EXHIBIT 99(a)(2)
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INDENTURE
Dated as of July 7, 1999
Among
ST. XXXX KNITS INTERNATIONAL, INCORPORATED, as Issuer,
The GUARANTORS Named herein
and
The Bank of New York, as Trustee
__________________
$100,000,000
12 1/2% Senior Subordinated Notes due 2009, Series A
12 1/2% Senior Subordinated Notes due 2009, Series B
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CROSS-REFERENCE TABLE
Trust Indenture Indenture
Act Section Section
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(S) 310(a)(1)............................................. 7.10
(a)(2)............................................. 7.10
(a)(3)............................................. N.A.
(a)(4)............................................. N.A.
(a)(5)............................................. 7.08, 7.10.
(b)................................................ 7.08; 7.10; 13.02
(c)................................................ N.A.
(S) 311(a)................................................ 7.11
(b)................................................ 7.11
(c)................................................ N.A.
(S) 312(a)................................................ 2.05
(b)................................................ 13.03
(c)................................................ 13.03
(S) 313(a)................................................ 7.06
(b)(1)............................................. 7.06
(b)(2)............................................. 7.06
(c)................................................ 7.06; 13.02
(d)................................................ 7.06
(S) 314(a)................................................ 4.11; 13.02
(b)................................................ N.A.
(c)(1)............................................. 13.04
(c)(2)............................................. 13.04
(c)(3)............................................. N.A.
(d)................................................ N.A.
(e)................................................ 13.05
(f)................................................ N.A.
(S) 315(a)................................................ 7.01(b)
(b)................................................ 7.05; 13.02
(c)................................................ 7.01(a)
(d)................................................ 7.01(c)
(e)................................................ 6.11
(S) 316(a)(last sentence)................................. 2.09
(a)(1)(A).......................................... 6.05
(a)(1)(B).......................................... 6.04
(a)(2)............................................. N.A.
(b)................................................ 6.07
(c)................................................ 10.04
(S) 317(a)(1)............................................. 6.08
(a)(2)............................................. 6.09
(b)................................................ 2.04
(S) 318(a)................................................ 13.01
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N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Incorporation by Reference of Trust Indenture Act........ 21
SECTION 1.03. Rules of Construction.................................... 22
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.......................................... 22
SECTION 2.02. Execution and Authentication............................. 23
SECTION 2.03. Registrar and Paying Agent............................... 24
SECTION 2.04. Paying Agent To Hold Assets in Trust..................... 24
SECTION 2.05. Holder Lists............................................. 24
SECTION 2.06. Transfer and Exchange.................................... 25
SECTION 2.07. Replacement Securities................................... 25
SECTION 2.08. Outstanding Securities................................... 26
SECTION 2.09. Treasury Securities...................................... 26
SECTION 2.10. Temporary Securities..................................... 26
SECTION 2.11. Cancellation............................................. 26
SECTION 2.12. Defaulted Interest....................................... 27
SECTION 2.13. CUSIP Number............................................. 27
SECTION 2.14. Deposit of Moneys........................................ 27
SECTION 2.15. Book-Entry Provisions for Global Securities.............. 27
SECTION 2.16. Registration of Transfers and Exchanges.................. 28
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee....................................... 32
SECTION 3.02. Selection of Securities To Be Redeemed................... 32
SECTION 3.03. Notice of Redemption..................................... 33
SECTION 3.04. Effect of Notice of Redemption........................... 34
SECTION 3.05. Deposit of Redemption Price.............................. 34
SECTION 3.06. Securities Redeemed in Part.............................. 34
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.................................... 34
SECTION 4.02. Maintenance of Office or Agency.......................... 35
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SECTION 4.03. Transactions with Affiliates............................. 35
SECTION 4.04. Limitation on Indebtedness............................... 36
SECTION 4.05. Disposition of Proceeds of Asset Sales................... 38
SECTION 4.06. Limitation on Restricted Payments........................ 40
SECTION 4.07. Corporate Existence...................................... 43
SECTION 4.08. Notice of Defaults....................................... 43
SECTION 4.09. Business Activities...................................... 43
SECTION 4.10. Compliance Certificate................................... 43
SECTION 4.11. Provision of Financial Information....................... 44
SECTION 4.12. Change of Control........................................ 44
SECTION 4.13. Limitation on Senior Subordinated Indebtedness........... 45
SECTION 4.14. Limitation on Dividend and Other Payment Restrictions
Affecting Restricted Subsidiaries....................... 45
SECTION 4.15. Designation of Unrestricted Subsidiaries................. 46
SECTION 4.16. Limitation on Liens...................................... 47
SECTION 4.17. Limitation on Guarantees by Restricted Subsidiaries...... 47
SECTION 4.18. Limitation on the Sale or Issuance of Equity Interests
of Restricted Subsidiaries.............................. 48
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc............................. 48
SECTION 5.02. Successor Corporation Substituted........................ 49
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default........................................ 50
SECTION 6.02. Acceleration............................................. 51
SECTION 6.03. Other Remedies........................................... 52
SECTION 6.04. Waiver of Past Default................................... 52
SECTION 6.05. Control by Majority...................................... 52
SECTION 6.06. Limitation on Suits...................................... 53
SECTION 6.07. Rights of Holders To Receive Payment..................... 53
SECTION 6.08. Collection Suit by Trustee............................... 53
SECTION 6.09. Trustee May File Proofs of Claim......................... 53
SECTION 6.10. Priorities............................................... 54
SECTION 6.11. Undertaking for Costs.................................... 54
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee........................................ 55
SECTION 7.02. Rights of Trustee........................................ 56
SECTION 7.03. Individual Rights of Trustee............................. 57
SECTION 7.04. Trustee's Disclaimer..................................... 57
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SECTION 7.05. Notice of Defaults....................................... 57
SECTION 7.06. Reports by Trustee to Holders............................ 57
SECTION 7.07. Compensation and Indemnity............................... 58
SECTION 7.08. Replacement of Trustee................................... 59
SECTION 7.09. Successor Trustee by Merger, etc......................... 59
SECTION 7.10. Eligibility; Disqualification............................ 60
SECTION 7.11. Preferential Collection of Claims Against Company........ 60
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness........... 60
SECTION 8.02. No Payment on Securities in Certain Circumstances........ 60
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc........... 61
SECTION 8.04. Subrogation.............................................. 62
SECTION 8.05. Obligations of Company Unconditional..................... 63
SECTION 8.06. Notice to Trustee........................................ 63
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating
Agent................................................... 64
SECTION 8.08. Trustee's Relation to Senior Indebtedness................ 64
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions
of the Company or Holders of Senior Indebtedness........ 64
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of
Securities.............................................. 65
SECTION 8.11. This Article Not To Prevent Events of Default............ 65
SECTION 8.12. Trustee's Compensation Not Prejudiced.................... 65
SECTION 8.13. No Waiver of Subordination Provisions.................... 65
SECTION 8.14. Subordination Provisions Not Applicable to Money Held
in Trust for Holders; Payments May Be Paid Prior to
Dissolution............................................. 65
SECTION 8.15. Acceleration of Securities............................... 66
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations..................... 66
SECTION 9.02. Application of Trust Money............................... 67
SECTION 9.03. Repayment to Company..................................... 67
SECTION 9.04. Reinstatement............................................ 68
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders............................... 68
SECTION 10.02. With Consent of Holders.................................. 69
SECTION 10.03. Compliance with Trust Indenture Act...................... 70
SECTION 10.04. Record Date for Consents and Effect of Consents.......... 70
SECTION 10.05. Notation on or Exchange of Securities.................... 71
SECTION 10.06. Trustee To Sign Amendments, etc.......................... 71
SECTION 10.07. Reliance by Holders of Senior Indebtedness on
Subordination Provisions................................ 71
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ARTICLE ELEVEN
GUARANTEE
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SECTION 11.01. Unconditional Guarantee................................. 71
SECTION 11.02. Severability............................................ 72
SECTION 11.03. Release of a Guarantor.................................. 72
SECTION 11.04. Limitation of Guarantor's Liability..................... 73
SECTION 11.05. Contribution............................................ 73
SECTION 11.06. Execution of Security Guarantee......................... 73
SECTION 11.07. Subordination of Subrogation and Other Rights........... 74
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor
Senior Indebtedness.................................... 74
SECTION 12.02. No Payment on Guarantees in Certain Circumstances....... 74
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.......... 75
SECTION 12.04. Subrogation............................................. 76
SECTION 12.05. Obligations of Guarantors Unconditional................. 77
SECTION 12.06. Notice to Trustee....................................... 77
SECTION 12.07. Reliance on Judicial Order or Certificate of
Liquidating Agent...................................... 78
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness..... 78
SECTION 12.09. Subordination Rights Not Impaired by Acts or
Omissions of the Guarantors or Holders of Guarantor
Senior Indebtedness.................................... 78
SECTION 12.10. Holders Authorize Trustee To Effectuate Subordination
of Guarantee........................................... 79
SECTION 12.11. This Article Not To Prevent Events of Default........... 79
SECTION 12.12. Trustee's Compensation Not Prejudiced................... 79
SECTION 12.13. No Waiver of Guarantee Subordination Provisions......... 79
SECTION 12.14. Payments May Be Paid Prior to Dissolution............... 79
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls............................ 80
SECTION 13.02. Notices................................................. 80
SECTION 13.03. Communications by Holders with Other Holders............ 81
SECTION 13.04. Certificate and Opinion as to Conditions Precedent...... 81
SECTION 13.05. Statements Required in Certificate...................... 82
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar............... 82
SECTION 13.07. Governing Law........................................... 82
SECTION 13.08. No Recourse Against Others.............................. 82
SECTION 13.09. Successors.............................................. 82
SECTION 13.10. Counterpart Originals................................... 82
SECTION 13.11. Severability............................................ 83
SECTION 13.12. No Adverse Interpretation of Other Agreements........... 83
SECTION 13.13. Legal Holidays.......................................... 83
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SIGNATURES....................................................... S-1
EXHIBIT A Form of Series A Security........................ A-1
EXHIBIT B Form of Series B Security........................ B-1
EXHIBIT C Form of Legend for Global Securities............. C-1
EXHIBIT D Form of Transfer Certificate..................... D-1
EXHIBIT E Form of Transfer Certificate for Institutional
Accredited Investors............................ E-1
EXHIBIT F Form of Transfer Certificate for Regulation S
Transfers........................................ F-1
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NOTE: This Table of Contents shall not, for any purpose, be deemed to be a part
of the Indenture.
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INDENTURE dated as of July 7, 1999, among ST. XXXX KNITS
INTERNATIONAL, INCORPORATED, a Delaware corporation (the "Company"), the
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GUARANTORS named herein and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Trustee").
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Each party hereto agrees as follows for the benefit of each other
party and for the equal and ratable benefit of the Holders of the Securities:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Acquired Indebtedness" means Indebtedness of a Person (a) assumed in
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connection with an Acquisition from such Person or (b) existing at the time such
Person becomes a Restricted Subsidiary or is merged or consolidated with or into
the Company or any Restricted Subsidiary.
"Acquired Person" means, with respect to any specified Person, any
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other Person which merges with or into or becomes a Subsidiary of such specified
Person.
"Acquisition" means (i) any capital contribution (by means of
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transfers of cash or other property to others or payments for property or
services for the account or use of others, or otherwise) by the Company or any
Restricted Subsidiary to any other Person, or any acquisition or purchase of
Equity Interests of any other Person by the Company or any Restricted
Subsidiary, in either case pursuant to which such Person shall become a
Restricted Subsidiary or shall be consolidated with or merged into the Company
or any Restricted Subsidiary or (ii) any acquisition by the Company or any
Restricted Subsidiary of the assets of any Person which constitute substantially
all of an operating unit or line of business of such Person or which is
otherwise outside of the ordinary course of business.
"Affiliate" of any specified Person means any other Person directly or
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indirectly controlling or controlled by or under direct or indirect common
control with such specified Person and shall also mean any beneficial owner of
shares representing 5% or more of the total voting power of the Voting Equity
Interests (on a fully diluted basis) of the Company or of rights or warrants to
purchase such Voting Equity Interests (whether or not currently exercisable) and
any Person who would be an Affiliate of any such beneficial owner pursuant to
this definition; provided, however, that for purposes of Section 4.03, the term
"Affiliate" shall not include the Initial Purchasers or their affiliates. For
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise.
"Affiliate Transaction" has the meaning provided in Section 4.03.
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"Agent" means any Registrar, Paying Agent or co-Registrar.
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"Asset Sale" means any direct or indirect sale, conveyance, transfer,
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lease (that has the effect of a disposition) or other disposition (including,
without limitation, any merger, consolidation or sale-leaseback transaction) to
any Person other than the Company or a Restricted Subsidiary, in one transaction
or a series of related transactions, of (i) any Equity Interest of any
Restricted Subsidiary (other than directors' qualifying shares, to the extent
mandated by applicable law); (ii) any assets of the Company or any Restricted
Subsidiary which constitute substantially all of an operating unit or line of
business of the Company or any Restricted Subsidiary; or (iii) any other
property or asset of the Company or any Restricted Subsidiary outside of the
ordinary course of business (including the receipt of proceeds paid on account
of the loss of or damage to any property or asset and awards of compensation for
any asset taken by condemnation, eminent domain or similar proceedings). For
the purposes of this definition, the term "Asset Sale" shall not include (a) the
creation of any Lien not prohibited by Section 4.16; (b) sales of property or
equipment that has become worn out, obsolete or damaged or otherwise unsuitable
for use in connection with the business of the Company or any Restricted
Subsidiary, as the case may be; (c) any transaction consummated in compliance
with Section 4.06; (d) any transfers of properties and assets between Restricted
Subsidiaries or the Company and a Restricted Subsidiary; (e) the sale of Cash
Equivalents in the ordinary course of business; (f) a disposition of inventory
in the ordinary course of business; (g) transactions permitted under Section
5.01; (h) the sale or other disposition of assets owned by Amen Wardy Home
Stores, LLC; and (i) the sale of accounts receivable, or participation therein,
in connection with any Qualified Receivables Transactions. In addition, solely
for purposes of Section 4.05, any sale, conveyance, transfer, lease or other
disposition of any property or asset, whether in one transaction or a series of
related transactions, involving assets with a Fair Market Value not in excess of
$2.5 million in any fiscal year shall be deemed not to be an Asset Sale.
"Attributable Indebtedness" in respect of a sale/leaseback transaction
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means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded semi-annually) 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).
"Bankruptcy Law" has the meaning provided in Section 6.01.
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"Board of Directors" means the board of directors of the Company or
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any Guarantor, as the case may be, or any authorized committee of such board of
directors.
"Board Resolution" means, with respect to any Person, a duly adopted
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resolution of the Board of Directors of such Person.
"Capital Lease Obligation" means at the time any determination thereof
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is to be made, the amount of the liability in respect of a capital lease that
would at such time be properly capitalized on the balance sheet in accordance
with GAAP.
"Cash Equivalents" means: (a) U.S. dollars; (b) securities issued or
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directly and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof having maturities of not more than one year from the
date of acquisition; (c) certificates of deposit and eurodollar time deposits
with maturities of six months or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; (e) commercial paper rated X-0, X-
0 or the equivalent thereof by Xxxxx'x Investors Service, Inc. or Standard &
Poor's Corporation, respectively, and in each case
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maturing within six months after the date of acquisition; and (f) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (a) through (e) of this definition.
"Change of Control" means the occurrence of any of the following
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events (whether or not approved by the Board of Directors of the Company): (i)
any Person (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, including any group acting for the purpose of acquiring, holding or
disposing of securities within the meaning of Rule 13d-5(b)(1) under the
Exchange Act), other than one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rule 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time, upon the happening of
an event or otherwise), directly or indirectly, of greater than 35% of the total
voting power of the then outstanding Voting Equity Interests of the Company and
such Person beneficially owns a greater percentage of the total voting power of
the then outstanding Voting Equity Interests of the Company than the Permitted
Holders; (ii) the Company or any of its Subsidiaries sells, assigns, conveys,
transfers, leases or otherwise disposes (other than by way of merger or
consolidation) of all or substantially all of the assets of the Company and its
Subsidiaries (determined on a consolidated basis) to any Person (other than the
Company or any Wholly Owned Restricted Subsidiary), (iii) during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors of the Company then still in office who were either directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation or dissolution.
"Change of Control Date" has the meaning provided in Section 4.12.
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"Company" means the Person named as the "Company" in the first
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paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request or order
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signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President, a Vice President or its Treasurer, and by
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Consolidated Coverage Ratio" as of any date of determination means
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the ratio of (i) the aggregate amount of Consolidated EBITDA for the four
quarter period of the most recent four consecutive fiscal quarters for which
financial statements are available ending prior to the date of such
determination (the "Four Quarter Period") to (ii) Consolidated Fixed Charges for
such Four Quarter Period; provided, however, that (1) if the Company or any
Restricted Subsidiary has incurred any Indebtedness since the beginning of such
Four Quarter Period that remains outstanding on such date of determination or if
the transaction giving rise to the need to calculate the Consolidated Coverage
Ratio is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated
Fixed Charges for such Four Quarter Period shall be calculated after giving
effect on a pro forma basis to such Indebtedness as if such Indebtedness had
been Incurred on the first day of such Four Quarter Period and the discharge of
any other Indebtedness repaid, repurchased or otherwise discharged with the
proceeds of such new Indebtedness as if such discharge had occurred on the first
day of such Four Quarter Period, (2) if since the beginning of such Four Quarter
Period the Company or any Restricted Subsidiary shall have made any Asset Sale,
the Consolidated EBITDA for such Four Quarter Period shall be reduced by an
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amount equal to the Consolidated EBITDA (if positive) directly attributable to
the assets that are the subject of such Asset Sale for such Four Quarter Period
or increased by an amount equal to the Consolidated EBITDA (if negative)
directly attributable thereto for such Four Quarter Period and Consolidated
Fixed Charges for such Four Quarter Period shall be reduced by an amount equal
to the Consolidated Fixed Charges directly attributable to any Indebtedness of
the Company or any Restricted Subsidiary repaid, repurchased or otherwise
discharged with respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Sale for such Four Quarter Period
(or, if the Equity Interests of any Restricted Subsidiary are sold, the
Consolidated Fixed Charges for such Four Quarter Period directly attributable to
the Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such Four Quarter Period the
Company or any Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any Person that becomes a Restricted
Subsidiary) or an acquisition of assets, including any acquisition of assets
occurring in connection with a transaction causing a calculation to be made
hereunder, which constitutes all or substantially all of an operating unit or a
line of a business or which constitutes Replacement Assets, Consolidated EBITDA
and Consolidated Fixed Charges for such Four Quarter Period shall be calculated
after giving pro forma effect to (x) such Investment or acquisition of assets
(including the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such Four Quarter Period and (y) net
expense and cost reductions attributable to the assets acquired calculated on a
basis consistent with the standards set forth in Regulation S-X under the
Securities Act as in effect on the Issue Date and (4) if since the beginning of
such Four Quarter 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 Four Quarter Period) shall have made any Asset Sale
or any Investment or acquisition of assets that would have required an
adjustment pursuant to clause (2) or (3) above if made by the Company or a
Restricted Subsidiary during such Four Quarter Period, Consolidated EBITDA and
Consolidated Fixed Charges for such Four Quarter Period shall be calculated
after giving pro forma effect thereto as if such Asset Sale, Investment or
acquisition of assets occurred on, with respect to any Investment or
acquisition, the first day of such Four Quarter Period and, with respect to any
Asset Sale, the day prior to the first day of such Four Quarter Period. For
purposes of this definition, whenever pro forma effect is to be given to an
acquisition of assets, the amount of income or earnings relating thereto and the
amount of Consolidated Fixed Charges associated with any Indebtedness Incurred
in connection therewith, the pro forma calculations shall be determined in
accordance with GAAP. If any Indebtedness bears a floating rate of interest and
is being given pro forma effect, the interest expense on such Indebtedness shall
be calculated as if the rate in effect on the date of determination had been the
applicable rate for the entire period (taking into account any agreement under
which Interest Rate Protection Obligations are outstanding applicable to such
Indebtedness if such agreement under which such Hedging Obligations are
outstanding has a remaining term as at the date of determination in excess of 12
months); provided, however, that the Consolidated Fixed Charges of the Company
attributable to interest on any Indebtedness Incurred 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 Four Quarter Period.
"Consolidated EBITDA" means, for any period, the Consolidated Net
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Income for such period, plus, without duplication, the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Income
Tax Expense for such period; (ii) Consolidated Interest Expense for such period;
(iii) Consolidated Non-cash Charges for such period; (iv) step-ups in inventory
valuation as a result of purchase accounting in connection with the acquisition
of assets or Equity Interests; (v) costs not reimbursable by the Company's or
any Subsidiary's insurance incurred in connection with any litigation and other
legal proceedings to which the Company or such Subsidiary is currently a party
(other than in connection with the settlement of the litigation concerning Amen
Wardy Home Stores, LLC), provided that such costs included in this clause (v)
shall not exceed $1.0 million for all periods; (vi) cash Charges not to exceed
$1.0 million in con-
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nection with the settlement of the litigation concerning Amen Wardy Home Stores,
LLC, the acquisition of the remaining 49% interest in Amen Wardy Home Stores,
LLC and the closure of certain Amen Wardy stores and related costs; and (vii)
expenses related to the Transactions; less (A) all non-cash items increasing
Consolidated Net Income for such period and (B) all cash payments during such
period relating to non-cash charges that were added back in determining
Consolidated EBITDA in any prior period.
"Consolidated Fixed Charges" means, with respect to any Person for any
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period, the sum, without duplication, of (i) Consolidated Interest Expense and
(ii) the product of (x) the amount of all dividend payments on any series of
Preferred Equity Interest of the Company and its Restricted Subsidiaries (other
than dividends paid solely in Qualified Equity Interests and other than unpaid
dividends on the Preferred Stock) paid, accrued or scheduled to be paid or
accrued during such period times (y) a fraction, the numerator of which is one
and the denominator of which is one minus the then current effective
consolidated Federal, state and local tax rate of such Person, expressed as a
decimal.
"Consolidated Income Tax Expense" means, with respect to the Company
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for any period, the provision for Federal, state, local and foreign income taxes
payable by the Company and the Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to the Company for
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any period, without duplication, the sum of (i) the interest expense of the
Company and the Restricted Subsidiaries for such period as determined on a
consolidated basis in accordance with GAAP, including, without limitation, (a)
any amortization of debt discount, (b) the net cost under Hedging Obligations,
(c) the interest portion of any deferred payment obligation, (d) all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, (e) all capitalized interest and
all accrued interest and (f) the cash contributions to any employee stock
ownership plan or similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person (other than the
Company) in connection with Indebtedness Incurred by such plan or trust;
provided, however, that there will be excluded therefrom any such interest
expense of any Unrestricted Subsidiary to the extent the related Indebtedness is
not guaranteed or paid by the Company or any Restricted Subsidiary and (ii)
interest expense attributable to Capitalized Lease Obligations and the interest
portion of rent expense associated with Attributable Indebtedness in respect of
the relevant lease giving rise thereto, determined as if such lease were a
capitalized lease in accordance with GAAP, as determined for the Company and the
Restricted Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
-----------------------
income (loss) of the Company and the Restricted Subsidiaries determined in
accordance with GAAP and before any reduction in respect of dividends paid
solely in Qualified Equity Interests and before any reduction in respect of
unpaid dividends on the Preferred Stock; provided, however, that there shall not
be included in such Consolidated Net Income: (i) any net income (loss) of any
Person if such Person is not a Restricted Subsidiary, except (A) to the extent
of cash actually distributed by such Person during such period to the Company or
a Restricted Subsidiary as a dividend or other distribution, (B) with respect to
foreign joint ventures, to the extent that cash is available for distribution
(without restriction and not committed for other purposes) during such period to
the Company or a Restricted Subsidiary as a dividend or other distribution, but
is not distributed due to adverse tax or other business reasons, such cash shall
be included and (C) the Company's equity in a net loss of any such Person (other
than an Unrestricted Subsidiary) for such period shall be included in
determining such Consolidated Net Income; (ii) any net income (loss) of any
person acquired by the Company or a Restricted Subsidiary in a pooling of
interests transaction for any period prior to the date of such acquisition;
(iii) any net income (but not loss) of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, di-
-6-
rectly or indirectly, on the payment of dividends or the making of distributions
by such Restricted Subsidiary, directly or indirectly, to the Company to the
extent of such restrictions; (iv) any gain or loss, together with any related
provision for taxes on such gain or loss, realized upon the sale or other
disposition of any asset of the Company or the Restricted Subsidiaries
(including pursuant to any sale/leaseback transaction) outside of the ordinary
course of business; (v) any extraordinary gain or loss, together with any
related provision for taxes or such extraordinary gain or loss; (vi) the
cumulative effect of a change in accounting principles; (vii) any restoration to
income of any contingency reserve of an extraordinary, non-recurring or unusual
nature, except to the extent that provision for such reserve was made out of
Consolidated Net Income accrued at any time following the Issue Date; (viii)
gains and losses resulting from foreign currency transaction adjustments; (ix)
gains and losses on assets that are marked to market; (x) any costs and expenses
related to the Transactions incurred on or immediately after the Issue Date,
including the settlement of all outstanding options; and (xi) non-cash expenses
resulting from the grant of Equity Interests and other compensation to
management personnel of the Company and its Subsidiaries pursuant to a written
plan or agreement or the treatment of options under variable plan accounting.
"Consolidated Net Worth" of any Person means the consolidated
----------------------
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Equity Interests of such Person.
"Consolidated Non-cash Charges" means, with respect to any Person, for
-----------------------------
any period the sum of (i) depreciation, (ii) amortization and (iii) all non-cash
extraordinary charges and other non-cash expenses of such Person and its
Restricted Subsidiaries reducing Consolidated Net Income of such Person and its
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP (excluding, for purposes of clause (iii) only, such charges
which require an accrual of or a reserve for cash charges for any future period)
including, without limitation, non-cash charges in connection with the
settlement of the litigation concerning Amen Wardy Home Stores, LLC, the
acquisition of the remaining 49% interest in Amen Wardy Home Stores, LLC and the
closure of certain Amen Wardy stores and related costs.
"Corporate Trust Office of the Trustee" shall be at the address of the
-------------------------------------
Trustee specified in Section 13.02 or such other address as the Trustee may give
notice to the Company.
"Credit Facility" means the Credit Agreement, dated as of the Issue
---------------
Date, among the Company, the lenders named therein, and The Chase Manhattan
Bank, as Administrative Agent, and any and all guarantee agreements, security
agreements and other agreements and instruments relating thereto, in each case
as the same may be amended, modified, supplemented or replaced from time to
time, and including any deferrals, renewals, extensions, replacements,
refinancings or refundings thereof, or amendments, modifications or supplements
thereto and any agreement providing therefor (including any restatements thereof
and any increases in the amount of the commitments or Indebtedness thereunder),
whether by or with the same or any other lender, creditor, group of lenders or
group of creditors, and including related notes, guarantee and note agreements
and other instruments and agreements executed in connection therewith.
