EXHIBIT 4.13
$150,000,000
XXXXXXXX-VAN HEUSEN CORPORATION
as Issuer
8 1/8% Senior Notes Due May 1, 2013
____________________
INDENTURE
Dated as of May 5, 2003
____________________
SUNTRUST BANK
as Trustee
CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310 (a)(1) 8.10
(a)(2) 8.10
(a)(3) N.A.
(a)(4) N.A.
(b) 8.08; 8.10
(c) N.A.
311 (a) 8.11
(b) 8.11
(c) N.A.
312 (a) 2.05
(b) 11.03
(c) 11.03
313 (a) 8.06
(b)(1) N.A.
(b)(2) 8.06
(c) 8.06; 11.02
(d) 8.06
314 (a) 5.02; 11.02;
5.12
(b) N.A.
(c)(1) 11.04
(c)(2) 11.04
(c)(3) N.A.
(d) N.A.
(e) 11.05
(f) N.A.
315 (a) 8.01
(b) 8.05; 11.02
(c) 8.01
(d) 8.01
(e) 7.11
316 (a)(last sentence) 11.06
(a)(1)(A) 7.05
(a)(1)(B) 7.04
(a)(2) N.A.
(b) 7.07
(c) 7.10
317 (a)(1) 7.08
(a)(2) 7.09
(b) 2.04
318 (a) 11.01
N.A. means Not Applicable.
Note: This Cross-Reference Table shall not, for any
purpose, be deemed to be part of this Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.DEFINITIONS 1
SECTION 1.01.OTHER DEFINITIONS 28
SECTION 1.02.INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT 28
SECTION 1.03.RULES OF CONSTRUCTION 28
ARTICLE 2
THE SECURITIES
SECTION 2.01.FORM AND DATING 29
SECTION 2.02.EXECUTION AND AUTHENTICATION 29
SECTION 2.03.REGISTRAR AND PAYING AGENT 30
SECTION 2.04.PAYING AGENT TO HOLD MONEY IN TRUST 31
SECTION 2.05.HOLDER LISTS 31
SECTION 2.06.TRANSFER AND EXCHANGE 31
SECTION 2.07.REPLACEMENT SECURITIES 31
SECTION 2.08.OUTSTANDING SECURITIES 32
SECTION 2.09.TEMPORARY SECURITIES 32
SECTION 2.10.CANCELLATION 32
SECTION 2.11.DEFAULTED INTEREST 32
SECTION 2.12.CUSIP NUMBERS 33
SECTION 2.13.ISSUANCE OF ADDITIONAL SECURITIES 33
ARTICLE 3
REDEMPTION
SECTION 3.01.NOTICES TO TRUSTEE 34
SECTION 3.02.SELECTION OF SECURITIES TO BE REDEEMED 34
SECTION 3.03.NOTICE OF REDEMPTION 34
SECTION 3.04.EFFECT OF NOTICE OF REDEMPTION 35
SECTION 3.05.DEPOSIT OF REDEMPTION PRICE 35
SECTION 3.06.SECURITIES REDEEMED IN PART 35
i
ARTICLE 4
CHANGE OF CONTROL
SECTION 4.01.REPURCHASE RIGHT 35
SECTION 4.02.NOTICES; METHOD OF EXERCISING
REPURCHASE RIGHTS, ETC. 36
ARTICLE 5
COVENANTS
SECTION 5.01.PAYMENT OF SECURITIES 37
SECTION 5.02.SEC REPORTS 37
SECTION 5.03.LIMITATION ON INDEBTEDNESS 37
SECTION 5.04.LIMITATION ON RESTRICTED PAYMENTS 40
SECTION 5.05.LIMITATION ON RESTRICTIONS ON
DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES 43
SECTION 5.06.LIMITATION ON SALES OF ASSETS AND
SUBSIDIARY STOCK 44
SECTION 5.07.LIMITATION ON AFFILIATE TRANSACTIONS 46
SECTION 5.08.LIMITATION ON THE SALE OR ISSUANCE OF
CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES 48
SECTION 5.09.LIMITATION ON LIENS 49
SECTION 5.10.LIMITATION ON SALE/LEASEBACK
TRANSACTIONS 51
SECTION 5.11.FUTURE SUBSIDIARY GUARANTEES 51
SECTION 5.12.COMPLIANCE CERTIFICATE 51
SECTION 5.13.FURTHER INSTRUMENTS AND ACTS 52
SECTION 5.14.COVENANT REMOVAL 52
ARTICLE 6
MERGER AND CONSOLIDATION
SECTION 6.01.WHEN COMPANY MAY MERGE OR TRANSFER
ASSETS 52
SECTION 6.02.WHEN A SUBSIDIARY GUARANTOR MAY MERGE
OR TRANSFER ASSETS 53
ARTICLE 7
DEFAULTS AND REMEDIES
SECTION 0.00.XXXXXX OF DEFAULT 54
SECTION 7.02.ACCELERATION 56
SECTION 7.03.OTHER REMEDIES 56
SECTION 7.04.WAIVER OF PAST DEFAULTS 56
SECTION 7.05.CONTROL BY MAJORITY 56
SECTION 7.06.LIMITATION ON SUITS 57
SECTION 7.07.RIGHTS OF HOLDERS TO RECEIVE PAYMENT 57
ii
SECTION 7.08.COLLECTION SUIT BY TRUSTEE 57
SECTION 7.09.TRUSTEE MAY FILE PROOFS OF CLAIM 57
SECTION 7.10.PRIORITIES 58
SECTION 7.11.UNDERTAKING FOR COSTS 58
SECTION 7.12.WAIVER OF STAY OR EXTENSION LAWS 58
ARTICLE 8
TRUSTEE
SECTION 8.01.DUTIES OF TRUSTEE 59
SECTION 8.02.RIGHTS OF TRUSTEE 60
SECTION 8.03.INDIVIDUAL RIGHTS OF TRUSTEE 60
SECTION 8.04.TRUSTEE'S DISCLAIMER 60
SECTION 8.05.NOTICE OF DEFAULTS 60
SECTION 8.06.REPORTS BY TRUSTEE TO HOLDERS 61
SECTION 8.07.COMPENSATION AND INDEMNITY 61
SECTION 8.08.REPLACEMENT OF TRUSTEE 62
SECTION 8.09.SUCCESSOR TRUSTEE BY MERGER 63
SECTION 8.10.ELIGIBILITY; DISQUALIFICATION 63
SECTION 8.11.PREFERENTIAL COLLECTION OF CLAIMS
AGAINST COMPANY 63
ARTICLE 9
DISCHARGE OF INDENTURE; DEFEASANCE
SECTION 9.01.DISCHARGE OF LIABILITY ON SECURITIES;
DEFEASANCE 63
SECTION 9.02.CONDITIONS TO DEFEASANCE 64
SECTION 9.03.APPLICATION OF TRUST MONEY 65
SECTION 9.04.REPAYMENT TO COMPANY 66
SECTION 9.05.INDEMNITY FOR GOVERNMENT OBLIGATIONS 66
SECTION 9.06.REINSTATEMENT 66
ARTICLE 10
AMENDMENTS
SECTION 10.01. WITHOUT CONSENT OF HOLDERS 66
SECTION 10.02. WITH CONSENT OF HOLDERS 67
SECTION 10.03. COMPLIANCE WITH TRUST INDENTURE ACT 68
SECTION 10.04. REVOCATION AND EFFECT OF CONSENTS AND WAIVERS 68
SECTION 10.05. NOTATION ON OR EXCHANGE OF SECURITIES 68
SECTION 10.06. TRUSTEE TO SIGN AMENDMENTS 69
SECTION 10.07. PAYMENT FOR CONSENT 69
iii
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS 69
SECTION 11.02. NOTICES 69
SECTION 11.03.COMMUNICATION BY HOLDERS WITH OTHER HOLDERS 70
SECTION 11.04.CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT 70
SECTION 11.05.STATEMENTS REQUIRED IN CERTIFICATE OR OPINION 70
SECTION 11.06. WHEN SECURITIES DISREGARDED 71
SECTION 11.07.RULES BY TRUSTEE, PAYING AGENT AND XXXXXXXXX 00
SECTION 11.08. LEGAL HOLIDAYS 71
SECTION 11.09. GOVERNING LAW 71
SECTION 11.10. NO RECOURSE AGAINST OTHERS 71
SECTION 11.11. SUCCESSORS 72
SECTION 11.12. MULTIPLE ORIGINALS 72
SECTION 11.13. TABLE OF CONTENTS; HEADINGS 72
Rule 144A/Regulation S Appendix
Exhibit 1 - Form of Initial Security
Exhibit A - Form of Exchange Security or Private Exchange Security
iv
INDENTURE, dated as of May 5, 2002,
among Xxxxxxxx-Van Heusen Corporation, a
Delaware corporation (the "Company"),
the Subsidiary Guarantors, if any, from
time to time party hereto and SunTrust
Bank, a state banking association, as
Trustee (the "Trustee").
Each party agrees as follows for the benefit of
the other parties and for the equal and ratable benefit of
the Holders of the Company's Initial Securities, Exchange
Securities and Private Exchange Securities (collectively,
the "Securities" or "Notes"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means:
(1) any property, plant or equipment used in a Related
Business;
(2) the Capital Stock of a Person that becomes a Restricted
Subsidiary as a result of the acquisition of such Capital
Stock by the Company or another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any
Person that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary
described in clause (2) or (3) above is primarily engaged in
a Related Business.
"Additional Securities" means, subject to the
Company's compliance with Section 5.03, any additional 8 1/8%
Senior Notes due May 1, 2013 issued from time to time after
the Issue Date under the terms of this Indenture (other than
pursuant to Section 2.06, 2.07, 2.09, 3.06 or 10.05 of this
Indenture or Section 2.3 of the Appendix and other than
Exchange Securities or Private Exchange Securities issued
pursuant to an exchange offer for other Securities
outstanding under this Indenture).
"Affiliate" of any specified Person means any
other Person, directly or indirectly, controlling or
controlled by or under direct or indirect common control
with such specified Person. For the purposes of this
definition, "control" when used with respect to any Person
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing. For purposes of Section 5.04,
Section 5.06 and Section 5.07 only, "Affiliate" shall also
mean any beneficial owner of Capital Stock representing 10%
or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants
to purchase such Capital Stock (whether or not currently
exercisable).
"Asset Disposition" means (a) an Asset Swap or (b)
any sale, lease, transfer or other disposition (or series of
related sales, leases, transfers or dispositions) by the
Company or any Restricted Subsidiary, including any
disposition by means of a merger, consolidation or similar
transaction (each referred to for the purposes of this
definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary
(other than directors' qualifying shares or shares required
by applicable law to be held by a Person other than the
Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or
line of business of the Company or any Restricted
Subsidiary; or
(3) any other assets of the Company or any Restricted
Subsidiary outside of the ordinary course of business of the
Company or such Restricted Subsidiary
(other than, in the case of clauses (1), (2) and (3) above,
(A) a disposition by a Restricted Subsidiary to the Company
or by the Company or a Restricted Subsidiary to a Restricted
Subsidiary (other than a Securitization Subsidiary);
(B) for purposes of Section 5.06 only, (x) a disposition
that constitutes a Restricted Payment permitted by Section
5.04 or a Permitted Investment and (y) a disposition of all
or substantially all the assets of the Company in accordance
with Article 6;
(C) a disposition of assets with a fair market value of
less than $2.0 million;
(D) disposals of obsolete, damaged or worn out equipment or
property or property that is no longer useful in the conduct
of the Company's business and that, in either case, is
disposed of in the ordinary course of business; and
(E) any disposition of accounts receivable, licensing
royalties and related assets to or of a Securitization
Subsidiary pursuant to a Qualified Securitization
Transaction.
"Asset Swap" means any exchange of property or
assets of the Company or any Restricted Subsidiary
(including shares of Capital Stock of a Restricted
Subsidiary) for property or assets of another Person
(including shares of Capital Stock of a Person whose primary
business is a Related Business) that are intended to be used
by the Company or any Restricted Subsidiary in a Related
Business, including, to the extent
2
necessary to equalize the value of the assets being exchanged,
cash of any party to such asset swap.
"Attributable Debt" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the
present value (discounted at the interest rate borne by the
Notes, compounded 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).
"Average Life" means, as of the date of
determination, with respect to any Indebtedness, the
quotient obtained by dividing:
(1) the sum of the products of the numbers of years from
the date of determination to the dates of each successive
scheduled principal payment of or redemption or similar
payment with respect to such Indebtedness multiplied by the
amount of such payment by
(2) the sum of all such payments.
"Board of Directors" means the Board of Directors
of the Company or any committee thereof duly authorized to
act on behalf of such Board.
"Borrowing Base" means, as of any date of
determination, an amount equal to (x) the sum without
duplication of (1) 80% of the book value of the accounts
receivable of the Company and its Restricted Subsidiaries on
a consolidated basis and (2) 65% of the book value of the
inventory of the Company and its Restricted Subsidiaries on
a consolidated basis, in each case as of the most recently
ended fiscal quarter of the Company preceding the date on
which the Indebtedness is Incurred, less (y) the Foreign
Borrowing Base of any Foreign Restricted Subsidiary to the
extent that Indebtedness of such Foreign Restricted
Subsidiary Incurred under Section 5.03(b)(14)(A) is then
outstanding.
"Business Day" means each day which is not a Legal
Holiday.
"Capital Lease Obligation" means an obligation
that is required to be classified and accounted for as a
capital lease for financial reporting purposes in accordance
with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such
obligation determined in accordance with GAAP; and the
Stated Maturity thereof shall be the date of the last
payment of rent or any other amount due under such lease
prior to the first date upon which such lease may be
terminated by the lessee without payment of a penalty. For
purposes of Section 5.09, a Capital Lease Obligation will be
deemed to be secured by a Lien on the property being leased.
"Capital Stock" of any Person means any and all
shares, interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in
(however designated) equity of such Person, including any
Preferred Stock, but excluding any debt securities
convertible into such equity.
3
"CK Amount" for any period means the Design
Services Purchase Payments (as defined in the CK Purchase
Agreement) paid or payable by the Company or any of its
Subsidiaries to Xx. Xxxxxx Xxxxx or the Xxxxx Heirs (as
defined in the CK Purchase Agreement) for such period
pursuant to the CK Purchase Agreement.
"CK Purchase Agreement" means the Stock Purchase
Agreement, dated as of December 17, 2002, among the Company,
Xxxxxx Xxxxx, Inc., Xxxxxx Xxxxx (Europe), Inc., Xxxxxx
Xxxxx (Europe II) Corp., Xxxxxx Xxxxx Europe S.R.L., CK
Service Corp., Xxxxxx Xxxxx, Xxxxx Xxxxxxxx, Trust for the
Benefit of the Issue of Xxxxxx Xxxxx, Trust for the Benefit
of the Issue of Xxxxx Xxxxxxxx, Xxxxxxxxx Xxxxxxxx-Xxxxxxx
and Xxxxxxxx Xxxxxxxx, as the same may be amended from time
to time.
"Change of Control" means:
(1) any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act), other than one or more
Permitted Holders, is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that for purposes of this clause (1) such 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), directly or indirectly, of more than 50% of the
total voting power of the Voting Stock of the Company; (for
the purposes of this clause (1), such person shall be deemed
to beneficially own any Voting Stock of a Person (the
"specified person") held by any other Person (the "parent
entity"), if such person is the beneficial owner (as defined
above in this clause (1)), directly or indirectly, of more
than 50% of the voting power of the Voting Stock of the
parent entity and the Permitted Holders beneficially own (as
defined in this proviso), directly or indirectly, in the
aggregate a lesser percentage of the voting power of the
Voting Stock of such parent entity and do not have the right
or ability by voting power, contract or otherwise to elect
or designate for election a majority of the board of
directors of the parent entity);
(2) individuals who on the Issue Date constituted the Board
of Directors (together with any new directors whose election
by the Board of Directors or whose nomination for election
by the stockholders 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 on the Issue Date or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
the Board of Directors then in office;
4
(3) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
(4) any merger, consolidation, reorganization, sale or
other similar transaction in connection with which any
holder of the Series B Preferred Stock exercises the right
to deem such transaction a liquidation event pursuant to the
terms of the Series B Preferred Stock.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commodity Agreement" means any commodity or raw
materials futures contract, commodity or raw materials
option, or any other agreement designed to protect against
or manage exposure to fluctuations in commodity or raw
materials pricing.
"Company" means the party named as such in this
Indenture until a successor replaces it and, thereafter,
means the successor and, for purposes of any provision
contained herein and required by the TIA, each other obligor
on the indenture securities.
"Consolidated Coverage Ratio" as of any date of
determination means the ratio of (x) the aggregate amount of
EBITDA for the period of the most recent four consecutive
fiscal quarters for which financial statements are available
on or prior to the date of such determination to (y)
Consolidated Interest Expense for such four fiscal quarters;
provided, however, that:
(1) if the Company or any Restricted Subsidiary has
Incurred any Indebtedness since the beginning of such period
that remains outstanding or if the transaction giving rise
to the need to calculate the Consolidated Coverage Ratio is
an Incurrence of Indebtedness, or both, EBITDA and
Consolidated Interest Expense for such 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 period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any
Indebtedness since the beginning of such period or if any
Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged (in each case other than Indebtedness
Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and has not been
replaced) on the date of the transaction giving rise to the
need to calculate the Consolidated Coverage Ratio, EBITDA
and Consolidated Interest Expense for such period shall be
calculated on a pro forma basis as if such discharge had
occurred on the first day of such period and as if the
Company or such Restricted Subsidiary has not earned the
interest income actually
5
earned during such period in respect of cash or Temporary
Cash Investments used to repay, repurchase, defease or otherwise
discharge such Indebtedness;
(3) if since the beginning of such period the Company or
any Restricted Subsidiary shall have made any Asset
Disposition, EBITDA for such period shall be reduced by an
amount equal to EBITDA (if positive) directly attributable
to the assets which are the subject of such Asset
Disposition for such period, or increased by an amount equal
to EBITDA (if negative), directly attributable thereto for
such period and Consolidated Interest Expense for such
period shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary
repaid, repurchased, defeased or otherwise discharged with
respect to the Company and its continuing Restricted
Subsidiaries in connection with such Asset Disposition for
such period (or, if the Capital Stock of any Restricted
Subsidiary is sold, the Consolidated Interest Expense for
such 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);
(4) if since the beginning of such period the Company or
any Restricted Subsidiary (by merger or otherwise) shall
have made an Investment in any Restricted Subsidiary (or any
Person which becomes a Restricted Subsidiary) or an
acquisition of assets, including any acquisition of assets
occurring in connection with a transaction requiring a
calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA
and Consolidated Interest Expense for such period shall be
calculated after giving pro forma effect thereto (including
the Incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period; and
(5) if since the beginning of such period any Person (that
subsequently became a Restricted Subsidiary or was merged
with or into the Company or any Restricted Subsidiary since
the beginning of such period) shall have made any Asset
Disposition, any Investment or acquisition of assets that
would have required an adjustment pursuant to clause (3) or
(4) above if made by the Company or a Restricted Subsidiary
during such period, EBITDA and Consolidated Interest Expense
for such period shall be calculated after giving pro forma
effect thereto as if such Asset Disposition, Investment or
acquisition occurred on the first day of such period.
