer or otherwise dispose of any of its properties or
assets to, or purchase any property or assets from, or enter into or make any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Subsidiary than those that would have been obtained
in a comparable transaction by the Company or such Subsidiary with an unrelated
Person and (ii) the Company delivers to the Trustee (a) with respect to any
Affiliate Transaction entered into after the date of this Indenture involving
aggregate consideration in excess of $1,000,000, a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (b) with respect to any Affiliate Transaction involving aggregate
consideration in excess of $5,000,000, an opinion as to the fairness to the
Company or such Subsidiary of such Affiliate Transaction from a financial point
of view issued by an investment banking firm of national standing; provided that
the following shall not be deemed to be Affiliate Transactions: (i) the
provision of administrative or management services by the Company or any of its
officers to any of its Subsidiaries in the ordinary course of business
consistent with past practice, (ii) any employment agreement entered into by the
Company or any of its Subsidiaries in the ordinary course of business and
consistent with the past practice of the Company or such Subsidiary, (iii)
transactions between or among the Company and/or its Wholly Owned Subsidiaries
or transactions between a Receivables Subsidiary and any Person in which the
Receivables Subsidiary has an Investment, (iv) transactions permitted by Section
4.09 hereof, (v) payments made by the Company to, and agreements entered into by
the Company, with Affiliates in connection with the Acquisition, in each case to
the extent (and only to the extent) the same are described under the Section
entitled "The Acquisition and Related Transactions" set forth in the Company's
Consent Solicitation Statement, dated February 20, 1998, as the same may be
amended or supplemented from time to time, (vi) payment of compensation,
performance of indemnification or contribution obligations, or any issuance,
grant or award of stock, options or other securities, to employees, officers or
directors in the ordinary course of business, (vii) maintenance in the ordinary
course of business of benefit programs or arrangements for employees, officers
or directors, including vacation plans, health and the insurance plans, deferred
compensation plans, and retirement or savings plans and similar plans, (viii)
loans or advances made to directors, officers or employees of the Company or any
Subsidiary, or guarantees in respect thereof or otherwise made on their behalf
(including any payments under such guarantees), (A) in respect of travel,
entertainment or moving-related expenses incurred in the ordinary course of
business, or (B) in the ordinary
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course of business not exceeding $500,000 in the aggregate outstanding at any
time, (ix) any other transaction arising out of agreements in existence on the
Closing Date, (x) execution, delivery and performance of the Tax Sharing
Agreement and the Management Agreements, including the ongoing payment of fees
to the Investors of up to $950,000 million per year plus reasonable
out-of-pocket expenses, and (xi) consummation of any merger of GSD Acquisition
II Corp., a Delaware corporation, with and into the Company, with the Company
continuing as the surviving corporation of such merger. The provisions of clause
(v) of the proviso in the immediately preceding sentence shall be deemed to
become effective for all purposes of the Indenture as of immediately prior to
the consummation of the Acquisition.
SECTION 5.01 MERGER, CONSOLIDATION, OR SALE OF ASSETS
Neither the Company nor the Guarantor shall in a single transaction
or series of related transactions consolidate or merge with or into (whether or
not the Company or the Guarantor is the surviving corporation) or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions, to another
corporation, Person or entity (other than a merger of the Company with and into
the Guarantor) unless (i) the Company or the Guarantor is the surviving
corporation or the entity or the Person formed by or surviving any such
consolidation or merger (if other than the Company or the Guarantor) or to which
such sale, assignment, transfer, lease, conveyance or other disposition shall
have been made is a corporation organized or existing under the laws of the
United States, any state thereof or the District of Columbia, (ii) the entity or
Person formed by or surviving any such consolidation or merger (if other than
the Company or the Guarantor) or the entity or Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company or the Guarantor, as the case
may be, pursuant to a supplemental indenture under the Notes, the Subsidiary
Guarantee and this Indenture in a form reasonably satisfactory to the Trustee,
(iii) immediately after such transaction, no Default or Event of Default exists
and (iv) except with respect to any merger of GSD Acquisition II Corp., a
Delaware corporation, with and into the Company, with the Company continuing as
the surviving corporation of such merger, the Company, the Guarantor or the
entity or Person formed by or surviving any such consolidation or merger (if
other than the Company or the Guarantor), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction) equal to or
greater than the Consolidated Net Worth of the Company or the Guarantor, as the
case may be, immediately preceding the transaction and (B) shall, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
be permitted to incur at least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first paragraph in Section
4.10 hereof.
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SECTION 9.04 REVOCATION AND EFFECTS OF CONSENTS
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's Note, even if notation of the consent
is not made on any Note. However, except with respect to the Proposed Amendments
reflected in the First Supplemental Indenture, as described in the Consent
Solicitation Statement, dated February 20, 1998, as the same is amended or
supplemented from time to time, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 10.01 [Intentionally deleted.]
SECTION 10.02 [Intentionally deleted.]
SECTION 10.03 [Intentionally deleted.]
SECTION 10.04 [Intentionally deleted.]
SECTION 10.05 [Intentionally deleted.]
SECTION 10.06 [Intentionally deleted.]
SECTION 10.07 [Intentionally deleted.]
SECTION 10.08 [Intentionally deleted.]
SECTION 10.09 [Intentionally deleted.]
SECTION 10.10 [Intentionally deleted.]
SECTION 10.11 [Intentionally deleted.]
SECTION 10.12 [Intentionally deleted.]
SECTION 10.13 [Intentionally deleted.]
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ARTICLE TWO
SUBSIDIARY GUARANTEE
SECTION 2.1. Subsidiary Guarantee. The Guarantor hereby ratifies its
obligations under Article 11 of the Indenture.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.1. The Trustee assumes no responsibility for the
correctness of the recitals herein contained, which shall be taken as the
statements of the Company. The Trustee makes no representation and shall have no
responsibility as to the validity and sufficiency of this First Supplemental
Indenture or the proper authorization or the due execution hereof by the Company
or the Guarantor.
SECTION 3.2. If and to the extent that any provision of this First
Supplemental Indenture limits, qualifies or conflicts with another provision
included in this First Supplemental Indenture, or in the Indenture, which is
required to be included in this First Supplemental Indenture or the Indenture by
any of the provisions of Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, as amended, such required provision shall control.
SECTION 3.3. Except as expressly amended by this First Supplemental
Indenture, the Indenture is in all respects ratified and confirmed by the
parties hereto and all the terms, conditions and provisions thereof shall remain
in full force and effect. This First Supplemental Indenture shall form a part of
the Indenture for all purposes, and every holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. All covenants and
agreements in the First Supplemental Indenture shall be binding on successors
and assigns of the parties hereto.
SECTION 3.4. Nothing in this First Supplemental Indenture is
intended to or shall provide any rights to any parties other than those
expressly contemplated by this First Supplemental Indenture.
SECTION 3.5. The internal law of the State of New York shall govern
and be used to construe this First Supplemental Indenture.
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SECTION 3.6. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
SECTION 3.7. This First Supplemental Indenture shall become
effective as of the date specified above.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
DAY INTERNATIONAL GROUP, INC.
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
DAY INTERNATIONAL, INC.
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
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FIRSTAR BANK OF MINNESOTA,
(AS SUCCESSOR IN INTEREST TO
AMERICAN BANK NATIONAL
ASSOCIATION)
By_______________________________
Name:
Title:
Attest:
_______________________________ (SEAL)
Name:
Title:
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