"Custodian" has the meaning provided in Section 6.01.
---------
"Default" means any event that is or with the passage of time or the
------
giving of notice or both would be an Event of Default.
"Defeasance Trust Payment" has the meaning provided in Section 8.02.
------------------------
-7-
"Depository" means, with respect to the Securities issued in the form
----------
of one or more Global Securities, The Depository Trust Company or another Person
designated as Depository by the Company, which must be a clearing agency
registered under the Exchange Act.
"Designated Senior Indebtedness" means (a) any Indebtedness of the
------------------------------
Company outstanding under the Credit Facility and (b) after the Credit Facility
has been terminated and all Indebtedness thereunder has been repaid in full, any
other Senior Indebtedness which, at the time of determination, has an aggregate
principal amount outstanding, together with any commitments to lend additional
amounts, of at least $10.0 million, if the instrument governing such Senior
Indebtedness expressly states that such Indebtedness is "Designated Senior
Indebtedness" for purposes of this Indenture and a Board Resolution setting
forth such designation by the Company has been filed with the Trustee.
"Designation" has the meaning provided in Section 4.15.
-----------
"Designation Amount" see Section 4.15.
------------------
"Disposition" means, with respect to any Person, any merger,
-----------
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.
"Disqualified Equity Interest" means any Equity Interest which, by its
----------------------------
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable at the option of the holder thereof), or upon the happening
of any event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable, at the option of the holder thereof
(except, in each case, upon the occurrence of a Change of Control or Asset
Sale), in whole or in part, or exchangeable into Indebtedness on or prior to the
earlier of the maturity date of the Securities or the date on which no
Securities remain outstanding.
"Domestic Restricted Subsidiary" means a Restricted Subsidiary of the
------------------------------
Company organized under the laws of the United States or any political
subdivision thereof or the operations of which are located substantially inside
the United States.
"Equity Interest" in any Person means any and all shares, interests,
---------------
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, in
such Person, including any Preferred Equity Interests.
"Event of Default" has the meaning provided in Section 6.01.
----------------
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
------------
and the rules and regulations promulgated by the SEC thereunder.
"Exchange Securities" means the 12 1/2% Senior Subordinated Notes due
-------------------
2009, Series B, to be issued in exchange for the Initial Securities pursuant to
the Registration Rights Agreement.
"Expiration Date" has the meaning set forth in the definition of
---------------
"Offer to Purchase" below.
"Fair Market Value" means, with respect to any asset, the price (after
-----------------
taking into account any liabilities relating to such assets) which could be
negotiated in an arm's-length free market transaction, for
-8-
cash, between a willing seller and a willing and able buyer, neither of which is
under any compulsion to complete the transaction; provided, however, that the
Fair Market Value of any such asset or assets shall be determined conclusively
by the Board of Directors of the Company acting in good faith, and shall be
evidenced by a Board Resolution delivered to the Trustee.
"Final Maturity Date" means July 1, 2009.
-------------------
"Foreign Restricted Subsidiary" means a Restricted Subsidiary of the
-----------------------------
Company not organized under the laws of the United States or any political
subdivision thereof and the operations of which are located and conducted
substantially outside of the United States.
"Four Quarter Period" has the meaning set forth in the definition of
-------------------
"Consolidated Coverage Ratio" above.
"Funding Guarantor" has the meaning provided in Section 11.05.
-----------------
"GAAP" means generally accepted accounting principles in effect in the
----
United States on the date hereof and which are consistently applied for all
applicable periods.
"Global Securities" means one or more 144A Global Securities,
-----------------
Regulation S Global Securities or IAI Global Securities.
"Xxxx Common Stock" means common stock of the Company owned by Xxxxxx
-----------------
X. Xxxx, Xxxxx Xxxx or Xxxxx X. Xxxx.
"guarantee" means, as applied to any obligation, (i) a guarantee
---------
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct or indirect, in any manner, of any part or
all of such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.
"Guarantee" has the meaning provided in Section 11.01.
---------
"Guarantor" means (i) each Domestic Restricted Subsidiary (other than
---------
a Receivables Entity) in existence on the Issue Date, and (ii) each other
Restricted Subsidiary, formed, created or acquired before or after the Issue
Date, required to become a Guarantor after the Issue Date pursuant to Section
4.17.
"Guarantor Blockage Period" has the meaning provided in Section
-------------------------
12.02(a).
"Guarantor Payment Blockage Notice" has the meaning provided in
---------------------------------
Section 12.02(a).
"Guarantor Senior Indebtedness" means, with respect to any Guarantor,
-----------------------------
at any date, (a) all Obligations of such Guarantor under or in respect of the
Credit Facility; (b) all Hedging Obligations of such Guarantor; (c) all
Obligations of such Guarantor under stand-by letters of credit; and (d) all
other Indebtedness of such Guarantor for borrowed money, including principal,
premium, if any, and interest (including Post-Petition Interest) on such
Indebtedness unless the instrument under which such Indebtedness of such
Guarantor for money borrowed is Incurred expressly provides that such
Indebtedness for money borrowed is
-9-
not senior or superior in right of payment to such Guarantor's Guarantee of the
Notes, and all renewals, extensions, modifications, amendments or refinancings
thereof. Notwithstanding the foregoing, Guarantor Senior Indebtedness shall not
include (a) to the extent that it may constitute Indebtedness, any Obligation
for Federal, state, local or other taxes; (b) any Indebtedness among or between
such Guarantor and any Subsidiary of such Guarantor or any Affiliate of such
Guarantor or any of such Affiliate's Subsidiaries; unless, and for so long as
such Indebtedness has been pledged to secure obligations under or in respect of
Guarantor Senior Indebtedness; (c) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business; (d) that portion of any Indebtedness that is Incurred in violation
of the Indenture; (e) Indebtedness evidenced by such Guarantor's Guarantee of
the Notes; (f) Indebtedness of such Guarantor that is expressly subordinate or
junior in right of payment to any other Indebtedness of such Guarantor; (g) to
the extent that it may constitute Indebtedness, any obligation owing under
leases (other than Capitalized Lease Obligations) or management agreements; (h)
any obligation that by operation of law is subordinate to any general unsecured
obligations of such Guarantor; and (i) Indebtedness of a Guarantor to the extent
such Indebtedness is owed to and held by any Federal, state, local or other
governmental authority.
"Guarantor Senior Subordinated Indebtedness" means the Guarantees and
------------------------------------------
any other Indebtedness of a Guarantor that specifically provides that such
Indebtedness is to rank pari passu in right of payment with the Guarantees and
is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of the Guarantor other than Guarantor Senior Indebtedness.
"Hedging Agreement" means, with respect to any Person, all interest
-----------------
rate swap or similar agreements or foreign currency or commodity hedge, exchange
or similar agreements of such Person.
"Hedging Obligations" means, with respect to any Person, the
-------------------
Obligations of such Person under Hedging Agreements.
"Holders" means the registered holders of the Securities.
-------
"IAI Global Security" means a permanent global security in registered
-------------------
form representing the aggregate principal amount of Securities transferred after
the Issue Date to Institutional Accredited Investors.
"Incur" means, with respect to any Indebtedness or other obligation of
-----
any Person, to create, issue, incur (including by conversion, exchange or
otherwise), assume, guarantee or otherwise become liable in respect of such
Indebtedness or other obligation or the recording, as required pursuant to GAAP
or otherwise, of any such Indebtedness or other obligation on the balance sheet
of such Person (and "Incurrence," "Incurred" and "Incurring" shall have meanings
---------- -------- ---------
correlative to the foregoing). Indebtedness of any Acquired Person or any of
its Subsidiaries existing at the time such Acquired Person becomes a Restricted
Subsidiary (or is merged into or consolidated with the Company or any Restricted
Subsidiary), whether or not such Indebtedness was Incurred in connection with,
as a result of, or in contemplation of, such Acquired Person becoming a
Restricted Subsidiary (or being merged into or consolidated with the Company or
any Restricted Subsidiary), shall be deemed Incurred at the time any such
Acquired Person becomes a Restricted Subsidiary or merges into or consolidates
with the Company or any Restricted Subsidiary.
"Indebtedness" means (without duplication), with respect to any
------------
Person, whether recourse is to all or a portion of the assets of such Person and
whether or not contingent, (a) every obligation of such Person for money
borrowed; (b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or
-10-
businesses; (c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person; (d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services (but excluding trade
accounts payable Incurred in the ordinary course of business and payable in
accordance with industry practices, or other accrued liabilities arising in the
ordinary course of business which are not overdue or which are being contested
in good faith); (e) every Capital Lease Obligation of such Person; (f) every net
obligation under Hedging Agreements of such Person; (g) every obligation of the
type referred to in clauses (a) through (f) of another Person and all dividends
of another Person the payment of which, in either case, such Person has
guaranteed or is responsible or liable for, directly or indirectly, as obligor,
guarantor or otherwise; and (h) any and all deferrals, renewals, extensions and
refundings of, or amendments, modifications or supplements to, any liability of
the kind described in any of the preceding clauses (a) through (g) above.
Indebtedness (a) shall never be calculated taking into account any cash and cash
equivalents held by such Person; (b) shall not include obligations of any Person
(x) arising from the honoring by a bank or other financial institution of a
check, draft or similar instrument inadvertently drawn against insufficient
funds in the ordinary course of business, provided that such obligations are
extinguished within two Business Days of their incurrence, (y) resulting from
the endorsement of negotiable instruments for collection in the ordinary course
of business and consistent with past business practices and (z) under stand-by
letters of credit to the extent collateralized by cash or Cash Equivalents; (c)
which provides that an amount less than the principal amount thereof shall be
due upon any declaration of acceleration thereof shall be deemed to be Incurred
or outstanding in an amount equal to the accreted value thereof at the date of
determination; and (d) shall include the liquidation preference and any
mandatory redemption payment obligations in respect of any Disqualified Equity
Interests of the Company or any Restricted Subsidiary.
"Indenture" means this Indenture, as amended or supplemented from time
---------
to time.
"Independent Financial Advisor" means a nationally recognized,
-----------------------------
accounting, appraisal, investment banking firm or consultant which, in the
judgment of the Board of Directors of the Company, is independent and qualified
to perform the task for which it is to be engaged.
"Initial Purchasers" means Chase Securities Inc., Bear, Xxxxxxx & Co.
------------------
Inc. and PaineWebber Incorporated.
"Initial Securities" means the 12 1/2% Senior Subordinated Notes due
------------------
2009, Series A, of the Company.
"Insolvency or Liquidation Proceeding" means, with respect to any
------------------------------------
Person, any liquidation, dissolution or winding up of such Person, or any
bankruptcy, reorganization, insolvency, receivership or similar proceeding with
respect to such Person, whether voluntary or involuntary.
"Institutional Accredited Investor" means an institution that is an
---------------------------------
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"interest" means, with respect to the Securities, the sum of any cash
--------
interest and any Liquidated Damages (as defined in the Registration Rights
Agreement) on the Securities.
"Interest Payment Date" means each semiannual interest payment date on
---------------------
January 1 and July 1 of each year, commencing January 1, 2000.
-11-
"Interest Record Date" for the interest payable on any Interest
--------------------
Payment Date (except a date for payment of defaulted interest) means the
December 15 or June 15 (whether or not a Business Day), as the case may be,
immediately preceding such Interest Payment Date.
"Investment" means, with respect to any Person, any direct or indirect
----------
loan, advance, guarantee or other extension of credit or capital contribution to
(by means of transfers of cash or other property or assets to others or payments
for property or services for the account or use of others, or otherwise), or
purchase or acquisition of capital stock, bonds, notes, debentures or other
securities or evidences of Indebtedness issued by, any other Person: provided
that (i) endorsements of negotiable instruments and documents in the ordinary
course of business and (ii) an acquisition of assets, Equity Interests or other
securities by the Company for consideration consisting exclusively of Equity
Interests (other than Disqualified Equity Interests) of the Company shall in
each case not be deemed to be an Investment. For purposes of Section 4.06, (i)
"Investment" shall include the applicable Designation Amount at the time of the
Designation of any Restricted Subsidiary as an Unrestricted Subsidiary and (ii)
the amount of any Investment shall be the original cost of such Investment, plus
the cost of all additions thereto, but without any other adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment; reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment; provided, however, that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. If the Company or any
Restricted Subsidiary sells or otherwise disposes of any Voting Equity Interests
of any direct or indirect Restricted Subsidiary such that, after giving effect
to any such sale or disposition, the Company no longer owns, directly or
indirectly, greater than 50% of the outstanding Voting Equity Interests of such
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition.
"Issue Date" means the original issue date of the Securities, July 7,
----------
1999.
"Lien" means any lien, mortgage, charge, security interest,
----
hypothecation, assignment for security or encumbrance of any kind (including any
conditional sale or capital lease or other title retention agreement, any lease
in the nature thereof and any agreement to give any security interest).
"Liquidated Damages" has the meaning provided in Section 4(a) of the
------------------
Registration Rights Agreement.
"Management Agreement" means the management agreement dated as of the
--------------------
Issue Date between the Company and Vestar.
"Maturity Date" means the date, which is set forth on the face of the
-------------
Securities, on which the Securities will mature.
"Net Cash Proceeds" means the aggregate proceeds in the form of cash
-----------------
or Cash Equivalents received by the Company or any Restricted Subsidiary in
respect of any Asset Sale, including all cash or Cash Equivalents received upon
any sale, liquidation or other exchange of proceeds of Asset Sales received in a
form other than cash or Cash Equivalents, net of (a) the direct costs relating
to such Asset Sale (including, without limitation, legal, accounting and
investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof; (b) taxes paid or payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements); (c) amounts required to be applied to the repayment of
Indebtedness secured by a Lien on the asset or assets that were the subject of
such Asset Sale;
-12-
(d) amounts deemed, in good faith, appropriate by the Board of Directors of the
Company to be provided as a reserve, in accordance with GAAP, against any
liabilities associated with such assets which are the subject of such Asset
Sale, including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an officer's certificate delivered to the Trustee (provided that
the amount of any such reserves shall be deemed to constitute Net Cash Proceeds
at the time such reserves shall have been reversed or are not otherwise required
to be retained as a reserve); and (e) with respect to Asset Sales by Restricted
Subsidiaries, the portion of such cash payments attributable to Persons holding
a minority interest in such Restricted Subsidiary.
"Obligations" means any principal, interest (including, without
-----------
limitation, Post-Petition Interest), penalties, fees, indemnification
obligations, reimbursement obligations, obligations to provide cash collateral,
damages and other liabilities payable under the documentation governing any
Indebtedness.
"Offer" has the meaning set forth in the definition of "Offer to
-----
Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent by or on
----------------- -----
behalf of the Company by first-class mail, postage prepaid, to each Holder at
his address appearing in the register for the Securities on the date of the
Offer offering to purchase up to the principal amount of Securities specified in
such Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture if so required). Unless otherwise required by applicable law,
the Offer shall specify an expiration date (the "Expiration Date") of the Offer
---------------
to Purchase, which shall be not less than 20 Business Days nor more than 60 days
after the date of such Offer, and a settlement date (the "Purchase Date") for
-------------
purchase of Securities to occur no later than five Business Days after the
Expiration Date. The Company shall notify the Trustee at least 15 Business Days
(or such shorter period as is acceptable to the Trustee) prior to the mailing of
the Offer of the Company's obligation to make an Offer to Purchase, and the
Offer shall be mailed by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. The Offer shall contain
all the information required by applicable law to be included therein. The
Offer shall contain all instructions and materials necessary to enable such
Holders to tender Securities pursuant to the Offer to Purchase. The Offer shall
also state: (1) the Section of this Indenture pursuant to which the Offer to
Purchase is being made; (2) the Expiration Date and the Purchase Date; (3) the
aggregate principal amount of the outstanding Securities offered to be purchased
by the Company pursuant to the Offer to Purchase (including, if less than 100%,
the manner by which such amount has been determined pursuant to the Section of
this Indenture requiring the Offer to Purchase) (the "Purchase Amount"); (4) the
---------------
purchase price to be paid by the Company for each $1,000 aggregate principal
amount of Securities accepted for payment (as specified pursuant to this
Indenture) (the "Purchase Price"); (5) that the Holder may tender all or any
--------------
portion of the Securities registered in the name of such Holder and that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount; (6) the place or places where Securities are to be
surrendered for tender pursuant to the Offer to Purchase; (7) that interest on
any Security not tendered or tendered but not purchased by the Company pursuant
to the Offer to Purchase will continue to accrue; (8) that on the Purchase Date
the Purchase Price will become due and payable upon each Security being accepted
for payment pursuant to the Offer to Purchase and that interest thereon shall
cease to accrue on and after the Purchase Date; (9) that each Holder electing to
tender all or any portion of a Security pursuant to the Offer to Purchase will
be required to surrender such Security at the place or places specified in the
Offer prior to the close of business on the Expiration Date (such Security
being, if the Company or the Trustee so requires, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing); (10) that (a) if Securities in an aggregate
principal amount less than or equal to the Purchase Amount are duly tendered and
not withdrawn pursuant to the Offer to Purchase, the Company shall pur-
-13-
chase all such Securities and (b) if Securities in an aggregate principal amount
in excess of the Purchase Amount are tendered and not withdrawn pursuant to the
Offer to Purchase, the Company shall purchase Securities having an aggregate
principal amount equal to the Purchase Amount on a pro rata basis (with such
adjustments as may be deemed appropriate so that only Securities in
denominations of $1,000 principal amount or integral multiples thereof shall be
purchased); and (11) that in the case of any Holder whose Security is purchased
only in part, the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder, in an
aggregate principal amount equal to and in exchange for the unpurchased portion
of the Security so tendered.
An Offer to Purchase shall be governed by and effected in accordance
with the provisions above pertaining to any Offer.
"Officer" means the Chairman, any Vice Chairman, the President, any
-------
Vice President, the Chief Financial Officer, the Treasurer, or the Secretary of
the Company.
"Officers' Certificate" means a certificate signed by two Officers or
---------------------
by an Officer and an Assistant Treasurer or Assistant Secretary of the Company
complying with Sections 13.04 and 13.05.
"144A Global Security" means a permanent global security in registered
--------------------
form representing the aggregate principal amount of Securities sold in reliance
on Rule 144A.
"Opinion of Counsel" means a written opinion delivered to the Trustee
------------------
from legal counsel who is reasonably acceptable to the Trustee. The counsel may
be an employee of or counsel to the Company, Vestar or the Trustee.
"Participant" has the meaning provided in Section 2.15.
-----------
"Paying Agent" has the meaning provided in Section 2.03.
------------
"Payment Blockage Notice" has the meaning provided in Section 8.02(a).
-----------------------
"Payment Blockage Period" has the meaning provided in Section 8.02(a).
-----------------------
"Permitted Business" means the business of the Company and its
------------------
Restricted Subsidiaries conducted on the Issue Date and businesses ancillary or
reasonably related thereto, including businesses whose principal strategy is to
capitalize on the image of the Company and its products.
"Permitted Holder" means Vestar and its Affiliates.
----------------
"Permitted Indebtedness" has the meaning provided in Section 4.04.
----------------------
"Permitted Investments" means (a) Cash and Cash Equivalents; (b)
---------------------
Investments in prepaid expenses, negotiable instruments held for collection and
lease, utility and workers' compensation, performance and other similar
deposits; (c) Hedging Obligations; (d) bonds, notes, debentures, stock or other
securities received as a result of Asset Sales permitted under Section 4.05; (e)
Investments in the Company and Investments in a Guarantor or a Person that, as a
result of or in connection with such Investment, becomes a Guarantor or is
merged with or into or consolidated with the Company or another Guarantor or
that transfers or
-14-
conveys all or substantially all its assets to the Company or a Guarantor, (f)
Investments existing as of the Issue Date; (g) any Investment consisting of a
guarantee by a Restricted Subsidiary of Senior Indebtedness or any guarantee of
Indebtedness otherwise permitted by the Indenture: (h) 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; (i) 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; (j) Investments in joint ventures in an aggregate amount not to exceed
$5.0 million; (k) stock, obligations or securities 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; (1) Investments by the Company or a Restricted Subsidiary in a
Receivables Entity or any Investment by a Receivables Entity in any other
Person, in each case, in connection with a Qualified Receivables Transaction;
(m) Indebtedness permitted pursuant to clause (m) of Section 4.04; (n)
Investments by the Company or a Restricted Subsidiary in St. Xxxx Company, Ltd.
for the purpose of purchasing minority interests therein in an aggregate amount
not to exceed $1.5 million and (o) Investments in Foreign Restricted
Subsidiaries which are not Guarantors in an aggregate amount not to exceed $10.0
million.
"Permitted Junior Securities" means any securities of the Company or
---------------------------
any other Person that are (i) equity securities without special covenants or
(ii) debt securities expressly subordinated in right of payment to all Senior
Indebtedness that may at the time be outstanding, to substantially the same
extent as, or to a greater extent than, the Securities are subordinated as
provided in this Indenture, in any event pursuant to a court order so providing
and as to which (a) the rate of interest on such securities shall not exceed the
effective rate of interest on the Securities on the date of this Indenture, (b)
such securities shall not be entitled to the benefits of covenants or defaults
materially more beneficial to the holders of such securities than those in
effect with respect to the Securities on the date of this Indenture and (c) such
securities shall not provide for amortization (including sinking fund and
mandatory prepayment provisions) commencing prior to the date six months
following the final scheduled maturity date of the Senior Indebtedness (as
modified by the plan of reorganization pursuant to which such securities are
issued).
"Permitted Liens" means (a) Liens on property of a Person existing at
---------------
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not secure any
property or assets of the Company or any Restricted Subsidiary other than the
property or assets subject to the Liens prior to such merger or consolidation;
(b) Liens imposed by law such as carriers', warehousemen's and mechanics' Liens
and other similar Liens arising in the ordinary course of business which secure
payment of obligations not more than 60 days past due or which are being
contested in good faith and by appropriate proceedings; (c) Liens existing on
the Issue Date; (d) Liens securing only the Securities or the Guarantees; (e)
Liens in favor of the Company or any Restricted Subsidiary (including any such
Liens securing Indebtedness to the extent and for so long as such Indebtedness
is pledged to secure Senior Indebtedness or Guarantor Senior Indebtedness, as
the case may be); (f) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted; provided,
however, that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (g) easements, reservation
of rights of way, restrictions and other similar easements, licenses,
restrictions on the use of properties, or minor imperfections of title that in
the aggregate do not in any case materially detract from the properties subject
thereto or interfere with the ordinary conduct of the business of the Company
and the Restricted Subsidiaries; (h) Liens re
-15-
sulting from the deposit of cash or notes in connection with contracts, tenders
or expropriation proceedings, or to secure workers' compensation, surety or
appeal bonds, costs of litigation when required by law and public and statutory
obligations or obligations under franchise arrangements entered into in the
ordinary course of business; (i) Liens securing Indebtedness consisting of
Capital Lease Obligations, Purchase Money Indebtedness, mortgage financings,
industrial revenue bonds or other monetary obligations, in each case incurred
solely for the purpose of financing all or any part of the purchase price or
cost of construction or installation of assets used in the business of the
Company or the Restricted Subsidiaries, or repairs, additions or improvements to
such assets; provided, however, that (I) such Liens secure Indebtedness in an
amount not in excess of the original purchase price or the original cost of any
such assets or repair, addition or improvement thereto (plus an amount equal to
the reasonable fees and expenses in connection with the incurrence of such
Indebtedness), (II) such Liens do not extend to any other assets of the Company
or the Restricted Subsidiaries (and, in the case of repair, addition or
improvements to any such assets, such Lien extends only to the assets (and
improvements thereto or thereon) repaired, added to or improved), (III) the
Incurrence of such Indebtedness is permitted by Section 4.04, and (IV) such
Liens attach within 90 days of such purchase, construction, installation,
repair, addition or improvement; (j) Liens in favor of issuers of surety or
performance bonds or letters of credit or bankers' acceptances issued pursuant
to the request of and for the account of such Person in the ordinary course of
its business; provided, however, that such letters of credit do not constitute
Indebtedness; (k) Liens securing Hedging Obligations so long as the related
Indebtedness is, and is permitted to be under the Indenture, secured by a Lien
on the same property securing such Hedging Obligation; (1) leases and subleases
of real property which do not materially interfere with the ordinary conduct of
the business of the Company or any of its Restricted Subsidiaries; (m) judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which 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; (n) Liens
arising solely by virtue of any statutory or common law provisions relating to
banker's Liens, rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a depositary institution; provided that
(1) such deposit account is not a dedicated cash collateral account and is not
subject to restrictions against access by the Company in excess of those set
forth by regulations promulgated by the Federal Reserve Board, and (2) such
deposit account is not intended by the Company or any Restricted Subsidiary to
provide collateral to the depositary institution; (o) 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; (p) 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; (q) Liens securing Indebtedness or other
obligations of a Restricted Subsidiary owing to the Company or a Restricted
Subsidiary; (r) Liens on assets transferred to a Receivables Entity or on assets
of a Receivables Entity, in either case incurred in connection with a Qualified
Receivables Transaction; (s) Liens arising out of consignment or similar
arrangements for the sale of goods entered into by the Company or any Restricted
Subsidiary in the ordinary course of business; (t) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary with
respect to obligations that do not exceed $5.0 million at any one time
outstanding and that (1) are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (2) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; and (u)
Liens to secure any refinancings, renewals, extensions, modifications or
replacements (collectively, "refinancing") (or successive refinancings), in
whole or in part, of any Indebtedness secured by Liens referred to in the
clauses above so long as such Lien does not extend to any other property (other
than improvements thereto).
-16-
"Person" means any individual, corporation, partnership, joint
------
venture, association, joint-stock company, limited liability company, limited
liability limited partnership, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Physical Securities" means one or more certificated Securities in
-------------------
registered form.
"Post-Petition Interest" means, with respect to any Indebtedness of
----------------------
any Person, all interest accrued or accruing on such Indebtedness after the
commencement of any Insolvency or Liquidation Proceeding with respect to such
Person in accordance with and at the contract rate (including, without
limitation, any rate applicable upon default) specified in the agreement or
instrument creating, evidencing or governing such Indebtedness, whether or not,
pursuant to applicable law or otherwise, the claim for such interest is allowed
or allowable as a claim in such Insolvency or Liquidation Proceeding.
"Preferred Equity Interest", in any Person, means an Equity Interest
-------------------------
of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
Equity Interests of any other class in such Person.
"Preferred Stock" means the 15 1/2% preferred stock of the Company
---------------
issued on the Issue Date and any Qualified Equity Interest of the Company or a
Guarantor issued in exchange for or the net proceeds of which are used to redeem
the Preferred Stock.
"principal" of a debt security means the principal of the security
--------
plus, when appropriate, the premium, if any, on the security.
"Private Exchange Securities" have the meaning provided in Section
---------------------------
2(b) of the Registration Rights Agreement.