6
For purposes of this definition, whenever pro forma effect
is to be given to an acquisition of assets (including
Capital Stock), the amount of income or earnings relating
thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection
therewith, the pro forma calculations shall be determined in
good faith by a responsible financial or accounting Officer
of the Company in accordance with GAAP. If any Indebtedness
bears a floating rate of interest and is being given pro
forma effect, the interest on such Indebtedness shall be
calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire
period (taking into account any Interest Rate Agreement
applicable to such Indebtedness if such Interest Rate
Agreement has a remaining term in excess of 12 months).
"Consolidated Current Liabilities" as of the date
of determination means the aggregate amount of liabilities
of the Company and its consolidated Restricted Subsidiaries
which may properly be classified as current liabilities
(including taxes accrued as estimated), on a consolidated
basis, after eliminating:
(1) all intercompany items between the Company and any
Restricted Subsidiary; and
(2) all current maturities of long-term Indebtedness, all
as determined in accordance with GAAP consistently applied.
"Consolidated Interest Expense" means, for any
period, the total interest expense of the Company and its
consolidated Restricted Subsidiaries, plus, to the extent
not included in such total interest expense, and to the
extent incurred by the Company or its Restricted
Subsidiaries, without duplication:
(1) interest expense attributable to capital leases and the
interest expense attributable to leases constituting part of
a Sale/Leaseback Transaction;
(2) amortization of debt discount and debt issuance cost;
(3) capitalized interest;
(4) non-cash interest expense;
(5) commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance
financing;
(6) net payments pursuant to Hedging Obligations;
(7) dividends declared and paid or payable in cash or
Disqualified Stock in respect of (A) all Disqualified Stock
of the Company and (B) all Preferred Stock of Restricted
Subsidiaries, in each case held by Persons other than the
Company or a Wholly Owned Subsidiary; provided, however,
that such dividends will be multiplied by a fraction, the
numerator of which is one and the
7
denominator of which is one minus the effective combined tax rate
of the issuer of such stock (expressed as a decimal) for such period
(as estimated by the Chief Financial Officer of the Company in
good faith);
(8) interest incurred in connection with Investments in
discontinued operations;
(9) interest accruing on any Indebtedness of any other
Person to the extent such Indebtedness is Guaranteed by (or
secured by the assets of) the Company or any Restricted
Subsidiary; and
(10) 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.
"Consolidated Net Income" means, for any period,
the net income of the Company and its consolidated
Subsidiaries; provided, however, that there shall not be
included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company)
if such Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Person
for such period shall be included in such Consolidated Net
Income up to the aggregate amount of cash actually
distributed by such Person during such period to the Company
or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other
distribution paid to a Restricted Subsidiary, to the
limitations contained in clause (3) below); and
(B) the Company's equity in a net loss of any such Person
for such period shall be included in determining such
Consolidated Net Income to the extent of any cash actually
contributed by the Company or a Restricted Subsidiary to
such Person during such period;
(2) any net income (or loss) of any Person acquired by the
Company or a Subsidiary in a pooling of interests
transaction for any period prior to the date of such
acquisition;
(3) any net income of any Restricted Subsidiary if such
Restricted Subsidiary is subject to restrictions, directly
or indirectly, on the payment of dividends or the making of
distributions by such
8
Restricted Subsidiary, directly or indirectly, to the Company, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such
Restricted Subsidiary for such period shall be included in
such Consolidated Net Income up to the aggregate amount of
cash that could have been distributed by such Restricted
Subsidiary during such period to the Company or another
Restricted Subsidiary as a dividend or other distribution
(subject, in the case of a dividend or other distribution
paid to another Restricted Subsidiary, to the limitation
contained in this clause); and
(B) the Company's equity in a net loss of any such
Restricted Subsidiary for such period shall be included in
determining such Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other
disposition of any assets of the Company, its consolidated
Subsidiaries or any other Person (including pursuant to any
Sale/Leaseback Transaction) which is not sold or otherwise
disposed of in the ordinary course of business and any gain
(or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(5) extraordinary gains or losses; and
(6) the cumulative effect of a change in accounting
principles.
Notwithstanding the foregoing, for the purposes of Section
5.04 only, there shall be excluded from Consolidated Net
Income any repurchases, repayments or redemptions of
Investments, proceeds realized on the sale of Investments or
return of capital to the Company or a Restricted Subsidiary
to the extent such repurchases, repayments, redemptions,
proceeds or returns increase the amount of Restricted
Payments permitted under Section 5.04 pursuant to clause
(a)(3)(D) thereof.
"Consolidated Net Tangible Assets" as of any date
of determination, means the total amount of assets (less
accumulated depreciation and amortization, allowances for
doubtful receivables, other applicable reserves and other
properly deductible items) which would appear on a
consolidated balance sheet of the Company and its
consolidated Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, and after giving
effect to purchase accounting and after deducting therefrom
Consolidated Current Liabilities and, to the extent
otherwise included, the amounts of:
(1) minority interests in consolidated Subsidiaries held by
Persons other than the Company or a Restricted Subsidiary;
9
(2) excess of cost over fair value of assets of businesses
acquired, as determined in good faith by the Board of
Directors;
(3) any revaluation or other write-up in book value of
assets subsequent to the Issue Date as a result of a change
in the method of valuation in accordance with GAAP
consistently applied;
(4) unamortized debt discount and expenses and other
unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, licenses,
organization or developmental expenses and other intangible
items;
(5) cash set apart and held in a sinking or other analogous
fund established for the purpose of redemption or other
retirement of Capital Stock to the extent such obligation is
not reflected in Consolidated Current Liabilities; and
(6) Investments in and assets of Unrestricted Subsidiaries.
"Credit Agreement" means the Revolving Credit
Agreement dated as of October 17, 2002, by and among the
Company, the Subsidiaries of the Company referred to
therein, the lenders referred to therein, JPMorgan Chase
Bank, as Administrative Agent and Collateral Agent, Lead
Arranger and Sole Bookrunner, Fleet Retail Finance Inc., as
Co-Arranger and Co-Syndication Agent, Sun Trust Bank, as Co-
Syndication Agent, and the CIT Group/Commercial Services,
Inc. and Bank of America, N.A., as Co-Documentation Agents,
together with the related documents thereto (including any
guarantees and security documents, whether in effect on the
Issue Date or entered into thereafter), as amended,
extended, renewed, restated, replaced, restructured,
supplemented or otherwise modified (in whole or in part, and
without limitation as to amount of Indebtedness which may be
Incurred thereunder, terms, conditions, covenants and other
provisions) from time to time, and any agreement (and
related document) governing Indebtedness incurred to
Refinance, in whole or in part, the borrowings and
commitments then outstanding or permitted to be outstanding
under such Credit Agreement or a successor Credit Agreement,
whether by the same or any other lender or group of lenders.
"Currency Agreement" means in respect of a Person
any foreign exchange contract, currency swap agreement or
other similar agreement designed to protect such Person
against fluctuations in currency values.
"Default" means any event which is, or after
notice or passage of time or both would be, an Event of
Default.
"Disqualified Stock" means, with respect to any
Person, any Capital Stock 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) or
upon the happening of any event:
10
(1) matures or is mandatorily redeemable (other than
redeemable only for Capital Stock of such Person which is
not itself Disqualified Stock) pursuant to a sinking fund
obligation or otherwise;
(2) is convertible or exchangeable at the option of the
holder for Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in
part;
in each case on or prior to the date that is 91 days after
the Stated Maturity of the Notes; provided, however, that
any Capital Stock that would not constitute Disqualified
Stock but for provisions thereof giving holders thereof the
right to require such Person to purchase or redeem such
Capital Stock upon the occurrence of an "asset sale" or
"change of control" occurring prior to the first anniversary
of the Stated Maturity of the Notes shall not constitute
Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions
applicable to such Capital Stock are not more favorable to
the holders of such Capital Stock than the terms applicable
to the Notes pursuant to Section 5.06 and Article 4; and
(2) any such requirement only becomes operative after
compliance with such terms applicable to the Notes,
including the purchase of any Notes tendered pursuant
thereto.
The amount of any Disqualified Stock that does not have a
fixed redemption, repayment or repurchase price will be
calculated in accordance with the terms of such Disqualified
Stock as if such Disqualified Stock were redeemed, repaid or
repurchased on any date on which the amount of such
Disqualified Stock is to be determined pursuant to this
Indenture; provided, however, that if such Disqualified
Stock could not be required to be redeemed, repaid or
repurchased at the time of such determination, the
redemption, repayment or repurchase price will be the book
value of such Disqualified Stock as reflected in the most
recent financial statements of such Person. For avoidance
of doubt, the Series B Preferred Stock on the terms thereof
in effect on the Issue Date is deemed not to constitute
Disqualified Stock.
"EBITDA" for any period means Consolidated Net
Income less the CK Amount, plus the following to the extent
deducted in calculating such Consolidated Net Income:
(1) all income tax expense of the Company and its
consolidated Restricted Subsidiaries;
(2) Consolidated Interest Expense;
11
(3) depreciation and amortization expense of the Company
and its consolidated Restricted Subsidiaries (excluding
amortization expense attributable to a prepaid operating
expense that was paid in cash in a prior period);
(4) all other non-cash charges of the Company and its
consolidated Restricted Subsidiaries (excluding any such non-
cash charge to the extent that it represents an accrual of
or reserve for cash expenditures in any future period);
(5) transition costs of up to $24.0 million in connection
with the acquisition of Xxxxxx Xxxxx, Inc. incurred no later
than the fourth quarter of the Company's 2003 fiscal year;
and
(6) the amount of any deduction in Consolidated Net Income
for such period from a write-off of goodwill attributable to
the payment of the CK Amount; provided, that such amount
shall in no event be greater than the CK Amount deducted in
calculating EBITDA;
in each case for such period. Notwithstanding the
foregoing, the provision for taxes based on the income or
profits of, and the depreciation and amortization and
noncash charges of, a Restricted Subsidiary shall be added
to Consolidated Net Income to compute EBITDA only to the
extent (and in the same proportion, including by reason of
minority interest) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net
Income and only if a corresponding amount could have been
distributed by such Restricted Subsidiary during such period
to the Company or another Restricted Subsidiary as a
dividend or other distribution (which other Restricted
Subsidiary could also have made such dividend or other
distribution).
"Equity Offering" means a primary public or
private offering of common stock of the Company.
"Exchange Act" means the U.S. Securities Exchange
Act of 1934, as amended.
"Existing Notes" means the Company's 9 1/2% Senior
Subordinated Notes due 2008 issued under an Indenture dated
as of April 22, 1998 between the Company and Union Bank of
California, N.A., as trustee, and the Company's 7 3/4%
Debentures due 2023 issued under an Indenture dated as of
November 1, 1993 between the Company and the Bank of New
York, as trustee, as amended.
"Foreign Borrowing Base" means, as of any date of
determination and with respect to any Foreign Restricted
Subsidiary, an amount equal to (x) the sum without
duplication of (1) 80% of the book value of the accounts
receivable of such Foreign Restricted Subsidiary and (2) 65%
of the book value of the inventory of such Foreign
Restricted Subsidiary, in each case as of the most recently
ended fiscal quarter of
12
the Company preceding the date on which the Indebtedness is
Incurred, less (y) any portion of such amount included in the
Borrowing Base, but only to the extent such portion is used to
determine the amount of Indebtedness which could be Incurred and
is then outstanding under Section 5.03(b)(1)(B).
"Foreign Restricted Subsidiary" means any
Restricted Subsidiary not incorporated or organized under
the laws of the United States, any State thereof or the
District of Columbia.
"GAAP" means generally accepted accounting
principles in the United States as in effect as of the Issue
Date, including those set forth in:
(1) the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified
Public Accountants;
(2) statements and pronouncements of the Financial
Accounting Standards Board;
(3) such other statements by such other entity as approved
by a significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the
inclusion of financial statements (including pro forma
financial statements) in periodic reports required to be
filed pursuant to Section 13 of the Exchange Act, including
opinions and pronouncements in staff accounting bulletins
and similar written statements from the accounting staff of
the SEC.
"Guarantee" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing
any Indebtedness of any Person and any obligation, direct or
indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such Person
(whether arising by virtue of partnership arrangements, or
by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay or to maintain
financial statement conditions or otherwise); or
(2) entered into for the purpose of assuring in any other
manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
13
"Guaranty Agreement" means a supplemental
indenture, in a form satisfactory to the Trustee, pursuant
to which a Subsidiary Guarantor guarantees the Company's
obligations with respect to the Notes on the terms provided
for in this Indenture.
"Hedging Obligations" of any Person means the
obligations of such Person pursuant to any Interest Rate
Agreement, Currency Agreement or Commodity Agreement entered
into in the ordinary course of business.
"Holder" or "Noteholder" means the Person in whose
name a Note is registered on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or
otherwise become liable for; provided, however, that any
Indebtedness or Capital Stock of a Person existing at the
time such Person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Person at the time it becomes
a Restricted Subsidiary. The term "Incurrence" when used as
a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person
on any date of determination (without duplication):
(1) the principal in respect of (A) indebtedness of such
Person for money borrowed and (B) indebtedness evidenced by
notes, debentures, bonds or other similar instruments for
the payment of which such Person is responsible or liable,
including, in each case, any premium on such indebtedness to
the extent such premium has become due and payable;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions
entered into by such Person;
(3) all obligations of such Person issued or assumed as the
deferred purchase price of property, all conditional sale
obligations of such Person and all obligations of such
Person under any title retention agreement (but excluding
trade accounts payable or accrued liabilities arising in the
ordinary course of business which are not overdue or which
are being contested in good faith);
(4) all obligations of such Person for the reimbursement of
any obligor on any letter of credit, banker's acceptance or
similar credit transaction;
(5) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of
any Disqualified Stock of such Person or, with respect to
any Preferred Stock of any
14
Subsidiary of such Person, the principal amount of such
Preferred Stock to be determined in accordance with this
Indenture;
(6) all obligations of the type referred to in clauses (1)
through (5) of other Persons and all dividends of other
Persons for the payment of which, in either case, such
Person is responsible or liable, directly or indirectly, as
obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1)
through (6) of other Persons secured by any Lien on any
property or asset of such Person (whether or not such
obligation is assumed by such Person), the amount of such
obligation being deemed to be the lesser of the value of
such property or assets and the amount of the obligation so
secured; and
(8) to the extent not otherwise included in this
definition, Hedging Obligations of such Person.
The amount of Indebtedness of any Person at any
date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at
such date; provided, however, that in the case of
Indebtedness sold at a discount, the amount of such
Indebtedness at any time will be the accreted value thereof
at such time.
"Independent Qualified Party" means an investment
banking firm, accounting firm or appraisal firm of national
standing; provided, however, that such firm is not an
Affiliate of the Company.
"Interest Rate Agreement" means in respect of a
Person any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement or other financial
agreement or arrangement including, without limitation, any
such arrangement whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic
payments calculated by applying either a fixed or floating
rate of interest on a stated notional amount in exchange for
periodic payments made by such Person calculated by applying
a fixed or floating rate of interest on the same notional
amount.
"Investment" in any Person means any direct or
indirect advance, loan (other than advances to customers in
the ordinary course of business that are recorded as
accounts receivable on the balance sheet of the lender) or
other extensions of credit (including by way of Guarantee or
similar arrangement) or capital contribution to (by means of
any transfer of cash or other property to others or any
payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock,
Indebtedness or other similar instruments issued by such
Person. Except as otherwise
15
provided for herein, the amount of an Investment shall be its fair
value at the time the Investment is made and without giving effect
to subsequent changes in value.
For purposes of the definition of "Unrestricted
Subsidiary", the definition of "Restricted Payment" and
Section 5.04:
(1) "Investment" shall include the portion (proportionate
to the Company's equity interest in such Subsidiary) of the
fair market value of the net assets of any Subsidiary of the
Company at the time that such Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary equal to an
amount (if positive) equal to (A) the Company's "Investment"
in such Subsidiary at the time of such redesignation less
(B) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the
net assets of such Subsidiary at the time of such
redesignation; and
(2) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the
time of such transfer, in each case as determined in good
faith by the Board of Directors.
"Issue Date" means the date on which the Notes
(other than any Additional Notes) are originally issued.
"Investment Grade" means (1) with respect to
Standard & Poor's Ratings Group, any of the ratings
categories from and including AAA to and including BBB- and
(2) with respect to Xxxxx'x Investor Service, Inc., any of
the ratings categories from and including Aaa to and
including Baa3.
"Legal Holiday" means a Saturday, a Sunday or a
day on which banking institutions are not required to be
open in the State of New York.
"Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including
any conditional sale or other title retention agreement or
lease in the nature thereof).
"Limited Originator Recourse" means a
reimbursement obligation of the Company in connection with a
drawing on a letter of credit, revolving loan commitment,
cash collateral account or other such credit enhancement
issued to support Indebtedness of a Securitization
Subsidiary that the Board of Directors determines is
necessary to effectuate a Qualified Securitization
Transaction; provided, that the available amount of any such
form of credit enhancement at any time shall not exceed 10%
of the principal amount of such Indebtedness at such time
and provided, further, that such reimbursement obligation is
permitted to be Incurred by the Company pursuant to Section
5.03 and that any such Lien securing such reimbursement
obligation is permitted pursuant to Section 5.09.
16
"Net Available Cash" from an Asset Disposition
means cash payments received therefrom (including any cash
payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any
securities received as consideration, but only as and when
received, but excluding any other consideration received in
the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such
properties or assets or received in any other noncash form),
in each case net of:
(1) all legal, accounting, financial advisory, title and
recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, provincial,
foreign and local taxes required to be accrued as a
liability under GAAP, as a consequence of such Asset
Disposition;
(2) all payments made on any Indebtedness which is secured
by any assets subject to such Asset Disposition, in
accordance with the terms of any Lien upon or other security
agreement of any kind with respect to such assets, or which
must by its terms, or in order to obtain a necessary consent
to such Asset Disposition, or by applicable law, be repaid
out of the proceeds of such Asset Disposition;
(3) all distributions and other payments required to be
made to minority interest holders in Restricted Subsidiaries
as a result of such Asset Disposition; and
(4) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any
liabilities associated with the property or other assets
disposed in such Asset Disposition and retained by the
Company or any Restricted Subsidiary after such Asset
Disposition; provided, however, that any reduction in such
reserve after consummation of the Asset Disposition will be
deemed a new Asset Disposition with Net Available Cash equal
to the amount of such reduction.