"Private Placement Legend" means the legend initially set forth on the
------------------------
Initial Securities in the form set forth on Exhibit A hereto.
---------
"Public Equity Offering" means, with respect to the Company, an
----------------------
underwritten public offering of Qualified Equity Interests of the Company
pursuant to an effective registration statement filed under the Securities Act
(excluding registration statements filed on Form S-8).
"Purchase Agreement" means the Purchase Agreement dated June 30, 1999
------------------
by and among the Company, the Guarantors and the Initial Purchasers.
"Purchase Amount" has the meaning set forth in the definition of
---------------
"Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the definition of "Offer
-------------
to Purchase" above.
"Purchase Money Indebtedness" means Indebtedness of the Company or any
---------------------------
Restricted Subsidiary Incurred for the purpose of financing all or any part of
the purchase price, or the cost of construction or improvement of any property;
provided, however, that the aggregate principal amount of such Indebtedness does
not exceed the lesser of the Fair Market Value of such property or such purchase
price or cost, including any refinancing of such Indebtedness that does not
increase the aggregate principal amount (or accreted amount, if less) thereof as
of the date of refinancing.
-17-
"Purchase Money Note" means a promissory note of a Receivables Entity
-------------------
evidencing a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note is repayable from cash available
to the Receivables Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts owing
to such investors and amounts paid in connection with the purchase of newly
generated accounts receivable.
"Purchase Price" has the meaning set forth in the definition of "Offer
--------------
to Purchase" above.
"Qualified Equity Interest" in any Person means any Equity Interest in
-------------------------
such Person other than any Disqualified Equity Interest.
"Qualified Institutional Buyer" or "QIB" means a "qualified
----------------------------- ---
institutional buyer" as that term is defined in Rule 144A under the Securities
Act.
"Qualified Receivables Transaction" means any transaction or series of
---------------------------------
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (1) a Receivables Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries) and (2) any
other Person (in the case of a transfer by a Receivables Entity), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, the proceeds of such receivables and
other assets which are customarily transferred, or in respect of which security
interests are customarily granted in connection with asset securitization
involving accounts receivable.
"Receivables Entity" means a Wholly Owned Restricted Subsidiary of the
------------------
Company (other than a Guarantor) which engages in no activities other than in
connection with the financing of accounts receivable and which is designated by
the Board of Directors of the Company (as provided below) as a Receivables
Entity:
(1) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which:
(a) is guaranteed by the Company or any Restricted Subsidiary of
the Company (excluding guarantees of Obligations (other than the
principal of, and interest on, Indebtedness) pursuant to Standard
Securitization Undertakings);
(b) is recourse to or obligates the Company or any Restricted
Subsidiary of the Company in any way other than pursuant to Standard
Securitization Undertakings; or
(c) subjects any property or asset of the Company or any
Restricted Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than
pursuant to Standard Securitization Undertakings;
(2) with which neither the Company nor any Restricted Subsidiary of
the Company has any material contract, agreement, arrangement or
understanding (except in connection with a Pur-
-18-
chase Money Note or Qualified Receivables Transaction) other than on terms
no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of
the Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable; and
(3) to which neither the Company nor any Restricted Subsidiary of the
Company has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of operating
results.
Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolution of the Board of Directors of the Company giving effect to such
designation and an officers' certificate certifying that such designation
complied with the foregoing conditions.
"Redemption Date," when used with respect to any Security to be
---------------
redeemed, means the date fixed for such redemption pursuant to this Indenture.
"redemption price," when used with respect to any Security to be
----------------
redeemed, means the price fixed for such redemption pursuant to this Indenture
as set forth in the form of Security annexed hereto as Exhibit A.
---------
"Registrar" has the meaning provided in Section 2.03.
---------
"Registration" means a registered exchange offer for the Securities by
------------
the Company or other registration of the Securities under the Securities Act
pursuant to and in accordance with the terms of the Registration Rights
Agreement.
"Registration Rights Agreement" means the Registration Rights
-----------------------------
Agreement dated as of July 7, 1999 by and among the Company, the Guarantors and
the Initial Purchasers.
"Regulation S" means Regulation S under the Securities Act.
------------
"Regulation S Global Security" means a permanent global security in
----------------------------
registered form representing the aggregate principal amount of Securities sold
in reliance on Regulation S under the Securities Act.
"Replacement Assets" has the meaning provided in Section 4.05.
------------------
"Required Filing Dates" has the meaning provided in Section 4.11.
---------------------
"Restricted Investment" means any Investment other than a Permitted
---------------------
Investment.
"Restricted Payments" has the meaning provided in Section 4.06.
-------------------
"Restricted Security" has the meaning set forth in Rule 144(a)(3)
-------------------
under the Securities Act; provided, however, that the Trustee shall be entitled
to request and conclusively rely upon an Opinion of Counsel with respect to
whether any Security is a Restricted Security.
-19-
"Restricted Subsidiary" means any Subsidiary of the Company that has
---------------------
not been designated by the Board of Directors of the Company, by a Board
Resolution of the Company delivered to the Trustee, as an Unrestricted
Subsidiary pursuant to Section 4.15. Any such designation may be revoked by a
Board Resolution of the Company delivered to the Trustee, subject to the
provisions of Section 4.15.
"Revocation" has the meaning provided in Section 4.15.
----------
"Rule 144A" means Rule 144A under the Securities Act.
---------
"SEC" or "Commission" means the Securities and Exchange Commission.
--- ----------
"Securities" means, collectively, the Initial Securities, the Private
----------
Exchange Securities and the Unrestricted Securities treated as a single class of
securities, as amended or supplemented from time to time in accordance with the
terms of this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
--------------
rules and regulations promulgated by the SEC thereunder.
"Securities Amount" has the meaning provided in Section 4.05.
-----------------
"Security Guarantee" means the Form of Security Guarantee of each
------------------
Guarantor to be endorsed on each of the Securities substantially in the form of
Exhibit A (in the case of an Initial Security) or Exhibit B (in the case of an
--------- ---------
Exchange Security) hereto.
"Senior Indebtedness" means, at any date, (a) all Obligations of the
-------------------
Company under or in respect of the Credit Facility; (b) all Hedging Obligations
of the Company; (c) all Obligations of the Company under stand-by letters of
credit; and (d) all other Indebtedness of the Company for borrowed money,
including principal, premium, if any, and interest (including Post-Petition
Interest) on such Indebtedness, unless the instrument under which such
Indebtedness of the Company for money borrowed is Incurred expressly provides
that such Indebtedness for money borrowed is not senior or superior in right of
payment to the Securities, and all renewals, extensions, modifications,
amendments or refinancings thereof. Notwithstanding the foregoing, Senior
Indebtedness shall not include (a) to the extent that it may constitute
Indebtedness, any Obligation for Federal, state, local or other taxes; (b) any
Indebtedness among or between the Company and any Subsidiary of the Company or
any Affiliate of the Company or any of such Affiliate's Subsidiaries, unless and
for so long as such Indebtedness has been pledged to secure obligations under or
in respect of Senior Indebtedness; (c) to the extent that it may constitute
Indebtedness, any Obligation in respect of any trade payable Incurred for the
purchase of goods or materials, or for services obtained, in the ordinary course
of business; (d) that portion of any Indebtedness that is Incurred in violation
of the Indenture; (e) Indebtedness evidenced by the Securities; (f) Indebtedness
of the Company that is expressly subordinate or junior in right of payment to
any other Indebtedness of the Company; (g) to the extent that it may constitute
Indebtedness, any obligation owing under leases (other than Capitalized Lease
Obligations) or management agreements; (h) any obligation that by operation of
law is subordinate to any general unsecured obligations of the Company; and (i)
Indebtedness of the Company to the extent such Indebtedness is owed to and held
by any Federal, state, local or other governmental authority.
"Senior Subordinated Indebtedness" means the Securities and any other
--------------------------------
Indebtedness of the Company that specifically provides that such Indebtedness is
to rank pari passu in right of payment with the
-20-
Securities and is not subordinated by its terms in right of payment to any
Indebtedness or other obligation of the Company which is not Senior
Indebtedness.
"Shelf Registration Statement" has the meaning provided in Section
----------------------------
2(a) of the Registration Rights Agreement.
"Significant Restricted Subsidiary" means any Restricted Subsidiary
---------------------------------
that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X promulgated pursuant to the Securities Act, as such regulation is
in effect on the date hereof.
"Standard Securitization Undertakings" means representations,
------------------------------------
warranties, covenants and indemnities entered into by the Company or any
Restricted Subsidiary of the Company which are reasonably customary in
securitization of accounts receivable transactions.
"Stated Maturity" means, when used with respect to any Security or any
---------------
installment of interest thereon, the date specified in such Security as the
fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Stockholders' Agreement" means the Stockholders' Agreement among St.
-----------------------
Xxxx Knits, Inc., the Company, Vestar/Xxxx Investors LLC, Vestar/SJK Investors
LLC and the members of Vestor/Xxxx Investors LLC party thereto dated as of, and
as in effect on, the Issue Date.
"Subordinated Indebtedness" means, with respect to the Company or any
-------------------------
Guarantor, any Indebtedness of the Company or such Guarantor, as the case may
be, which is expressly subordinated in right of payment to the Securities.
"Subsidiary" means, with respect to any Person, (a) any corporation of
----------
which the outstanding Voting Equity Interests having at least a majority of the
votes entitled to be cast in the election of directors shall at the time be
owned, directly or indirectly, through one or more Persons by such Person, or
(b) any other Person of which at least a majority of Voting Equity Interests are
at the time, directly or indirectly, owned by such first named Person.
"Surviving Person" means, with respect to any Person involved in or
----------------
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code (S)(S)
---
77aaa-77bbbb), as amended, as in effect on the date of this Indenture (except as
provided in Section 10.03) until such time as this Indenture is qualified under
the TIA, and thereafter as in effect on the date on which this Indenture is
qualified under the TIA.
"Transactions" means the mergers to be consummated on or about the
------------
Issue Date relating to the purchase of the equity of St. Xxxx Knits, Inc. and
the financings related thereto.
"Trust Officer" means any officer within the corporate trust
-------------
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary, assistant treasurer, trust
officer or any other officer of the Trustee customarily performing functions
similar to those performed by the persons who at that time shall be such
officers, and also means, with respect to a particular cor-
-21-
porate trust matter, any other officer to whom such trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Trustee" means the party named as such in the first paragraph of this
-------
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.
"United States Government Obligations" means direct non-callable
------------------------------------
obligations of the United States of America for the payment of which the full
faith and credit of the United States is pledged.
"Unrestricted Securities" means one or more Securities that do not and
-----------------------
are not required to bear the Private Placement Legend in the form set forth in
Exhibit A hereto, including, without limitation, the Exchange Securities and any
---------
Securities registered under the Securities Act pursuant to and in accordance
with the Registration Rights Agreement.
"Unrestricted Subsidiary" means any Subsidiary of the Company
-----------------------
designated as such pursuant to Section 4.15. Any such designation may be
revoked by a Board Resolution of the Company delivered to the Trustee, subject
to the provisions of Section 4.15.
"Unutilized Net Cash Proceeds" has the meaning provided in Section
----------------------------
4.05(a).
"Vestar" means Vestar Capital Partners III, L.P.
------
"Vestar/Xxxx LLC Agreement" means the Amended and Restated Limited
-------------------------
Liability Company Agreement of Vestar/Xxxx Investors LLC, by and among
Vestar/SJK Investors LLC, Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxx X. Xxxx, the Xxxxx Xxx
Xxxx Trust and the Xxxx Family Trust dated as of, and as in effect on, the Issue
Date.
"Voting Equity Interests" means Equity Interests in a corporation or
-----------------------
other Person with voting power under ordinary circumstances entitling the
holders thereof to elect the Board of Directors or other governing body of such
corporation or Person.
"Weighted Average Life to Maturity" means, when applied to any
---------------------------------
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment of final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
aggregate principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary
----------------------------------
all of the outstanding Voting Equity Interests (other than directors' qualifying
shares) of which are owned, directly or indirectly, by the Company and/or one or
more Wholly Owned Restricted Subsidiaries.
SECTION 1.02. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
-22-
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.03. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles in effect
from time to time, and any other reference in this Indenture to "generally
accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) "herein," "hereof" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Initial Securities and the Trustee's certificate of authentication
thereof shall be substantially in the form of Exhibit A hereto, which is hereby
---------
incorporated in and expressly made a part of this Indenture. The Exchange
Securities and the Trustee's certificate of authentication thereof shall be
substantially
-23-
in the form of Exhibit B hereto, which is hereby incorporated in and expressly
---------
made a part of this Indenture. The Securities may have notations, legends or
endorsements (including the Security Guarantee) required by law, stock exchange
rule or usage. The Company and the Trustee shall approve the form of the
Securities and any notation, legend or endorsement (including the Security
Guarantee) on them. Each Security shall be dated the date of its issuance and
shall show the date of its authentication.
Securities offered and sold in reliance on Rule 144A and Securities
offered and sold in reliance on Regulation S shall be issued initially in the
form of one or more Global Securities, substantially in the form set forth in
Exhibit A hereto, deposited with the Trustee, as custodian for the Depository,
---------
duly executed by the Company and authenticated by the Trustee as hereinafter
provided with the Guarantees of the Guarantors endorsed thereon and shall bear
the legend set forth in Exhibit C hereto. The aggregate principal amount of the
---------
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided. Securities issued in exchange for interests in a
Global Security pursuant to Section 2.16 may be issued in the form of Physical
Securities in substantially the form set forth in Exhibit A.
---------
SECTION 2.02. Execution and Authentication.
Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Securities for the Company by manual or facsimile
signature.
If an Officer or an Assistant Secretary whose signature is on a
Security was an Officer or an Assistant Secretary, as the case may be, at the
time of such execution but no longer holds that office at the time the Trustee
authenticates the Security, the Security shall be valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Securities for original
issue in an aggregate principal amount not to exceed $100,000,000, (ii) Private
Exchange Securities from time to time only in exchange for a like principal
amount of Initial Securities and (iii) Unrestricted Securities from time to time
only in exchange for (A) a like principal amount of Initial Securities or (B) a
like principal amount of Private Exchange Securities, in each case upon a
written order of the Company to be signed by an Officer of the Company. Each
such written order shall specify the amount of Securities to be authenticated
and the date on which the Securities are to be authenticated, whether the
Securities are to be Initial Securities, Private Exchange Securities or
Unrestricted Securities and whether the Securities are to be issued as Physical
Securities or Global Securities and such other information as the Trustee may
reasonably request. The aggregate principal amount of Securities outstanding at
any time may not exceed $100,000,000, except as provided in Sections 2.07 and
2.08.
Notwithstanding the foregoing, all Securities issued under this
Indenture shall vote and consent together on all matters (as to which any of
such Securities may vote or consent) as one class and no series of Securities
will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate Securities. Unless otherwise provided in the
appointment, an authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
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Trustee includes authentication by such agent. An authenticating agent shall
have the same rights as an Agent to deal with the Company and Affiliates of the
Company.
The Securities shall be issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency, which shall be in the
Borough of Manhattan, The City of New York, where (a) Securities may be
presented or surrendered for registration of transfer or for exchange (the
"Registrar"), (b) Securities may be presented or surrendered for payment (the
----------
"Paying Agent") and (c) notices and demands in respect of the Securities and
-------------
this Indenture may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company, upon notice to the
Trustee, may appoint one or more co-Registrars and one or more additional Paying
Agents. The term "Paying Agent" includes any additional Paying Agent. Except as
provided herein, the Company or any Guarantor 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, which shall incorporate the provisions of
the TIA. The agreement shall implement the provisions of this Indenture that
relate to such Agent. The Company shall notify the Trustee 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 7.07.
The Company initially appoints the Trustee as Registrar and Paying
Agent until such time as the Trustee has resigned or a successor has been
appointed.
SECTION 2.04. Paying Agent To Hold Assets in Trust.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all assets held by the Paying Agent for the payment of
principal of, or interest on, the Securities, and shall notify the Trustee of
any Default by the Company in making any such payment. The Company at any time
may require a Paying Agent to distribute all assets held by it to the Trustee
and account for any assets disbursed and the Trustee may at any time during the
continuance of any payment Default, upon written request to a Paying Agent,
require such Paying Agent to distribute all assets held by it to the Trustee and
to account for any assets distributed. Upon distribution to the Trustee of all
assets that shall have been delivered by the Company to the Paying Agent (if
other than the Company), the Paying Agent shall have no further liability for
such assets. If the Company, any Guarantor or any of their respective
Affiliates acts as Paying Agent, it shall, on or before each due date of the
principal of or interest on the Securities, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay the principal or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and will promptly notify the Trustee of
its action or failure so to act.
SECTION 2.05. Holder Lists.
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. If the Trustee is not the Registrar, the Company
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shall furnish to the Trustee before each Interest Record Date and at such other
times as the Trustee may request in writing a list as of such date and in such
form as the Trustee may reasonably require of the names and addresses of
Holders, which list may be conclusively relied upon by the Trustee.
SECTION 2.06. Transfer and Exchange.
Subject to the provisions of Sections 2.15 and 2.16, when Securities
are presented to the Registrar or a co-Registrar with a request to register the
transfer of such Securities or to exchange such Securities for an equal
principal amount of Securities of other authorized denominations of the same
series, the Registrar or co-Registrar shall register the transfer or make the
exchange as requested if its requirements for such transaction are met;
provided, however, that the Securities surrendered for transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Securities at the Registrar's or co-Registrar's
written request. No service charge shall be made 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 other governmental charge
payable upon exchanges or transfers pursuant to Section 2.02, 2.10, 3.06, 4.05,
4.12, or 10.05). The Registrar or co-Registrar shall not be required to register
the transfer or exchange of any Security (i) during a period beginning at the
opening of business 15 days before the mailing of a notice of redemption of
Securities and ending at the close of business on the day of such mailing and
(ii) selected for redemption in whole or in part pursuant to Article Three
hereof, except the unredeemed portion of any Security being redeemed in part.
Prior to the registration of any transfer by a Holder as provided
herein, the Company, the Trustee and any Agent of the Company shall treat the
person in whose name the Security is registered as the owner thereof for all
purposes whether or not the Security shall be overdue, and neither the Company,
the Trustee nor any such Agent shall be affected by notice to the contrary. Any
Holder of a beneficial interest in a Global Security shall, by acceptance of
such beneficial interest in a Global Security, agree that transfers of
beneficial interests in such Global Security may be effected only through a
book-entry system maintained by the Depository (or its agent), and that
ownership of a beneficial interest in a Global Security shall be required to be
reflected in a book entry.
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if the Holder
of a Security claims that the Security has been lost, destroyed or wrongfully
taken, the Company shall issue and the Trustee shall authenticate a replacement
Security if the Trustee's requirements for replacement of Securities are met.
Such Holder must provide an indemnity bond or other indemnity, sufficient in the
judgment of both the Company and the Trustee, to protect the Company, the
Trustee and any Agent from any loss which any of them may suffer if a Security
is replaced. The Company may charge such Holder for its reasonable out-of-
pocket expenses in replacing a Security, including reasonable fees and expenses
of counsel.
Every replacement Security is an additional obligation of the Company.
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SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all the Securities that have
been authenticated by the Trustee except those canceled by it, those delivered
to it for cancellation and those described in this Section 2.08 as not
outstanding. Subject to Section 2.09, a Security does not cease to be
outstanding because the Company or any of its Affiliates holds the Security.
If a Security is replaced pursuant to Section 2.07 (other than a
mutilated Security surrendered for replacement), it ceases to be outstanding
unless a Trust Officer of the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser. A mutilated Security ceases
to be outstanding upon surrender of such Security and replacement thereof
pursuant to Section 2.07.
If on a Redemption Date, Purchase Date or the Final Maturity Date the
Paying Agent holds money sufficient to pay all of the principal and interest due
on the Securities payable on that date, and is not prohibited from paying such
money to the Holders pursuant to the terms of this Indenture, then on and after
that date such Securities cease to be outstanding and interest on them ceases to
accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company, the Guarantors or any of their respective Affiliates shall be
disregarded, except that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities that a Trust Officer of the Trustee actually knows are so owned shall
be disregarded.
The Company shall notify the Trustee, in writing, when it, any
Guarantor or any of its Affiliates repurchases or otherwise acquires Securities,
of the aggregate principal amount of such Securities so repurchased or otherwise
acquired.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Securities upon receipt of
a written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Securities to be
authenticated and the date on which the temporary Securities are to be
authenticated.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Company considers appropriate for
temporary Securities. Without unreasonable delay, the Company shall prepare and
the Trustee shall authenticate upon receipt of a written order of the Company
pursuant to Section 2.02 definitive Securities in exchange for temporary
Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for transfer, exchange or payment. The
Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent,
and no one else, shall cancel, and at the written direction of the Company,
dispose of and deliver evidence of such disposal of the Securities in accordance
with its customary procedures. Subject to Section 2.07, the Company
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may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation. If the Company or any Guarantor shall acquire
any of the Securities, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are surrendered to the Trustee for cancellation pursuant to this
Section 2.11.
SECTION 2.12. Defaulted Interest.
The Company shall pay interest on overdue principal from time to time
on demand at the rate of interest then borne by the Securities. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Securities.
If the Company defaults in a payment of interest on the Securities, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest to the Persons who are Holders on a subsequent
special record date, which date shall be the fifteenth day preceding the date
fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. At least 15 days
before the subsequent special record date, the Company shall mail to each
Holder, with a copy to the Trustee, a notice that states the subsequent special
record date, the payment date and the amount of defaulted interest, and interest
payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.01(b) shall be paid to
Holders as of the Interest Record Date for the Interest Payment Date for which
interest has not been paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities will use a "CUSIP" number and
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided , however, that any such notice may state that
no representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Securities, and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company
shall promptly notify the Trustee of any changes in CUSIP numbers.
SECTION 2.14. Deposit of Moneys.
Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Redemption Date, Purchase Date and the Final Maturity Date, the Company shall
deposit with the Paying Agent in immediately available funds money sufficient to
make cash payments, if any, due on such Interest Payment Date, Redemption Date,
Purchase Date or Final Maturity Date, as the case may be, in a timely manner
which permits the Paying Agent to remit payment to the Holders on such Interest
Payment Date, Redemption Date, Purchase Date or Final Maturity Date, as the case
may be.
SECTION 2.15. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered in the
name of the Depository or the nominee of such Depository, (ii) be delivered to
the Trustee as custodian for such Depository and (iii) bear legends as set forth
in Exhibit C.
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Members of, or participants in, the Depository ("Participants") shall
------------
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository, or the Trustee as its custodian, or under the
Global Security, and the Depository may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of the Global
Security for all purposes whatsoever. 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 Depository or impair, as between the Depository
and Participants, the operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to transfers in
whole, but not in part, to the Depository, its successors or their respective
nominees. Interests of beneficial owners in the Global Securities may be
transferred or exchanged for Physical Securities in accordance with the rules
and procedures of the Depository and the provisions of Section 2.16; provided,
however, that Physical Securities shall be transferred to all beneficial owners
in exchange for their beneficial interests in Global Securities if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for any Global Security and a successor Depository is not appointed
by the Company within 90 days of such notice, (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of the
Securities as Physical Securities or (iii) an Event of Default has occurred and
is continuing and the Registrar has received a request from the Depository to
issue Physical Securities.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in a Global Security to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Securities are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of such Global Security in an amount equal to the principal
amount of the beneficial interest in the Global Security to be transferred, and
the Company shall execute, and the Trustee shall authenticate and deliver, one
or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of Global Securities as an
entirety to beneficial owners pursuant to paragraph (b) of this Section 2.15,
the Global Securities shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall upon written
instructions from the Company authenticate and deliver, to each beneficial owner
identified by the Depository in exchange for its beneficial interest in the
Global Securities, an equal aggregate principal amount of Physical Securities of
authorized denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in a Global Security pursuant to paragraph
(c) of this Section 2.15 shall, except as otherwise provided by Section 2.16,
bear the Private Placement Legend.
(f) The Holder of any Global Security may grant proxies and otherwise
authorize any Person, including Participants and Persons that may hold interests
through Participants, to take any action which a Holder is entitled to take
under this Indenture or the Securities and the Trustee is entitled to rely upon
any electronic instructions from beneficial owners to the Holder of any Global
Security.
SECTION 2.16. Registration of Transfers and Exchanges.
(a) Transfer and Exchange of Physical Securities. When Physical
Securities are presented to the Registrar or co-Registrar with a request:
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(i) to register the transfer of the Physical Securities; or
(ii) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Registrar or co-Registrar shall register the transfer or make the exchange
as requested if the requirements under this Indenture as set forth in this
Section 2.16 for such transactions are met; provided, however, that the Physical
Securities presented or surrendered for registration of transfer or exchange:
(I) shall be duly endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar or co-Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing;
and
(II) in the case of Physical Securities the offer and sale of which
have not been registered under the Securities Act, such Physical Securities
shall be accompanied, in the sole discretion of the Company, by the
following additional information and documents, as applicable:
(A) if such Physical Security is being delivered to the Registrar or
co-Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to
that effect (substantially in the form of Exhibit D hereto); or
---------
(B) if such Physical Security is being transferred to a QIB in
accordance with Rule 144A, a certification to that effect
(substantially in the form of Exhibit D hereto); or
---------
(C) if such Physical Security is being transferred to an
Institutional Accredited Investor, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto) and a
---------
transferee letter of representation (substantially in the form of
Exhibit E) hereto and, at the option of the Company, an Opinion
---------
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(D) if such Physical Security is being transferred in reliance on
Regulation S, delivery of a certification to that effect
(substantially in the form of Exhibit D hereto) and a transferor
---------
certificate for Regulation S transfers substantially in the form
of Exhibit F hereto and, at the option of the Company, an Opinion
---------
of Counsel reasonably satisfactory to the Company to the effect
that such transfer is in compliance with the Securities Act; or
(E) if such Physical Security is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto) and,
-------
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(F) if such Physical Security is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the Company,
---------
an
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Opinion of Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the Securities
Act.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security the offer and sale of which
has not been registered under the Securities Act may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Registrar or co-Registrar of
a Physical Security, duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Registrar or co-Registrar, together with:
(A) certification, substantially in the form of Exhibit D hereto,
---------
that such Physical Security is being transferred (I) to a QIB,
(II) to an Accredited Investor or (III) in an offshore
transaction in reliance on Regulation S and, with respect to (II)
or (III), at the option of the Company, an Opinion of Counsel
reasonably acceptable to the Company to the effect that such
transfer is in compliance with the Securities Act; and
(B) written instructions directing the Registrar or co-Registrar to
make, or to direct the Depository to make, an endorsement on the
applicable Global Security to reflect an increase in the
aggregate amount of the Securities represented by the Global
Security,
then the Registrar or co-Registrar shall cancel such Physical Security and
cause, or direct the Depository to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Registrar or
co-Registrar, the principal amount of Securities represented by the applicable
Global Security to be increased accordingly. If no 144A Global Security, IAI
Global Security or Regulation S Global Security, as the case may be, is then
outstanding, the Company shall, unless either of the events in the proviso to
Section 2.15(b) have occurred and are continuing, issue and the Trustee shall,
upon written instructions from the Company in accordance with Section 2.02,
authenticate such a Global Security in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities. The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository in accordance with this Indenture (including the
restrictions on transfer set forth herein) and the procedures of the Depository
therefor. Upon receipt by the Registrar or Co-Registrar of written
instructions, or such other instruction as is customary for the Depository, from
the Depository or its nominee, requesting the registration of transfer of an
interest in a 144A Global Security, an IAI Global Security or Regulation S
Global Security, as the case may be, to another type of Global Security,
together with the applicable Global Securities (or, if the applicable type of
Global Security required to represent the interest as requested to be obtained
is not then outstanding, only the Global Security representing the interest
being transferred), the Registrar or Co-Registrar shall reflect on its books and
records (and the applicable Global Security) the applicable increase and
decrease of the principal amount of Securities represented by such types of
Global Securities, giving effect to such transfer. If the applicable type of
Global Security required to represent the interest as requested to be obtained
is not outstanding at the time of such request, the Company shall issue and the
Trustee shall, upon written instructions from the Company in accordance with
Section 2.02, authenticate a new Global Security of such type in principal
amount equal to the principal amount of the interest requested to be
transferred.