"Net Cash Proceeds", with respect to any issuance
or sale of Capital Stock or Indebtedness, means (A) the cash
proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees,
discounts or commissions and brokerage, consultant and other
fees actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result thereof
and (B) solely for purposes of Section 5.04(a)(3)(B), the
fair market value (as of the date of the transaction and as
determined in good faith by the Board of Directors) of the
Capital Stock (other than Disqualified Stock) of a Person
(whose primary business is a Related Business) that
thereupon becomes a Restricted Subsidiary (other than a
Securitization Subsidiary), which Capital Stock constitutes
the proceeds received by the Company from an issuance or
sale of its Capital Stock, net of the fees and taxes
described in clause (A) above.
17
"Notes" means the Notes to be issued pursuant to
this Indenture.
"Obligations" means with respect to any
Indebtedness all obligations for principal, premium,
interest, penalties, fees, indemnifications, reimbursements
and other amounts payable pursuant to the documentation
governing such indebtedness.
"Offering Circular" means the offering circular,
together with any documents incorporated therein by
reference, prepared by the Company and relating to the
Notes, dated as of April 30, 2003.
"Officer" means the Chairman of the Board, the
President, any Vice President, the Treasurer or the
Secretary of the Company.
"Officers' Certificate" means a certificate signed
by two Officers.
"Opinion of Counsel" means a written opinion from
legal counsel who is reasonably acceptable to the Trustee.
The counsel may be an employee of or counsel to the Company
or the Trustee.
"Permitted Guarantees" means any guarantee by a
Restricted Subsidiary (i) outstanding on the Issue Date
after giving effect to the use of the net proceeds of the
sale of the Notes as described in the Offering Circular,
(ii) of Indebtedness of the Company Incurred under Section
5.03(b)(1) and (iii) of Indebtedness of the Company
Incurred under a bank credit facility that is Incurred in
compliance with Section 5.03 and secured in compliance with
Section 5.09.
"Permitted Holders" means Apax Managers, Inc. and
Apax Partners Europe Managers Limited and their Affiliates.
"Permitted Investment" means an Investment by the
Company or any Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary (other than a
Securitization Subsidiary) or a Person that will, upon the
making of such Investment, become a Restricted Subsidiary
(other than a Securitization Subsidiary); provided, however,
that the primary business of such Restricted Subsidiary is a
Related Business;
(2) another Person if as a result of such Investment such
other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all its assets to,
the Company or a Restricted Subsidiary; provided, however,
that such Person's primary business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted
Subsidiary if created or acquired in the ordinary course of
business and
18
payable or dischargeable in accordance with
customary trade terms; provided, however, that such trade
terms may include such concessionary trade terms as the
Company or any such Restricted Subsidiary deems reasonable
under the circumstances;
(5) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to
be treated as expenses for accounting purposes and that are
made in the ordinary course of business;
(6) loans or advances to employees made in the ordinary
course of business consistent with past practices of the
Company or such Restricted Subsidiary but in any event not
to exceed $2.0 million in the aggregate outstanding at any
one time;
(7) 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;
(8) any Person to the extent such Investment represents the
non-cash portion of the consideration received for an Asset
Disposition as permitted pursuant to Section 5.06;
(9) Hedging Obligations in compliance with Section 5.03;
(10) any Person to the extent such Investment is in
existence on the Issue Date (after giving effect to the use
of the net proceeds of the sale of the Notes as described in
the Offering Circular);
(11) a Securitization Subsidiary in connection with a
Qualified Securitization Transaction which Investments are
customary for such transaction; and
(12) any Person engaged principally in a Related Business
prior to such Investment if (i) at the time of such
Investment and after giving pro forma effect thereto, the
Company is entitled to Incur an additional $1.00 of
Indebtedness pursuant to Section 5.03(a) and (ii) the
aggregate amount of all Investments made pursuant to this
clause (12) does not exceed $15.0 million at any one time
outstanding; provided that Investments of up to $5.0 million
in the aggregate at any one time outstanding shall be
permitted under this clause (12) without regard to the
requirements of clause (i) of this clause (12).
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
19
organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock
of any Person, means Capital Stock 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 shares of Capital Stock of
any other class of such Person.
"principal" of a Note means the principal of the
Note plus the premium, if any, payable on the Note which is
due or overdue or is to become due at the relevant time.
"Purchase Money Indebtedness" means any
Indebtedness of a Person to any seller or other Person
incurred to finance the acquisition or construction of any
property or assets and which is incurred substantially
concurrently therewith, is secured only by the assets so
financed and the principal amount of which does not exceed
the cost of the assets acquired or constructed.
"Qualified Securitization Transaction" means any
accounts receivable or licensing royalty financing facility
or arrangement pursuant to which a Securitization Subsidiary
purchases or otherwise acquires accounts receivable or
licensing royalties and related assets from the Company or
any Restricted Subsidiary and enters into a third party
financing thereof on customary market terms that the Board
of Directors has concluded are fair to the Company and its
Restricted Subsidiaries.
"Refinance" means, in respect of any Indebtedness,
to refinance, extend, renew, refund, repay, prepay, redeem,
defease or retire, or to issue other Indebtedness in
exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have
correlative meanings.
"Refinancing Indebtedness" means Indebtedness that
Refinances any Indebtedness of the Company or any Restricted
Subsidiary existing on the Issue Date (after giving effect
to the use of the net proceeds of the sale of the Notes as
described in the Offering Circular) or Incurred in
compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however,
that:
(1) such Refinancing Indebtedness has a Stated Maturity no
earlier than the Stated Maturity of the Indebtedness being
Refinanced;
(2) such Refinancing Indebtedness has an Average Life at
the time such Refinancing Indebtedness is Incurred that is
equal to or greater than the Average Life of the
Indebtedness being Refinanced; and
(3) unless otherwise permitted to be Incurred pursuant to
Section 5.03, such Refinancing Indebtedness has an aggregate
principal
20
amount (or if Incurred with original issue
discount, an aggregate issue price) that is equal to or less
than the aggregate principal amount (or if Incurred with
original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including
any premium and defeasance costs) under the Indebtedness
being Refinanced;
provided, further, however, that Refinancing Indebtedness
shall not include (A) Indebtedness of a Subsidiary that
Refinances Indebtedness of the Company or (B) Indebtedness
of the Company or a Restricted Subsidiary that Refinances
Indebtedness of an Unrestricted Subsidiary.
"Related Business" means any business in which the
Company or any Restricted Subsidiary was engaged on the
Issue Date and any business related, ancillary or
complementary to any business of the Company or any
Restricted Subsidiary in which the Company or any Restricted
Subsidiary was engaged on the Issue Date.
"Restricted Payment" with respect to any Person
means:
(1) the declaration or payment of any dividends or any
other distributions of any sort in respect of its Capital
Stock (including any payment in connection with any merger
or consolidation involving such Person) or similar payment
to the direct or indirect holders of its Capital Stock
(other than dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and dividends
or distributions payable solely to the Company or a
Restricted Subsidiary, and other than pro rata dividends or
other distributions made by a Subsidiary that is not a
Wholly Owned Subsidiary to minority stockholders (or owners
of an equivalent interest in the case of a Subsidiary that
is an entity other than a corporation));
(2) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company
held by any Person or of any Capital Stock of a Restricted
Subsidiary held by any Affiliate of the Company (other than
a Restricted Subsidiary), including in connection with any
merger or consolidation and including the exercise of any
option to exchange any Capital Stock (other than into
Capital Stock of the Company that is not Disqualified
Stock);
(3) the purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking
fund payment of any Subordinated Obligations of such Person
(other than the purchase, repurchase or other acquisition of
Subordinated Obligations purchased in anticipation of
satisfying a sinking fund
21
obligation, principal installment
or final maturity, in each case due within one year of the
date of such purchase, repurchase or other acquisition); or
(4) the making of any Investment (other than a Permitted
Investment) in any Person.
"Restricted Subsidiary" means any Subsidiary of
the Company that is not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means any arrangement
with any Person providing for the leasing by the Company or
any Restricted Subsidiary of the Company, for a period of
more than three years, of any real or tangible personal
property, which property has been or is to be sold or
transferred by the Company or such Restricted Subsidiary to
such Person in contemplation of such leasing.
"SEC" means the U.S. Securities and Exchange
Commission.
"Securities Act" means the U.S. Securities Act of
1933, as amended.
"Securitization Subsidiary" means a Wholly Owned
Subsidiary of the Company
(1) that is designated a "Securitization Subsidiary" by the
Board of Directors;
(2) that does not engage in any activities other than
Qualified Securitization Transactions and any activity
necessary or incidental thereto;
(3) no portion of the Indebtedness or any other obligation,
contingent or otherwise, of which
(A) is Guaranteed by the Company or any
Restricted Subsidiary other than
pursuant to Standard Securitization
Undertakings or Limited Originator
Recourse,
(B) is recourse to or obligates the Company
or any other Restricted Subsidiary in
any way other than pursuant to Standard
Securitization Undertakings or Limited
Originator Recourse, or
(C) subjects any property or asset of the
Company or any other Restricted
Subsidiary, directly or indirectly,
contingently or otherwise, to the
satisfaction thereof other than pursuant
to Standard Securitization Undertakings
or Limited Originator Recourse; and
22
(4) with respect to which neither the Company nor any
Restricted Subsidiary has any obligation to maintain or
preserve its financial condition or cause it to achieve
certain levels of operating results.
"Senior Indebtedness" means with respect to any
Person:
(1) Indebtedness of such Person, whether outstanding on the
Issue Date (after giving effect to the use of the net
proceeds of the sale of the Notes as described in the
Offering Circular) or thereafter Incurred; and
(2) all other Obligations of such Person (including
interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to such Person
whether or not post-filing interest is allowed in such
proceeding) in respect of Indebtedness described in clause
(1) above;
unless, in the case of clauses (1) and (2), in the
instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that such
Indebtedness or other Obligations are subordinate in right
of payment to the Notes or the Subsidiary Guaranty of such
Person, as the case may be; provided, however, that Senior
Indebtedness shall not include:
(1) any obligation of such Person to any Subsidiary;
(2) any liability for Federal, state, local or other taxes
owed or owing by such Person;
(3) any accounts payable or other liability to trade
creditors arising in the ordinary course of business
(including guarantees thereof or instruments evidencing such
liabilities);
(4) any Indebtedness or other Obligation of such Person
which is subordinate or junior in any respect to any other
Indebtedness or other Obligation of such Person;
(5) that portion of any Indebtedness which at the time of
Incurrence is Incurred in violation of this Indenture; or
(6) any Capital Stock.
"Series B Preferred Stock" means the Company's
Series B Convertible Preferred Stock outstanding on the
Issue Date and any additional shares thereof issued in
payment of dividends thereon.
23
"Significant Subsidiary" means any Restricted
Subsidiary that would be a "Significant Subsidiary" of the
Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"Standard Securitization Undertakings" means
representations, warranties, covenants and indemnities
entered into by the Company or any Restricted Subsidiary
that are reasonably customary in accounts receivable or
licensing royalty securitization transactions, as the case
may be.
"Stated Maturity" means, with respect to any
security, the date specified in such security as the fixed
date on which the final payment of principal of such
security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision
providing for the repurchase of such security at the option
of the holder thereof upon the happening of any contingency
unless such contingency has occurred).
"Subordinated Obligation" means, with respect to a
Person, any Indebtedness of such Person (whether outstanding
on the Issue Date (after giving effect to the use of the net
proceeds of the sale of the Notes as described in the
Offering Circular) or thereafter Incurred) which is
subordinate or junior in right of payment to the Notes or a
Subsidiary Guaranty of such Person, as the case may be,
pursuant to a written agreement to that effect.
"Subsidiary" means, with respect to any Person,
any corporation, association, partnership or other business
entity of which more than 50% of the total voting power of
shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such
Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantor" means each Restricted
Subsidiary of the Company that delivers a Guaranty Agreement
pursuant to Section 5.11.
"Subsidiary Guaranty" means a Guarantee by a
Subsidiary Guarantor of the Company's obligations with
respect to the Notes.
"Temporary Cash Investments" means any of the
following:
(1) any investment in direct obligations of the United
States or any agency thereof or obligations guaranteed by
the United States or any agency thereof;
(2) investments in time deposit accounts, certificates of
deposit and money market deposits maturing within 365 days
of the date of
24
acquisition thereof issued by a bank or trust
company which is organized under the laws of the United
States, any State thereof or any foreign country recognized
by the United States, and which bank or trust company has
capital, surplus and undivided profits aggregating in excess
of $50.0 million (or the foreign currency equivalent
thereof) and has outstanding debt which is rated "A" (or
such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as
defined in Rule 436 under the Securities Act) or any money-
market fund sponsored by a registered broker dealer or
mutual fund distributor;
(3) repurchase obligations with a term of not more than 30
days for underlying securities of the types described in
clause (1) above entered into with a bank meeting the
qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than
270 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Company)
organized and in existence under the laws of the United
States of or any foreign country recognized by the United
States with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to Xxxxx'x
Investors Service, Inc. or "A-1" (or higher) according to
Standard and Poor's Ratings Group; and
(5) investments in securities with maturities of 270 days
or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the
United States, or by any political subdivision or taxing
authority thereof, and rated at least "A" by Standard &
Poor's Ratings Group or "A" by Xxxxx'x Investors Service,
Inc.
"Trustee" means SunTrust Bank, a state banking
association, until a successor replaces it and, thereafter,
means the successor.
"Trust Indenture Act" means the Trust Indenture
Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the
Issue Date.
"Trust Officer" means the Chairman of the Board,
the President or any other officer or assistant officer of
the Trustee assigned by the Trustee to administer its
corporate trust matters.
"U.S. Government Obligations" means direct
obligations (or certificates representing an ownership
interest in such obligations) of the United States
(including any agency or instrumentality thereof) for the
payment of which the full faith and credit of the United
States is pledged and which are not callable at the issuer's
option.
25
"Unrestricted Subsidiary" means:
(1) any Subsidiary of an Unrestricted Subsidiary; and
(2) any Subsidiary of the Company which is designated after
the Issue Date as an Unrestricted Subsidiary by a resolution
of the Board of Directors of the Company;
provided that a Subsidiary may be so designated as an
Unrestricted Subsidiary only if
(A) such designation is in compliance with Section 5.04;
(B) such Subsidiary does not own any Capital Stock or
Indebtedness of, or hold any Lien on any property of, the
Company or any Restricted Subsidiary;
(C) no Default or Event of Default has occurred and is
continuing or results therefrom; and
(D) neither the Company nor any Restricted Subsidiary will
at any time
(i) provide a guarantee of, or similar credit support to,
any Indebtedness of such Subsidiary (including any
undertaking, agreement or instrument evidencing such
Indebtedness),
(ii) be directly or indirectly liable for any Indebtedness
of such Subsidiary, or
(iii) be directly or indirectly liable for any other
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 respect to any other
Indebtedness that is Indebtedness of such Subsidiary
(including any corresponding right to take enforcement
action against such Subsidiary),
except in the case of clause (i) or (ii) above to the extent
(i) that the Company or such Restricted Subsidiary could
otherwise provide such a guarantee or incur such
Indebtedness pursuant to Section 5.03(a); and
26
(ii) the provision of such guarantee and the incurrence of
such Indebtedness otherwise would be permitted under
Section 5.04.
The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary;
provided, however, that immediately after giving effect to
such designation (A) the Company could Incur $1.00 of
additional Indebtedness under Section 5.03(a) and (B) no
Default or Event of Default shall have occurred and be
continuing.
Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with
the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with
the foregoing provisions.
"Voting Stock" of a Person means all classes of
Capital Stock or other interests (including partnership
interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers
or trustees thereof.
"Wholly Owned Subsidiary" means a Restricted
Subsidiary all the Capital Stock of which (other than
directors' qualifying shares) is owned by the Company or one
or more Wholly Owned Subsidiaries.
27
SECTION 1.01.
Other Definitions.
Term Defined
in Section
"Affiliate Transaction" 5.07
"Appendix" 2.01
"Bankruptcy Law" 7.01
"covenant defeasance option" 9.01(b)
"Custodian" 7.01
"Event of Default" 7.01
"Exchange Securities" Appendix
"Initial Securities" Appendix
"legal defeasance option" 9.01(b)
"Paying Agent" 2.03
"Private Exchange Securities" Appendix
"Registrar" 2.03
"Registration Rights Agreement" Appendix
"Successor Company" 6.01(1)
SECTION 1.02. Incorporation by Reference of Trust
Indenture Act. This Indenture is subject to the mandatory provisions of
the TIA, which are incorporated by reference in and made a
part of this Indenture. The following TIA terms have the
following meanings:
"Commission" means the SEC;
"indenture securities" means the Securities and
each Subsidiary Guaranty;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee; and
"obligor" on the indenture securities means the
Company, each Subsidiary Guarantor and any other
obligor on the indenture 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 have the meanings assigned to
them by such definitions.
SECTION 1.03. Rules of Construction. Unless the context
otherwise requires:
(1) a term has the meaning assigned to it;
28
(2) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and
words in the plural include the singular;
(6) unsecured Indebtedness shall not be deemed to
be subordinate or junior to secured Indebtedness merely
by virtue of its nature as unsecured Indebtedness;
(7) the principal amount of any non-interest
bearing or other discount security at any date shall be
the principal amount thereof that would be shown on a
balance sheet of the issuer dated such date prepared in
accordance with GAAP;
(8) the principal amount of any Preferred Stock
shall be (i) the maximum liquidation value of such
Preferred Stock or (ii) the maximum mandatory
redemption or mandatory repurchase price with respect
to such Preferred Stock, whichever is greater; and
(9) all references to the date the Securities
were originally issued shall refer to the Issue Date.
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions
relating to the Initial Securities, the
Private Exchange Securities and the Exchange Securities are
set forth in the Rule 144A/Regulation S Appendix attached
hereto (the "Appendix") which is hereby incorporated in and
expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit 1 to the
Appendix which is hereby incorporated in and expressly made
a part of this Indenture. The Exchange Securities, the
Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit
A, which is hereby incorporated in and expressly made a part
of this Indenture. The Securities may have notations,
legends or endorsements required by law, stock exchange
rule, agreements to which the Company is subject, if any, or
usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each
Security shall be dated the date of its authentication. The
terms of the Securities set forth in the Appendix and
Exhibit A are part of the terms of this Indenture.
SECTION 2.02. Execution and Authentication. Two
Officers shall sign the Securities for the Company by
manual or facsimile signature. The Company's seal
29
shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer, whose signature is on a Security 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.
On the Issue Date, the Trustee shall authenticate
and deliver $150 million of 8 1/8% Senior Notes Due May 1,
2013, and, at any time and from time to time thereafter, the
Trustee shall authenticate and deliver Securities for
original issue in an aggregate principal amount specified in
such order, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and, in
the case of an issuance of Additional Securities pursuant to
Section 2.13 after the Issue Date, shall certify that such
issuance is in compliance with Section 5.03.
The Trustee may appoint an authenticating agent
reasonably acceptable to the Company to authenticate the
Securities. Unless limited by the terms of such
appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference
in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has
the same rights as any Registrar, Paying Agent or agent for
service of notices and demands.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or
for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying
Agent"). The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Company
may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes
any additional paying agent.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent or co-registrar
not a party to this Indenture, which shall incorporate the
terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The
Company shall notify the Trustee in writing of the name and
address of any such agent. If the Company fails to maintain
a Registrar or Paying Agent, the Trustee shall act as such
and shall be entitled to appropriate compensation and
indemnity therefor pursuant to Section 8.07. The Company or
any Wholly Owned Subsidiary incorporated or organized within
the United States may act as Paying Agent, Registrar, co-
registrar or transfer agent.
30
The Company initially appoints the Trustee as
Registrar and Paying Agent in connection with the
Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust.
No later than 10:00 a.m. New York City time on each due
date of the principal and interest on any Security, the
Company shall deposit with the Paying Agent a sum sufficient
to pay such principal and interest when so becoming due.
The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall
hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal
of or interest on the Securities and shall notify the
Trustee in writing of any default by the Company in making
any such payment. If the Company or a Wholly Owned
Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate
trust fund. The Company at any time may require a Paying
Agent to pay all money held by it to the Trustee and to
account for any funds disbursed by the Paying Agent. Upon
complying with this Section 2.04, the Paying Agent shall
have no further liability for the money delivered to the
Trustee.
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 shall furnish to the Trustee,
in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may
request in writing, a list in such form and as of such date
as the Trustee may reasonably require of the names and
addresses of Holders.
SECTION 2.06. Transfer and Exchange. The Securities
shall be issued in registered form and
shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented
to the Registrar or a co-registrar with a request to
register a transfer, the Registrar shall register the
transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met.
When Securities are presented to the Registrar or a co-
registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the
Registrar shall make the exchange as requested if the same
requirements are met. No service charge shall be made for
any registration of transfer or exchange or redemption of
the Notes, 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 similar governmental charge payable
upon exchanges pursuant to Article 4 or Section 2.09, 3.06,
5.06 or 10.05).
SECTION 2.07. Replacement Securities. If a
mutilated Security is surrendered to the Registrar
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 requirements of Section 8-405 of the Uniform
Commercial Code are met and the Holder satisfies any other
reasonable requirements of the Trustee. If required by the
Trustee or the Company, such Holder shall furnish an
affidavit of lost certificate and indemnity bond or other
indemnity sufficient in the judgment of the Company and the
Trustee to protect the Company, the Trustee, the Paying
Agent, the Registrar and any co-registrar from any loss
which any of them may
31
suffer if a Security is replaced. The
Company and the Trustee may charge the Holder for their
expenses in replacing a Security, including reasonable fees
and expenses of counsel, and for any tax imposed in
replacing such Security.
Every replacement Security is an additional
obligation of the Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities
authenticated by the Trustee except for those canceled by
it, those delivered to it for cancellation and those
described in this Section 2.08 as not outstanding. A
Security does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section
2.07, it ceases to be outstanding unless the Trustee and the
Company receive proof satisfactory to them that the replaced
Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust,
in accordance with this Indenture, on a redemption date or
maturity date money sufficient to pay all principal and
interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the
case may be, then on and after that date such Securities (or
portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.09. Temporary Securities. Until
definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate
temporary Securities. 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
definitive Securities and deliver them in exchange for
temporary Securities.
SECTION 2.10. 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 registration of transfer, exchange
or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the
Exchange Act) all Securities surrendered for registration of
transfer, exchange, payment or cancellation in accordance
with the Trustee's customary procedures. The Company may
not issue new Securities to replace Securities it has
redeemed, paid or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the
Company defaults in a payment of interest on the
Securities, the Company shall pay defaulted interest as
provided in the Securities (plus interest on such defaulted
interest to the extent lawful) in any lawful manner. The
Company may pay the defaulted interest to the Persons who
are Holders on a subsequent special record date. The
Company shall fix or cause to be fixed any such special
record date and payment date to the reasonable satisfaction
of the Trustee and shall promptly mail to each Holder a
notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
32
SECTION 2.12. CUSIP Numbers. The Company in
issuing the Securities may use "CUSIP" numbers (if then generally
in use) and, if so, the Trustee shall use CUSIP numbers 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 of such CUSIP numbers either as printed on
the Securities or as contained in any notice of a redemption
and that reliance may be placed only on the other
identification numbers printed on the Securities, and any
such redemption shall not be affected by any defect in or
omission of such numbers. The Company will notify the
Trustee in writing of any change in a CUSIP number. The
Temporary Regulation S Global Security (as defined in
Section 2.1(a) of the Appendix hereto) and the Rule 144A
Global Security (as defined in Section 2.1(a) of the
Appendix hereto) shall be assigned separate CUSIP numbers.
SECTION 2.13. Issuance of Additional Securities.
The Company shall be entitled, subject to its compliance
with Section 5.03, to issue Additional Securities under this
Indenture, which shall have identical terms as the Initial
Securities issued on the Issue Date, other than with respect
to the date of issuance, the date from which interest will
accrue thereon, the issue price and the amount of interest
payable upon a registration default as provided under a
registration rights agreement related thereto (and if such
Additional Securities shall be issued in the form of
Exchange Securities, other than with respect to transfer
restrictions). The Initial Securities issued on the Issue
Date, any Additional Securities and all Exchange Securities
or Private Exchange Securities issued in exchange therefor
shall be treated as a single class for all purposes under
this Indenture.
With respect to any Additional Securities, the
Company shall set forth in a resolution of the Board of
Directors and an Officers' Certificate, a copy of each of
which shall be delivered to the Trustee, the following
information:
(1) the aggregate principal amount of such
Additional Securities to be authenticated and delivered
pursuant to this Indenture;
(2) the issue price, the issue date and the CUSIP
numbers of such Additional Securities; provided,
however, that no Additional Securities may be issued at
a price that would cause such Additional Securities to
have "original issue discount" within the meaning of
Section 1273 of the Code; and
(3) whether such Additional Securities shall be
Transfer Restricted Securities (as defined in the
Appendix hereto) and issued in the form of Initial
Securities as set forth in the Appendix to this
Indenture or shall be issued in the form of Exchange
Securities as set forth in Exhibit A.
33
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the
Company elects to redeem Securities pursuant to
paragraph 5 of the Securities, it shall notify the Trustee
in writing of the redemption date, the principal amount of
Securities to be redeemed and the paragraph of the
Securities pursuant to which the redemption will occur.
The Company shall give notice to the Trustee
provided for in this Section 3.01 at least 30 but not more
than 60 days before the redemption date unless the Trustee
consents in writing to a shorter period. Such notice shall
be accompanied by an Officers' Certificate from the Company
to the effect that such redemption will comply with the
conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If fewer than all of the Securities are to be redeemed,
the Trustee shall select the Securities to be redeemed on a
pro rata basis or by lot or by a method that complies with
applicable legal and securities exchange requirements, if
any, and that the Trustee in its sole discretion shall deem
to be fair and appropriate and in accordance with methods
generally used at the time of selection by fiduciaries in
similar circumstances. The Trustee shall make the selection
from outstanding Securities not previously called for
redemption. The Trustee may select for redemption portions
of the principal of Securities that have denominations
larger than $1,000. Securities and portions of them the
Trustee selects shall be in principal amounts of $1,000 or a
whole multiple of $1,000. Provisions of this Indenture that
apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee
shall notify the Company promptly of the Securities or
portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least
30 days but not more than 60 days before a date
for redemption of Securities, the Company shall mail a
notice of redemption by first-class mail to each Holder of
Securities to be redeemed at such Holder's registered
address.
The notice shall identify the Securities to be
redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be
surrendered to the Paying Agent to collect the
redemption price;
(5) if fewer than all of the outstanding
Securities are to be redeemed, the identification and
principal amounts of the particular Securities to be
redeemed;
34
(6) that, unless the Company defaults in making
such redemption payment, interest on Securities (or a
portion thereof) called for redemption ceases to accrue
on and after the redemption date; and
(7) that no representation is made as to the
correctness or accuracy of the CUSIP numbers, if any,
listed in such notice or printed on the Securities.
At the Company's written request, the Trustee
shall give the notice of redemption in the Company's name
and at the Company's expense. In such event, the Company
shall provide the Trustee with the information required by
this Section 3.03.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed, Securities called
for redemption become due and payable on the redemption date
and at the redemption price stated in the notice. Upon
surrender
to the Paying Agent, such Securities shall be paid
at the redemption price stated in the notice, plus accrued
interest to the redemption date (subject to the right of
Holders of record on the relevant record date to receive
interest due on the related interest payment date). Failure
to give notice or any defect in the notice to any Holder
shall not affect the validity of the notice to any other
Holder.
SECTION 3.05. Deposit of Redemption Price.
No later than 10:00 a.m. New York City time on the
redemption date, the Company shall deposit with the Paying
Agent (or, if the Company or a Subsidiary is the Paying
Agent, shall segregate and hold in trust) money sufficient
to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities
or portions of Securities called for redemption which have
been delivered by the Company to the Trustee for
cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part,
the Company shall execute and the Trustee shall authenticate
for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the
Security surrendered.
ARTICLE 4
Change of Control
SECTION 4.01. Repurchase Right. Upon the
occurrence of a Change of Control,
each Holder shall have the right to require that the Company
repurchase such Holder's Notes at a purchase price in cash
equal to 101% of the principal amount thereof on the date of
purchase plus accrued and unpaid interest, if any, to the
date of purchase (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date).
35
SECTION 4.02. Notices; Method of Exercising Repurchase
Rights, Etc.
(a) Within 30 days following any Change of Control, the
Company will mail a notice to each Holder with a copy to the
Trustee (the "Change of Control Offer") stating:
(1) that a Change of Control has occurred and that such
Holder has the right to require the Company to purchase such
Holder's Notes at a purchase price in cash equal to 101% of
the principal amount thereof on the date of purchase, plus
accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant
record date to receive interest on the relevant interest
payment date);
(2) the circumstances and relevant facts regarding such
Change of Control;
(3) the purchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is
mailed); and
(4) the instructions, as determined by the Company,
consistent with the Section described hereunder, that a
Holder must follow in order to have its Notes purchased.
(b) Holders electing to have a Note purchased
will be required to surrender the Note, with an appropriate
form duly completed, to the Company at the address specified
in the notice at least three Business Days prior to the
purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Company receives, not later
than one Business Day prior to the purchase date, a
telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Security which was delivered for purchase by the Holder and
a statement that such Holder is withdrawing his election to
have such Note purchased.
(c) On the purchase date, all Notes purchased by
the Company under this Section 4.02 shall be delivered by
the Company to the Trustee for cancellation, and the Company
shall pay the purchase price plus accrued and unpaid
interest, if any, to the Holders entitled thereto.
(d) Notwithstanding the foregoing provisions of
this Section 4.02, the Company will not be required to make
a Change of Control Offer following a Change of Control if a
third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the
requirements set forth in this Indenture applicable to a
Change of Control Offer made by the Company and purchases
all Notes validly tendered and not withdrawn under such
Change of Control Offer.
(e) The Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes as a result of a
Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions
of the covenant described hereunder, the Company will comply
with the
36
applicable securities laws and regulations and
shall not be deemed to have breached the Company's
obligations under the covenant described hereunder by virtue
of the Company's compliance with such securities laws or
regulations.
ARTICLE 5
Covenants
SECTION 5.01. Payment of Securities. The
Company shall promptly pay in lawful currency of the
United States the principal of and interest on the
Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal and interest
shall be considered paid on the date due if no later than
10:00 a.m. New York City time on such date the Trustee or
the Paying Agent holds in accordance with this Indenture
money sufficient to pay all principal and interest then due.
The Company shall pay interest on overdue
principal at the rate specified therefor in the Securities,
and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
SECTION 5.02. SEC Reports. Notwithstanding
that the Company may not be subject
to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, the Company will file with the SEC (to the
extent that the SEC will accept such filing) and provide the
Trustee (and, only if the Company is no longer subject to
such reporting requirements, the Holders) with such annual
reports and such information, documents and other reports as
are specified in Sections 13 and 15(d) of the Exchange Act
and applicable to a U.S. corporation subject to such
Sections, such information, documents and other reports to
be so filed and provided at the times specified for the
filings of such information, documents and reports under
such Sections.
In addition, the Company will furnish to the
Holders and to prospective investors, upon the requests of
such Holders, any information required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act so long
as the Notes are not freely transferable under the
Securities Act.
SECTION 5.03. Limitation on Indebtedness.
(a) The Company will not, and will not permit any
Restricted Subsidiary to, Incur, directly or indirectly, any
Indebtedness; provided, however, that the Company and any
future Subsidiary Guarantor will be entitled to Incur
Indebtedness if, on the date of such Incurrence and after
giving effect thereto on a pro forma basis, no Default has
occurred and is continuing and the Consolidated Coverage
Ratio would be greater than 2.0 to 1.
(b) Notwithstanding the foregoing paragraph (a), the
Company and the Restricted Subsidiaries will be entitled to
Incur any or all of the following Indebtedness:
(1) Indebtedness Incurred by the Company and the Restricted
Subsidiaries (including Restricted Subsidiaries that become
Subsidiaries after the Issue Date) pursuant to the Credit
Agreement; provided, however, that, after giving effect to
any such Incurrence, the aggregate principal amount of all
37
Indebtedness Incurred under this clause (1) and then
outstanding does not exceed the greater of (A) $325.0
million and (B) the Borrowing Base, less in the case of
clause (A) the sum of all mandatory principal payments with
respect to such Indebtedness pursuant to Section
5.06(a)(3)(A) (which principal payments in the case of
revolving loans are accompanied by a corresponding permanent
commitment reduction);
(2) Indebtedness owed to and held by the Company or a
Restricted Subsidiary (other than a Securitization
Subsidiary); provided, however, that any subsequent issuance
or transfer of any Capital Stock which results in any such
Restricted Subsidiary ceasing to be a Restricted Subsidiary
or any subsequent transfer of such Indebtedness (other than
to the Company or a Restricted Subsidiary (other than a
Securitization Subsidiary)) shall be deemed, in each case,
to constitute the Incurrence of such Indebtedness by the
obligor thereon;
(3) the Notes and the Exchange Securities (other than any
Additional Notes);
(4) the Existing Notes and any other Indebtedness
outstanding on the Issue Date after giving effect to the use
of the net proceeds of the sale of the Notes as described in
the Offering Circular (other than Indebtedness described in
clause (1), (2), (3) or (10) of this Section 5.03(b));
(5) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on or prior to the date on which such Subsidiary
was acquired by the Company (other than Indebtedness
Incurred in connection with, or to provide all or any
portion of the funds or credit support utilized to
consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a
Subsidiary or was acquired by the Company); provided,
however, that at the time of such acquisition and after
giving pro forma effect thereto, the aggregate principal
amount of all Indebtedness Incurred pursuant to this clause
(5) and then outstanding does not exceed $5.0 million
(including
any Refinancing Indebtedness with respect thereto);
(6) Refinancing Indebtedness in respect of Indebtedness
Incurred pursuant to Section 5.03(a) or pursuant to clause
(3), (4) or (5) or this clause (6) of this Section 5.03(b);
provided, however, that to the extent such Refinancing
Indebtedness directly or indirectly Refinances Indebtedness
of a Subsidiary Incurred pursuant to Section 5.03(b)(5),
such Refinancing Indebtedness shall be Incurred only by such
Subsidiary;
(7) Hedging Obligations consisting of Interest Rate
Agreements, Currency Agreements or Commodity Agreements not
entered into for speculative purposes;
38
(8) obligations in respect of performance, bid and surety
bonds and completion guarantees provided by the Company or
any Restricted Subsidiary in the ordinary course of
business;
(9) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar
instrument drawn against insufficient funds in the ordinary
course of business; provided, however, that such
Indebtedness is extinguished within two Business Days of its
Incurrence;
(10) Indebtedness of the Company consisting of (A)
guarantees of payments of accounts payable of third-party
manufacturing facilities up to the amount of the commitment
therefor on the Issue Date but in any event not to exceed
$4.5 million and (B) obligations of Xxxxxx Xxxxx, Inc. for
the payment of letters of credit issued on its behalf up to
the amount of the commitment therefor on the Issue Date but
in any event not to exceed $1.5 million.
(11) Purchase Money Indebtedness and Capital Lease
Obligations Incurred by the Company or a Restricted
Subsidiary to acquire property in the ordinary course of
business and which do not in the aggregate exceed $10.0
million at any time outstanding;
(12) the Subsidiary Guaranty of a Subsidiary Guarantor;
(13) any Permitted Guarantee by a Restricted Subsidiary
described in clause (iii) of the definition of "Permitted
Guarantees" or any Indebtedness Incurred by a Restricted
Subsidiary as a co-borrower of Indebtedness of the Company
described in clause (iii) of the definition of "Permitted
Guarantees";
(14) Indebtedness of a Foreign Restricted Subsidiary which
at any time outstanding does not exceed the greater of (A)
the Foreign Borrowing Base of such Foreign Restricted
Subsidiary and (B) an amount which, when taken together with
all Indebtedness Incurred by all other Foreign Restricted
Subsidiaries and then outstanding, does not exceed $5.0
million in the aggregate;
(15) Indebtedness Incurred by a Securitization Subsidiary in
a Qualified Securitization Transaction; and
(16) Indebtedness of the Company and any future Subsidiary
Guarantors in an aggregate principal amount which, when
taken together with all other Indebtedness of the Company
and its Restricted Subsidiaries outstanding on the date of
such Incurrence (other than Indebtedness permitted by
clauses (1) through (15) above or Section 5.03(a)) does not
exceed $30.0 million.
(c) Notwithstanding the foregoing, neither the Company
nor any Subsidiary Guarantor will Incur any Indebtedness
pursuant to the foregoing paragraph (b) if the proceeds
thereof are used, directly or indirectly, to Refinance any
Subordinated Obligations of the Company or any Subsidiary
Guarantor unless such Indebtedness shall
39
be subordinated to the Notes or the applicable Subsidiary
Guaranty to at least the same extent as such Subordinated
Obligations.