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(d) Transfer of a Beneficial Interest in a Global Security for a
Physical Security.
(i) Any Person having a beneficial interest in a Global Security may
upon request exchange such beneficial interest for a Physical Security;
provided, however, that prior to the Registration, a transferee that is a
QIB or Institutional Accredited Investor may not exchange a beneficial
interest in a Global Security for a Physical Security. Upon receipt by the
Registrar or co-Registrar of written instructions, or such other form of
instructions as is customary for the Depository, from the Depository or its
nominee on behalf of any Person (subject to the previous sentence) having a
beneficial interest in a Global Security and upon receipt by the Trustee of
a written order or such other form of instructions as is customary for the
Depository or the Person designated by the Depository as having such a
beneficial interest containing registration instructions and, in the case
of any such transfer or exchange of a beneficial interest in Securities the
offer and sale of which have not been registered under the Securities Act,
the following additional information and documents:
(A) if such beneficial interest is being transferred in reliance on
Rule 144 under the Securities Act, delivery of a certification to
that effect (substantially in the form of Exhibit D hereto) and,
---------
at the option of the Company, an Opinion of Counsel reasonably
satisfactory to the Company to the effect that such transfer is
in compliance with the Securities Act; or
(B) if such beneficial interest is being transferred in reliance on
another exemption from the registration requirements of the
Securities Act, a certification to that effect (substantially in
the form of Exhibit D hereto) and, at the option of the Company,
---------
(except in the case of a transfer to a QIB) an Opinion of Counsel
reasonably satisfactory to the Company to the effect that such
transfer is in compliance with the Securities Act,
then the Registrar or co-Registrar will cause, in accordance with the
standing instructions and procedures existing between the Depository and
the Registrar or co-Registrar, the aggregate principal amount of the
applicable Global Security to be reduced and, following such reduction, the
Company will execute and, upon receipt of an authentication order in the
form of an Officers' Certificate in accordance with Section 2.02, the
Trustee will authenticate and deliver to the transferee a Physical Security
in the appropriate principal amount.
(ii) Securities issued in exchange for a beneficial interest in a
Global Security pursuant to this Section 2.16(d) shall be registered in
such names and in such authorized denominations as the Depository, pursuant
to instructions from its direct or indirect participants or otherwise,
shall instruct the Registrar or co-Registrar in writing. The Registrar or
co-Registrar shall deliver such Physical Securities to the Persons in
whose names such Physical Securities are so registered.
(e) Restrictions on Transfer and Exchange of Global Securities.
Notwithstanding any other provisions of this Indenture, a Global Security may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Private Placement Legend. Upon the transfer, exchange or
replacement of Securities not bearing the Private Placement Legend, the
Registrar or co-Registrar shall deliver Securities that do not bear
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the Private Placement Legend. Upon the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar or co-Registrar
shall deliver only Securities that bear the Private Placement Legend unless, and
the Trustee is hereby authorized to deliver Securities without the Private
Placement Legend if, (i) there is delivered to the Trustee an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act;(ii) such
Security has been sold pursuant to an effective registration statement under the
Securities Act (including pursuant to a Registration); or (iii) the date of such
transfer, exchange or replacement is two years after the later of (x) the Issue
Date and (y) the last date that the Company or any affiliate (as defined in Rule
144 under the Securities Act) of the Company was the owner of such Securities
(or any predecessor thereto).
(g) General. By its acceptance of any Security bearing the Private
Placement Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Security only as provided
in this Indenture.
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 Security (including any transfers between or among Participants or
beneficial owners of interest in any Global Security) 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.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.15 or this Section 2.16.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to paragraph 5 or 6
of the Securities at the applicable redemption price set forth thereon, it shall
notify the Trustee in writing of the Redemption Date and the principal amount of
Securities to be redeemed. The Company shall give such notice to the Trustee at
least 45 days before the Redemption Date (unless a shorter notice shall be
agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant to
paragraph 5 of the Securities, the Trustee shall select the Securities to be
redeemed in compliance with the requirements of the principal na
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tional securities exchange, if any, on which the Securities are listed or, if
the Securities are not then listed on a national securities exchange, on a pro
rata basis, by lot or in such other manner as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements).
Selection of the Securities to be redeemed pursuant to paragraph 6 of the
Securities shall be made by the Trustee only on a pro rata basis or on as nearly
a pro rata basis as is practicable (subject to the procedures of the Depository)
based on the aggregate principal amount of Securities held by each Holder unless
such method is otherwise prohibited. The Trustee shall make the selection from
the Securities then outstanding, subject to redemption and not previously called
for redemption.
The Trustee may select for redemption pursuant to paragraph 5 or 6 of
the Securities portions of the principal amount of Securities that have
denominations larger than $1,000 principal amount. Securities and portions of
them the Trustee so selects shall be in amounts of $1,000 principal amount or
integral multiples thereof. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail to each Holder
whose Securities are to be redeemed at such Holder's registered address;
provided, however, that notice of a redemption pursuant to paragraph 6 of the
Securities shall be mailed to each Holder whose Securities are to be redeemed no
later than 60 days after the date of the Closing of the relevant Public Equity
Offering of the Company.
Each notice of redemption shall identify the Securities to be redeemed
(including the CUSIP number thereon) and shall state:
(1) the Redemption Date;
(2) the redemption price;
(3) the name and address of the Paying Agent to which the Securities
are to be surrendered for redemption;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue on
and after the Redemption Date and the only remaining right of the Holders
is to receive payment of the redemption price upon surrender to the Paying
Agent; and
(6) in the case of any redemption pursuant to paragraph 5 or 6 of
the Securities, if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof will
be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
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SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the Redemption Date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon, if any, to the Redemption Date,
but interest installments whose maturity is on or prior to such Redemption Date
shall be payable to the Holders of record at the close of business on the
relevant Interest Record Date.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company is its own Paying Agent,
shall, on or before the Redemption Date, segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest, if any, on all
Securities to be redeemed on that date other than Securities or portions thereof
called for redemption on that date which have been delivered by the Company to
the Trustee for cancellation.
If any Security surrendered for redemption in the manner provided in
the Securities shall not be so paid on the Redemption Date due to the failure of
the Company to deposit with the Paying Agent money sufficient to pay the
redemption price thereof, the principal and accrued and unpaid interest, if any,
thereon shall, until paid or duly provided for, bear interest as provided in
Sections 2.12 and 4.01 with respect to any payment default.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Trustee
shall authenticate for the Holder a new Security equal in principal amount to
the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the Securities
in the manner provided in the Securities and the Registration Rights Agreement.
An installment of principal or interest shall be considered paid on the date due
if the Trustee or Paying Agent (other than the Company, a Guarantor or any of
their respective Affiliates) holds on that date money designated for and
sufficient to pay the installment in full and is not prohibited from paying such
money to the Holders of the Securities pursuant to the terms of this Indenture.
The Company shall pay cash interest on overdue principal at the same
rate per annum borne by the Securities. The Company shall pay cash interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful, as provided in Section 2.12.
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SECTION 4.02. Maintenance of Office or Agency.
The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the address of the
Trustee set forth in Section 13.02. The Company hereby initially designates the
Trustee at its address set forth in Section 13.02 as its office or agency in The
Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.03. Transactions with Affiliates.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, conduct any business or enter into any
transaction (or series of related transactions) with or for the benefit of any
of their respective Affiliates or any officer, director or employee of the
Company or any Restricted Subsidiary (each an "Affiliate Transaction"), unless
---------------------
(i) such Affiliate Transaction is on terms which are no less favorable to the
Company or such Restricted Subsidiary, as the case may be, than would be
available in a comparable transaction with an unaffiliated third party and (ii)
(A) if such Affiliate Transaction (or series of related Affiliate Transactions)
involves aggregate payments or the transfer of other consideration between the
Company and an Affiliate of the Company having a Fair Market Value in excess of
$5.0 million, such Affiliate Transaction is in writing and the Company delivers
an officer's certificate to the Trustee certifying that such Affiliate
Transaction (or series of Affiliate Transactions) complies with the foregoing
provisions or (B) if such Affiliate Transaction (or series of related Affiliate
Transactions) involves aggregate payments or the transfer of other consideration
between the Company and an Affiliate of the Company having a Fair Market Value
in excess of $10.0 million, such Affiliate Transaction is in writing and the
Company delivers a written opinion from an Independent Financial Advisor (filed
with the Trustee) stating that the terms of such Affiliate Transaction are
fair, from a financial point of view, to the Company or the Restricted
Subsidiary involved in such Affiliate Transaction, as the case may be.
Notwithstanding the foregoing, the restrictions set forth in this
covenant shall not apply to (i) transactions with or among the Company and any
Restricted Subsidiary or between or among Restricted Subsidiaries; (ii) any
issuance of securities, or other payments, awards or grants in cash, securities
or otherwise pursuant to, or the funding of, employment arrangements, stock
options and stock ownership plans and other reasonable fees and compensation
paid to and indemnity provided on behalf of, officers, directors, employees,
consultants or agents of the Company or any Restricted Subsidiary of the Company
as determined in good faith by the Company's Board of Directors; (iii) the
payment of fees and expenses to Vestar or any of its Affiliates (A) pursuant to
the Management Agreement, as in effect on the Issue Date, or (B) pursuant to any
amended, supplemented or replacement management agreement in an aggregate amount
not to exceed 1.25% of Consolidated EBITDA for the last four full fiscal
quarters completed prior to the date of such payment; (iv) any Restricted
Payments made in compliance with Section 4.06; (v) loans and advances to
officers, directors and employees of the Company or any Restricted Subsidiary
made in the ordinary course of business; (vi) the entering into by the Company
and any of its Restricted Subsidiaries of a tax sharing or similar arrangement;
(vii) any employment agreement entered into by the Company or any Restricted
Subsidiary in the ordinary course of business; (viii) payment of reasonable
Directors' fees to Persons who are not otherwise Affiliates of the Company; (ix)
any sale or other issuance of Equity Interests (other than Disqualified Equity
Interests) of the Company; (x) payments by the Company or any Restricted
Subsidiary to Vestar and its Affiliates made for any financial advisory,
financing, underwriting or placement services in connection with acquisitions or
other corporate transactions, in amounts which are (a) usual and customary for
transactions of such type, in an amount not to exceed 1% of the value of any
such transaction or (b) approved by a majority of the disinter-
-36-
ested members of the Board of Directors of the Company as comparable to that
which would be charged by an unaffiliated third party for such services; (xi)
transactions permitted by the Vestar/Xxxx LLC Agreement; (xii) sales or other
transfers or dispositions of accounts receivable and other related assets
customarily transferred in an asset securitization transaction involving
accounts receivable to a Receivables Entity in a Qualified Receivables
Transaction, and acquisitions of Permitted Investments in connection with a
Qualified Receivables Transaction; (xiii) leases in effect on the Issue Date and
any renewals thereof which include substantially similar terms; (xiv) the
Transactions and the payment of all fees and expenses related thereto; (xv) any
agreement as in effect on the Issue Date (including, without limitation, each of
the agreements entered into in connection with the Transactions) or any
transaction contemplated thereby; and (xvi) the sale of Preferred Stock to
Vestar or any of its affiliates and any transaction contemplated by the terms of
the Preferred Stock.
SECTION 4.04. Limitation on Indebtedness.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Indebtedness (including
Acquired Indebtedness), except for Permitted Indebtedness; provided, however,
that the Company and any Restricted Subsidiary may Incur Indebtedness if, at the
time of and immediately after giving pro forma effect to such Incurrence of
Indebtedness and the application of the proceeds therefrom, the Consolidated
Coverage Ratio would be at least 2.0 to 1.0 prior to the second anniversary of
the Issue Date; 2.25 to 1.0 on or after the second anniversary of the Issue Date
but prior to the fourth anniversary of the Issue Date; and 2.5 to 1.0 on or
after the fourth anniversary of the Issue Date.
The foregoing limitations will not apply to the Incurrence by the
Company or any Restricted Subsidiary of any of the following (collectively,
"Permitted Indebtedness"), each of which shall be given independent effect:
-----------------------
(a) Indebtedness under the Securities, the Exchange Securities, and
other Indebtedness outstanding on the Issue Date;
(b) Indebtedness of the Company and any Guarantor Incurred pursuant
to (i) the Credit Facility if at the time of and immediately after giving
effect thereto, the aggregate consolidated Indebtedness Incurred under the
Credit Facility would not exceed $215.0 million at any one time
outstanding; provided, however, that such $215.0 million shall be reduced
by the sum of (i) the amount of any repayments or prepayments of
Indebtedness (that are accompanied by a corresponding permanent commitment
reduction) under the Credit Facility and (ii) the outstanding principal
amount of Indebtedness and preferred stock of a Receivables Entity
(excluding the net proceeds of such Indebtedness and preferred stock that
are applied to the repayment or prepayment of Indebtedness described in
clause (i));
(c) Indebtedness of any Guarantor owed to and held by the Company or
any Guarantor and other Indebtedness of the Company owed to and held by any
Guarantor which is unsecured and subordinated in right of payment to the
payment and performance of the Company's obligations under any Senior
Indebtedness, this Indenture and the Securities and Indebtedness of a
Foreign Restricted Subsidiary that is not a Guarantor owed to and held by
any other Foreign Restricted Subsidiary that is not a Guarantor; provided,
however, that an Incurrence of Indebtedness that is not permitted by this
clause (c) shall be deemed to have occurred upon (i) any sale or other
disposition of any Indebtedness of the Company or any Restricted Subsidiary
referred to in this clause (c) to a Person (other than the Company or a
Guarantor), (ii) any sale or other disposition of Equity Interests of any
Guarantor which holds Indebtedness of the Company or another Restricted
Subsidiary such that such Guarantor
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ceases to be a Guarantor and (iii) the designation of a Restricted
Subsidiary that is a Guarantor and which holds Indebtedness of the Company
or any other Restricted Subsidiary as an Unrestricted Subsidiary;
(d) the Guarantees and guarantees by any Guarantor of Indebtedness of
the Company; provided, however, that if such guarantee is of Subordinated
Indebtedness, then the Guarantee of such Guarantor shall be senior to such
Guarantor's guarantee of Subordinated Indebtedness;
(e) Hedging Obligations of the Company or any Restricted Subsidiary
entered into in the ordinary course of business and not for speculative
purposes;
(f) Purchase Money Indebtedness (and refinancings thereof) and
Capitalized Lease Obligations (and refinancings thereof) which do not
exceed $7.0 million in the aggregate at any one time outstanding;
(g) Indebtedness to the extent representing a replacement, renewal,
refinancing or extension (collectively, a "refinancing") of outstanding
-----------
Indebtedness Incurred in compliance with the Consolidated Coverage Ratio of
the first paragraph of this covenant or clause (a) of this paragraph of
this covenant; provided, however, that (i) any such refinancing shall not
exceed the sum of the principal amount (or accreted amount (determined in
accordance with GAAP), if less) of the Indebtedness being refinanced, plus
the amount of accrued interest thereon, plus the amount of any reasonably
determined prepayment premium necessary to accomplish such refinancing and
such reasonable fees and expenses incurred in connection therewith, (ii)
Indebtedness representing a refinancing of Indebtedness other than Senior
Indebtedness shall have a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of the Indebtedness
being refinanced, (iii) Indebtedness that is pari passu with the Securities
may only be refinanced with Indebtedness that is made pari passu with or
subordinate in right of payment to the Securities and Subordinated
Indebtedness may only be refinanced with Subordinated Indebtedness, (iv) no
Restricted Subsidiary that is not a Guarantor may Incur Indebtedness to
refinance Indebtedness of the Company or any Guarantor and (v) Indebtedness
of the Company may only be refinanced by Indebtedness of the Company and
Indebtedness of a Restricted Subsidiary may only be refinanced by
Indebtedness of such Restricted Subsidiary or by the Company;
(h) Indebtedness incurred in respect of workers' compensation claims,
self-insurance obligations, performance, surety and similar bonds and
completion guarantees provided by the Company or a Restricted Subsidiary in
the ordinary course of business;
(i) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar obligations, in each case, incurred or assumed in
connection with the disposition of any business, assets or Equity Interests
of a Restricted Subsidiary, provided that the maximum aggregate liability
in respect of all such Indebtedness shall at no time exceed the gross
proceeds actually received by the Company and its Restricted Subsidiaries
in connection with such disposition;
(j) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument (except in
the case of daylight overdrafts) drawn against insufficient funds in the
ordinary course of business, provided, however, that such Indebtedness is
extinguished within five business days of Incurrence;
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(k) Indebtedness representing deferred compensation to employees of
the Company and its Subsidiaries in an aggregate amount not to exceed $1.0
million at any one time outstanding;
(l) Indebtedness of Foreign Restricted Subsidiaries which are not
Guarantors in an aggregate amount not to exceed $7.5 million at any one
time outstanding;
(m) Indebtedness of Foreign Restricted Subsidiaries which are not
Guarantors owed to and held by the Company or any Guarantor in an aggregate
amount not to exceed $12.5 million at any one time outstanding;
(n) Indebtedness of a Receivables Entity that is non-recourse to the
Company or any other Restricted Subsidiary of the Company Incurred in
connection with a Qualified Receivables Transaction, provided that the
proceeds of such Indebtedness are used to reduce Indebtedness under the
Credit Facility; and
(o) in addition to the items referred to in clauses (a) through (n)
above, Indebtedness of the Company (including any Indebtedness under the
Credit Facility that utilizes this subparagraph (o)) having an aggregate
principal amount not to exceed $10.0 million at any one time outstanding.
For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness incurred pursuant to and in
compliance with, this covenant:
(1) in the event that Indebtedness meets the criteria of more than
one of the types of indebtedness described in the first and second
paragraphs of this covenant, the Company, in its sole discretion, will
classify such item of Indebtedness on the date of Incurrence and only be
required to include the amount and type of such Indebtedness in one of such
clauses; and
(2) the amount of Indebtedness issued at a price that is less than
the principal amount thereof will 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, the payment of interest in the form of additional Indebtedness and the
payment of dividends in the form of additional shares of preferred stock will
not be deemed to be an Incurrence of Indebtedness for purposes of this covenant
provided, in each such case, that the amount thereof is included in the
Consolidated Fixed Charges of such Person.
SECTION 4.05. Disposition of Proceeds of Asset Sales.
(a) The Company shall not, and shall not cause or permit any
Restricted Subsidiary to, directly or indirectly, make any Asset Sale, unless
(i) the Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets sold or otherwise disposed of and (ii) at least 75% of such
consideration consists of (A) cash or Cash Equivalents, or (B) properties and
capital assets that will be used in the business of the Company and its
Restricted Subsidiaries as existing at such time or in businesses reasonably
related thereto (as determined in good faith by the Company's Board of
Directors) ("Replacement Assets") or the Equity Interests of any Person engaged
------------------
in a Permitted Business if, in connection with the receipt by the Company or any
Restricted Subsidiary of such Equity Interests, (1) such Person becomes a
Restricted Subsidiary and a Guarantor or (2) such Person is merged, consolidated
or amalgamated with or into, or transfers or conveys substantially all of its
assets to,
-39-
or is liquidated into, the Company or any Restricted Subsidiary that is a
Guarantor. The amount of any Indebtedness (other than any Subordinated
Indebtedness) of the Company or any Restricted Subsidiary that is actually
assumed by the transferee in such Asset Sale and from which the Company and the
Restricted Subsidiaries are fully and unconditionally released shall be deemed
to be cash for purposes of determining the percentage of cash consideration
received by the Company or the Restricted Subsidiaries within such period.
The Company or such Restricted Subsidiary, as the case may be, may (i)
apply the Net Cash Proceeds of any Asset Sale within 360 days of receipt thereof
to repay Senior Indebtedness and permanently reduce any related commitment, or
(ii) make an Investment in Replacement Assets within such period.
To the extent all or part of the Net Cash Proceeds of any Asset Sale
are not applied within 360 days of such Asset Sale as described in clause (i) or
(ii) of the immediately preceding paragraph (such Net Cash Proceeds, the
"Unutilized Net Cash Proceeds"), the Company shall, within 45 days after such
-----------------------------
360th day, make an Offer to Purchase all outstanding Securities and other Senior
Subordinated Indebtedness, pro rata, up to a maximum principal amount (expressed
as a multiple of $1,000) of Securities and other Senior Subordinated
Indebtedness equal to such Unutilized Net Cash Proceeds, at a purchase price in
cash equal to 100% of the principal amount thereof (or the accreted value of
such other Senior Subordinated Indebtedness, if such other Senior Subordinated
Indebtedness is issued at a discount), plus accrued and unpaid interest thereon,
if any, to the Purchase Date; provided, however, that the Offer to Purchase may
be deferred until there are aggregate Unutilized Net Cash Proceeds equal to or
in excess of $10.0 million, at which time the entire amount of such Unutilized
Net Cash Proceeds, and not just the amount in excess of $10.0 million, shall be
applied as required pursuant to this paragraph.
(b) With respect to any Offer to Purchase effected pursuant to this
covenant, among the Securities, to the extent the aggregate principal amount of
Securities and other Senior Subordinated Indebtedness tendered pursuant to such
Offer to Purchase exceeds the Unutilized Net Cash Proceeds to be applied to the
repurchase thereof, such Securities and other Senior Subordinated Indebtedness
shall be purchased pro rata based on the aggregate principal amount of such
Securities and other Senior Subordinated Indebtedness tendered (or the accreted
value of such other Senior Subordinated Indebtedness, if such other Senior
Subordinated Indebtedness is issued at a discount) by each holder of Securities
and such other Senior Subordinated Indebtedness. To the extent the Unutilized
Net Cash Proceeds exceed the aggregate amount of Securities and other Senior
Subordinated Indebtedness tendered pursuant to such Offer to Purchase, the
Company may retain and utilize any portion of the Unutilized Net Cash Proceeds
not applied to repurchase the Securities and other Senior Subordinated
Indebtedness for any purpose consistent with the other terms of this Indenture.
Upon completion of the Offer to Purchase, Unutilized Net Cash Proceeds will be
reset at zero.
(c) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) subject to paragraph (b) of this Section 4.05,
accept for payment all Securities validly tendered pursuant to the Offer, (ii)
deposit with the Paying Agent or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 2.04, money sufficient
to pay the Purchase Price of all Securities or portions thereof so accepted and
(iii) deliver or cause to be delivered to the Trustee for cancellation all
Securities so accepted together with an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent (or the Company, if so acting) shall promptly mail or deliver to Holders
of Securities so accepted, payment in an amount equal to the Purchase Price for
such Securities, and the Trustee shall promptly authenticate and mail or deliver
to each Holder of Securities a new Security or Securities equal in principal
amount to any unpurchased portion of the Security surrendered as requested by
the Holder. Any Security not accepted for payment shall be promptly mailed or
delivered by the Company to the
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Holder thereof. The Company shall publicly announce the results of the Offer on
or as soon as practicable after the Purchase Date.
(d) In the event that the Company makes an Offer to Purchase the
Securities and other Senior Subordinated Indebtedness, the Company shall comply
with any applicable securities laws and regulations, and any violation of the
provisions of this Indenture relating to such Offer to Purchase occurring as a
result of such compliance shall not be deemed a Default or an Event of Default.
(e) Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder pursuant to the Offer to Purchase, subject to
the requirement that any portion of a Security tendered must be tendered in an
integral multiple of $1,000 principal amount and subject to any proration among
tendering Holders and holders of other Senior Subordinated Indebtedness as
described above.
SECTION 4.06. Limitation on Restricted Payments.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly,
(i) declare or pay any dividend or any other distribution on any
Equity Interests of the Company or any Restricted Subsidiary or make any
payment or distribution to the direct or indirect holders (in their
capacities as such) of Equity Interests of the Company or any Restricted
Subsidiary (other than any dividends, distributions and payments made to
the Company or any Restricted Subsidiary and dividends or distributions
payable to any Person solely in Qualified Equity Interests of the Company
or any Restricted Subsidiary or in options, warrants or other rights to
purchase Qualified Equity Interests of the Company or any Restricted
Subsidiary);
(ii) purchase, redeem or otherwise acquire or retire for value any
Equity Interests of the Company or any Restricted Subsidiary (other than
any such Equity Interests owned by the Company or any Restricted
Subsidiary);
(iii) purchase, redeem, defease or retire for value, or make any
principal payment on, prior to any scheduled maturity, scheduled repayment
or scheduled sinking fund payment, any Subordinated Indebtedness (other
than any Subordinated Indebtedness held by the Company); or
(iv) make any Investment in any Person (other than Permitted
Investments)
(any such payment or any other action (other than any exception thereto)
described in (i), (ii), (iii) or (iv) each, a "Restricted Payment"), unless
------------------
(a) no Default or Event of Default shall have occurred and be
continuing at the time or immediately after giving effect to such
Restricted Payment;
(b) immediately after giving effect to such Restricted Payment, the
Company would be able to Incur $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the first
paragraph of Section 4.04; and
(c) immediately after giving effect to such Restricted Payment, the
aggregate amount of all Restricted Payments declared or made on or after
the Issue Date does not exceed an amount equal to
-41-
the sum of (1) 50% of cumulative Consolidated Net Income determined for the
period (taken as one period) from the Issue Date and ending on the last day
of the most recent fiscal quarter immediately preceding the date of such
Restricted Payment for which consolidated financial information of the
Company is available (or if such cumulative Consolidated Net Income shall
be a loss, minus 100% of such loss), plus (2) the aggregate net cash
proceeds received by the Company either (x) as capital contributions to the
Company after the Issue Date or (y) from the issue and sale (other than to
a Restricted Subsidiary) of its Qualified Equity Interests after the Issue
Date (excluding the net proceeds from any issuance and sale of Qualified
Equity Interests financed, directly or indirectly, using funds borrowed
from the Company or any Restricted Subsidiary until and to the extent such
borrowing is repaid), plus (3) the principal amount (or accreted amount
(determined in accordance with GAAP), if less) of any Indebtedness of the
Company or any Restricted Subsidiary Incurred after the Issue Date which
has been converted into or exchanged for Qualified Equity Interests of the
Company, plus (4) without duplication of any amounts included in clause (1)
above, in the case of the disposition or repayment of, or the receipt by
the Company or any Restricted Subsidiary of any dividends or distributions
from, any Investment constituting a Restricted Payment made after the Issue
Date (including by way of a Revocation), an amount equal, in the aggregate,
to the lesser of the amount of such Investment, other than pursuant to a
Revocation, in which case such amount will be the lesser of the Fair Market
Value of such Investment at the date of Revocation, and the amount received
by the Company or any Restricted Subsidiary upon such disposition,
repayment, dividend or distribution or Revocation.
The foregoing provisions will not prevent (i) the payment of any
dividend or distribution on, or redemption of, Equity Interests within 60 days
after the date of declaration of such dividend or distribution or the giving of
formal notice of such redemption, if at the date of such declaration or giving
of such formal notice such payment or redemption would comply with the
provisions of the Indenture; provided, however, that the payment of the $0.025
per share dividend on St. Xxxx Xxxxxx Stock declared on June 8, 1999 and payable
on July 22, 1999 shall not constitute a Restricted Payment; (ii) the purchase,
redemption, retirement or other acquisition of any Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the substantially
concurrent issue and sale (other than to a Restricted Subsidiary) of, Qualified
Equity Interests of the Company; provided, however, that any such net cash
proceeds and the value of any Qualified Equity Interests issued in exchange for
such retired Equity Interests are excluded from clause (c)(2) of the preceding
paragraph (and were not included therein at any time) and are not used to redeem
the Securities pursuant to paragraphs 5 or 6 of the Securities; (iii) the
purchase, redemption, retirement, defeasance or other acquisition of
Subordinated Indebtedness, or any other payment thereon, made in exchange for,
or out of the net cash proceeds of, a substantially concurrent issue and sale
(other than to a Restricted Subsidiary) of (x) Qualified Equity Interests of the
Company; provided, however, that any such net cash proceeds and the value of any
Qualified Equity Interests issued in exchange for Subordinated Indebtedness are
excluded from clauses (c)(2) and (c)(3) of the preceding paragraph (and were not
included therein at any time) and are not used to redeem the Securities pursuant
to paragraphs 5 or 6 of the Securities or (y) Subordinated Indebtedness
permitted to be Incurred pursuant to clause (g) of the second paragraph of
Section 4.04; (iv) the making of loans or advances to officers, employees and
directors of the Company or any Restricted Subsidiary entered into in the
ordinary course of business or to fund purchases by such employees from the
Company of Equity Interests of the Company, in an amount not to exceed $5.0
million at any one time outstanding; (v) the repurchase, redemption, defeasance,
retirement, refinancing or acquisition for value or payment of principal of
Subordinated Indebtedness at a purchase price not greater than 101% of the
principal amount of such Subordinated Indebtedness in the event of a Change of
Control pursuant to a provision similar to Section 4.12; provided, however, that
prior to any such repurchase, the Company has made an Offer to Purchase as
provided in Section 4.12 with respect to the Securities and has repurchased all
Securities validly tendered for payment in connection with such Offer
-42-
to Purchase; (vi) the purchase, redemption or other acquisition, cancellation or
retirement for value of Equity Interests of the Company or any Restricted
Subsidiary of the Company or any parent of the Company held by any existing or
former employees or management of the Company or any Restricted Subsidiary of
the Company (other than Xxxxxx Xxxx, Xxxxx Xxxx and Xxxxx Xxxx) 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
agreements to compensate management employees; provided that such redemptions or
repurchases pursuant to this clause will not exceed $500,000 in the aggregate
during any calendar year; provided, further, that any amounts not used for
redemptions or repurchases pursuant to this clause (vi) may be used in any
subsequent calendar year; (vii) repurchases of Equity Interests deemed to occur
upon the exercise of stock options if such Equity Interests represent a portion
of the exercise price thereof; (viii) the defeasance, redemption or repurchase
of any Disqualified Equity Interest of the Company or any Restricted Subsidiary
in exchange for, or out of the net cash proceeds of, a substantially concurrent
issue and sale (other than to the Company or a Subsidiary of the Company) of
Disqualified Equity Interests of the Company or such Restricted Subsidiary,
respectively; provided that: (A) the aggregate liquidation preference of such
Disqualified Equity Interest does not exceed the aggregate liquidation
preference of the Disqualified Equity Interest so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith); (B) such Disqualified Equity Interest has a final
maturity date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to Maturity
of the Notes; and (C) such Disqualified Equity Interest is incurred either by
the Company or by the Restricted Subsidiary who is the obligor on the
Disqualified Equity Interest being extended, refinanced, renewed, replaced,
defeased or refunded;(ix) the defeasance, redemption or repurchase of any
Preferred Equity Interest or Disqualified Equity Interest issued in connection
with the acquisition of assets or a Permitted Business, provided, that the
aggregate amount of such defeasance, redemption or repurchase payments shall not
exceed at any time $5.0 million; (x) the payment of any dividend by a Restricted
Subsidiary to the holders of its common Equity Interests on a pro rata basis;
(xi) the purchase by the Company of Xxxx Common Stock pursuant to the terms of
the Stockholders' Agreement in an amount not to exceed $5.0 million, provided,
however, that such amounts do not exceed $2.5 million for the first twelve month
period following the Issue Date; (xii) cash payments to Xxxxxx Xxxx, Xxxxx Xxxx
or Xxxxx X. Xxxx on Preferred Equity Interests of the Company that are Qualified
Equity Interests in an amount not to exceed $250,000 for each fiscal year;
(xiii) Restricted Payments in an amount not to exceed $10.0 million; (xiv)
Restricted Payments made on the Issue Date in connection with the Transactions;
and (xv) the redemption of up to $5.0 million of Preferred Stock (which $5.0
million amount may include the amount of any accrued but unpaid dividends) after
the first anniversary of the Issue Date; provided the Consolidated Coverage
Ratio, pro forma for such transaction, for the two most recently completed
fiscal quarters of the Company, is at least 2.25 to 1.0; and provided, further,
that the Company and its Restricted Subsidiaries may only redeem Preferred Stock
pursuant to this clause (xv) once; provided, however, that in the case of each
of clauses (v), (vi), (ix), (x) and (xv), no Default or Event of Default shall
have occurred and be continuing or would arise therefrom.
In determining the amount of Restricted Payments permissible under
this Section, amounts expended pursuant to clauses (iv), (vi), (ix), (xi),
(xii), (xiii) and (xv) of the immediately preceding paragraph shall be included
as Restricted Payments. Amounts paid pursuant to clause (i) of the immediately
preceding paragraph shall be included, when paid, as Restricted Payments only to
the extent not already included as Restricted Payments upon declaration.
Amounts expended pursuant to all other clauses of the immediately preceding
paragraph shall not be included as Restricted Payments. The amount of any non-
cash Restricted Payment shall be deemed to be equal to the Fair Market Value
thereof at the date of the making of such Restricted Payment.
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SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause to be
done all things necessary to preserve and keep in full force and effect its
corporate existence and the corporate, partnership or other existence of each
Restricted Subsidiary in accordance with the respective organizational documents
of each such Restricted Subsidiary and the rights (charter and statutory) and
material franchises of the Company and the Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right or
franchise, or the corporate existence of any Restricted Subsidiary, if the Board
of Directors of the Company shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and the
Restricted Subsidiaries, taken as a whole; provided, further, however, that a
determination of the Board of Directors of the Company shall not be required in
the event of a merger of one or more Wholly Owned Restricted Subsidiaries of the
Company with or into another Wholly Owned Restricted Subsidiary of the Company
or another Person, if the surviving Person is a Wholly Owned Restricted
Subsidiary of the Company organized under the laws of the United States or a
State thereof or of the District of Columbia or, in the case of a Foreign
Restricted Subsidiary, the jurisdiction of incorporation or organization of such
Foreign Restricted Subsidiary. This Section 4.07 shall not prohibit the Company
from taking any other action otherwise permitted by, and made in accordance
with, the provisions of this Indenture.
SECTION 4.08. Notice of Defaults.
(a) In the event that any Indebtedness of the Company or any of its
Subsidiaries is declared due and payable before its maturity because of the
occurrence of any default (or any event which, with notice or lapse of time, or
both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(b) Upon becoming aware of any Default or Event of Default, the
Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.09. Business Activities.
The Company will not, and will not permit any Restricted Subsidiary to
engage in any business other than the Permitted Business.
SECTION 4.10. Compliance Certificate.
The Company shall deliver to the Trustee within 120 days after the
close of each fiscal year a certificate signed by the principal executive
officer, principal financial officer or principal accounting officer stating
that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
year. If they do know of such a Default or Event of Default, the certificate
shall describe all such Defaults or Events of Default, their status and the
action the Company is taking or proposes to take with respect thereto. The
first certificate to be delivered by the Company pursuant to this Section 4.10
shall be for the fiscal year ending November 1, 1999.
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SECTION 4.11. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, or any successor provision thereto, the Company shall file with
the SEC (if permitted by SEC practice and applicable law and regulations) the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the SEC pursuant to such Section 13(a) or 15(d)
or any successor provision thereto if the Company were so subject, such
documents to be filed with the SEC on or prior to the respective dates (the
"Required Filing Dates") by which the Company would have been required so to
----------------------
file such documents if the Company were so subject. The Company shall also in
any event (a) within 15 days of each Required Filing Date (whether or not
permitted or required to be filed with the SEC) (i) transmit (or cause to be
transmitted) by mail to all Holders, as their names and addresses appear in the
Security register, without cost to such Holders upon their request, and (ii)
file with the Trustee, copies of the annual reports, quarterly reports and proxy
statements which the Company is required to file with the SEC pursuant to the
preceding sentence, or, if such filing is not so permitted, information and data
of a similar nature, and (b) if, notwithstanding the preceding sentence, filing
such documents by the Company with the SEC is not permitted by SEC practice or
applicable law or regulations, promptly upon written request supply copies of
such documents to any Holder. In addition, for so long as any Securities remain
outstanding and prior to the later of the consummation of the Exchange Offer and
the filing of the Shelf Registration Statement, if required, the Company will
furnish to the Holders, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.12. Change of Control.
(a) Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall notify the
----------------------
Holders of the Securities of such occurrence in the manner prescribed by this
Indenture and shall, within 45 days after the Change of Control Date, make an
Offer to Purchase all Securities then outstanding at a purchase price in cash
equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Purchase Date (subject to the right of Holders
of record on the relevant Interest Record Date to receive interest due on the
relevant Interest Payment Date). The Company's obligations will be satisfied if
a third party makes the Offer to Purchase in the manner, at the times and
otherwise in compliance with the requirements of this Indenture applicable to an
Offer to Purchase made by the Company and purchases all Securities validly
tendered and not withdrawn under such Offer to Purchase. Each Holder shall be
entitled to tender all or any portion of the Securities owned by such Holder
pursuant to the Offer to Purchase, subject to the requirement that any portion
of a Security tendered must be tendered in an integral multiple of $1,000
principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04, money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
acting) shall promptly mail or deliver to Holders of Securities so ac
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cepted, payment in an amount equal to the Purchase Price for such Securities,
and the Trustee shall promptly authenticate and mail or deliver to each Holder
of Securities a new Security or Securities equal in principal amount to any
unpurchased portion of the Security surrendered as requested by the Holder. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company shall publicly announce the results
of the Offer on or as soon as practicable after the Purchase Date.
(c) If the Company makes an Offer to Purchase, the Company shall
comply with all applicable securities laws and regulations and any violation of
the provisions of this Indenture relating to such Offer to Purchase occurring as
a result of such compliance shall not be deemed a Default or an Event of
Default.
SECTION 4.13. Limitation on Senior Subordinated Indebtedness.
(a) The Company shall not, directly or indirectly, Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and subordinate in right of payment to any other Indebtedness
of the Company.
(b) The Company shall not permit any Guarantor to, and no Guarantor
shall, directly or indirectly, Incur any Indebtedness that by its terms would
expressly rank senior in right of payment to the Guarantee of such Guarantor and
subordinate in right of payment to any other Indebtedness of such Guarantor.
SECTION 4.14. Limitation on Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Equity Interests or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(b) make loans or advances to, or guarantee any Indebtedness or other
obligations of, or make any Investment in, the Company or any other Restricted
Subsidiary, or (c) transfer any of its properties or assets to the Company or
any other Restricted Subsidiary, except for such encumbrances or restrictions
------
existing under or by reason of (i) the Credit Facility, or any other agreement
of the Company or the Restricted Subsidiaries outstanding on the Issue Date, in
each case as in effect on the Issue Date, and any amendments, restatements,
renewals, replacements or refinancings thereof; provided, however, that any such
amendment, restatement, renewal, replacement or refinancing is no more
restrictive in the aggregate with respect to such encumbrances or restrictions
than those contained in the agreement being amended, restated, reviewed,
replaced or refinanced; (ii) applicable law; (iii) any instrument governing
Indebtedness or Equity Interests of an Acquired Person acquired by the Company
or any Restricted Subsidiary as in effect at the time of such acquisition
(except to the extent such Indebtedness was Incurred by such Acquired Person in
connection with, as a result of or in contemplation of such acquisition);
provided, however, that such encumbrances and restrictions are not applicable to
the Company or any Restricted Subsidiary, or the properties or assets of the
Company or any Restricted Subsidiary, other than the Acquired Person; (iv)
customary non-assignment provisions in leases entered into in the ordinary
course of business and consistent with past practices; (v) Purchase Money
Indebtedness for property acquired in the ordinary course of business that only
imposes encumbrances and restrictions on the property so acquired; (vi) any
agreement for the sale or disposition of the Equity Interests or assets of any
Restricted Subsidiary; provided, however, that such encumbrances and
restrictions described in this clause (vi) are only applicable to such
Restricted Subsidiary or assets, as applicable, and any such sale or disposition
is made in compliance with Section 4.05 to the extent applicable thereto; (vii)
refinancing Indebted
-46-
ness permitted under clause (g) of the second paragraph of Section 4.04;
provided, however, that such encumbrances and restrictions contained in the
agreements governing such Indebtedness are no more restrictive in the aggregate
than those contained in the agreements governing the Indebtedness being
refinanced immediately prior to such refinancing; (viii) this Indenture; (ix)
mortgages, pledges or other security agreements permitted under this Indenture
securing Indebtedness of the Company or a Restricted Subsidiary to the extent
such encumbrances or restrictions restrict the transfer of the property subject
to such mortgages, pledges or other security agreements; (x) Liens securing
Indebtedness otherwise permitted to be Incurred pursuant to Section 4.16 that
limit the right of the Company or any Restricted Subsidiary to dispose of the
assets subject to such Liens; (xi) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements and other similar
agreements entered into in the ordinary course of business; (xii) any other
security agreement, instrument or document relating to Senior Indebtedness
hereafter in effect, provided that such encumbrances or restrictions are
customary in connection with such documents and that the terms and conditions of
such encumbrances or restrictions are no more restrictive than those
encumbrances or restrictions imposed in connection with the Credit Facility as
in effect on the Issue Date; (xiii) any agreement relating to a sale and
leaseback transaction or capital lease, but only on the property subject to such
transaction or lease and only to the extent that such restrictions or
encumbrances are customary with respect to a sale and leaseback transaction or
capital lease; (xiv) Indebtedness Incurred by Foreign Restricted Subsidiaries;
or (xv) customary restrictions imposed on the payment of dividends by a
Receivables Entity in connection with a Qualified Receivables Transaction.
SECTION 4.15. Designation of Unrestricted Subsidiaries.
(a) The Company may designate after the Issue Date any Subsidiary of
the Company as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
-----------
(i) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such Designation;
(ii) at the time of and after giving effect to such Designation, the
Company could Incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Consolidated Coverage Ratio of the first paragraph
of Section 4.04; and
(iii) the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such Designation) pursuant to the first paragraph of
Section 4.06 in an amount (the "Designation Amount") equal to the Fair
------------------
Market Value of the net assets of the Company's Investment in such
Subsidiary on such date.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
4.06 for all purposes of this Indenture in the Designation Amount.
Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide credit support for, subject any of its property or assets (other
than the Equity Interests of any Unrestricted Subsidiary) to the satisfaction
of, or guarantee, any Indebtedness of any Unrestricted Subsidiary (including any
undertaking, agreement or instrument evidencing such Indebtedness), (y) be
directly or indirectly liable for any Indebtedness of any Unrestricted
Subsidiary, or (z) be directly or indirectly liable for any Indebtedness which
provides that the holder thereof may (upon notice, lapse of time or both)
declare a default thereon or cause the payment thereof to be accelerated or
payable prior to its final scheduled maturity upon the occurrence of a default
with
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respect to any Indebtedness of any Unrestricted Subsidiary, except for any
non-recourse guarantee given solely to support the pledge by the Company or any
Restricted Subsidiary of the capital stock of any Unrestricted Subsidiary. For
purposes of the foregoing, the Designation of a Subsidiary of the Company as an
Unrestricted Subsidiary shall be deemed to include the Designation of all of the
Subsidiaries of such Subsidiary.
(b) The Company may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation") only if:
----------
(i) no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at
such time, have been permitted to be Incurred for all purposes of this
Indenture.
All Designations and Revocations must be evidenced by resolutions of
the Board of Directors of the Company, delivered to the Trustee certifying
compliance with the foregoing provisions.
SECTION 4.16. Limitation on Liens.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, Incur any Liens of any kind against or
upon any of their respective properties or assets now owned or hereafter
acquired, or any proceeds therefrom or any income or profits therefrom, to
secure any Indebtedness unless contemporaneously therewith effective provision
is made, (x) in the case of the Company, to secure the Securities and all other
amounts due under this Indenture and any other class of Senior Subordinated
Indebtedness, and (y) in the case of a Restricted Subsidiary which is a
Guarantor, to secure such Restricted Subsidiary's Guarantee of the Securities
and all other amounts due under this Indenture, in each case, equally and
ratably with such Indebtedness (or, in the event that such Indebtedness is
subordinated in right of payment to the Securities or such Restricted
Subsidiary's Guarantee, prior to such Indebtedness) with a Lien on the same
properties and assets securing such Indebtedness for so long as such
Indebtedness is secured by such Lien, except for (i) Liens securing Senior
Indebtedness (including, without limitation, Indebtedness Incurred under the
Credit Facility) and (ii) Permitted Liens.
SECTION 4.17. Limitation on Guarantees by Restricted Subsidiaries.
In the event the Company (i) organizes or acquires any Domestic
Restricted Subsidiary (other than a Receivables Entity) after the Issue Date
that is not a Guarantor or (ii) causes or permits any Foreign Restricted
Subsidiary that is not a Guarantor to, directly or indirectly, guarantee the
payment of any Indebtedness of the Company or any Domestic Restricted Subsidiary
("Other Indebtedness") then, in each case the Company shall cause such
------------------
Restricted Subsidiary to simultaneously execute and deliver a supplemental
indenture to this Indenture pursuant to which it will become a Guarantor under
this Indenture; provided, however, that in the event a Domestic Restricted
Subsidiary is acquired in a transaction in which a merger agreement is entered
into, such Domestic Restricted Subsidiary shall not be required to execute and
deliver such supplemental indenture until the consummation of the merger
contemplated by any such merger agreement; provided, further, that if such Other
Indebtedness is (i) Indebtedness that is ranked pari passu in right of payment
with the Securities or the Guarantee of such Domestic Restricted Subsidiary, as
the case may be, the Guarantee of such Foreign Restricted Subsidiary shall be
pari passu in right of payment with the guarantee of the Other Indebtedness; or
(ii) Subordinated Indebtedness, the Guarantee of such Foreign Restricted
Subsidiary
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shall be senior in right of payment to the guarantee of the Other
Indebtedness (which guarantee of such Subordinated Indebtedness shall provide
that such guarantee is subordinated to the Guarantees of such Subsidiary to the
same extent and in substantially the same manner as the Other Indebtedness is
subordinated to the Notes or the Guarantee of such Domestic Restricted
Subsidiary, as the case may be).
SECTION 4.18. Limitation on the Sale or Issuance of Equity Interests of
Restricted Subsidiaries.
The Company shall not sell any Equity Interest of a Restricted
Subsidiary, and shall not cause or permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any Equity Interests, except: (i) to the Company or
a Wholly Owned Restricted Subsidiary; or (ii) if, immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary. Notwithstanding the foregoing, the Company
is permitted to sell all the Equity Interests of a Restricted Subsidiary as long
as the Company is in compliance with Section 4.05 and, if applicable, Article
Five.
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Mergers, Sale of Assets, etc.
(a) The Company shall not consolidate with or merge with or into
(whether or not the Company is the Surviving Person) any other entity and the
Company shall not, and shall not cause or permit any Restricted Subsidiary to,
sell, convey, assign, transfer, lease or otherwise dispose of all or
substantially all of the Company's and the Restricted Subsidiaries' properties
and assets (determined on a consolidated basis for the Company and the
Restricted Subsidiaries) to any entity in a single transaction or series of
related transactions (including by way of consolidation or merger), unless: (i)
either (x) the Company shall be the Surviving Person or (y) the Surviving Person
(if other than the Company) shall be a corporation organized and validly
existing under the laws of the United States of America or any State thereof or
the District of Columbia or, if any such transaction involves a Disposition by a
Foreign Restricted Subsidiary, under the laws of the United States of America or
any state thereof or the District of Columbia or the jurisdiction under which
such Foreign Restricted Subsidiary was organized, and shall, in any such case,
expressly assume by a supplemental indenture, the due and punctual payment of
the principal of, premium, if any, and interest on all the Securities and the
performance and observance of every covenant of this Indenture and the
Registration Rights Agreement to be performed or observed on the part of the
Company; (ii) immediately thereafter, no Default or Event of Default shall have
occurred and be continuing; and (iii) immediately after giving effect to any
such transaction involving the Incurrence by the Company or any Restricted
Subsidiary, directly or indirectly, of additional Indebtedness (and treating any
Indebtedness not previously an obligation of the Company or any Restricted
Subsidiary in connection with or as a result of such transaction as having been
Incurred at the time of such transaction), the Surviving Person could Incur, on
a pro forma basis after giving effect to such transaction as if it had occurred
at the beginning of the four quarter period immediately preceding such
transaction for which consolidated financial statements of the Company are
available, at least $1.00 of additional Indebtedness (other than Permitted
Indebtedness) under the Consolidated Coverage Ratio of the first paragraph of
Section 4.04.
Notwithstanding the foregoing clause (iii) of the immediately
preceding paragraph, (x) any Restricted Subsidiary may consolidate with, merge
into or transfer all or part of its properties and assets to the Company or any
Restricted Subsidiary that is a Guarantor and (y) the Company may merge with an
Affiliate
-49-
incorporated solely for the purpose of reincorporating the Company in
another domestic United States jurisdiction to realize tax or other benefits.
For purposes of the foregoing, the transfer (by lease, assignment,
sale or otherwise, in a single transaction or series of transactions) of all or
substantially all the properties and assets of one or more Restricted
Subsidiaries the Equity Interests of which constitutes all or substantially all
the properties and assets of the Company shall be deemed to be the transfer of
all or substantially all the properties and assets of the Company.
(b) No Guarantor (other than a Guarantor whose Guarantee is to be
released in accordance with the terms of its Guarantee and this Indenture as
provided in Section 11.03) shall consolidate with or merge with or into another
Person, whether or not such Person is affiliated with such Guarantor and whether
or not such Guarantor is the Surviving Person, unless (i) the Surviving Person
(if other than such Guarantor) is a corporation organized and validly existing
under the laws of the United States, any State thereof or the District of
Columbia; (ii) the Surviving Person (if other than such Guarantor) expressly
assumes by a supplemental indenture all the obligations of such Guarantor under
its Guarantee and the performance and observance of every covenant of the
Indenture and the Registration Rights Agreement to be performed or observed by
such Guarantor; (iii) at the time of and immediately after such Disposition, no
Default or Event of Default shall have occurred and be continuing; and (iv)
immediately after giving effect to any such transaction involving the Incurrence
by such Guarantor, directly or indirectly, of additional Indebtedness (and
treating any Indebtedness not previously an obligation of such Guarantor in
connection with or as a result of such transaction as having been Incurred at
the time of such transaction), the Company could Incur, on a pro forma basis
after giving effect to such transaction as if it had occurred at the beginning
of the latest fiscal quarter for which consolidated financial statements of the
Company are available, at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) under the Consolidated Coverage Ratio of the first
paragraph of Section 4.04; provided, however, that this paragraph shall not be a
condition to a merger or consolidation of a Guarantor if such merger or
consolidation only involves the Company and/or one or more other Guarantors.
Notwithstanding the foregoing, nothing in this covenant shall prohibit the
consolidation or merger with or into or the sale of all or substantially all of
the assets or properties of a Guarantor to any other Restricted Subsidiary that
is a Guarantor.
SECTION 5.02. Successor Corporation Substituted.
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in Section 5.01 in which the Company or a
Guarantor, as the case may be, is not the Surviving Person and the Surviving
Person is to assume all the Obligations of the Company under the Securities,
this Indenture and the Registration Rights Agreement or of such Guarantor under
its Guarantee, this Indenture and the Registration Rights Agreement, as the case
may be, pursuant to a supplemental indenture, such Surviving Person shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, and the Company shall be
discharged from its Obligations under this Indenture and the Securities or such
Guarantor shall be discharged from its Obligations under this Indenture and its
Guarantee, as the case may be.