(d) For purposes of determining compliance with this
Section 5.03:
(1) any Indebtedness remaining outstanding under the Credit
Agreement after the application of the net proceeds of the
sale of the Notes will be treated as Incurred on the Issue
Date under Section 5.03(b)(1) above;
(2) in the event that an item of Indebtedness meets the
criteria of more than one of the types of Indebtedness
described above, the Company, in its sole discretion, will
classify such item of Indebtedness at the time of Incurrence
and will only be required to include the amount and type of
such Indebtedness in one of the above clauses; and
(3) the Company will be entitled to divide and classify an
item of Indebtedness in more than one of the types of
Indebtedness described above.
(e) Notwithstanding any other provision of this
Section 5.03, the accrual of interest, the accretion or
amortization of original issue discount and the payment of
interest on any Indebtedness in the form of additional
Indebtedness with the same terms will not be deemed to be an
incurrence of Indebtedness for purposes of this covenant;
provided, however, that the amount thereof is included in
Consolidated Interest Expense of the Company and its
consolidated Restricted Subsidiaries as accrued.
SECTION 5.04. Limitation on Restricted Payments
. (a) The Company will not, and will not permit any
Restricted Subsidiary, directly or indirectly, to make a
Restricted Payment if at the time the Company or such
Restricted Subsidiary makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or
would result therefrom);
(2) the Company is not entitled to Incur an additional
$1.00 of Indebtedness pursuant to Section 5.03(a); or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments since the Issue Date would exceed
the sum of (without duplication):
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning
of the fiscal quarter immediately following the fiscal
quarter during which the Issue Date occurs to the end of the
most recent fiscal quarter for which financial statements
are available on or prior to the date of such Restricted
Payment (or, in case such Consolidated Net Income shall be a
deficit, minus 100% of such deficit); plus
40
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock,
including Capital Stock issued pursuant to a stock option or
similar plan established by the Company (other than
Disqualified Stock) subsequent to the Issue Date (other than
an issuance or sale to a Subsidiary of the Company and other
than an issuance or sale to an employee stock ownership plan
or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) and 100% of
any cash capital contribution received by the Company from
its stockholders subsequent to the Issue Date; plus
(C) the amount by which Indebtedness of the Company is
reduced on the Company's balance sheet upon the conversion
or exchange subsequent to the Issue Date of any Indebtedness
of the Company convertible or exchangeable for Capital Stock
(other than Disqualified Stock) of the Company (less the
amount of any cash, or the fair value of any other property,
distributed by the Company upon such conversion or
exchange); provided, however, that the foregoing amount
shall not exceed the Net Cash Proceeds received by the
Company or any Restricted Subsidiary from the sale of such
Indebtedness (excluding Net Cash Proceeds of sales to a
Subsidiary of the Company or to an employee stock ownership
plan or a trust established by the Company or any of its
Subsidiaries for the benefit of their employees); plus
(D) an amount equal to the sum of (x) the reduction, net of
costs, in the Investments (other than Permitted Investments)
made by the Company or any Restricted Subsidiary in any
Person resulting from repurchases, repayments or redemptions
of such Investments by such Person, proceeds realized on the
sale of such Investment and proceeds representing the return
of capital (excluding dividends and distributions), in each
case received by the Company or any Restricted Subsidiary,
and (y) to the extent such Person is an Unrestricted
Subsidiary, the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value
of the net assets of such Unrestricted Subsidiary at the
time such Unrestricted Subsidiary is designated a Restricted
Subsidiary; provided, however, that the foregoing sum shall
not exceed, in the case of any such Person or Unrestricted
Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted
Payment) by the Company or any Restricted Subsidiary in such
Person or Unrestricted Subsidiary; plus
(E) $7.5 million.
(b) The preceding provisions will not prohibit:
(1) any Restricted Payment made out of the Net Cash
Proceeds of the substantially concurrent sale of, or made by
exchange for, Capital Stock of the Company (other than
Disqualified Stock and other than Capital Stock issued or
41
sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or
any of its Subsidiaries for the benefit of their employees)
or a substantially concurrent cash capital contribution
received by the Company from its stockholders; provided,
however, that (A) such Restricted Payment shall be excluded
in the calculation of the amount of Restricted Payments and
(B) the Net Cash Proceeds of such sale or such cash capital
contribution (to the extent so used for such Restricted
Payment) shall be excluded from the calculation of amounts
under Section 5.04(a)(3)(B);
(2) any purchase, repurchase, redemption, defeasance or
other acquisition or retirement for value of Subordinated
Obligations of the Company or any Subsidiary Guarantor made
by exchange for, or out of the proceeds of the substantially
concurrent sale of, Indebtedness which is permitted to be
Incurred pursuant to Section 5.03; provided, however, that
such purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value shall be excluded in the
calculation of the amount of Restricted Payments;
(3) dividends paid within 60 days after the date of
declaration thereof if at such date of declaration such
dividend would have complied with this covenant; provided,
however, that at the time of payment of such dividend, no
other Default shall have occurred and be continuing (or
result therefrom); provided further, however, that such
dividend shall be included in the calculation of the amount
of Restricted Payments;
(4) the payment of dividends by the Company on its common
stock in an annual amount of up to $0.15 per outstanding
share of common stock; provided, however, that such payment
will be included in the calculation of the amount of
Restricted Payments;
(5) repurchases by the Company of Capital Stock deemed to
occur upon the exercise of options or warrants if such
Capital Stock represents all or a portion of the exercise
price thereof; provided, however, that such repurchases will
be excluded from the calculation of the amount of Restricted
Payments; and
(6) other Restricted Payments not exceeding $15.0 million
in the aggregate at any one time outstanding; provided,
however, that (A) at the time of such Restricted Payments,
no Default or Event of Default shall have occurred and be
continuing (or result therefrom) and (B) such Restricted
Payments will be excluded in the calculation of the amount
of Restricted Payments.
(c) For purposes of determining compliance with
this Section 5.04, in the event that a Restricted Payment
meets the criteria of more than one of the types of
Restricted Payments described above, the Company may order
and classify, and from time to time may reclassify, such
Restricted Payment if that classification would have been
permitted at the time such Restricted Payment was made and
at the time of the reclassification.
42
SECTION 5.05. Limitation on Restrictions on
Distributions from Restricted Subsidiaries. The Company will not,
and will not permit any Restricted
Subsidiary to, create or otherwise cause or permit to exist
or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to
(a) pay dividends or make any other distributions on its
Capital Stock to the Company or a Restricted Subsidiary or
pay any Indebtedness owed to the Company, (b) make any loans
or advances to the Company or (c) transfer any of its
property or assets to the Company, except:
(1) with respect to clauses (a), (b) and (c) of this
Section 5.05,
(A) any encumbrance or restriction pursuant to an agreement
in effect at or entered into on the Issue Date (after giving
effect to the use of the net proceeds of the sale of the
Notes as described in the Offering Circular);
(B) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to
any Indebtedness Incurred by such Restricted Subsidiary on
or prior to the date on which such Restricted Subsidiary was
acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the
funds or credit support utilized to consummate, the
transaction or series of related transactions pursuant to
which such Restricted Subsidiary became a Restricted
Subsidiary or was acquired by the Company) and outstanding
on such date;
(C) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to
an agreement referred to in clause (A) or (B) of this
Section 5.05(1) or this clause (C) or contained in any
amendment to an agreement referred to in clause (A) or (B)
of this Section 5.05(1) or this clause (C); provided,
however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any such
refinancing agreement or amendment are no less favorable in
any material respect to the Noteholders than encumbrances
and restrictions with respect to such Restricted Subsidiary
contained in such predecessor agreements;
(D) any encumbrance or restriction with respect to a
Restricted Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of all or
substantially all of the Capital Stock or assets of such
Restricted Subsidiary pending the closing of such sale or
disposition and so long as the consummation of such
transaction would not result in a Default or Event of
Default;
(E) any encumbrance or restriction under applicable
corporate law or regulation relating to the payment of
dividends or distributions;
43
(F) any encumbrance or restriction contained in the terms
of any Indebtedness permitted to be Incurred under this
Indenture; provided that such encumbrances or restrictions
are ordinary and customary with respect to the type of
Indebtedness being Incurred if the Board of Directors
determines that any such encumbrance or restriction will not
adversely affect the Company's ability to make principal or
interest payments on the Notes; and
(G) any encumbrance or restriction with respect to
Indebtedness or other contractual requirements of a
Securitization Subsidiary in connection with and, in the
good faith determination of the Board of Directors,
necessary to effectuate, a Qualified Securitization
Transaction; provided, however, that such encumbrance or
restriction applies only to such Securitization Subsidiary;
and
(2) with respect to clause (c) of this Section 5.05 only,
(A) any encumbrance or restriction consisting of customary
nonassignment provisions in leases governing leasehold
interests to the extent such provisions restrict the
transfer of the lease or the property leased thereunder; and
(B) any encumbrance or restriction contained in security
agreements or mortgages securing Indebtedness of a
Restricted Subsidiary to the extent such encumbrance or
restriction restricts the transfer of the property subject
to such security agreements or mortgages.
SECTION 5.06. Limitation on Sales of Assets and
Subsidiary Stock. (a) The Company will not, and will not permit
any Restricted Subsidiary to, directly or indirectly,
consummate any Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least
equal to the fair market value (including as to the value of
all non-cash consideration), as determined in good faith by
the Board of Directors, of the shares and assets subject to
such Asset Disposition;
(2) in the case of an Asset Disposition other than an Asset
Swap, at least 75% of the consideration thereof received by
the Company or such Restricted Subsidiary is in the form of
cash or cash equivalents; and
(3) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Company (or such
Restricted Subsidiary, as the case may be)
44
(A) to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, redeem or
purchase Senior Indebtedness of the Company or Indebtedness
(other than any Disqualified Stock) of a Restricted
Subsidiary (in each case other than Indebtedness owed to the
Company or an Affiliate of the Company) within one year from
the later of the date of such Asset Disposition or the
receipt of such Net Available Cash;
(B) to the extent the Company elects, to acquire Additional
Assets within one year from the later of the date of such
Asset Disposition or the receipt of such Net Available Cash;
and
(C) to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B), to
make an offer to the Holders (and to holders of other Senior
Indebtedness of the Company designated by the Company) to
purchase Notes (and such other Senior Indebtedness of the
Company) pursuant to and subject to the conditions contained
in this Indenture;
provided, however, that in connection with
any prepayment, repayment or purchase of
Indebtedness pursuant to clause (A) or (C)
above, the Company or such Restricted
Subsidiary shall permanently retire such
Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced
in an amount equal to the principal amount so
prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this
Section 5.06, the Company and the Restricted Subsidiaries
will not be required to apply any Net Available Cash in
accordance with this Section 5.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions
which is not applied in accordance with this Section 5.06
exceeds $20.0 million. Pending application of Net Available
Cash pursuant to this Section 5.06, such Net Available Cash
shall be invested in Temporary Cash Investments or applied
to temporarily reduce revolving credit indebtedness.
(b) For the purposes of this Section 5.06, the
following are deemed to be cash or cash equivalents:
(1) the assumption of Indebtedness of the Company or any
Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition; and
(2) securities, notes or other obligations received by the
Company or any Restricted Subsidiary from the transferee to
the extent
45
converted within 90 days by the Company or such
Restricted Subsidiary into cash or Temporary Cash
Investments.
(c) In the event of an Asset Disposition that
requires the purchase of Notes (and other Senior
Indebtedness of the Company) pursuant to clause (a)(3)(C) of
this Section 5.06, the Company will purchase Notes tendered
pursuant to an offer by the Company for the Notes (and such
other Senior Indebtedness) at a purchase price of 100% of
their principal amount (or, in the event such other Senior
Indebtedness of the Company was issued with significant
original issue discount, 100% of the accreted value thereof)
without premium, plus accrued but unpaid interest (or, in
respect of such other Senior Indebtedness of the Company,
such lesser price, if any, as may be provided for by the
terms of such Senior Indebtedness) in accordance with the
procedures (including prorating in the event of
oversubscription) set forth in this Indenture. If the
aggregate purchase price of the securities tendered exceeds
the Net Available Cash allotted to their purchase, the
Company will select the securities to be purchased on a pro
rata basis but in round denominations, which in the case of
the Notes will be denominations of $1,000 principal amount
or multiples thereof. The Company shall not be required to
make such an offer to purchase Notes (and other Senior
Indebtedness of the Company) pursuant to this Section 5.06
if the Net Available Cash available therefor is less than
$10.0 million (which lesser amount shall be carried forward
for purposes of determining whether such an offer is
required with respect to the Net Available Cash from any
subsequent Asset Disposition).
(d) The Company will comply, to the extent
applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in
connection with the repurchase of Notes pursuant to this
Section 5.06. To the extent that the provisions of any
securities laws or regulations conflict with provisions of
this Section 5.06, the Company will comply with the
applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section
5.06 by virtue of its compliance with such securities laws
or regulations.
SECTION 5.07. Limitation on Affiliate Transactions.
(a) The Company will not, and will not permit any
Restricted Subsidiary to, enter into or permit to exist any
transaction (including the purchase, sale, lease or exchange
of any property, employee compensation arrangements or the
rendering of any service) with, or for the benefit of, any
Affiliate of the Company (an "Affiliate Transaction") unless:
(1) the terms of the Affiliate Transaction are no less
favorable to the Company or such Restricted Subsidiary than
those that could be obtained at the time of the Affiliate
Transaction in arm's-length dealings with a Person who is
not an Affiliate;
(2) if such Affiliate Transaction involves an amount in
excess of $5.0 million, the terms of the Affiliate
Transaction are set forth in writing and a majority of the
non-employee directors of the Company disinterested with
respect to such Affiliate Transaction have determined in
good faith that the criteria set forth in clause
46
(1) of this
Section 5.07 are satisfied and have approved the relevant
Affiliate Transaction as evidenced by a resolution of the
Board of Directors; and
(3) if such Affiliate Transaction involves an amount in
excess of $17.5 million, the Board of Directors shall also
have received a written opinion from an Independent
Qualified Party to the effect that such Affiliate
Transaction is fair, from a financial standpoint, to the
Company and its Restricted Subsidiaries or is not less
favorable to the Company and its Restricted Subsidiaries
than could reasonably be expected to be obtained at the time
in an arm's-length transaction with a Person who was not an
Affiliate.
(b) The provisions of the preceding paragraph (a) will not
prohibit:
(1) any Investment (other than a Permitted Investment) or
other Restricted Payment, in each case permitted to be made
pursuant to Section 5.04;
(2) 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 in the ordinary course of business;
(3) loans or advances to employees in the ordinary course
of business in accordance with the past practices of the
Company or its Restricted Subsidiaries, but in any event not
to exceed $2.0 million in the aggregate outstanding at any
one time;
(4) the payment of fees and compensation to, and the
provision of employee benefit arrangements and indemnity for
the benefit of, directors, officers and employees of the
Company or any of its Restricted Subsidiaries entered into
in the ordinary course of business;
(5) any transaction between the Company and a Restricted
Subsidiary or between Restricted Subsidiaries (other than
Securitization Subsidiaries);
(6) any transaction with a Restricted Subsidiary or joint
venture or similar entity which would constitute an
Affiliate Transaction solely because the Company or a
Restricted Subsidiary owns an equity interest in or
otherwise controls such Restricted Subsidiary, joint venture
or similar entity;
(7) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
47
(8) any agreement or arrangement in effect on the Issue
Date (after giving effect to the use of the net proceeds of
the sale of the Notes as described in the Offering Circular)
or any amendment or replacement thereof; provided, however,
that any such amendment or replacement is not less favorable
in any material respect to the Company or any of its
Restricted Subsidiaries than that in effect on the Issue
Date;
(9) sales or other dispositions of accounts receivable or
licensing royalties and related assets to a Securitization
Subsidiary in a Qualified Securitization Transaction which
are customarily transferred in such a transaction; and
(10) purchases by the Company or any Restricted Subsidiary
from TAL Apparel Limited and related companies in the
ordinary course of business on terms no less favorable to
the Company or such Restricted Subsidiary than those that
could be obtained at the time in arm's length dealings with
an unrelated Person.
SECTION 5.08. Limitation on the Sale or Issuance of
Capital Stock of Restricted Subsidiaries. The Company:
(1) will not, and will not permit any Restricted Subsidiary
to, sell, lease, transfer or otherwise dispose of any
Capital Stock of any Restricted Subsidiary to any Person
(other than the Company or a Restricted Subsidiary other
than a Securitization Subsidiary), and
(2) will not permit any Restricted Subsidiary to issue any
of its Capital Stock (other than, if necessary, shares of
its Capital Stock constituting directors' or other legally
required qualifying shares) to any Person (other than the
Company or a Restricted Subsidiary other than a
Securitization Subsidiary),
unless
(A) immediately after giving effect to such issuance, sale
or other disposition, neither the Company nor any of its
Subsidiaries own any Capital Stock of such Restricted
Subsidiary;
(B) immediately after giving effect to such issuance, sale
or other disposition, such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect thereto is
treated as a new Investment by the Company and such
Investment would be permitted to be made under Section 5.04
if made on the date of such issuance, sale or other
disposition; or
(C) immediately after giving effect to such issuance, sale
or other disposition of Capital Stock, other than
Disqualified Stock, such Restricted Subsidiary would
continue to be a Restricted Subsidiary,
48
and in the case of each of (A), (B) and (C), such issuance,
sale or other disposition complies with, and the proceeds
thereof are applied in accordance with, Section 5.06.
SECTION 5.09. Limitation on Liens. The Company
will not, and will not permit any
Restricted Subsidiary to, issue, assume or guarantee any
Indebtedness for borrowed money secured by any Lien on any
property or asset now owned or hereafter acquired by the
Company or such Restricted Subsidiary without making
effective provision whereby any and all Notes then or
thereafter outstanding will be secured by a Lien equally and
ratably with (or, if the obligation to be secured by such
Lien is subordinated in right of payment to the Notes, prior
to) any and all other obligations thereby secured for so
long as any such obligations shall be so secured.