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ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
Each of the following shall be an "Event of Default" for purposes of
this Indenture:
(a) failure to pay principal of (or premium, if any, on) any Security
when due (whether or not prohibited by the provisions of Article Eight);
(b) failure to pay any interest on any Security when due, continued
for 30 days or more (whether or not prohibited by the provisions of Article
Eight);
(c) default in the payment of principal of or interest on any
Security required to be purchased pursuant to any Offer to Purchase
required by this Indenture when due and payable or failure to pay on the
Purchase Date the Purchase Price for any Security validly tendered pursuant
to any Offer to Purchase required by this Indenture (whether or not
prohibited by the provisions of Article Eight);
(d) failure to perform or comply with any of the provisions of
Section 5.01;
(e) failure to perform any other covenant, warranty or agreement of
the Company under this Indenture or in the Securities or of the Guarantors
under this Indenture or in the Guarantees continued for 30 days or more
after written notice to the Company by the Trustee or the Holders of at
least 25% in aggregate principal amount of the outstanding Securities;
(f) default or defaults under the terms of one or more instruments
evidencing or securing Indebtedness of the Company or any of its
Subsidiaries having an outstanding principal amount of $10.0 million or
more individually or in the aggregate that has resulted in the acceleration
of the payment of such Indebtedness or failure by the Company or any of its
Restricted Subsidiaries to pay principal of at least $10.0 million when due
at the stated maturity of any such Indebtedness and such default or
defaults shall have continued after any applicable grace period and shall
not have been cured or waived within 10 days after the occurrence thereof;
(g) the rendering of a final judgment or judgments (not subject to
appeal) against the Company or any of its Restricted Subsidiaries in an
amount of $10.0 million or more (net of any amounts covered by reputable
and creditworthy insurance companies) which remains undischarged or
unstayed for a period of 60 days after the date on which the right to
appeal has expired;
(h) the Company or any of its Significant Restricted Subsidiaries
pursuant to or within the meaning of any Bankruptcy Law: (i) admits in
writing its inability to pay its debts generally as they become due; (ii)
commences a voluntary case or proceeding; (iii) consents to the entry of an
order for relief against it in an involuntary case or proceeding; (iv)
consents or acquiesces in the institution of a bankruptcy or insolvency
proceeding against it; (v) consents to the appointment of a Custodian of it
or for all or substantially all of its property; or (vi) makes a general
assignment for the benefit of its creditors, or any of them takes any
action to authorize or effect any of the foregoing;
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(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that: (i) is for relief against the Company or any
Significant Restricted Subsidiary in an involuntary case or proceeding;
(ii) appoints a Custodian of the Company or any Significant Restricted
Subsidiary for all or substantially all of its property; or (iii) orders
the liquidation of the Company or any Significant Restricted Subsidiary;
and in each case the order or decree remains unstayed and in effect for 60
days; provided, however, that if the entry of such order or decree is
appealed and dismissed on appeal, then the Event of Default hereunder by
reason of the entry of such order or decree shall be deemed to have been
cured; or
(j) other than as provided in or pursuant to any Guarantee or this
Indenture, the Guarantee of any Guarantor that constitutes a Significant
Restricted Subsidiary ceases to be in full force and effect or is declared
null and void and unenforceable or found to be invalid or any Guarantor
that is a Significant Restricted Subsidiary denies its liability under its
Guarantee (other than by reason of a release of such Guarantor from its
Guarantee in accordance with the terms of the Indenture and such
Guarantee).
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar
--------------
Federal, state or foreign law for the relief of debtors. The term "Custodian"
---------
means any receiver, trustee, assignee, liquidator, sequestrator or similar
official under any Bankruptcy Law.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other than an
Event of Default specified in clause (h) or (i) of Section 6.01 with respect to
the Company) occurs and is continuing, the Trustee or the Holders of at least
25% in aggregate principal amount of the outstanding Securities by notice in
writing to the Company (and to the Trustee if given by the Holders) may declare
the unpaid principal of and accrued interest to the date of acceleration on all
outstanding Securities to be due and payable immediately and, upon any such
declaration, such principal amount and accrued interest, notwithstanding
anything contained in this Indenture or the Securities to the contrary, shall
become immediately due and payable; provided, however, that so long as the
Credit Facility shall be in full force, if an Event of Default shall have
occurred and be continuing (other than an Event of Default specified in clause
(h) or (i) of Section 6.01 with respect to the Company), the Securities shall
not become due and payable until the earlier to occur of (x) five Business Days
following delivery of a written notice by the Trustee of such acceleration of
the Securities to the agent under the Credit Facility and (y) the acceleration
(ipso facto or otherwise) of any Indebtedness under the Credit Facility.
If an Event of Default specified in clause (h) or (i) of Section 6.01
with respect to the Company occurs, all unpaid principal of and accrued interest
on all outstanding Securities shall ipso facto become immediately due and
payable without any declaration or other act on the part of the Trustee or any
Holder.
After a declaration of acceleration, but before a judgment or decree
of the money due in respect of the Securities has been obtained, the Holders of
not less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and interest on the Securities which has become due solely by
virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
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SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities 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 maturing
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 6.04. Waiver of Past Default.
Subject to Sections 2.09 and 6.07, prior to the declaration of
acceleration of the Securities, the Holders of not less than a majority in
aggregate principal amount of the outstanding Securities by written notice to
the Trustee may waive an existing Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Security as specified in clauses (a), (b) and (c) of Section 6.01 or a Default
in respect of any term or provision of this Indenture that may not be amended or
modified without the consent of each Holder affected as provided in Section
10.02. The Company shall deliver to the Trustee an Officers' Certificate
stating that the requisite percentage of Holders have consented to such waiver
and attaching copies of such consents. In case of any such waiver, the Company,
the Trustee and the Holders shall be restored to their former positions and
rights hereunder and under the Securities, respectively. This paragraph of this
Section 6.04 shall be in lieu of (S) 316(a)(1)(B) of the TIA and such (S)
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Securities, as permitted by the TIA.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Securities, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in principal amount
of the outstanding Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture that the Trustee
determines may be unduly prejudicial to the rights of another Holder, it being
understood that the Trustee shall have no duty (subject to Section 7.01) to
ascertain whether or not such actions or forebearances are unduly prejudicial to
such holders, or that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In the event the Trustee takes
any action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction. This Section 6.05 shall be in lieu of (S) 316(a)(1)(A) of the TIA,
and such (S) 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
-53-
SECTION 6.06. Limitation on Suits.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(i) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(ii) the Holders of at least 25% in aggregate principal amount of
the outstanding Securities make a written request to the Trustee to pursue
a remedy;
(iii) such Holder or Holders offer and, if requested, provide to
the Trustee indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision
of indemnity; and
(v) during such 60-day period the Holders of a majority in principal
amount of the outstanding Securities do not give the Trustee a direction
which, in the opinion of the Trustee, is inconsistent with the request.
A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, but subject in
any event to the provisions of Articles Eight and Twelve, the right of any
Holder to receive payment of principal of or interest on a Security, on or after
the respective due dates expressed in the Security, 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 the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of principal or interest specified
in Section 6.01(a), (b) or (c) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
or any other obligor on the Securities for the whole amount of principal and
accrued interest remaining unpaid, together with interest overdue on principal
and to the extent that payment of such interest is lawful, interest on overdue
installments of interest, in each case at the rate per annum borne by the
Securities and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 6.09. 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relative to the Company (or any
other obligor upon the Securities), its creditors or its property and shall be
entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings
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is hereby authorized by each Holder to make such 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 to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. 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 of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
-------- -------
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and may be a member of the creditors'
committee.
SECTION 6.10. Priorities.
Subject to Articles Eight and Twelve, if the Trustee collects any
money or property pursuant to this Article Six, it shall pay out the money or
property in the following order:
First: to the Trustee for amounts due under Section 7.07;
Second: to Holders for amounts due and unpaid on the Securities for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
Third: to the Company.
The Trustee, upon prior written notice to the Company, may fix a
record date and payment date for any payment to the Holders pursuant to this
Section 6.10.
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 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
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ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the performance of
such duties as are specifically set forth herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions conforming to
the requirements of this Indenture; however, in the case of any such
certificates or opinions which by any provision 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.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) 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 6.05.
(d) No provision of this Indenture 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 to take or omit to take any action
under this Indenture or take any action at the request or direction of Holders
if it shall have reasonable grounds for believing that repayment of such funds
is not assured to it or it does not receive from such Holders an indemnity
satisfactory to it in its sole discretion against such risk, liability, loss,
fee or expense which might be incurred by it in compliance with such request or
direction.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.01.
(f) 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.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may conclusively rely on any document believed by it
to be genuine and to have been signed or presented by the proper person.
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 and/or an Opinion of Counsel, which shall conform
to the provisions of Section 13.05. The Trustee shall not be liable for
any action it takes or omits to take in good faith in reliance on such
certificate or opinion.
(c) The Trustee may act through attorneys and agents of its selection
and shall not be responsible for the misconduct or negligence of any agent
or attorney (other than an agent who is an employee of the Trustee)
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it reasonably believes to be authorized or
within its rights or powers.
(e) Before the Trustee acts or refrains from acting, it may consult
with counsel of its selection and the advice or opinion of such counsel as
to matters of law shall be full and complete authorization and protection
from liability in respect of any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) Any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution.
(g) 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 pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity reasonably satisfactory
to it against the costs, expenses and liabilities which might be incurred
by it in compliance with such request or direction.
(h) The Trustee shall not be bound to make any investigation into 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.
(i) The Trustee shall not be deemed to have notice of any Event of
Default unless a Trust Officer of the Trustee has actual knowledge thereof
or unless the Trustee shall have received written notice thereof at the
Corporate Trust Office of the Trustee, and such notice references the
Securities and this Indenture. As used herein, the term "actual knowledge"
------ ---------
means the actual fact or statement of knowing, without any duty to make any
investigation with regard thereto.
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(j) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(k) The permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty and the Trustee shall not
be answerable for other than its negligence or willful misconduct.
(l) 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, and to each agent, custodian and other
Person employed to act hereunder, except as provided in clause (c) of this
Section 7.02.
SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee, subject to
Section 7.10 hereof. Any Agent may do the same with like rights. However, the
Trustee is subject to Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement of the Company in this Indenture or
any document issued in connection with the sale of Securities or any statement
in the Securities other than the Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing and a
Trust Officer of the Trustee has actual knowledge of such Default or Event of
Default, the Trustee shall mail to each Holder notice of the Default or Event of
Default within 90 days after the occurrence thereof. Except in the case of a
Default or an Event of Default in payment of principal of or interest on any
Security or a Default or Event of Default in complying with Section 5.01, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the interest
of Holders. This Section 7.05 shall be in lieu of the proviso to (S) 315(b) of
the TIA and such proviso to (S) 315(b) of the TIA is hereby expressly excluded
from this Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA (S) 313(a), within 60 days after each May 15
beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder a report dated as of such May 15 that complies with
TIA (S) 313(a). The Trustee also shall comply with TIA (S)(S) 313(b), (c) and
(d).
A copy of each such report at the time of its mailing to Holders shall
be filed with the SEC and each stock exchange, if any, on which the Securities
are listed.
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The Company shall promptly notify the Trustee in writing if the
Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation as the Company and the Trustee
shall from time to time agree in writing for its services. The Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances, including all costs and
expenses of collection (including reasonable fees, disbursements and expenses of
its agents and outside counsel) incurred or made by it in addition to the
compensation for its services except any such disbursements, expenses and
advances as may be attributable to the Trustee's negligence or willful
misconduct. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents, accountants, experts and
outside counsel and any taxes or other expenses incurred by a trust created
pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee or any predecessor Trustee,
and their agents, for, and hold it harmless against any and all loss, damage,
claims, liability or expense, including taxes (other than franchise taxes
imposed on the Trustee and taxes based upon, measured by or determined by the
income of the Trustee), arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder, except to the extent that such loss, damage, claim (whether asserted
by the Company, or any Holder or any Person), liability or expense is due to its
own negligence or willful misconduct. The Trustee shall notify the Company
promptly of any claim asserted against the Trustee for which it may seek
indemnity. However, the failure by the Trustee to so notify the Company shall
not relieve the Company of its obligations hereunder. The Company shall defend
the claim and the Trustee shall cooperate in the defense (and may employ its own
counsel) at the Company's expense; provided, however, that the Company's
reimbursement obligation with respect to counsel employed by the Trustee will be
limited to the reasonable fees and expenses of such additional counsel.
The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any loss or liability incurred by the
Trustee as a result of its own negligence or willful misconduct.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a Lien prior to the Securities against all money or property
held or collected by the Trustee, in its capacity as Trustee, except money or
property held in trust to pay principal of or interest on particular Securities
or the Purchase Price or redemption price of any Securities to be purchased
pursuant to an Offer to Purchase or redeemed.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) occurs, the expenses (including the
reasonable fees and expenses of its agents and counsel) and the compensation for
the services shall be preferred over the status of the Holders in a proceeding
under any Bankruptcy Law and are intended to constitute expenses of
administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Nine and any rejection or termination under any Bankruptcy Law.
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SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company in
writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged a bankrupt or an insolvent under any
Bankruptcy Law;
(c) a custodian or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed 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. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee pursuant to Section 7.07, all property held
by it as Trustee to the successor Trustee, subject to the Lien provided in
Section 7.07, the resignation or removal of the retiring Trustee shall become
effective, and the successor Trustee shall have the rights, powers and duties of
the Trustee under this Indenture. A successor Trustee shall mail notice of its
succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Securities may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
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SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be eligible to
act as Trustee under TIA (S)(S) 310(a)(1) and 310(a)(2). The Trustee shall have
a combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. If the Trustee has or shall acquire
any "conflicting interest" within the meaning of TIA (S) 310(b), the Trustee and
the Company shall comply with the provisions of TIA (S) 310(b); provided,
however, that there shall be excluded from the operation of TIA (S) 310(b)(1)
any indenture or indentures under which other securities or certificates of
interest or participation in other securities of the Company are outstanding if
the requirements for such exclusion set forth in TIA (S) 310(b)(1) are met. If
at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 7.10, the Trustee shall resign immediately in the
manner and with the effect hereinbefore specified in this Article Seven.
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee shall comply with TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each Holder of
the Securities by his acceptance thereof likewise covenant and agree, that all
Securities shall be issued subject to the provisions of this Article Eight; and
each person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees that all payments of the
principal of and interest on the Securities by the Company shall, to the extent
and in the manner set forth in this Article Eight, be subordinated in right of
payment to the prior payment in full in cash of all Senior Indebtedness.
SECTION 8.02 No Payment on Securities in Certain Circumstances.
(a) No direct or indirect payment of any kind or character (excluding
any payment or distribution of Permitted Junior Securities and excluding any
payment from funds held in trust for the benefit of Holders pursuant to Article
Nine (a "Defeasance Trust Payment")) by or non behalf of the Company in respect
------------------------
of principal of, premium, if any, or interest on the Securities or to acquire
any of the Securities, whether pursuant to the terms of the Securities, upon
acceleration, pursuant to an Offer to Purchase or otherwise, shall be made if,
at the time of such payment, there exists a default in the payment of all or any
portion of the obligations in respect of any Designated Senior Indebtedness,
whether at maturity, on account of mandatory redemption or prepayment,
acceleration or otherwise, and such default shall not have been cured or waived
or the benefits of this sentence waived by or on behalf of the requisite number
of holders of such Designated Senior Indebtedness. In addition, if any non-
payment event of default occurs with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be immediately
accelerated, then upon and after receipt by the Trustee of written notice (a
"Payment Blockage Notice") from the holder or holders of such Des-
-----------------------
-61-
ignated Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Senior Indebtedness, unless and until all such events of default have
been cured or waived or have ceased to exist or such Designated Senior
Indebtedness has been discharged or repaid in full in cash or the benefits of
these provisions have been waived by the requisite number of holders of such
Designated Senior Indebtedness, no direct or indirect payment of any kind or
character (excluding any payment or distribution of Permitted Junior Securities
and excluding any Defeasance Trust Payment) shall be made by or on behalf of the
Company in respect of principal of, premium, if any, or interest on the
Securities or to acquire any of the Securities, upon acceleration pursuant to
any Offer to Purchase or otherwise to such Holders, during a period (a "Payment
-------
Blockage Period") commencing on the date of receipt of such Payment Blockage
---------------
Notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the contrary,
(x) in no event shall a Payment Blockage Period extend beyond 179 days from the
date the Payment Blockage Notice in respect thereof was given, (y) there shall
be a period of at least 181 consecutive days in each 360-day period when no
Payment Blockage Period is in effect and (z) not more than one Payment Blockage
Period may be commenced with respect to the Securities during any period of 360
consecutive days. No event of default that existed or was continuing on the
date of commencement of any Payment Blockage Period with respect to the
Designated Senior Indebtedness initiating such Payment Blockage Period (to the
extent the holder of Designated Senior Indebtedness, or trustee or agent, giving
notice commencing such Payment Blockage Period had knowledge of such existing or
continuing event of default) may be, or be made, the basis for the commencement
of any other Payment Blockage Period by the holder or holders of such Designated
Senior Indebtedness or the trustee or agent acting on behalf of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such event of default has been cured or waived for a period of not less
than 90 consecutive days (it being understood that a subsequent act or event
that constitutes a breach of a covenant or other provision, including breach of
a financial covenant with respect to a subsequent period, shall be considered a
separate event of default from a previous act or event that constitutes a breach
of the same covenant or other provision for this purpose).
(b) In the event that, notwithstanding the foregoing, the Company
shall have made payment to the Trustee or any Holder when such payment is
prohibited by Section 8.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered by the Trustee (if the Notice
required by Section 8.06 has been received by the Trustee) or the Holder to, the
holders of Senior Indebtedness or their respective representatives, or to the
trustee or trustees under any indenture pursuant to which any of such Designated
Senior Indebtedness may have been issued, as their respective interests may
appear, but only to the extent that, upon notice from the Trustee to the holders
of Senior Indebtedness that such prohibited payment has been made, the holders
of Senior Indebtedness (or their representative or representatives or a trustee
or trustees) notify the Trustee in writing of the amounts then due and owing on
the Senior Indebtedness, if any, and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities and
excluding any Defeasance Trust Payment), upon any dissolution or winding-up or
total liquidation or reorganization of the Company or assignment for the benefit
of creditors of the Company or similar proceeding, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
Senior Indebtedness shall first be paid in full in cash before the Holders of
the Securities or the Trustee on behalf of such Holders shall be entitled to
receive any payment by or on behalf of the Company of, the princi-
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pal of, premium, if any, or interest on the Securities, or any payment by or on
behalf of the Company to acquire any of the Securities for cash, property or
securities, or any distribution by the Company with respect to the Securities of
any cash, property or securities (excluding any payment or distribution of
Permitted Junior Securities and excluding any Defeasance Trust Payment). Before
any such payment or distribution may be made by, or on behalf of, the Company in
respect of the principal of, premium, if any, or interest on the Securities upon
any such dissolution or winding-up or liquidation or reorganization or
assignment for the benefit of creditors of the Company or similar proceeding,
any payment or distribution of assets or securities of the company of any kind
or character, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities and excluding any Defeasance Trust
Payment), to which the Holders of the Securities or the Trustee on their behalf
would be entitled, but for the subordination provisions of this Indenture, shall
be made by the Company or by any receiver, trustee in bankruptcy, liquidation
trustee, agent or other Person making such payment or distribution, directly to
the holders of the Senior Indebtedness (pro rata to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees or agent or agents under any
agreement or indenture pursuant to which any of such Senior Indebtedness may
have been issued, as their respective interests may appear, to the extent
necessary to pay all such Senior Indebtedness in full in cash after giving
effect to any prior or concurrent payment, distribution or provision therefor
to or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities (excluding any payment or distribution of Permitted Junior
Securities and excluding any Defeasance Trust Payment), shall be paid by the
Company to the Trustee or any Holder of Securities at a time when such payment
or distribution is prohibited by Section 8.03(a) and before all obligations in
respect of Senior Indebtedness are paid in full in cash, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered by the Trustee (if the Notice required by Section 8.06
has been received by the Trustee) or the Holder to, the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders) or their respective representatives,
or to the trustee or trustees or agent or agents under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full in
cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided in Article five shall not be deemed a dissolution, winding-
up, liquidation or reorganization for the purposes of this Section 8.03 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full in cash of all Senior Indebtedness, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such
Senior Indebtedness until the principal of and interest on the Securities shall
be paid in full in cash; and, for the purposes of such subrogation, no payments
or distributions to the holders of the Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee on their
behalf would be entitled except for the
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provisions of this Article Eight, and no payment over pursuant to the provisions
of this Article Eight to the holders of Senior Indebtedness by Holders of the
Securities or the Trustee on their behalf shall, as between the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the
Securities, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. It is understood that the provisions of this Article Eight
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Securities, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article Eight
shall have been applied, pursuant to the provisions of this Article Eight, to
the payment of all amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount required to make
payment in full in cash of such Senior Indebtedness.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article Eight or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as among the Company and
the Holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the principal of,
premium, if any, and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Eight of the holders of the Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Eight shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Senior Indebtedness then due
and payable shall first be paid in full in cash before the Holders of the
Securities or the Trustee are entitled to receive any direct or indirect payment
from the Company of principal of or interest on the Securities.
SECTION 8.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities pursuant to the provisions of this
Article Eight. The Trustee shall not be charged with knowledge of the existence
of any event of default with respect to any Senior Indebtedness or of any other
facts which would prohibit the making of any payment to or by the Trustee unless
and until the Trustee shall have received notice in writing at its Corporate
Trust Office to that effect signed by an Officer of the Company, or by a holder
of Senior Indebtedness or trustee or agent therefor; and prior to the receipt of
any such written notice, the Trustee shall, subject to Article Seven, be
entitled to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 8.06 at
least two Business Days prior to the date upon which by the terms of this
Indenture any moneys shall become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from the Company and
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to apply the same to the purpose for which they were received, and shall not be
affected by any notice to the contrary which may be received by it on or after
such prior date. Nothing contained in this Section 8.06 shall limit the right of
the holders of Senior Indebtedness to recover payments as contemplated by
Section 8.03. The Trustee shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a holder of any
Senior Indebtedness (or a trustee on behalf of, or other representative of, such
holder) to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Eight, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Eight, and if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
SECTION 8.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities referred to
in this Article Eight, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article Eight.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Eight with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Eight, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Section 8.03(b)). The Trustee shall not be liable to any such holders if the
Trustee shall in good faith mistakenly pay over or distribute to Holders of
Securities or to the Company or to any other person cash, property or securities
to which any holders of Senior Indebtedness shall be entitled by virtue of this
Article Eight or otherwise.
SECTION 8.09. Subordination Rights Not Impaired by Acts or Omissions of the
Company or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the
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part of the Company or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or
otherwise be charged with. The provisions of this Article Eight are intended to
be for the benefit of, and shall be enforceable directly by, the holders of
Senior Indebtedness.
SECTION 8.10. Holders Authorize Trustee To Effectuate Subordination of
Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Eight, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of the Company (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of the Company, the filing of a claim for the unpaid balance
of its or his Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Eight shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Eight shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Eight or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (a) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding or secured; (b) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Senior Indebtedness; and (d) exercise or refrain from exercising any rights
against the Company and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable to Money Held in Trust
for Holders; Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited in trust
with the Trustee pursuant to and in accordance with Article Nine shall be for
the sole benefit of the Holders and shall not be subject to this Article Eight.
Nothing contained in this Article Eight or elsewhere in this Indenture
shall prevent (i) the Company, except under the conditions described in Sections
8.02 and 8.03, from making payments of princi-
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pal of and interest on the Securities or from depositing with the Trustee any
moneys for such payments or from effecting a termination of the Company's and
the Guarantors' obligations under the Securities and this Indenture as provided
in Article Nine, or (ii) the application by the Trustee of any moneys deposited
with it for the purpose of making such payments of principal of and interest on
the Securities, to the holders entitled thereto unless at least two Business
Days prior to the date upon which such payment becomes due and payable, the
Trustee shall have received the written notice provided for in Section 8.02(b)
or in Section 8.06. The Company shall give prompt written notice to the Trustee
of any dissolution, winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of the Senior Indebtedness of
the acceleration.
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
Subject to the provisions of Article Eight, the Company may terminate
its and the Guarantors' substantive obligations in respect of the Securities by
delivering all outstanding Securities to the Trustee for cancellation and paying
all sums payable by it on account of principal of and interest on all Securities
or otherwise. In addition to the foregoing, subject to the provisions of
Article Eight with respect to the creation of the defeasance trust provided for
in the following clause (i), the Company may, provided that no Default or Event
of Default has occurred and is continuing or would arise therefrom (or, with
respect to a Default or Event of Default specified in Section 6.01(h) or (i),
occurs at any time on or prior to the 91st calendar day after the date of such
deposit (it being understood that this condition shall not be deemed satisfied
until after such 91st day)) and provided that no default under any Senior
Indebtedness would result therefrom, terminate its and the Guarantors'
substantive obligations in respect of Article Four (other than Sections 4.01,
4.02, 4.07, 4.10 and 4.11) and Article Five hereof and any Event of Default
specified in Section 6.01 (d) or (e) by (i) depositing with the Trustee, under
the terms of an irrevocable trust agreement, money or United States Government
Obligations sufficient (without reinvestment) to pay all remaining Indebtedness
on the Securities, (ii) delivering to the Trustee either an Opinion of Counsel
or a ruling directed to the Trustee from the Internal Revenue Service to the
effect that the Holders will not recognize income, gain or loss for Federal
income tax purposes as a result of such deposit and termination of obligations,
(iii) delivering to the Trustee an Opinion of Counsel to the effect that the
Company's exercise of its option under this Section 9.01 will not result in any
of the Company, the Trustee or the trust created by the Company's deposit of
funds pursuant to this provision becoming or being deemed to be an "investment
company" subject to regulation under the Investment Company Act of 1940, as
amended (the "Investment Company Act"), and (iv) delivering to the Trustee an
----------------------
Officers' Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein. In addition, subject to the
provisions of Article Eight with respect to the creation of the defeasance trust
provided for in the following clause (i), the Company may, provided that no
Default or Event of Default has occurred and is continuing or would arise
therefrom (or, with respect to a Default or Event of Default specified in
Section 6.01(h) or (i), occurs at any time on or prior to the 91st calendar day
after the date of such deposit (it being understood that this condition shall
not be deemed satisfied until after such 91st day)) and
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provided that no default under any Senior Indebtedness would arise therefrom,
terminate all of its and the Guarantors' substantive obligations in respect of
the Securities (including its obligations to pay the principal of and interest
on the Securities and the Guarantors' Guarantee thereof) by (i) depositing with
the Trustee, under the terms of an irrevocable trust agreement, money or United
States Government Obligations sufficient (without reinvestment) to pay all
remaining Indebtedness on the Securities, (ii) delivering to the Trustee either
a ruling directed to the Trustee from the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations or an Opinion of Counsel addressed to the Trustee based upon such a
ruling or based on a change in the applicable Federal tax law since the date of
this Indenture to such effect, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
Section 9.01 will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" subject to regulation under the
Investment Company Act and (iv) delivering to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating compliance with all
conditions precedent provided for herein.
Notwithstanding the foregoing paragraph, the Company's obligations in
Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 2.13 and 4.01 (but not with
respect to termination of substantive obligations pursuant to the third sentence
of the foregoing paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall survive until
the Securities are no longer outstanding. Thereafter the Company's obligations
in Sections 7.07, 9.03 and 9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the United States Government
Obligations deposited pursuant to this Section 9.01 or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Securities.
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States Government
Obligations deposited with it pursuant to Section 9.01, and shall apply the
deposited money and the money from United States Government Obligations in
accordance with this Indenture solely to the payment of principal of and
interest on the Securities.
SECTION 9.03. Repayment to Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly pay to
the Company upon written request any excess money held by it at any time. The
Trustee shall pay to the Company upon written request any money held by it for
the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining shall
be repaid to the Company. After payment to the Company, Holders entitled
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to money must look solely to the Company for payment as general creditors unless
an applicable abandoned property law designates another person and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 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
Company's and the Guarantors' obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.01 until such time as the Trustee is permitted to apply
all such money or United States Government Obligations in accordance with
Section 9.01; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a resolution of
their respective Boards of Directors, and the Trustee may amend or supplement
this Indenture or the Securities without notice to or consent of any Holder:
(a) to cure any ambiguity, defect or inconsistency; provided,
however, that such amendment or supplement does not adversely affect the
rights of any Holder;
(b) to effect the assumption by a successor Person of all obligations
of the Company under the Securities and his Indenture in connection with
any transaction complying with Article Five of this Indenture;
(c) to provide for uncertificated Securities in addition to or in
place of certificated Securities (provided that the uncertificated Notes
are issued in registered form for purposes of Section 163(f) of the
Internal Revenue Code, or in a manner such that the uncertificated Notes
are described in Section 163(f)(2)(B) of the Internal Revenue Code);
(d) to comply with any requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to make any change that would provide any additional benefit or
rights to the Holders;
(f) to make any change that does not adversely affect the rights of
any Holder under this Indenture;
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(g) to evidence the succession of another Person to any Guarantor and
the assumption by any such successor of the covenants of such Guarantor
herein and in the Guarantee in connection with any transaction complying
with Article Five of this Indenture;
(h) to add to the covenants of the Company or the Guarantors for the
benefit of the Holders, or to surrender any right or power herein conferred
upon the Company or any Guarantor;
(i) to secure the Securities pursuant to the requirements of Section
4.16 or otherwise; or
(j) to reflect the release of a Guarantor from its obligations with
respect to its Guarantee in accordance with the provisions of Section 11.03
and to add a Guarantor pursuant to the requirements of Section 4.17;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities.
However, without the consent of each Holder affected, an amendment, supplement
or waiver, including a waiver pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of or any installment
of interest on such Security or alter the optional redemption or repurchase
provisions of any Security or this Indenture in a manner adverse to the
Holders of the Securities;
(b) reduce the principal amount of (or the premium) of any Security;
(c) reduce the rate of or extend the time for payment of interest on
any Security;
(d) change the place or currency of payment of principal of (or
premium) or interest on any Security;
(e) modify any provisions of Section 6.04 (other than to add sections
of this Indenture or the Securities subject thereto) or 6.07 or this
Section 10.02 (other than to add sections of this Indenture or the
Securities which may not be amended, supplemented or waived without the
consent of each Holder affected);
(f) reduce the percentage of the principal amount of outstanding
Securities necessary for amendment to or waiver of compliance with any
provision of this Indenture or the Securities or for waiver of any Default
in respect thereof;
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(g) waive a Default in the payment of principal of, interest on, or
redemption payment with respect to, the Securities (except a rescission of
acceleration of the Securities by the Holders thereof as provided in
Section 6.02 and a waiver of the payment default that resulted from such
acceleration);
(h) modify the ranking or priority of any Security or the Guarantee
in respect thereof of any Guarantor or modify the definition of Senior
Indebtedness or Guarantor Senior Indebtedness or amend or modify any of the
provisions of Article Eight or Article Twelve in any manner adverse to the
Holders of the Securities;
(i) release any Significant Restricted Subsidiary that is a Guarantor
from any of its obligations under its Guarantee or this Indenture otherwise
than in accordance with this Indenture; or
(j) amend, change or modify in any material respect the obligation of
the Company to make and consummate an Offer to Purchase in the event of a
Change of Control or make and consummate an Offer to Purchase with respect
to any Asset Sale that has been consummated or modify in any material
respect any of the provisions or definitions with respect thereto;
An amendment under this Section 10.02 may not make any change under
Article Eight or Article Twelve hereof that adversely affects in any material
respect the rights of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, then outstanding unless the holders of such
Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, (or
any group or representative thereof authorized to give a consent) shall have
consented to such change.
It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 10.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 10.04. Record Date for Consents and Effect of Consents.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders of Securities entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then those persons
who were Holders of Securities at such record date (or their duly designated
proxies), and only those persons, shall be entitled to consent to such
amendment, supplement or waiver or to revoke any consent previously given,
whether or not such persons continue to be Holders of such Securities after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date. The Trustee is entitled to rely upon any electronic
instruction from beneficial owners to the Holders of any Global Security.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes a change described in any of clauses (a)
through (j) of Section 10.02. In that case the amendment, supplement or waiver
shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
Failure to make the appropriate notation or issue a new Security shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully protected
in relying upon, an Opinion of Counsel stating that the execution of any
amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
the Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
SECTION 10.07. Reliance by Holders of Senior Indebtedness on Subordination
Provisions.
Each Holder by accepting any Securities acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness of the
Company, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees (each, a "Guarantee") to each Holder of a Security authenticated by
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the Trustee and to the Trustee and its successors and assigns that: the
principal of and interest on the Securities will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity, by
acceleration or otherwise, and interest on the overdue principal and interest on
any overdue interest on the Securities, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or under the
Securities will be promptly paid in full
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or performed, all in accordance with the terms hereof and thereof; subject,
however, to the limitations set forth in Section 11.04. Each Guarantor hereby
agrees that its obligations hereunder shall be unconditional, irrespective of
the validity, regularity or enforceability of the Securities or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Securities with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, any action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a Guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that the Guarantee will not be discharged except by complete performance of the
obligations contained in the Securities, this Indenture, and this Guarantee. If
any Holder or the Trustee is required by any court or otherwise to return to the
Company, any Guarantor, or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or any Guarantor, any amount paid by
the Company or any Guarantor to the Trustee or such Holder, this Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor further agrees that, as between each Guarantor, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article Six for
the purpose of this Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Six, such obligations (whether or not due and payable)
shall forth become due and payable by each Guarantor for the purpose of this
Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
(a) If the Securities are defeased in accordance with the terms of
this Indenture, or if Section 5.01(b) is complied with, or if, subject to the
requirements of Section 5.01(a), all or substantially all of the assets of any
Guarantor or all of the Equity Interests of any Guarantor are sold (including by
issuance or otherwise) by the Company (or pursuant to an exercise of remedies,
or transfer in lieu thereof, on behalf of any holder or holders of a Lien
securing Senior Indebtedness) and if (x) the Net Cash Proceeds from such Asset
Sale are used in accordance with Section 4.05 or (y) the Company delivers to the
Trustee an Officers' Certificate to the effect that the Net Cash Proceeds from
such Asset Sale shall be used in accordance with Section 4.05 and within the
time limits specified by Section 4.05, then each Guarantor (in the case of
defeasance) or such Guarantor (in the event of a sale or other disposition of
all of the Equity Interests of such Guarantor) or the corporation acquiring such
assets (in the event of a sale or other disposition of all or substantially all
of the assets of such Guarantor) shall be released and discharged from all
obligations under this Article Eleven without any further action required on the
part of the Trustee or any Holder provided, however that a sale of a Guarantor
(other than by way of a sale or disposition pursuant to an exercise of remedies,
or transfer in lieu thereof, on behalf of any holder or holders of a Lien
securing Senior Indebtedness) will still be subject to the Company's obligations
under the first paragraph of Section 5.01. The Trustee shall, at the sole cost
and expense of the Company and upon receipt at the reasonable request of the
Trustee of an Opinion of Counsel that the provisions of this Section 11.03 have
been complied with, deliver an appropriate instrument evidencing such release
upon receipt of a request by the Company accompanied by an Officers' Certificate
certifying as to the compliance with this Section 11.03. Any Guarantor not so
released remains liable for the full amount of
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principal of and interest on the Securities and the other obligations of the
Company hereunder as provided in this Article Eleven.
(b) Any Guarantor that is designated an Unrestricted Subsidiary
pursuant to and in accordance with Section 4.15 will upon such Designation be
released and discharged of its Guarantee obligation in respect of this Indenture
and the Securities.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and the
Trustee, hereby confirms that it is the intention of all such parties that the
guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and each Guarantor hereby
irrevocably agree that the obligations of each Guarantor under its Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor (including any Guarantor
Senior Indebtedness Incurred after the Issue Date) and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.05, result in the obligations of such Guarantor under its
Guarantee not constituting such a fraudulent transfer or conveyance under
Federal or State law.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
-----------------
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by such
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
SECTION 11.06. Execution of Security Guarantee.
To further evidence their Guarantee to the Holders, each of the
Guarantors hereby agrees to execute a Security Guarantee to be endorsed on each
Security ordered to be authenticated and delivered by the Trustee. Each
Guarantor hereby agrees that its Guarantee set forth in Section 11.01 shall
remain in full force and effect notwithstanding any failure to endorse on each
Security a Security Guarantee. Each such Security Guarantee shall be signed on
behalf of each Guarantor by its Chairman of the Board, its President or its
Chief Financial Officer (as applicable) or one of its Vice Presidents prior to
the authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Security Guarantee on behalf of such Guarantor.
Such signature upon the Security Guarantee may be manual or facsimile signature
of such officer and may be imprinted or otherwise reproduced on the Security
Guarantee, and in case such officer who shall have signed the Security Guarantee
shall cease to be such officer before the Security on which such Security
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Company, such Security nevertheless may be authenticated
and delivered or disposed of as though the Person who signed the Security
Guarantee had not ceased to be such officer of such Guarantor.
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SECTION 11.07. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the Company that
arises from the payment, performance or enforcement of such Guarantor's
obligations under its Guarantee or this Indenture, including, without
limitation, any right of subrogation, shall be subject and subordinate to, and
no payment with respect to any such claim of such Guarantor shall be made
before, the payment in full in cash of all outstanding Securities in accordance
with the provisions provided therefor in this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior
Indebtedness.
Each Guarantor covenants and agrees, and the Trustee and each Holder
of the Securities by his acceptance thereof likewise covenant and agree, that
the Guarantee of such Guarantor shall be issued subject to the provisions of
this Article Twelve; and each person holding any Security, whether upon original
issue or upon transfer, assignment or exchange thereof, accepts and agrees that
all payments of the principal of and interest on the Securities pursuant to the
Guarantee made by or on behalf of any Guarantor shall, to the extent and in the
manner set forth in this Article Twelve, be subordinated and junior in right of
payment to the prior payment in full in cash of all Guarantor Senior
Indebtedness of such Guarantor.
SECTION 12.02. No Payment on Guarantees in Certain Circumstances.
(a) No direct or indirect payment of any kind or character (excluding
any payment or distribution of Permitted Junior Securities) by or on behalf of
any Guarantor in respect of principal of, premium, if any, or interest on the
Securities pursuant to such Guarantor's Guarantee or to acquire any of the
Securities, whether pursuant to the terms of the Securities, upon acceleration
or otherwise, shall be made if, at the time of such payment, there exists a
default in the payment of all or any portion of the obligations in respect of
any Designated Senior Indebtedness of such Guarantor, whether at maturity, on
account of mandatory redemption or prepayment, acceleration or otherwise, and
such default shall not have been cured or waived or the benefits of this
sentence waived by or on behalf of the requisite number of holders of such
Designated Senior Indebtedness. In addition, if any non-payment event of
default occurs with respect to any Designated Senior Indebtedness of a Guarantor
pursuant to which the maturity thereof may be immediately accelerated, then upon
and after receipt by the Trustee of written notice (a "Guarantor Payment
-----------------
Blockage Notice") from the holder or holders of such Designated Senior
---------------
Indebtedness or the trustee or agent acting on behalf of such Designated Senior
Indebtedness, unless and until all such events of default have been cured or
waived or have ceased to exist or such Designated Senior Indebtedness has been
discharged or paid in full in cash or the benefits of these provisions have been
waived by the requisite number of holders of such Designated Senior
Indebtedness, no direct or indirect payment of any kind or character (excluding
any payment or distribution of Permitted Junior Securities) shall be made by or
on behalf of such Guarantor of in respect of principal, premium, if any, or
interest on the Securities or to acquire any of the Securities, upon
acceleration, pursuant to any Offer to Purchase or otherwise during a period (a
"Guarantor Blockage Period") commencing on the date of receipt of such Payment
-------------------------
Blockage Notice by the Trustee and ending 179 days thereafter.
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Notwithstanding anything herein or in the Securities to the contrary,
(x) in no event shall a Guarantor Blockage Period extend beyond 179 days from
the date the Guarantor Payment Blockage Notice in respect thereof was given, (y)
there shall be a period of at least 181 consecutive days in each 360-day period
when no Guarantor Blockage Period is in effect and (z) not more than one
Guarantor Blockage Period may be commenced with respect to any Guarantor during
any period of 360 consecutive days. No event of default that existed or was
continuing on the date of commencement of any Guarantor Blockage Period with
respect to the Designated Senior Indebtedness of such Guarantor initiating such
Guarantor Blockage Period (to the extent the holder of such Designated Senior
Indebtedness, or trustee or agent, giving notice commencing such Guarantor
Blockage Period had knowledge of such existing or continuing event of default)
may be, or be made, the basis for the commencement of any other Guarantor
Blockage Period by the holder or holders of such Designated Senior Indebtedness
or the trustee or agent acting on behalf of such Designated Senior Indebtedness,
whether or not within a period of 360 consecutive days, unless such event of
default has been cured or waived for a period of not less than 90 consecutive
days (it being understood that a subsequent act or event that constitutes a
breach of a covenant or other provision, including breach of a financial
covenant with respect to a subsequent period, shall be considered a separate
event of default from a previous act or event that constitutes a breach of the
same covenant or other provision for this purpose).
(b) In the event that, notwithstanding the foregoing, any payment
shall be made directly to the Trustee or any Holder when such payment is
prohibited by Section 12.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered by the Trustee (if the Notice
required by Section 12.06 has been received by the Trustee) or the Holder to,
the holders of Designated Senior Indebtedness of such Guarantor or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Designated Senior Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that,
upon notice from the Trustee to the holders of such Designated Senior
Indebtedness that such prohibited payment has been made, the holders of such
Designated Senior Indebtedness (or their representative or representatives or a
trustee or trustees) notify the Trustee in writing of the amounts then due and
owing on such Designated Senior Indebtedness, if any, and only the amounts
specified in such notice to the Trustee shall be paid to the holders of such
Designated Senior Indebtedness.
SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities of any
Guarantor of any kind or character, whether in cash, property or securities
(excluding any payment or distribution of Permitted Junior Securities), upon any
dissolution or winding-up or total liquidation or reorganization of such
Guarantor or assignment for the benefit of creditors of such Guarantor or
similar proceeding, whether voluntary or involuntary or in bankruptcy,
insolvency, receivership or other proceedings, all Guarantor Senior Indebtedness
of such Guarantor shall first be paid in full in cash before the Holders of the
Securities or the Trustee on behalf of such Holders shall be entitled to receive
any payment by or on behalf of such Guarantor of the principal of or interest
on the Securities pursuant to such Guarantor's Guarantee, or any payment by or
on behalf of such Guarantor to acquire any of the Securities for cash, property
or securities, or any distribution with respect to the Securities of any cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities). Before any such payment or distribution may be made by, or
on behalf of, any Guarantor in respect of the principal of, premium, if any, or
interest on the Securities upon any such dissolution or winding-up or
liquidation or reorganization of the Guarantor or assignment for the benefit of
creditors of such Guarantor or similar proceeding, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, any
payment or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities (excluding any payment or
distribution of Permitted Junior Securities), to which the Holders of the
Securities or the Trustee on their behalf would be entitled, but for the
subordina-
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tion provisions of this Indenture, shall be made by such Guarantor or
by any receiver, trustee in bankruptcy, liquidation trustee, agent or other
Person making such payment or distribution, directly to the holders of the
Guarantor Senior Indebtedness of such Guarantor (pro rata to such holders on the
basis of the respective amounts of such Guarantor Senior Indebtedness held by
such holders) or their representatives or to the trustee or trustees or agent or
agents under any agreement or indenture pursuant to which any of such Guarantor
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all such Guarantor Senior Indebtedness in
full in cash after giving effect to any prior or concurrent payment,
distribution or provision therefor to or for the holders of such Guarantor
Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities (excluding any payment or distribution of Permitted
Junior Securities), shall be made directly to the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
12.03(a) and before all obligations in respect of the Guarantor Senior
Indebtedness of such Guarantor are paid in full in cash, such payment or
distribution shall be received and held in trust for the benefit of, and shall
be paid over or delivered by the Trustee (if the Notice required by Section
12.06 has been received by the Trustee) or the Holder to, the holders of such
Guarantor Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of such Guarantor Senior Indebtedness held by such holders)
or their respective representatives, or to the trustee or trustees or agent or
agents under any indenture pursuant to which any of such Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of such Guarantor Senior Indebtedness remaining
unpaid until all such Guarantor Senior Indebtedness has been paid in full in
cash after giving effect to any prior or concurrent payment, distribution or
provision therefor to or for the holders of such Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 12.03
if such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 12.04. Subrogation.
Upon the payment in full in cash of all Guarantor Senior Indebtedness
of a Guarantor, or provision for payment, the Holders of the Securities shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to
receive payments or distributions of cash, property or securities of such
Guarantor made on such Guarantor Senior Indebtedness until the principal of and
interest on the Securities shall be paid in full in cash; and, for the purposes
of such subrogation, no payments or distributions to the holders of such
Guarantor Senior Indebtedness of any cash, property or securities to which the
Holders of the Securities or the Trustee on their behalf would be entitled
except for the provisions of this Article Twelve, and no payment over pursuant
to the provisions of this Article Twelve to the holders of such Guarantor Senior
Indebtedness by Holders of the Securities or the Trustee on their behalf shall,
as between such Guarantor, its creditors other than holders of such Guarantor
Senior Indebtedness, and the Holders of the Securities, be deemed to be a
payment by such Guarantor to or on account of such Guarantor Senior
Indebtedness. It is understood that the provisions of this Article Twelve are
and are intended solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of Guarantor Senior
Indebtedness of each Guarantor, on the other hand.
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If any payment or distribution to which the Holders of the Securities
would otherwise have been entitled but for the provisions of this Article Twelve
shall have been applied, pursuant to the provisions of this Article Twelve, to
the payment of all amounts payable under Guarantor Senior Indebtedness, then and
in such case, the Holders of the Securities shall be entitled to receive from
the holders of such Guarantor Senior Indebtedness any payments or distributions
received by such holders of Guarantor Senior Indebtedness in excess of the
amount required to make payment in full in cash of such Guarantor Senior
Indebtedness.
SECTION 12.05. Obligations of Guarantors Unconditional.
Nothing contained in this Article Twelve or elsewhere in this
Indenture or in the Securities or the Guarantees is intended to or shall impair,
as among each of the Guarantors and the Holders of the Securities, the
obligation of each Guarantor, which is absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest on the Securities as and
when the same shall become due and payable in accordance with the terms of the
Guarantee of such Guarantor, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of any Guarantor other
than the holders of Guarantor Senior Indebtedness of such Guarantor, nor shall
anything herein or therein prevent the Holder of any Security or the Trustee on
their behalf from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Twelve of the holders of Guarantor Senior Indebtedness in respect of
cash, property or securities of any Guarantor received upon the exercise of any
such remedy.
Without limiting the generality of the foregoing, nothing contained in
this Article Twelve shall restrict the right of the Trustee or the Holders of
Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
of any Guarantor then due and payable shall first be paid in full before the
Holders of the Securities or the Trustee are entitled to receive any direct or
indirect payment from such Guarantor of principal of or interest on the
Securities pursuant to such Guarantor's Guarantee.
SECTION 12.06. Notice to Trustee.
The Company and each Guarantor shall give prompt written notice to the
Trustee of any fact known to the Company or such Guarantor which would prohibit
the making of any payment to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Twelve. The Trustee shall not be
charged with knowledge of the existence of any event of default with respect to
any Guarantor Senior Indebtedness or of any other facts which would prohibit the
making of any payment to or by the Trustee unless and until the Trustee shall
have received notice in writing at its Corporate Trust Office to that effect
signed by an Officer of the Company or such Guarantor, or by a holder of
Guarantor Senior Indebtedness or trustee or agent therefor; and prior to the
receipt of any such written notice, the Trustee shall, subject to Article Seven,
be entitled to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 12.06 at
least two Business Days prior to the date upon which by the terms of this
Indenture any moneys shall become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Security), then,
regardless of anything herein to the contrary, the Trustee shall have full power
and authority to receive any moneys from any Guarantor and to apply the same to
the purpose for which they were received, and shall not be affected by any
notice to the contrary which may be received by it on or after such prior date.
Nothing contained in this Section 12.06 shall limit the right of the holders of
Guarantor Senior Indebtedness to recover payments as contemplated by Section
12.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be
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a holder of any Guarantor Senior Indebtedness (or a trustee on behalf of, or
other representative of, such holder) to establish that such notice has been
given by a holder of such Guarantor Senior Indebtedness or a trustee or
representative on behalf of any such holder.
In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Twelve, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article Twelve, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article Twelve, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Guarantor Senior Indebtedness
of such Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article Twelve.
SECTION 12.08. Trustee's Relation to Guarantor Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the rights
set forth in this Article Twelve with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other holder of Guarantor Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee or any
Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Twelve, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Section 12.03(b)). The Trustee shall not be
liable to any such holders if the Trustee shall in good faith mistakenly pay
over or distribute to Holders of Securities or to the Company or to any other
person cash, property or securities to which any holders of Guarantor Senior
Indebtedness shall be entitled by virtue of this Article Twelve or otherwise.
SECTION 12.09. Subordination Rights Not Impaired by Acts or Omissions of the
Guarantors or Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act, in good faith, by any such
holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which
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any such holder may have or otherwise be charged with. The provisions of this
Article Twelve are intended to be for the benefit of, and shall be enforceable
directly by, the holders of Guarantor Senior Indebtedness.
SECTION 12.10. Holders Authorize Trustee To Effectuate Subordination of
Guarantee.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article Twelve, and appoints the Trustee his attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, total
liquidation or reorganization of any Guarantor (whether in bankruptcy,
insolvency, receivership, reorganization or similar proceedings or upon an
assignment for the benefit of creditors or otherwise) tending towards
liquidation of the business and assets of such Guarantor, the filing of a claim
for the unpaid balance of its or his Securities in the form required in those
proceedings.
SECTION 12.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or interest
on the Securities by reason of any provision of this Article Twelve shall not be
construed as preventing the occurrence of an Event of Default specified in
clauses (a), (b) or (c) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article Twelve shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Guarantee Subordination Provisions.
Without in any way limiting the generality of Section 12.09, the
holders of Guarantor Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article
Twelve or the obligations hereunder of the Holders of the Securities to the
holders of Guarantor Senior Indebtedness, do any one or more of the following:
(a) change the manner, place or terms of payment or extend the time of payment
of, or renew or alter, Guarantor Senior Indebtedness or any instrument
evidencing the same or any agreement under which Guarantor Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Guarantor Senior
Indebtedness; (c) release any Person liable in any manner for the collection of
Guarantor Senior Indebtedness; and (d) exercise or refrain from exercising any
rights against any Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article Twelve or elsewhere in this
Indenture shall prevent (i) a Guarantor, except under the conditions described
in Sections 12.02 and 12.03, from making payments of principal of and interest
on the Securities, or from depositing with the Trustee any moneys for such
payments, or (ii) the application by the Trustee of any moneys deposited with it
for the purpose of making such payments of principal of and interest on the
Securities, to the holders entitled thereto unless at least two Business Days
prior to the date upon which such payment becomes due and payable, the Trustee
shall have received the
-80-
written notice provided for in Section 12.02(b) or in Section 12.06. The
Guarantors shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of such Guarantor.
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that are
required to be a part of this Indenture, and shall, to the extent applicable, be
governed by such provisions. If any provision of this Indenture modifies any
TIA provision that may be so modified, such TIA provision shall be deemed to
apply to this Indenture as so modified. If any provision of this Indenture
excludes any TIA provision that may be so excluded, such TIA provision shall be
excluded from this Indenture.
The provisions of TIA (S)(S) 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included unless expressly
excluded by this Indenture) are a part of and govern this Indenture, whether or
not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in writing
and delivered in person, by facsimile and confirmed by overnight courier, or
mailed by first-class mail addressed as follows:
if to the Company or to the Guarantors:
St. Xxxx Knits International, Incorporated
00000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
with a copy, which shall not constitute notice, to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
-81-
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx - Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Trustee Administration
Facsimile: (000) 000-0000
Telephone: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed, first-class, postage prepaid, to a
Holder including any notice delivered in connection with TIA (S) 310(b), TIA (S)
313(c), TIA (S) 314(a) and TIA (S) 315(b), shall be mailed to him at his address
as set forth on the Security register and shall be sufficiently given to him if
so mailed within the time prescribed. To the extent required by the TIA, any
notice or communication shall also be mailed to any Person described in TIA (S)
313(c).
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. Except for a
notice to the Trustee, which is deemed given only when received, if a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders
with respect to their rights under this Indenture or the Securities. The
Company, the Trustee, the Registrar and any other person shall have the
protection of TIA (S) 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
or refrain from taking any action under this Indenture, the Company shall
furnish to the Trustee at the request of the Trustee:
(1) an Officers' Certificate in form and substance 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
(2) an Opinion of Counsel in form and substance satisfactory to the
Trustee stating that, in the opinion of such counsel, all such conditions
precedent have been complied with; provided, however, that with respect to
matters of fact an Opinion of Counsel may rely on an Officers' Certificate
or certificates of public officials.
-82-
SECTION 13.05. Statements Required in Certificate.
Each certificate with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate has read
such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements contained in such certificate
are based;
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 13.06. Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Paying Agent or Registrar may make reasonable rules for its
functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture, the
Securities and the Security Guarantees without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
SECTION 13.08. No Recourse Against Others.
A director, officer, employee, incorporator, stockholder, general or
limited partner or member, as such, of the Company or any of its Affiliates
shall not have any liability for any obligations of the Company or any of its
Affiliates under the Securities, the Guarantee of such Guarantor or this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities and the Guarantees.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of each Guarantor in this Indenture
and such Guarantor's Guarantee shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 13.10. Counterpart 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.
-83-
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or in the
Guarantee shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, and a Holder shall have no claim therefor against any party
hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary. Any such indenture, loan or debt
agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a not a Business Day at a place of payment,
payment may be made at that place on the next succeeding Business Day, and no
interest shall accrue for the intervening period.
[Signature Pages Follow]
S-1
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the date first written above.
ST. XXXX KNITS INTERNATIONAL, INCORPO-
RATED
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
ST. XXXX KNITS, INC.,
ST. XXXX TRADEMARKS, INC.,
ST. XXXX ITALY, INC.,
as Guarantors
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
ST. XXXX XXXX, LLC, as Guarantor
By: St. Xxxx Knits, Inc., its sole member
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ Xxxxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Assistant Treasurer
EXHIBIT A
---------
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE ISSUER OR ANY
AFFILIATE OF THE ISSUER WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A
PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND
SALES THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S
UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT OF
THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE ISSUER'S AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND, IN THE CASE OF THE
FOREGOING CLAUSE (D), A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE
OTHER SIDE OF THIS SECURITY COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE
ISSUER AND THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.