The foregoing restriction does not, however, apply
to:
(1) Liens existing on the Issue Date after giving effect to
the use of the net proceeds of the sale of the Notes as
described in the Offering Circular;
(2) Liens securing Hedging Obligations so long as such
Hedging Obligations relate to Indebtedness that is, and is
permitted to be under this Indenture, secured by a Lien on
the same property securing such Hedging Obligations;
(3) Liens to secure Purchase Money Indebtedness that is
otherwise permitted under this Indenture; provided that (i)
any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, the cost
of the acquisition or construction that is the subject of
the Purchase Money Indebtedness and (ii) such Lien is
limited in the manner described in the definition of
Purchase Money Indebtedness;
(4) Liens securing Capital Lease Obligations; provided,
however, that such Lien does not extend to any property
other than that subject to the underlying lease;
(5) Liens in favor of landlords contained in leases and
subleases of real property granted by the Company or any
Restricted Subsidiary or inventory or fixtures located on
the leased real property; provided, however, that such Liens
are in the ordinary course of business, are on terms
customary for leases of such type and do not materially
impair the use of the liened property in the operation of
the business of the Company or the Restricted Subsidiary;
(6) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs
duties in connection with the importation of goods;
(7) Liens imposed by law, including, carriers',
warehousemen's and mechanics' Liens, in each case for sums
not yet due or being contested in good faith by appropriate
proceedings; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been
made therefor;
49
(8) Liens for taxes, assessments and governmental charges
not yet subject to penalties for non-payment or which are
being contested in good faith and by appropriate
proceedings; provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been
made therefor;
(9) Liens securing Indebtedness Incurred under Section
5.03(b)(1);
(10) Liens securing Indebtedness owed by a Restricted
Subsidiary to the Company or to any other Restricted
Subsidiary (other than a Securitization Subsidiary);
(11) Liens on the property of any Restricted Subsidiary
existing at the time such Person becomes a Subsidiary and
not incurred as result of (or in connection with or in
anticipation of) such Person becoming a Subsidiary;
provided, however, that such Liens do not extend to or cover
any property or assets of the Company or any of the
Restricted Subsidiaries other than the property encumbered
at the time such Person becomes a Subsidiary and do not
secure Indebtedness with a principal amount in excess of the
principal amount outstanding at such time;
(12) Liens securing the Notes and the Exchange Securities;
(13) Liens to secure taxes not yet due or which are being
contested in good faith by the Company or a Restricted
Subsidiary;
(14) Liens securing Refinancing Indebtedness incurred to
refinance Indebtedness that was previously so secured;
provided that such Lien extends to or covers only the same
property that secures the Indebtedness being refinanced;
(15) Liens (excluding in all cases Liens securing Limited
Originator Recourse obligations) on (i) accounts receivable
and related assets transferred to, or on accounts receivable
and related assets of, a Securitization Subsidiary in
connection with a Qualified Securitization Transaction and
(ii) licensing royalties and related assets transferred to,
or on licensing royalties and related assets of, a
Securitization Subsidiary in connection with a Qualified
Securitization Transaction in an aggregate amount of up to
15% of the total revenues from royalties or similar
licensing payments of the Company and its Restricted
Subsidiaries;
(16) Liens securing Indebtedness Incurred under Section
5.03(b)(14); or
(17) Liens (exclusive of any Lien of any type otherwise
permitted under clauses (1) through (16) of this Section
5.09) securing Indebtedness for borrowed money of the
Company or any Restricted Subsidiary in an aggregate
principal amount which, together with the aggregate amount
of Attributable Indebtedness deemed to be outstanding in
respect of all Sale/Leaseback Transactions entered into
pursuant to Section 5.10(a) (exclusive of any such
Sale/Leaseback Transactions otherwise permitted under
clauses (1) through (16) of this Section
50
5.09), does not at
the time such Indebtedness is incurred exceed the greater of
$40.0 million and 15% of Consolidated Net Tangible Assets,
as determined based on the consolidated balance sheet of the
Company as of the end of the most recent fiscal quarter for
which financial statements are available.
Any Lien created for the benefit of the Holders
pursuant to the preceding sentence shall provide by its
terms that such Lien shall be automatically and
unconditionally released and discharged upon the release and
discharge of the initial Lien.
SECTION 5.10. Limitation on Sale/Leaseback
Transactions. The Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale/Leaseback Transaction
with respect to any property unless (a) the Company or such
Subsidiary would be entitled to (1) incur Indebtedness in an
amount equal to the Attributable Debt with respect to such
Sale/Leaseback Transaction pursuant to Section 5.03 and (2)
create a Lien on such property securing such Attributable
Debt without equally and ratably securing the Notes pursuant
to Section 5.09, (b) the net proceeds received by the
Company or any Restricted Subsidiary in connection with such
Sale/Leaseback Transaction are at least equal to the fair
value (as determined by the Board of Directors) of such
property and (c) the Company applies the proceeds of such
transaction in compliance with Section 5.06.
SECTION 5.11. Future Subsidiary Guarantees
. The Company will not permit any Restricted
Subsidiary, directly or indirectly, to Guarantee any
Indebtedness of the Company (other than Permitted
Guarantees) or to Incur any Indebtedness under Section
5.03(a) or Section 5.03(b)(16) unless such Restricted
Subsidiary simultaneously executes and delivers a Guaranty
Agreement providing for the unconditional and irrevocable
Guarantee of the Notes by such Restricted Subsidiary,
jointly and severally with all other Subsidiary Guarantors.
If the Indebtedness to be Guaranteed is subordinated to the
Notes, the Guarantee of such Indebtedness will be
subordinated to the Guarantee of the Notes to the same
extent as the Indebtedness to be Guaranteed is subordinated
to the Notes. Notwithstanding the foregoing, any such
Guarantee by a Restricted Subsidiary of the Notes will
provide by its terms that it will be automatically and
unconditionally released and discharged upon either:
(1) the release or discharge of such Guarantee of payment
of such other Indebtedness, except a discharge by or as a
result of payment under such Guarantee; or
(2) any sale or transfer, other than to the Company or a
Subsidiary of the Company, of all of the Company's Capital
Stock in, or all or substantially all the assets of, such
Restricted Subsidiary, which sale or transfer is made in
compliance with the applicable provisions of this Indenture.
SECTION 5.12. Compliance Certificate. The Company shall deliver
to the Trustee within 120 days after the end of each fiscal year of the Company
an Officers'
51
Certificate stating that in the course of the
performance by the signers of their duties as officers of
the Company they would normally have knowledge of any
Default and whether or not the signers know of any Default
that occurred during such period. If they do, the
certificate shall describe the Default, its status and what
action the Company is taking or proposes to take with
respect thereto. The Company also shall comply with TIA Section
314(a)(4).
SECTION 5.13. Further Instruments and Acts. Upon
request of the Trustee, the Company will execute and
deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 5.14. Covenant Removal. Notwithstanding
any other provision of this Indenture,
during any period of time that both (1) the Notes are rated
Investment Grade by each of Xxxxx'x Investor Service, Inc.
and Standard & Poor's Ratings Group and (2) no Default or
Event of Default shall have occurred and be continuing, the
Company and its Restricted Subsidiaries will not be subject
to the covenants set forth in Sections 5.03, 5.04, 5.05,
5.06, 5.07, 5.08 and clause (3) of Section 6.01.
ARTICLE 6
Merger and Consolidation
SECTION 6.01. When Company May Merge or Transfer
Assets. The Company will not consolidate with or merge
with or into, or convey, transfer or lease, in one
transaction or a series of transactions, directly or
indirectly, all or substantially all its assets to, any
Person, unless:
(1) the resulting, surviving or transferee Person (the
"Successor Company") shall be a Person organized and
existing under the laws of the United States, any State
thereof or the District of Columbia and the Successor
Company (if not the Company) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the
obligations of the Company under the Notes and this
Indenture;
(2) immediately after giving pro forma effect to such
transaction (and treating any Indebtedness which becomes an
obligation of the Successor Company or any Subsidiary as a
result of such transaction as having been Incurred by such
Successor Company or such Subsidiary at the time of such
transaction), no Default or Event of Default shall have
occurred and be continuing;
(3) immediately after giving pro forma effect to such
transaction, the Successor Company would be able to Incur an
additional $1.00 of Indebtedness pursuant to Section
5.03(a); and
52
(4) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture;
provided, however, that clauses (3) and (4) will not be
applicable to (A) a Restricted Subsidiary consolidating
with, merging into or transferring all or part of its
properties and assets to the Company or (B) the Company
merging with an Affiliate of the Company solely for the
purpose and with the sole effect of reincorporating the
Company in another jurisdiction.
For purposes of this Article 6, the sale, lease,
conveyance, assignment, transfer or other disposition of all
or substantially all of the properties and assets of one or
more Subsidiaries of the Company, which properties and
assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties
and assets of the Company on a consolidated basis, shall be
deemed to be the transfer of all or substantially all of the
properties and assets of the Company.
The Successor Company shall be the successor to
the Company and shall succeed to, and be substituted for,
and may exercise every right and power of, the Company under
this Indenture, and the predecessor Company, except in the
case of a lease, shall be released from the obligation to
pay the principal of and interest on the Notes.
SECTION 6.02. When a Subsidiary Guarantor May Merge or
Transfer Assets. The Company will not permit any Subsidiary Guarantor to
consolidate with or merge with or into, or convey, transfer
or lease, in one transaction or a series of transactions,
all or substantially all of its assets to any Person unless:
(1) except in the case of a Subsidiary Guarantor that has
been disposed of in its entirety to another Person (other
than to the Company or an Affiliate of the Company), whether
through a merger, consolidation or sale of Capital Stock or
assets, if in connection therewith the Company provides an
Officers' Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 5.06
in respect of such disposition, the resulting, surviving or
transferee Person (if not such Subsidiary) shall be a Person
organized and existing under the laws of the jurisdiction
under which such Subsidiary was organized or under the laws
of the United States, or any State thereof or the District
of Columbia, and such Person shall expressly assume, by a
Guaranty Agreement, in a form satisfactory to the Trustee,
all the obligations of such Subsidiary, if any, under its
Subsidiary Guaranty;
(2) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any
Indebtedness which becomes an obligation of the resulting,
surviving or transferee Person as a result of such
transaction as having been issued by such Person at the time
of such transaction), no Default or Event of Default shall
have occurred and be continuing; and
53
(3) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that
such consolidation, merger or transfer and such Guaranty
Agreement, if any, complies with this Indenture.
ARTICLE 7
Defaults and Remedies
SECTION 7.01. Events of Default. Each of the following is an
"Event of Default":
(1) a default in the payment of interest on the Notes when
due, which continues for 30 days;
(2) a default in the payment of principal of any Note when
due at its Stated Maturity, upon optional redemption, upon
required purchase, upon declaration of acceleration or otherwise;
(3) subject to Section 5.14, the failure by the Company to
comply with its obligations under Article 6.
(4) subject to Section 5.14, the failure by the Company to
comply for 30 days after notice with any of its obligations
under Article 4 (other than a failure to purchase Notes) or
under Sections 5.02, 5.03, 5.04, 5.05, 5.06 (other than a
failure to purchase Notes), 5.07, 5.08, 5.09, 5.10 or 5.11;
(5) the failure by the Company or any Restricted Subsidiary
to comply for 60 days after notice with its other covenants,
obligations, warranties or agreements contained in this
Indenture;
(6) Indebtedness of the Company, any Subsidiary Guarantor
or any Significant Subsidiary is not paid within any
applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and
the total amount of such Indebtedness unpaid or accelerated
exceeds $15.0 million (the "cross acceleration provision");
(7) the Company, a Subsidiary Guarantor or any Significant
Subsidiary pursuant to or within the meaning of any
Bankruptcy Law (the "bankruptcy provisions");
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it
in an involuntary case;
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property; or
54
(D) makes a general assignment for the benefit of its
creditors; or takes any comparable action under any foreign laws
relating to insolvency;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, a Subsidiary
Guarantor or any Significant Subsidiary in an involuntary
case;
(B) appoints a Custodian of the Company, a Subsidiary
Guarantor or any Significant Subsidiary or for all or
substantially all of the property of any of them; or
(C) orders the winding up or liquidation of the Company, a
Subsidiary Guarantor or any Significant Subsidiary;
or any similar relief is granted under any foreign laws
and the order or decree remains unstayed and in effect
for 60 days;
(9) a judgment or order is rendered against the Company, a
Subsidiary Guarantor or any Significant Subsidiary, which
requires the payment in money by the Company, a Subsidiary
Guarantor or any Significant Subsidiary either individually
or in the aggregate, of an amount (to the extent not covered
by insurance) in excess of $15.0 million and such judgment
or order remains unsatisfied, undischarged, unvacated,
unbonded and unstayed for 60 days (the "judgment default
provision"); or
(10) a Subsidiary Guaranty ceases to be in full force and
effect (other than in accordance with the terms of such
Subsidiary Guaranty) or a Subsidiary Guarantor denies or
disaffirms its obligations under its Subsidiary Guaranty.
The foregoing will constitute Events of Default
whatever the reason for any such Event of Default and
whether it is voluntary or involuntary or is effected by
operation of law or pursuant to any judgment, decree or
order of any court or any order, rule or regulation of any
administrative or governmental body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx
Xxxxxx Code, or any similar Federal or state law for the
relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A default under clauses (4) and (5) will not
constitute an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the
outstanding Notes notify the Company of the default and the
Company does not cure such default within the time specified
after receipt of such notice. Such notice must specify the
Default, demand that it be remedied and state that such
notice is a "Notice of Default".
55
The Company shall deliver to the Trustee, within
30 days after the occurrence thereof, written notice in the
form of an Officers' Certificate of any Event of Default
under clause (6) or (10) and any event which with the giving
of notice or the lapse of time would become an Event of
Default under clause (4) or (5) or (9), its status and what
action the Company is taking or proposes to take with
respect thereto.
SECTION 7.02. Acceleration. If an Event of Default
(other than an Event of Default
specified in Section 7.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to
the Company, or the Holders of at least 25% in principal
amount of the Securities by notice to the Company and the
Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due
and payable immediately. If an Event of Default specified
in Section 7.01(7) or (8) with respect to the Company
occurs, the principal of and interest on all the Securities
shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the
Trustee or any Holders. The Holders of a majority in
principal amount of the Securities by notice to the Trustee
may rescind an acceleration and its consequences if the
rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or
waived except nonpayment of principal or interest that has
become due solely because of acceleration. No such
rescission shall affect any subsequent Default or impair any
right consequent thereto.
SECTION 7.03. Other Remedies. If an Event of Default
occurs and is continuing, the
Trustee may pursue any available remedy to collect the
payment of principal of or interest on the 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
accruing upon an Event of Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the
Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 7.04. Waiver of Past Defaults. The Holders
of a majority in principal amount of the
Securities by notice to the Trustee may waive an existing
Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security (ii) a
Default arising from the failure to redeem or purchase any
Security when required pursuant to this Indenture or (iii) a
Default in respect of a provision that under Section 10.02
cannot be amended without the consent of each Holder
affected. When a Default is waived, it is deemed cured, but
no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
SECTION 7.05. Control by Majority. The Holders
of a majority in principal amount of the
Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any
direction
56
that conflicts with law or this Indenture or,
subject to Section 8.01, that the Trustee determines is
unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the
Trustee shall be entitled to reasonable indemnification
against all losses and expenses caused by taking or not
taking such action.
SECTION 7.06. Limitation on Suits. Except to enforce
the right to receive payment of
principal, premium (if any) or interest when due, no Holder
may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) such Holder has previously given the Trustee written
notice stating that an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the
outstanding Securities make a written request to the Trustee
to pursue the remedy;
(3) such Holder has offered the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee has not complied with such request within
60 days after the receipt thereof and the offer of security
or indemnity; and
(5) Holders of a majority in principal amount of the
outstanding Securities have not given the Trustee a
direction inconsistent with such request during such 60-day
period.
A Holder may not use this Indenture to prejudice
the rights of another Holder or to obtain a preference or
priority over another Holder.
SECTION 7.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of principal of
and interest on the Securities held by such Holder, on or
after the respective due dates expressed in the Securities,
or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
SECTION 7.08. Collection Suit by Trustee. If an Event
of Default specified in Section 7.01(1) or
(2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust
against the Company for the whole amount then due and owing
(together with interest on any unpaid interest to the extent
lawful) and the amounts provided for in Section 8.07.
SECTION 7.09. 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 and the Holders
allowed in any judicial proceedings relative to the Company,
its creditors or its property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders
in any election of a
57
trustee in bankruptcy or other Person
performing similar functions, and any Custodian in any such
judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount
due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
its counsel, and any other amounts due the Trustee under
Section 8.07.
SECTION 7.10. Priorities. If the Trustee collects
any money or property pursuant to
this Article 7, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under
Section 8.07;
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 may fix a record date and payment date
for any payment to Holders pursuant to this Section 7.10.
At least 15 days before such record date, the Company shall
mail to each Holder and the Trustee a notice that states the
record date, the payment date and amount to be paid.
SECTION 7.11. 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, 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 7.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 7.07 or a
suit by Holders of more than 10% in principal amount of the
Securities.
SECTION 7.12. Waiver of Stay or Extension Laws.
The Company (to the extent it may lawfully do so) shall
not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been
enacted.
58
ARTICLE 8
Trustee
SECTION 8.01. Duties of Trustee. (a) If an Event
of Default has occurred and is
continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent Person would
exercise or use under the circumstances in the conduct of
such Person's own affairs.
(b) Except during the continuance of an Event of
Default:
(1) the Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be
read into this Indenture against the Trustee; 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 furnished to the
Trustee and conforming to the requirements of this
Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Trustee may 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 8.01;
(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 7.05.
(d) Every provision of this Indenture that in
any way relates to the Trustee is subject to this Section
8.01.
(e) 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.
(f) Money held in trust by the Trustee need not
be segregated from other funds except to the extent required
by law.
(g) No provision of this Indenture shall require
the Trustee to expend or risk its own funds or otherwise
incur financial liability in the performance of any of its
59
duties hereunder or in the exercise of any of its rights or
powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to
the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions
of this Section 8.01 and to the provisions of the TIA.
SECTION 8.02. Rights of Trustee. (a) The
Trustee may 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 or an
Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance
on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any
agent 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
believes to be authorized or within its rights or powers;
provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Securities shall be full
and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or
opinion of such counsel.
SECTION 8.03. 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. Any Paying Agent,
Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Trustee must comply with
Sections 8.10 and 8.11.
SECTION 8.04. 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 of the Securities, and it
shall not be responsible for any statement of the Company in
this Indenture or in any document issued in connection with
the sale of the Securities or in the Securities other than
the Trustee's certificate of authentication.
SECTION 8.05. Notice of Defaults. If a Default
occurs and is continuing and if it is known
to the Trustee, the Trustee shall mail to each Holder notice
of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest
on any Security (including payments pursuant to the
mandatory
60
redemption provisions of such Security, if any),
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 best interests of
Holders.
SECTION 8.06. Reports by Trustee to Holders.
As promptly as practicable after each May 1 beginning
with the May 1 following the date of this Indenture, and in
any event prior to July 1 in each year, the Trustee shall
mail to each Holder a brief report dated as of May 1 that
complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b).
A copy of each 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. The
Company agrees to notify promptly the Trustee whenever the
Securities become listed on any stock exchange and of any
delisting thereof.
SECTION 8.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services as the Company and
the Trustee shall agree in writing. 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 out-of-
pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its
services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the
Trustee's agents, counsel, accountants and experts. Except
as otherwise provided in this Section 8.07, the Company
shall indemnify the Trustee against any and all loss,
liability or expense (including reasonable attorneys' fees)
incurred by it in connection with the administration of this
trust and the performance of its duties hereunder. The
Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so
notify the Company shall not relieve the Company of its
obligations hereunder except to the extent that the Company
has been materially prejudiced by such failure. The Company
shall defend the claim and the Trustee may have separate
counsel; provided, that the Trustee shall pay the reasonable
fees and expenses of such separate counsel unless (a) the
Company and the Trustee shall have mutually agreed to the
contrary, (b) the Company has failed within a reasonable
time to retain counsel reasonably satisfactory to the
Trustee, (c) the Trustee shall have reasonably concluded
that there may be legal defenses available to it that are
different from or in addition to those available to the
Company or (d) the named parties in any claim (including any
impleaded parties) include both the Company and the Trustee
and representation of both the Company and the Trustee by
the same counsel would be inappropriate due to actual or
potential differing interests between the Company and the
Trustee. The Trustee shall not, without the prior written
consent of the Company, effect any settlement of any action
in respect of which the Trustee is indemnified by the
Company hereunder. The Company need not reimburse any
expense or indemnify against any loss, liability or expense
incurred by the Trustee through the Trustee's own willful
misconduct, negligence or bad faith.
To secure the Company's payment obligations in
this Section 8.07, the Trustee shall have a lien prior to
the Securities on all money or property held or collected
61
by the Trustee other than money or property held in trust to
pay principal of and interest on particular Securities.
The Company's payment obligations pursuant to this
Section 8.07 shall survive the discharge of this Indenture.
When the Trustee incurs expenses after the occurrence of a
Default specified in Section 7.01(7) or (8) with respect to
the Company, the expenses are intended to constitute
expenses of administration under the Bankruptcy Law.
SECTION 8.08. Replacement of Trustee. The Trustee
may resign at any time by so notifying the
Company in writing at least 30 days prior to the date of the
proposed resignation. The Holders of a majority in
principal amount of the Securities may remove the Trustee by
so notifying the Trustee and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company
or by the Holders of a majority in principal amount of the
Securities and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event
being referred to herein as the retiring Trustee), the
Company shall promptly appoint a successor Trustee.
A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
the Company. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to Holders. The retiring
Trustee shall promptly transfer all property held by it as
Trustee to the successor Trustee, subject to the lien
provided for in Section 8.07.
If a successor Trustee does not take office within
60 days after the retiring Trustee resigns or is removed,
the retiring Trustee or the Holders of 10% in principal
amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10,
any Holder may petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a
successor Trustee.
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Notwithstanding the replacement of the Trustee
pursuant to this Section 8.08, the Company's obligations
under Section 8.07 shall continue for the benefit of the
retiring Trustee.
SECTION 8.09. Successor Trustee by Merger
.. If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee
corporation without any further act shall be the successor
Trustee.
In case at the time such successor or successors
by merger, conversion or consolidation to the Trustee shall
succeed to the trusts created by this Indenture any of the
Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver
such Securities so authenticated; and in case at that time
any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities
either in the name of any predecessor hereunder or in the
name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is
anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 8.10. Eligibility; Disqualification.
The Trustee shall at all times satisfy the requirements
of TIA Section 310(a). The Trustee shall have a combined capital
and surplus of at least $50.0 million as set forth in its
most recent published annual report of condition. The
Trustee shall comply with TIA Section 310(b); provided, however,
that there shall be excluded from the operation of TIA Section
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 Section 310(b)(1)
are met.
SECTION 8.11. Preferential Collection of Claims
Against Company. The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section 311(b). A
Trustee who has resigned or been removed shall be subject to TIA Section
311(a) to the extent indicated therein.
ARTICLE 9
Discharge of Indenture; Defeasance
SECTION 9.01. Discharge of Liability on Securities;
Defeasance. (a) When (1) the Company delivers to the
Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (2)
all outstanding Securities have become due and payable,
whether at maturity or on a redemption date as a result of
the mailing of a notice of redemption pursuant to Article 3
hereof and the Company irrevocably deposits with the Trustee
funds sufficient to pay at maturity or upon redemption all
outstanding Securities, including interest thereon to
maturity or such redemption date (other than Securities
replaced pursuant to Section 2.07), and if in either
63
case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section
9.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on
demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel at the cost and
expense of the Company.
(b) Subject to Sections 9.01(c) and 9.02, the
Company at any time may terminate (1) all its obligations
under the Securities and this Indenture ("legal defeasance
option") or (2) its obligations under Sections 4.01, 4.02,
5.02, 5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 and
5.11 and the operation of Sections 7.01(4), 7.01(6),
7.01(7), 7.01(8) and 7.01(9) (but, in the case of Sections
7.01(7) and (8), with respect only to Significant
Subsidiaries and Subsidiary Guarantors) and the limitations
contained in Section 6.01(3) ("covenant defeasance option").
The Company may exercise its legal defeasance option
notwithstanding its prior exercise of its covenant
defeasance option.
If the Company exercises its legal defeasance
option, payment of the Securities may not be accelerated
because of an Event of Default with respect thereto. If the
Company exercises its covenant defeasance option, payment of
the Securities may not be accelerated because of an Event of
Default specified in Sections 7.01(4), 7.01(6), 7.01(7),
7.01(8) and 7.01(9) (but, in the case of Sections 7.01(7)
and (8), with respect only to Significant Subsidiaries and
Subsidiary Guarantors) or because of the failure of the
Company to comply with Section 6.01(3). If the Company
exercises its legal defeasance option or its covenant
defeasance option, each Subsidiary Guarantor, if any, shall
be released from all its obligations with respect to its
Subsidiary Guaranty.
Upon satisfaction of the conditions set forth
herein and upon written request of the Company, the Trustee
shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above,
the Company's obligations in Sections 2.03, 2.04, 2.05,
2.06, 2.07, 2.08, 8.07 and 8.08 and in this Article 9 shall
survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 8.07, 9.04
and 9.05 shall survive.
SECTION 9.02. Conditions to Defeasance. The Company may
exercise its legal defeasance option or
its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with
the Trustee money or U.S. Government Obligations for the
payment of principal of and interest on the Securities to
maturity or redemption, as the case may be;
(2) the Company delivers to the Trustee a
certificate from a nationally recognized firm of independent
accountants expressing their opinion that the payments of
principal and interest when due and without reinvestment on
the deposited U.S. Government obligations plus any deposited
money without investment will provide cash at such times and
in such amounts as will be
64
sufficient to pay principal and
interest when due on all the Securities to maturity or
redemption, as the case may be;
(3) 123 days pass after the deposit is made and during
the 123-day period no Default specified in Section 7.01(7)
or (8) with respect to the Company occurs which is
continuing at the end of the period;
(4) the exercise does not result in or constitute a
Default or Event of Default under this Indenture;
(5) the deposit does not constitute a default under
any other agreement binding on the Company;
(6) the Company delivers to the Trustee an Opinion of
Counsel to the effect that the trust resulting from the
deposit does not constitute, or is qualified as, a regulated
investment company under the Investment Company Act of 1940;
(7) in the case of the legal defeasance option, the
Company shall have delivered to the Trustee an Opinion of
Counsel stating that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture there has
been a change in the applicable Federal income tax law, in
either case to the effect that, and based thereon such
Opinion of Counsel shall confirm that, the Holders will not
recognize income, gain or loss for Federal income tax
purposes as a result of such defeasance and will be subject
to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if
such defeasance had not occurred;
(8) in the case of the covenant defeasance option, the
Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders will not recognize
income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to
Federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such
covenant defeasance had not occurred; and
(9) the Company delivers to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the
securities as contemplated by this Article 9 have been
complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities
at a future date in accordance with Article 3.
SECTION 9.03. Application of Trust Money. The
Trustee shall hold in trust money or U.S. Government
obligations deposited with it pursuant to this Article 9.
It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal
of and interest on the Securities.
65
SECTION 9.04. Repayment to Company. The Trustee
and the Paying Agent shall promptly turn over
to the Company upon written request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law,
the Trustee and the Paying Agent shall pay to the Company
upon written request any money held by them for the payment
of principal or interest that remains unclaimed for two
years, and, thereafter, Holders entitled to the money must
look to the Company for payment as general creditors.
SECTION 9.05. Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government
Obligations.
SECTION 9.06. Reinstatement. If the Trustee or
Paying Agent is unable to apply any
money or U.S. Government obligations in accordance with this
Article 9 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 obligations under this Indenture
and the Securities shall be revived and reinstated as though
no deposit had occurred pursuant to this Article 9 until
such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in
accordance with this Article 9; 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 U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 10
Supplements and Amendments
SECTION 10.01. Without Consent of Holders. The Company,
the Subsidiary Guarantors and the Trustee
may amend or supplement this Indenture and the Securities
without notice to or the consent of any Holder:
(1) to cure any ambiguity, omission, defect or
inconsistency;
(2) to provide for the assumption by a successor
corporation of the obligations of the Company or any
Subsidiary Guarantor under this Indenture;
(3) to provide for uncertificated Securities in
addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are
issued in registered form for purposes of Section 163(f) of
the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the
Code;
66
(4) to add guarantees with respect to the Securities,
including any Subsidiary Guaranties, or to secure the
Securities;
(5) to add to the covenants of the Company or a
Subsidiary Guarantor for the benefit of the Holders or to
surrender any right or power herein conferred upon the
Company or a Restricted Subsidiary;
(6) to make any change that does not adversely affect
the rights of any Holder; or
(7) to comply with any requirement of the SEC in
connection with the qualification of this Indenture under
the TIA.
After an amendment or supplement under this Section
10.01 becomes effective, the Company shall mail to Holders a
notice briefly describing such amendment or supplement. The
failure to give such notice to all Holders, or any defect
therein, shall not impair or affect the validity of an
amendment or supplement under this Section 10.01.
SECTION 10.02. With Consent of Holders. The Company, the
Subsidiary Guarantors and the Trustee may
amend, or waive any past Default or noncompliance with any
provision of, this Indenture or the Securities without
notice to any Holder but with the written consent of the
Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in
connection with a tender offer or exchange for the
Securities). However, without the consent of each Holder
affected thereby, an amendment or waiver may not:
(1) reduce the amount of Securities whose Holders
must consent to an amendment;
(2) reduce the rate of or extend the time for
payment of interest on any Security;
(3) reduce the principal amount of or extend the
Stated Maturity of any Security;
(4) reduce the amount payable upon the redemption of
any Security or change the time at which any Security may be
redeemed in accordance with Article 3;
(5) make any Security payable in money other than that
stated in the Security;
(6) impair the right of any Holder to receive payment
of principal of and interest on such Holder's Securities on
or after the due dates therefor or to institute suit for the
enforcement of any payment on or with respect to such
Holder's Securities;
67
(7) make any change in the amendment provisions that
require each Holder's consent or in the waiver provisions of
this Indenture;
(8) make any change in the ranking or priority of any
Security that would adversely affect the Holders; or
(9) make any change in any Subsidiary Guaranty that would
adversely affect the Holders.
It shall not be necessary for the consent of the
Holders under this Indenture to approve the particular form
of any proposed amendment, but it shall be sufficient if
such consent approves the substance thereof.
After an amendment under this Indenture becomes
effective, the Company is required to mail to Holders a
notice briefly describing such amendment. However, the
failure to give such notice to all Holders, or any defect
therein, will not impair or affect the validity of the
amendment.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities shall comply with
the TIA as then in effect.
SECTION 10.04. Revocation and Effect of Consents and
Waivers. A consent to an amendment or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder
of that Security or portion of the Security that evidences
the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may
revoke the consent or waiver as to such Holder's Security or
portion of the Security if the Trustee receives the notice
of revocation before the date the amendment or waiver
becomes effective. After an amendment or waiver becomes
effective, it shall bind every Holder. An amendment or
waiver becomes effective upon the execution of such
amendment or waiver by the Trustee.
The Company may, but shall not be obligated to,
fix a record date for the purpose of determining the Holders
entitled to give their consent or take any other action
described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly
designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not
such Persons continue to be Holders after such record date.
No such consent shall be valid or effective for more than
120 days after such record date.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment 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 regarding the changed
terms and return it to the Holder. Alternatively, if the
Company or the Trustee so determines, the Company in
exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms.
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Failure to make the appropriate notation or to issue a new
Security shall not affect the validity of such amendment or
waiver.
SECTION 10.06. Trustee To Sign Amendments
.. The Trustee shall sign any amendment authorized pursuant
to this Article 10 if the amendment does not adversely
affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may but need not sign it.
In signing such amendment the Trustee shall be entitled to
receive indemnity reasonably satisfactory to it and to
receive, and (subject to Section 8.01) shall be fully
protected in relying upon, an Officers' Certificate and an
Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture.
SECTION 10.07. Payment for Consent
.. Neither the Company nor any Affiliate of the Company
shall, directly or indirectly, pay or cause to be paid any
consideration, whether by way of interest, fee or otherwise,
to any Holder for or as an inducement to any consent, waiver
or amendment of any of the terms or provisions of this
Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or
agree to amend in the time frame set forth in solicitation
documents relating to such consent, waiver or agreement to
amend.
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be
included in this Indenture by the TIA, the required
provision shall control.
SECTION 11.02. Notices. Any notice or communication
shall be in writing and
delivered in person or mailed by first-class mail addressed
as follows:
if to the Company or any Subsidiary Guarantor:
Xxxxxxxx-Van Heusen Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
with a copy to:
Xxxxxx Xxxxxx Xxxxx Xxxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx, Esq.
if to the Trustee:
SunTrust Bank
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
69
with a copy to:
Xxxxxx Xxxxxxxxx Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, X.X., 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
The Company, any Subsidiary Guarantor or the
Trustee by notice to the other may designate additional or
different addresses for subsequent notices or
communications.
Any such notice or communication mailed to a
Holder shall be mailed to the Holder at such Holder's
address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed
within the time prescribed.
Failure to mail a notice or communication to a
Holder or any defect in the notice or communication shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner
provided above, it is duly given, whether or not the
addressee receives such notice or communication.
SECTION 11.03. Communication by Holders with Other
Holders. Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this
Indenture or the Securities. The Company, any Subsidiary
Guarantor, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 11.04. 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:
(1) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee stating that, in the
opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee stating that, in the
opinion of such counsel, all such conditions precedent have
been complied with.
SECTION 11.05. Statements Required in Certificate or
Opinion. Each certificate or opinion with respect to compliance
with a covenant or condition provided for in this Indenture
shall include:
(1) a statement that the individual making such
certificate or opinion has read such covenant or condition;
70
(2) a brief statement as to the nature and scope of
the examination or investigation upon which the statements
or opinions contained in such certificate or opinion are
based;
(3) a statement that, in the opinion of such
individual, 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 individual, such covenant or condition has been
complied with.
SECTION 11.06. When Securities Disregarded. 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 or by any Person directly or indirectly controlling
or controlled by or under direct or indirect common control
with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining
whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded. Also,
subject to the foregoing, only Securities outstanding at the
time shall be considered in any such determination.
SECTION 11.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or a
meeting of Holders. The Registrar and the Paying Agent may
make reasonable rules for their functions.
SECTION 11.08. Legal Holidays. If a payment date is a Legal
Holiday, payment shall be
made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If
a regular record date is a Legal Holiday, the record date
shall not be affected.
SECTION 11.09. Governing Law. This Indenture and the Securities
shall be governed by,
and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles
of conflicts of law to the extent that the application of
the laws of another jurisdiction would be required thereby.
SECTION 11.10. No Recourse Against Others. No director, officer,
employee, incorporator or
stockholder, as such, of the Company or any Subsidiary shall
have any liability for any obligations of the Company or
such Subsidiary under the Securities, any Subsidiary
Guaranty 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 issuance of the Securities.
Such waiver and release may not be effective to waive
liabilities under the U.S. Federal securities laws, and it
is the view of the SEC that such a waiver is against public
policy.
71
SECTION 11.11. Successors. All agreements of the
Company in this Indenture and the
Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may
sign any number of copies of this
Indenture. Each signed copy shall be an original, but all
of them together represent the same agreement. One signed
copy is enough to prove this Indenture.
SECTION 11.13. Table of Contents; Headings. The table of
contents, cross-reference sheet and headings
of the Articles and Sections of this Indenture have been
inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or
restrict any of the terms or provisions hereof.
72
IN WITNESS WHEREOF, the parties have caused this
Indenture to be duly executed as of the date first written
above.
XXXXXXXX-VAN HEUSEN CORPORATION
By:
Name:
Title:
SUNTRUST BANK,
as Trustee
By:
Name: Xxxx Xxxxxxx
Title: Assistant Vice President
73
RULE 144A/REGULATION S APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
Capitalized terms used but not otherwise defined
in this Appendix shall have the meanings assigned in the
Indenture. For the purposes of this Appendix the following
terms shall have the meanings indicated below:
"Applicable Procedures" means, with respect to any
transfer or transaction involving a Temporary Regulation S
Global Security or beneficial interest therein, the rules
and procedures of the Depository, Euroclear and Clearstream
for such a Temporary Regulation S Global Security, in each
case to the extent applicable to such transaction and as in
effect from time to time.
"Clearstream" means Clearstream Banking, Societe
Anonyme, or any successor securities clearing agency.
"Definitive Security" means a certificated Initial
Security or Exchange Security or Private Exchange Security
bearing, if required, the restricted securities legend set
forth in Section 2.3(e).
"Depository" means The Depository Trust Company,
its nominees and their respective successors.
"Distribution Compliance Period", with respect to
any Securities, means the period of 40 consecutive days
beginning on and including the later of (i) the day on which
such Securities are first offered to Persons other than
distributors (as defined in Regulation S under the
Securities Act) in reliance on Regulation S and (ii) the
Issue Date with respect to such Securities.
"Euroclear" means Euroclear Bank S.A., as operator
of the Euroclear System or any successor securities clearing
agency.
"Exchange Securities" means (1) the 8 1/8% Senior
Notes Due May 1, 2013 issued pursuant to the Indenture in
connection with the Registered Exchange offer pursuant to
the Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration
statement filed with the SEC under the Securities Act.
Appendix - 1
"Initial Purchasers" means with respect to the
Initial Securities issued on the Issue Date, Credit Suisse
First Boston Corporation, X.X. Xxxxxx Securities Inc. and
Xxxxxx Brothers Inc. and (2) with respect to each issuance
of Additional Securities, the Persons purchasing such
Additional Securities under the related Purchase Agreement.
"Initial Securities" means $150,000,000 aggregate
principal amount of 8 1/8% Senior Notes Due May 1, 2013 issued
on the Issue Date and (2) Additional Securities, if any,
issued in a transaction exempt from the registration
requirements of the Securities Act.
"Private Exchange" means the offer by the Company,
pursuant to a Registration Rights Agreement, to the Initial
Purchasers to issue and deliver to each Initial Purchaser,
in exchange for the Initial Securities held by the Initial
Purchaser as part of its initial distribution, a like
aggregate principal amount of Private Exchange Securities.
"Private Exchange Securities" means any 8 1/8% Senior
Notes Due May 1, 2013 issued in connection with a Private
Exchange.