A-1
ST. XXXX KNITS INTERNATIONAL, INCORPORATED
12 1/2% Senior Subordinated Note
due 2009, Series A
CUSIP No.:[ ]
No. [ ] $[ ]
ST. XXXX KNITS INTERNATIONAL, INCORPORATED, a Delaware corporation
(the "Company", which term includes any successor corporation), for value
-------
received promises to pay to [ ] or registered assigns, the principal sum
of [ ] Dollars, on July 1, 2009.
Interest Payment Dates: January 1 and July 1, commencing on January
1, 2000.
Interest Record Dates: December 15 and June 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
ST. XXXX KNITS INTERNATIONAL, INCORPO-
RATED
By:____________________________________
Name:
Title:
By:____________________________________
Name:
Title:
Dated: [ ]
A-2
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12 1/2% Senior Subordinated Notes due 2009, Series
A, described in the within-mentioned Indenture.
Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By:__________________________________
Authorized Signatory
A-3
(REVERSE OF SECURITY)
ST. XXXX KNITS INTERNATIONAL, INCORPORATED
12 1/2% Senior Subordinated Note
due 2009, Series A
1. Interest.
--------
ST. XXXX KNITS INTERNATIONAL, INCORPORATED, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
-------
Security at the rate per annum shown above. Cash interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from July 7, 1999. The Company will pay interest semi-
annually in arrears on each Interest Payment Date, commencing January 1, 2000.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities.
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
-----------------
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
--------------------------
Initially, The Bank of New York (the "Trustee") will act as Paying
-------
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
------------------------
The Company issued the Securities under an Indenture, dated as of July
7, 1999 (the "Indenture"), by and among the Company, the Guarantors and the
---------
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. This Security is one of a duly authorized issue of
Securities of the Company designated as its 12 1/2% Senior Subordinated Notes
due 2009, Series A (the "Initial Securities"), limited (except as otherwise
------------------
provided in the Indenture) in aggregate principal amount to
A-4
$100,000,000, which may be issued under the Indenture. The Securities include
the Initial Securities, the Private Exchange Securities (as defined in the
Indenture) and the Unrestricted Securities (as defined below) issued in exchange
for the Initial Securities pursuant to the Registration Rights Agreement. The
Initial Securities, the Private Exchange Securities and the Unrestricted
Securities are treated as a single class of securities under the Indenture. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
(S)(S) 77aaa-77bbbb) (the "TIA"), as in effect on the date of the Indenture
---
(except as otherwise indicated in the Indenture) until such time as the
Indenture is qualified under the TIA, and thereafter as in effect on the date on
which the Indenture is qualified under the TIA. Notwithstanding anything to the
contrary herein, the Securities are subject to all such terms, and holders of
Securities are referred to the Indenture and the TIA for a statement of them.
The Securities are general unsecured obligations of the Company. The Securities
are subordinated in right of payment to all Senior Indebtedness of the Company
to the extent and in the manner provided in the Indenture. Each Holder of a
Security, by accepting a Security, agrees to such subordination, authorizes the
Trustee to give effect to such subordination and appoints the Trustee as
attorney-in-fact for such purpose.
Payment on the Securities is guaranteed (each, a "Guarantee"), on a
---------
senior subordinated basis, jointly and severally, by each Domestic Restricted
Subsidiary of the Company existing on the Issue Date (each, a "Guarantor")
---------
pursuant to Article Eleven and Article Twelve of the Indenture. In addition, in
certain circumstances subject to certain exceptions, the Indenture requires the
Company to cause each Restricted Subsidiary formed, created or acquired after
the Issue Date to become a party to the Indenture as a Guarantor and guarantee
payment on the Securities pursuant to Article Eleven and Article Twelve of the
Indenture. In certain circumstances, the Guarantees may be released.
5. Optional Redemption.
-------------------
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 1, 2004, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the Redemption Date (subject to the
right of holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the 12-
month period commencing on July 1 of the years indicated below:
Year Percentage
---- ----------
2004.......................... 106.250%
2005.......................... 104.688%
2006.......................... 103.125%
2007.......................... 101.563%
2008 and thereafter........... 100.000%
6. Optional Redemption upon Public Equity Offerings.
----------------------------------------------------
In addition, at any time and from time to time on or prior to July 1,
2002, the Company may redeem in the aggregate up to 35% of the originally issued
aggregate principal amount of the Securities with the net cash proceeds of one
or more Public Equity Offerings by the Company at a redemption price in cash
equal to 112.500% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Interest Record Date to receive interest due
on the relevant Interest Payment Date); provided, however, that at least 65% of
the originally issued aggregate principal amount of the Securities must remain
outstanding immediately after giving effect to
A-5
each such redemption (excluding any Securities held by the Company or any of its
Affiliates). Notice of any such redemption must be given within 60 days after
the date of the closing of the relevant Public Equity Offering of the Company.
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
8. Change of Control Offer.
-----------------------
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall, within 45
days after the Change of Control Date, make an Offer to Purchase all Securities
then outstanding at a purchase price in cash equal to 101% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, if any, to
the Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
-----------------------------------
The Company is, subject to certain conditions and certain exceptions,
obligated to make an Offer to Purchase Securities at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date (subject to the right of Holders of record on the
Interest Relevant Record Date to receive interest due on the relevant Interest
Payment Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
A-6
11. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at its written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantees, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guarantees to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets and to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications
and exceptions. The Company must report annually to the Trustee on compliance
with such limitations.
16. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
or
A-7
power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
--------------------------
No director, officer, employee, incorporator, stockholder, general or
limited partner or member, as such, of the Company or any of its Affiliates
shall have any liability for any obligation of the Company or any of its
Affiliates under the Securities, the Guarantee of such Guarantor or the
Indenture or for any claim based on, in respect of or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities and the Guarantees.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Registration Rights.
-------------------
Pursuant to the Registration Rights Agreement, the Company will be
obligated upon the occurrence of certain events to consummate an exchange offer
pursuant to which the Holder of this Security shall have the right to exchange
this Security for a 12 1/2% Senior Subordinated Note due 2009, Series B, of the
Company (an "Unrestricted Security") which has been registered under the
---------------------
Securities Act, in like principal amount and having terms identical in all
material respects to the Initial Securities. The Holders shall be entitled to
receive certain liquidated damages in the event such exchange offer is not
consummated and upon certain other conditions, all pursuant to and in accordance
with the terms of the Registration Rights Agreement.
A-8
23. Governing Law.
-------------
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without giving effect to applicable
principles of conflicts of law to the extent that the application of the law of
another jurisdiction would be required thereby.
A-9
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in the Security
upon which this notation is endorsed) hereby unconditionally guarantees on a
senior subordinated basis (such Guarantee by the Guarantor being referred to
herein as the "Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article Eleven and Article Twelve of the Indenture, and reference is hereby made
to such Indenture for the precise terms of the Guarantee therein made.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set forth
in the Indenture.
ST. XXXX KNITS, INC.
ST. XXXX TRADEMARKS, INC.
ST. XXXX ITALY, INC.
By:___________________________________
Name:
Title:
ST. XXXX XXXX, LLC
By: St. Xxxx Knits, Inc., its sole member
By:___________________________________
Name:
Title:
ASSIGNMENT FORM
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
--------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed:___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: ________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.12 of the Indenture, check the appropriate
box:
Section 4.05 [ ]
Section 4.12 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.12 of the Indenture, state the
amount: $_____________
Dated:___________________ Your Signature: ___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: _________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
EXHIBIT B
---------
[FORM OF SERIES B SECURITY]
ST. XXXX KNITS INTERNATIONAL, INCORPORATED
12 1/2% Senior Subordinated Note
due 2009, Series B
CUSIP No.:[ ]
No. [ ] $[ ]
ST. XXXX KNITS INTERNATIONAL, INCORPORATED, a Delaware corporation
(the "Company", which term includes any successor corporation), for value
-------
received promises to pay to [ ] or registered assigns, the principal sum
of [ ] Dollars, on July 1, 2009.
Interest Payment Dates: January 1 and July 1, commencing on [ ].
Interest Record Dates: December 15 and June 15.
Reference is made to the further provisions of this Security contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Security to be signed
manually or by facsimile by its duly authorized officer.
ST. XXXX KNITS INTERNATIONAL, INCORPO-
RATED
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Dated: [ ]
B-1
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the 12 1/2% Senior Subordinated Notes due 2009, Series
B, described in the within-mentioned Indenture.
Dated: [ ]
THE BANK OF NEW YORK,
as Trustee
By:______________________________________
Authorized Signatory
B-2
(REVERSE OF SECURITY)
ST. XXXX KNITS INTERNATIONAL, INCORPORATED
12 1/2% Senior Subordinated Note
due 2009, Series B
1. Interest.
--------
ST. XXXX KNITS INTERNATIONAL, INCORPORATED, a Delaware corporation
(the "Company"), promises to pay interest on the principal amount of this
-------
Security at the rate per annum shown above. Cash interest on the Securities
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from [ ]. The Company will pay interest semi-
annually in arrears on each Interest Payment Date, commencing [ ].
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
The Company shall pay interest on overdue principal from time to time
on demand and on overdue installments of interest (without regard to any
applicable grace periods) to the extent lawful from time to time on demand, in
each case at the rate borne by the Securities
2. Method of Payment.
-----------------
The Company shall pay interest on the Securities (except defaulted
interest) to the persons who are the registered Holders at the close of business
on the Interest Record Date immediately preceding the Interest Payment Date even
if the Securities are canceled on registration of transfer or registration of
exchange after such Interest Record Date. Holders must surrender Securities to
a Paying Agent to collect principal payments. The Company shall pay principal
and interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
-----------------
the Company may pay principal and interest by wire transfer of Federal funds
(provided that the Paying Agent shall have received wire instructions on or
prior to the relevant Interest Record Date), or interest by check payable in
such U.S. Legal Tender. The Company may deliver any such interest payment to
the Paying Agent or to a Holder at the Holder's registered address.
3. Paying Agent and Registrar.
--------------------------
Initially, The Bank of New York (the "Trustee") will act as Paying
-------
Agent and Registrar. The Company may change any Paying Agent or Registrar
without notice to the Holders. The Company or any of its Subsidiaries may,
subject to certain exceptions, act as Registrar.
4. Indenture and Guarantees.
------------------------
The Company issued the Securities under an Indenture, dated as of July
7, 1999 (the "Indenture"), by and among the Company, the Guarantors and the
---------
Trustee. Capitalized terms herein are used as defined in the Indenture unless
otherwise defined herein. This Security is one of a duly authorized issue of
Securities of the Company designated as its 12 1/2% Senior Subordinated Notes
due 2009, Series B (the "Unrestricted Securities"), limited (except as otherwise
-----------------------
provided in the Indenture) in aggregate principal
B-3
amount to $100,000,000, which may be issued under the Indenture. The Securities
include the 12 1/2% Senior Subordinated Notes due 2009, Series A (the "Initial
-------
Securities"), the Private Exchange Securities (as defined in the Indenture) and
----------
the Unrestricted Securities. The Initial Securities, the Private Exchange
Securities and the Unrestricted Securities are treated as a single class of
securities under the Indenture. The terms of the Securities include those stated
in the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) (the "TIA"), as in effect
---
on the date of the Indenture (except as otherwise indicated in the Indenture)
until such time as the Indenture is qualified under the TIA, and thereafter as
in effect on the date on which the Indenture is qualified under the TIA.
Notwithstanding anything to the contrary herein, the Securities are subject to
all such terms, and holders of Securities are referred to the Indenture and the
TIA for a statement of them. The Securities are general unsecured obligations of
the Company. The Securities are subordinated in right of payment to all Senior
Indebtedness of the Company to the extent and in the manner provided in the
Indenture. Each Holder of a Security, by accepting a Security, agrees to such
subordination, authorizes the Trustee to give effect to such subordination and
appoints the Trustee as attorney-in-fact for such purpose.
Payment on the Securities is guaranteed (each, a "Guarantee"), on a
---------
senior subordinated basis, jointly and severally, by each Domestic Restricted
Subsidiary of the Company existing on the Issue Date (each, a "Guarantor")
---------
pursuant to Article Eleven and Article Twelve of the Indenture. In addition, in
certain circumstances subject to certain exceptions, the Indenture requires the
Company to cause each Restricted Subsidiary formed, created or acquired after
the Issue Date to become a party to the Indenture as a Guarantor and guarantee
payment on the Securities pursuant to Article Eleven and Article Twelve of the
Indenture. In certain circumstances, the Guarantees may be released.
5. Optional Redemption.
-------------------
The Securities will be redeemable at the option of the Company, in
whole or in part, at any time on or after July 1, 2004, at the redemption prices
(expressed as a percentage of principal amount) set forth below, plus accrued
and unpaid interest thereon, if any, to the Redemption Date (subject to the
right of holders of record on the relevant Interest Record Date to receive
interest due on the relevant Interest Payment Date) if redeemed during the 12-
month period commencing on July 1 of the years indicated below:
Year Percentage
---- ----------
2004................................ 106.250%
2005................................ 104.688%
2006................................ 103.125%
2007................................ 101.563%
2008 and thereafter................. 100.000%
6. Optional Redemption upon Public Equity Offerings.
----------------------------------------------------
In addition, at any time and from time to time on or prior to July 1,
2002, the Company may redeem in the aggregate up to 35% of the originally issued
aggregate principal amount of the Securities with the net cash proceeds of one
or more Public Equity Offerings by the Company at a redemption price in cash
equal to 112.500% of the principal amount thereof, plus accrued and unpaid
interest thereon, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Interest Record Date to receive interest due
on the relevant Interest Payment Date); provided, however, that at least 65% of
the originally issued aggregate principal amount of the Securities must remain
outstanding immediately after giving effect to
B-4
each such redemption (excluding any Securities held by the Company or any of
its Affiliates). Notice of any such redemption must be given within 60 days
after the date of the closing of the relevant Public Equity Offering of the
Company.
7. Notice of Redemption.
--------------------
Notice of redemption will be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at its registered address. The Trustee may select for
redemption portions of the principal amount of Securities that have
denominations equal to or larger than $1,000 principal amount. Securities and
portions of them the Trustee so selects shall be in amounts of $1,000 principal
amount or integral multiples thereof.
If any Security is to be redeemed in part only, the notice of
redemption that relates to such Security shall state the portion of the
principal amount thereof to be redeemed. A new Security in a principal amount
equal to the unredeemed portion thereof will be issued in the name of the Holder
thereof upon cancellation of the original Security. On and after the Redemption
Date, interest will cease to accrue on Securities or portions thereof called for
redemption so long as the Company has deposited with the Paying Agent for the
Securities funds in satisfaction of the redemption price pursuant to the
Indenture and the Paying Agent is not prohibited from paying such funds to the
Holders pursuant to the terms of the Indenture.
8. Change of Control Offer.
-----------------------
Following the occurrence of a Change of Control (the date of such
occurrence being the "Change of Control Date"), the Company shall within 45 days
after the Change of Control Date, make an Offer to Purchase all Securities then
outstanding at a purchase price in cash equal to 101% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Purchase Date (subject to the right of Holders of record on the relevant
Interest Record Date to receive interest due on the relevant Interest Payment
Date).
9. Limitation on Disposition of Assets.
-----------------------------------
The Company is, subject to certain conditions and certain exceptions,
obligated to make an Offer to Purchase Securities at a purchase price equal to
100% of the principal amount thereof, plus accrued and unpaid interest thereon,
if any, to the Purchase Date (subject to the right of Holders of record on the
Interest Relevant Record Date to receive interest due on the relevant Interest
Payment Date) with the proceeds of certain asset dispositions.
10. Denominations; Transfer; Exchange.
---------------------------------
The Securities are in registered form, without coupons, in
denominations of $1,000 and integral multiples of $1,000. A Holder shall
register the transfer of or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay certain transfer
taxes or similar governmental charges payable in connection therewith as
permitted by the Indenture. The Registrar need not register the transfer of or
exchange any Securities or portions thereof selected for redemption, except the
unredeemed portion of any security being redeemed in part.
B-5
11. Persons Deemed Owners.
---------------------
The registered Holder of a Security shall be treated as the owner of
it for all purposes.
12. Unclaimed Funds.
---------------
If funds for the payment of principal or interest remain unclaimed for
two years, the Trustee and the Paying Agent will repay the funds to the Company
at its written request. After that, all liability of the Trustee and such
Paying Agent with respect to such funds shall cease.
13. Legal Defeasance and Covenant Defeasance.
----------------------------------------
The Company and the Guarantors may be discharged from their
obligations under the Indenture, the Securities and the Guarantees, except for
certain provisions thereof, and may be discharged from obligations to comply
with certain covenants contained in the Indenture, the Securities and the
Guarantees, in each case upon satisfaction of certain conditions specified in
the Indenture.
14. Amendment; Supplement; Waiver.
-----------------------------
Subject to certain exceptions, the Indenture, the Securities and the
Guarantees may be amended or supplemented with the written consent of the
Holders of at least a majority in aggregate principal amount of the Securities
then outstanding, and any existing Default or Event of Default or compliance
with any provision may be waived with the consent of the Holders of a majority
in aggregate principal amount of the Securities then outstanding. Without
notice to or consent of any Holder, the parties thereto may amend or supplement
the Indenture, the Securities and the Guarantees to, among other things, cure
any ambiguity, defect or inconsistency, provide for uncertificated Securities in
addition to or in place of certificated Securities or comply with any
requirements of the SEC in connection with the qualification of the Indenture
under the TIA, or make any other change that does not materially adversely
affect the rights of any Holder of a Security.
15. Restrictive Covenants.
---------------------
The Indenture contains certain covenants that, among other things,
limit the ability of the Company and the Restricted Subsidiaries to make
restricted payments, to incur indebtedness, to create liens, to sell assets, to
permit restrictions on dividends and other payments by Restricted Subsidiaries
to the Company, to consolidate, merge or sell all or substantially all of its
assets and to engage in transactions with affiliates or certain other related
persons. The limitations are subject to a number of important qualifications
and exceptions. The Company must report annually to the Trustee on compliance
with such limitations.
16. Defaults and Remedies.
---------------------
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in aggregate principal amount of Securities then
outstanding may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture, the Securities or the Guarantees except as
provided in the Indenture. The Trustee is not obligated to enforce the
Indenture, the Securities or the Guarantees unless it has received indemnity
satisfactory to it. The Indenture permits, subject to certain limitations
therein provided, Holders of a majority in aggregate principal amount of the
Securities then outstanding to direct the Trustee in its exercise of any trust
B-6
or power. The Trustee may withhold from Holders of Securities notice of certain
continuing Defaults or Events of Default if it determines that withholding
notice is in their interest.
17. Trustee Dealings with Company.
-----------------------------
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise deal
with the Company, its Subsidiaries or their respective Affiliates as if it were
not the Trustee.
18. No Recourse Against Others.
--------------------------
No, director, officer, employee, incorporator, stockholder, general or
limited partner or member, as such, of the Company or any of its Affiliates
shall have any liability for any obligation of the Company or any of its
Affiliates under the Securities, the Guarantee of such Guarantor or the
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issuance of the Securities and the Guarantees.
19. Authentication.
--------------
This Security shall not be valid until the Trustee or authenticating
agent signs the certificate of authentication on this Security.
20. Abbreviations and Defined Terms.
-------------------------------
Customary abbreviations may be used in the name of a Holder of a
Security or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
21. CUSIP Numbers.
-------------
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders of the Securities. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identification numbers
printed hereon.
22. Governing Law.
-------------
The laws of the State of New York shall govern the Indenture, this
Security and any Guarantee thereof without giving effect to applicable
principles of conflicts of law to the effect that the application of the law of
another jurisdiction would be required thereby.
B-7
[FORM OF SECURITY GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantor (as defined in the Indenture referred to in the Security
upon which this notation is endorsed) hereby unconditionally guarantees on a
senior subordinated basis (such Guarantee by the Guarantor being referred to
herein as the "Guarantee") the due and punctual payment of the principal of,
premium, if any, and interest on the Securities, whether at maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal, premium and interest on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee, all in accordance with the terms set forth in Article Eleven of the
Indenture.
The obligations of the Guarantor to the Holders of Securities and to
the Trustee pursuant to the Guarantee and the Indenture are expressly set forth,
and are expressly subordinated and subject in right of payment to the prior
payment in full of all Guarantor Senior Indebtedness (as defined in the
Indenture) of such Guarantor, to the extent and in the manner provided in
Article Eleven and Article Twelve of the Indenture, and reference is hereby made
to such Indenture for the precise terms of the Guarantee therein made.
This Security Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Securities upon which
this Security Guarantee is noted shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized officers.
This Security Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law to the extent that the application of the law of another
jurisdiction would be required thereby.
This Security Guarantee is subject to release upon the terms set forth
in the Indenture.
ST. XXXX KNITS, INC.
ST. XXXX TRADEMARKS, INC.
ST. XXXX ITALY, INC.
By:______________________________________
Name:
Title:
ST. XXXX XXXX, LLC
By: St. Xxxx Knits, LLC, its sole member
By:______________________________________
Name:
Title:
ASSIGNMENT FORM
I or we assign and transfer this Security to
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type name, address and zip code of assignee or transferee)
--------------------------------------------------------------------------------
(Insert Social Security or other identifying number of assignee or transferee)
and irrevocably appoint ________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:___________________ Signed: ___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: __________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.05 or Section 4.12 of the Indenture, check the appropriate
box:
Section 4.05 [ ]
Section 4.12 [ ]
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.05 or Section 4.12 of the Indenture, state the
amount: $_____________
Dated:_________________ Your Signature: ___________________________________
(Signed exactly as name appears
on the other side of this Security)
Signature Guarantee: __________________________________________________________
Participant in a recognized Signature Guarantee
Medallion Program (or other signature guarantor
program reasonably acceptable to the Trustee)
EXHIBIT C
---------
FORM OF LEGEND FOR GLOBAL SECURITIES
Any Global Security authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS
SECURITY AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE
DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
SECTION 2.16 OF THE INDENTURE.
C-1
EXHIBIT D
---------
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
Re: 12 1/2% Senior Subordinated Notes due 2009
(the "Securities"), of St. Xxxx Knits International, Incorporated
-----------------------------------------------------------------
This Certificate relates to $_______ principal amount of Securities
held in the form of* ___ a beneficial interest in a Global Security or* _______
Physical Securities by ______ (the "Transferor").
The Transferor:*
[_] has requested by written order that the Registrar deliver in exchange
for its beneficial interest in the Global Security held by the Depositary a
Physical Security or Physical Securities in definitive, registered form of
authorized denominations and an aggregate number equal to its beneficial
interest in such Global Security (or the portion thereof indicated above); or
[_] has requested that the Registrar by written order to exchange or
register the transfer of a Physical Security or Physical Securities.
In connection with such request and in respect of each such Security,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Securities and the restrictions on
transfers thereof as provided in Section 2.16 of such Indenture, and that the
transfer of the Securities does not require registration under the Securities
Act of 1933, as amended (the "Act"), because*:
[_] Such Security is being acquired for the Transferor's own account,
without transfer (in satisfaction of Section 2.16 of the Indenture).
[_] Such Security is being transferred to a "qualified institutional
buyer" (as defined in Rule 144A under the Act), in reliance on Rule 144A.
[_] Such Security is being transferred to an institutional "accredited
investor" (within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule
501 under the Act) which delivers a certificate to the Trustee in the form of
Exhibit E to the Indenture. [An Opinion of Counsel to the effect that such
---------
transfer does not require registration under the Securities Act accompanies this
certification.]
[_] Such Security is being transferred in reliance on Rule 144 under the
Act.
[_] Such Security is being transferred in reliance on Regulation S under
the Act.
[_] Such Security is being transferred in reliance on and in compliance
with an exemption from the registration requirements of the Act other than Rule
144A or Rule 144 under the Act to a person other than an institutional
"accredited investor." [An Opinion of Counsel to the effect that such transfer
does not require registration under the Securities Act accompanies this
certification.]
________________________________
[INSERT NAME OF TRANSFEROR]
By: __________________________
[Authorized Signatory]
Date: _____________
*Check applicable box.
D-1
EXHIBIT E
---------
Form of Transferee Letter of Representation
-------------------------------------------
The Bank of New York
000 Xxxxxxx Xxxxxx - Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Trustee Administration
Dear Sirs:
This certificate is delivered to request a transfer of $________
principal amount of the 12 1/2% Senior Subordinated Notes due 2009 (the "Notes")
of St. Xxxx Knits International, Incorporated (the "Company"). Upon transfer,
the Notes would be registered in the name of the new beneficial owner as
follows:
Name:__________________________________
Address:_______________________________
Taxpayer ID Number:____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933 (the "Securities
Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Notes, and we are acquiring the Notes not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act. We
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Notes and we
invest in or purchase securities similar to the Notes in the normal course of
our business. We and any accounts for which we are acting are each able to bear
the economic risk of our or its investment.
2. We understand that the Notes have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes prior to the date which is two years after the later of the
date of original issue and the last date on which the Company or any affiliate
of the Company was the owner of such Notes (or any predecessor thereto) (the
"Resale Restriction Termination Date") only (a) to the Company, (b) pursuant to
-----------------------------------
a registration statement which has been declared effective under the Securities
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
---
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) to an institutional "accredited investor" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act that is
purchasing for its own account or for the account of such an institutional
"accredited investor," in each case in a minimum principal amount of Notes of
$250,000, (e) pursuant to offers and sales that occur outside the United States
within the meaning of Regula-
E-1
tion S under the Securities Act or (f) pursuant to any other available exemption
from the registration requirements of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and in compliance with any applicable state securities laws.
The foregoing restrictions on resale will not apply subsequent to the Resale
Restriction Termination Date. If any resale or other transfer of the Notes is
proposed to be made pursuant to clause (d) above prior to the Resale Restriction
Termination Date, the transferor shall deliver a letter from the transferee
substantially in the form of this letter to the Company and the Trustee, which
shall provide, among other things, that the transferee is an institutional
"accredited investor" within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act and that it is acquiring such Notes for investment
purposes and not for distribution in violation of the Securities Act. Each
purchaser acknowledges that the Company and the Trustee reserve the right prior
to any offer, sale or other transfer prior to the Resale Restriction Termination
Date of the Notes pursuant to clause (d), (e) or (f) above to require the
delivery of an opinion of counsel, certificates and/or other information
satisfactory to the Company and the Trustee.
Dated: ______________________ TRANSFEREE: _________________________
By:______________________________________
E-2
EXHIBIT F
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Form of Certificate To Be
Delivered in Connection
with Regulation S Transfers
_______________, ____
The Bank of New York
000 Xxxxxxx Xxxxxx - Xxxxx 00X
Xxx Xxxx, XX 00000
Attention: Corporate Trust Trustee Administration
Re: ST. XXXX KNITS INTERNATIONAL, INCORPORATED (the "Company")
12 1/2% Senior Subordinated Notes due 2009, Series A and
12 1/2% Senior Subordinated Notes due 2009, Series B (the "Securities")
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Ladies and Gentlemen:
In connection with our proposed sale of $____________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the United
States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been
prearranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
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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. Defined terms used herein without
definition have the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By: _________________________
[Authorized Signatory]
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