"Purchase Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Purchase
Agreement dated April 30, 2003, among the Company and the
Initial Purchasers and (2) with respect to each issuance of
Additional Securities, the purchase agreement or
underwriting agreement among the Issuer, the Company, any
Subsidiary Guarantors and the Persons purchasing such
Additional Securities.
"QIB" means a "qualified institutional buyer" as
defined in Rule 144A.
"Registered Exchange Offer" means the offer by the
Company, pursuant to a Registration Rights Agreement, to
certain Holders of Initial Securities, to issue and deliver
to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities
registered under the Securities Act.
"Registration Rights Agreement" means (1) with
respect to the Initial Securities issued on the Issue Date,
the Registration Rights Agreement dated April 30, 2003,
among the Company and the Initial Purchasers and (2) with
respect to each issuance of Additional Securities issued in
a transaction exempt from the registration requirements of
the Securities Act, the registration rights agreement, if
any, among the Issuer, the Company and the Persons
purchasing such Additional Securities under the related
Purchase Agreement.
"Securities Custodian" means the custodian with
respect to a Global Security (as appointed by the
Depository) or any successor Person thereto, and shall
initially be the Trustee.
"Shelf Registration Statement" means the
registration statement issued by the Company in connection
with the offer and sale of Initial Securities or Private
Exchange Securities pursuant to a Registration Rights
Agreement.
Appendix - 2
"Transfer Restricted Securities" means Securities
that bear or are required to bear the legend set forth in
Section 2.3(e) hereto.
1.2 Other Definitions
Term Defined
in Section:
"Agent Members" 2.1(b)
"Global Securities" 2.1(a)
"Permanent Regulation S Global Security" 2.1(a)
"Regulation S" 2.1(a)
"Rule 144A" 2.1(a)
"Rule 144A Global Security" 2.1(a)
"Temporary Regulation S Global Security" 2.1(a)
2. The Securities.
2.1 (a) Form and Dating. The Initial Securities will
be offered and sold by the Company pursuant to a Purchase
Agreement. The Initial Securities will be resold initially
only to (i) QIBs in reliance on Rule 144A under the
Securities Act ("Rule 144A") and (ii) Persons other than
U.S. Persons (as defined in Regulation S) in reliance on
Regulation S under the Securities Act ("Regulation S").
Initial Securities may thereafter be transferred to QIBs,
purchasers in reliance on Regulation S and others as
provided in the Securities, in each case subject to the
restrictions on transfer set forth herein. Initial
Securities initially resold pursuant to Rule 144A shall be
issued initially in the form of one or more permanent global
Securities in definitive, fully registered form
(collectively, the "Rule 144A Global Security") and Initial
Securities initially resold pursuant to Regulation S shall
be issued initially in the form of one or more temporary
global securities in definitive, fully registered form
(collectively, the "Temporary Regulation S Global
Security"), in each case without interest coupons and with
the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto, which shall be
deposited on behalf of the purchasers of the Initial
Securities represented thereby with the Securities
Custodian, and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and
authenticated by the Trustee as provided in the Indenture.
Except as set forth in this Section 2.1(a), beneficial
ownership interests in the Temporary Regulation S Global
Security (x) will not be exchangeable for interests in the
Rule 144A Global Security, a permanent global security (the
"Permanent Regulation S Global Security") or any other
Security without a legend containing restrictions on
transfer of such Security, prior to the expiration of the
Distribution Compliance Period and (y) then only upon
certification in form reasonably satisfactory to the Trustee
that beneficial ownership interests in such Temporary
Regulation S Global Security are owned either by non-U.S.
persons or U.S. persons who purchased such interests in a
transaction that did not require registration under the
Securities Act.
Appendix - 3
Beneficial interests in the Temporary Regulation S
Global Security may be exchanged for interests in Rule 144A
Global Securities only if (1) such exchange occurs in
connection with a transfer of Securities in compliance with
Rule 144A, and (2) the transferor of the beneficial interest
in the Temporary Regulation S Global Security first delivers
to the Trustee a written certificate (in a form satisfactory
to the Trustee) to the effect that the beneficial interest
in the Temporary Regulation S Global Security is being
transferred to a Person (a) who the transferor reasonably
believes to be a QIB (b) purchasing for its own account or
the account of a QIB in a transaction meeting the
requirements of Rule 144A, and (c) in accordance with all
applicable securities laws of the States of the United
States and other jurisdictions.
Beneficial interests in the Rule 144A Global
Security may be transferred to a Person who takes delivery
in the form of an interest in the Regulation S Global
Security, whether before or after the expiration of the
Distribution Compliance Period, only if the transferor first
delivers to the trustee a written certificate (in the form
attached to this certificate) to the effect that if such
transfer is being made in accordance with rule 903 or 904 of
Regulation S or Rule 144 (if available) and that, if such
transfer occurs prior to the expiration of the Distribution
Compliance Period, the interest transferred will be held
immediately thereafter through Euroclear Bank S.A./N.A. or
Clearstream Banking Societe Anonyme.
The Rule 144A Global Security, the Temporary
Regulation S Global Security and the Permanent Regulation S
Global Security are collectively referred to herein as
"Global Securities". 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
and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b)
shall apply only to a Global Security deposited with or on
behalf of the Depository.
The Company shall execute and the Trustee shall,
in accordance with this Section 2.1(b), authenticate and
deliver initially one or more Global Securities that (a)
shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such
Depository and (b) shall be delivered by the Trustee to such
Depository or pursuant to such Depository's instructions or
held by the Trustee as custodian for the Depository.
Members of, or participants in, the Depository
("Agent Members") shall have no rights under the Indenture
with respect to any Global Security held on their behalf by
the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company,
the Trustee and any agent of the Company or the Trustee
shall be entitled to treat the Depository as the absolute
owner of such 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 its Agent Members, the
operation of
Appendix - 4
customary practices of such Depository
governing the exercise of the rights of a holder of a
beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided
in this Section 2.1 or Section 2.3 or 2.4, owners of
beneficial interests in Global Securities shall not be
entitled to receive physical delivery of Definitive
Securities.
2.2 Authentication. The Trustee shall authenticate
and deliver: (1) on the Issue Date, an aggregate principal
amount of $150.0 million 8 1/8% Senior Notes Due May 1, 2013,
(2) any Additional Securities for an original issue in an
aggregate principal amount specified in the written order of
the Company pursuant to Section 2.02 of the Indenture and
(2) Exchange Securities or Private Exchange Securities for
issue only in a Registered Exchange Offer or a Private
Exchange, respectively, pursuant to the Registration Rights
Agreement, for a like principal amount of Initial
Securities, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an
Assistant Treasurer or an Assistant Secretary of the
Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the
original issue of Securities is to be authenticated and, in
the case of any issuance of Additional Securities pursuant
to Section 2.13 of the Indenture, shall certify that such
issuance is in compliance with Section 4.03 of the
Indenture..
2.3 Transfer and Exchange. (a) Transfer and Exchange
of Definitive Securities. When Definitive Securities are
presented to the Registrar or a co-registrar with a request:
(x) to register the transfer of such Definitive
Securities; or
(y) to exchange such Definitive Securities for an
equal principal amount of Definitive Securities of
other authorized denominations,
the Registrar or co-registrar shall register the transfer or
make the exchange as requested if its reasonable
requirements for such transaction are met; provided,
however, that the Definitive Securities surrendered for
transfer or exchange:
(i) shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably
satisfactory to the Company and the Registrar or
co-registrar, duly executed by the Holder thereof or
its attorney duly authorized in writing; and
(ii) if such Definitive Securities are required to
bear a restricted securities legend, they are being
transferred or exchanged pursuant to an effective
registration statement under the Securities Act,
pursuant to Section 2.3 (b) or pursuant to clause (A),
(B) or (C) below, and are accompanied by the following
additional information and documents, as applicable:
(A) if such Definitive Securities are being
delivered to the Registrar by a Holder for
registration in the name of such Holder, without
transfer, a certification from such Holder to that
effect; or
Appendix - 5
(B) if such Definitive Securities are being
transferred to the Company, a certification to
that effect; or
(C) if such Definitive Securities are being
transferred (x) pursuant to an exemption from
registration in accordance with Rule 144A,
Regulation S or Rule 144 under the Securities Act;
or (y) in reliance upon another exemption from the
requirements of the Securities Act: (i) a
certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if
the Company so requests, an opinion of counsel or
other evidence reasonably satisfactory to it as to
the compliance with the restrictions set forth in
the legend set forth in Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive
Security for a Beneficial Interest in a Global Security. A
Definitive Security may not be exchanged for a beneficial
interest in a Rule 144A Global Security or a Permanent
Regulation S Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee
of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to
the Trustee, together with:
(i) certification, in the form set forth on the
reverse of the Security, that such Definitive Security
is either (A) being transferred to a QIB in accordance
with Rule 144A or (B) is being transferred after
expiration of the Distribution Compliance Period by a
Person who initially purchased such Security in
reliance on Regulation S to a buyer who elects to hold
its interest in such Security in the form of a
beneficial interest in the Permanent Regulation S
Global Security; and
(ii) written instructions directing the Trustee to
make, or to direct the Securities Custodian to make, an
adjustment on its books and records with respect to
such Rule 144A Global Security (in the case of a
transfer pursuant to clause (b)(i)(A)) or Permanent
Regulation S Security (in the case of a transfer
pursuant to clause (b)(i)(B)) to reflect an increase in
the aggregate principal amount of the Securities
represented by the Rule 144A Global Security or
Permanent Regulation S Global Security, as applicable,
such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and
cause, or direct the Securities Custodian to cause, in
accordance with the standing instructions and procedures
existing between the Depository and the Securities
Custodian, the aggregate principal amount of Securities
represented by the Rule 144A Global Security or Permanent
Regulation S Global Security, as applicable, to be increased
by the aggregate principal amount of the Definitive Security
to be exchanged and shall credit or cause to be credited to
the account of the Person specified in such instructions a
beneficial interest in the Rule 144A Global Security or
Permanent Regulation S Global Security, as applicable, equal
to the principal amount of the Definitive Security so
canceled. If no Rule 144A Global Securities or Permanent
Regulation S Global Securities, as applicable, are then
outstanding, the Company shall issue and the Trustee shall
authenticate, upon written order of the
Appendix - 6
Company in the form of an Officers' Certificate, a new Rule 144A
Global Security or Permanent Regulation S Global Security, as
applicable, in the appropriate principal amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the
Depository, in accordance with the Indenture (including
applicable restrictions on transfer set forth herein, if
any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in
accordance with the Depository's procedures containing
information regarding the participant account of the
Depository to be credited with a beneficial interest in the
Global Security. The Registrar shall, in accordance with
such instructions, instruct the Depository to credit to the
account of the Person specified in such instructions a
beneficial interest in the Global Security and to debit the
account of the Person making the transfer the beneficial
interest in the Global Security being transferred.
(ii) If the proposed transfer is a transfer of a
beneficial interest in one Global Security to a
beneficial interest in another Global Security, the
Registrar shall reflect on its books and records the
date and an increase in the principal amount of the
Global Security to which such interest is being
transferred in an amount equal to the principal amount
of the interest to be so transferred, and the Registrar
shall reflect on its books and records the date and a
corresponding decrease in the principal amount of the
Global Security from which such interest is being
transferred.
(iii) Notwithstanding any other provisions of
this Appendix (other than the provisions set forth in
Section 2.4), a Global Security may not be transferred
except as a whole and not in part 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.
(iv) In the event that a Global Security is
exchanged for Definitive Securities pursuant to Section
2.4 of this Appendix prior to the consummation of a
Registered Exchange Offer or the effectiveness of a
Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in
accordance with such procedures as are substantially
consistent with the provisions of this Section 2.3
(including the certification requirements set forth on
the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A or
Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the
Company.
(d) Restrictions on Transfer of Temporary
Regulation S Global Securities. During the Distribution
Compliance Period, beneficial ownership interests in
Temporary Regulation S Global Securities may only be sold,
pledged or transferred through Euroclear or Clearstream in
accordance with the Applicable Procedures and only
Appendix - 7
(i) to the Company, (ii) so long as such Security is eligible for
resale pursuant to Rule 144A, to a Person whom the selling
holder reasonably believes is a QIB that purchases for its
own account or for the account of a QIB in a transaction
meeting the requirements of Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S (other than a
transaction resulting in an exchange for interest in a
Permanent Regulation S Global Security), (iv) pursuant to an
exemption from registration under the Securities Act
provided by Rule 144 (if applicable) under the Securities
Act or (v) pursuant to an effective registration statement
under the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United
States.
(e) Legend.
(i) Except as permitted by the following
paragraphs (ii), (iii) and (iv), each Security
certificate evidencing the Global Securities (and all
Securities issued in exchange therefore or in
substitution thereof) shall bear a legend in
substantially the following form:
THIS SECURITY (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY MAY
NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION
5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) THIS SECURITY MAY BE
OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(I) TO THE COMPANY, (II) IN THE UNITED STATES TO A
PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND OTHER JURISDICTIONS, AND
(B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT
OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
Appendix - 8
Each Definitive Security will also bear the following
additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH
REGISTRAR AND TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted
Security represented by a Global Security) pursuant to
Rule 144 under the Securities Act, the Registrar shall
permit the transferee thereof to exchange such Transfer
Restricted Security for a certificated Security that
does not bear the legend set forth above and rescind
any restriction on the transfer of such Transfer
Restricted Security, if the transferor thereof
certifies in writing to the Registrar that such sale or
transfer was made in reliance on Rule 144 (such
certification to be in the form set forth on the
reverse of the Security).
(iii) After a transfer of any Initial
Securities or Private Exchange Securities pursuant to
and during the period of the effectiveness of a Shelf
Registration Statement with respect to such Initial
Securities or Private Exchange Securities, as the case
may be, all requirements pertaining to legends on such
Initial Security or such Private Exchange Security will
cease to apply, the requirements requiring any such
Initial Security or such Private Exchange Security
issued to certain Holders be issued in global form will
cease to apply, and a certificated Initial Security or
Private Exchange Security or an Initial Security or
Private Exchange Security in global form, in each case
without restrictive transfer legends, will be available
to the transferee of the Holder of such Initial
Securities or Private Exchange Securities upon exchange
of such transferring Holders certificated Initial
Security or Private Exchange Security or appropriate
directions to transfer such Holder's interest in the
Global Security, as applicable.
(iv) Upon the consummation of a Registered
Exchange Offer with respect to the Initial Securities,
all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be
issued in global form will still apply with respect to
Holders of such Initial Securities that do not exchange
their Initial Securities, and Exchange Securities in
certificated or global form, in each case without the
restrictive securities legend set forth in Exhibit 1
hereto will be available to Holders that exchange such
Initial Securities in such Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange
with respect to the Initial Securities, all
requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued
in global form will still apply with respect to Holders
of such Initial Securities that do not exchange their
Initial
Appendix - 9
Securities, and Private Exchange Securities in
global form with the global securities legend and the
Restricted Securities Legend set forth in Exhibit 1
hereto will be available to Holders that exchange such
Initial Securities in such Private Exchange.
(f) Cancellation or Adjustment of Global
Security. At such time as all beneficial interests in a
Global Security have either been exchanged for Definitive
Securities, redeemed, purchased or canceled, such Global
Security shall be returned to the Depository for
cancellation or retained and canceled by the Trustee. At
any time prior to such cancellation, if any beneficial
interest in a Global Security is exchanged for certificated
Securities, redeemed, purchased or canceled, the principal
amount of Securities represented by such Global Security
shall be reduced and an adjustment shall be made on the
books and records of the Trustee (if it is then the
Securities Custodian for such Global Security) with respect
to such Global Security, by the Trustee or the Securities
Custodian, to reflect such reduction.
(g) Obligations with Respect to Transfers and
Exchanges of Securities.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the Trustee
shall authenticate Definitive Securities and Global
Securities at the Registrar's or co-registrar's
request.
(ii) 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, assessments, or similar governmental
charge payable in connection therewith (other than any
such transfer taxes, assessments or similar
governmental charge payable upon exchange or transfer
pursuant to Article 4 or Sections 2.09, 3.06, 5.06 or
10.05 of the Indenture).
(iii) The Registrar or co-registrar shall not
be required to register the transfer of or exchange of
(a) any Definitive Security selected for redemption in
whole or in part pursuant to Article 3 of the
Indenture, except the unredeemed portion of any
Definitive Security being redeemed in part, or (b) any
Security for a period beginning 15 Business Days before
the mailing of a notice of an offer to repurchase or
redeem Securities or 15 Business Days before an
interest payment date.
(iv) Prior to the due presentation for
registration of transfer of any Security, the Company,
the Trustee, the Paying Agent, the Registrar or any co-
registrar may deem and treat the person in whose name a
security is registered as the absolute owner of such
Security for the purpose of receiving payment of
principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security
is overdue, and none of the Company, the Trustee, the
Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.
Appendix - 10
(v) All Securities issued upon any transfer or
exchange pursuant to the terms of the Indenture shall
evidence the same debt and shall be entitled to the
same benefits under the Indenture as the Securities
surrendered upon such transfer or exchange.
(h) No obligation of the Trustee.
(i) The Trustee shall have no responsibility or
obligation to any beneficial owner of a Global
Security, a member of, or a participant in the
Depository or other Person with respect to the accuracy
of the records of the Depository or its nominee or of
any participant or member thereof, with respect to any
ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial
owner or other Person (other than the Depository) of
any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such
Securities. All notices and communications to be given
to the Holders and all payments to be made to Holders
under the Securities shall be given or made only to or
upon the order of the registered Holders (which shall
be the Depository or its nominee in the case of a
Global Security). The rights of beneficial owners in
any Global Security shall be exercised only through the
Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and
shall be fully protected in relying upon information
furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty
to monitor, determine or inquire as to compliance with
any restrictions on transfer imposed under the
Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any
transfers between or among Depository participants,
members or beneficial owners 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 the Indenture, and to examine
the same to determine substantial compliance as to form
with the express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the
Depository or with the Trustee as Custodian for the
Depository pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of Definitive
Securities in an aggregate principal amount equal to the
principal amount of such Global Security, in exchange for
such Global Security, only if such transfer complies with
Section 2.3 hereof and (i) the Depository notifies the
Company that it is unwilling or unable to continue as
Depository for such Global Security or if at any time such
Depository ceases to be a "clearing agency" registered under
the Exchange Act and, in either case, a successor Depository
is not appointed by the Company within 90 days of such
notice, or (ii) an Event of Default has occurred and is
continuing or (iii) the Company, in its sole discretion,
notifies the
Appendix - 11
Trustee in writing that it elects to cause the
issuance of Definitive Securities under the Indenture.
(b) Any Global Security that is transferable to
the beneficial owners thereof pursuant to this Section 2.4
shall be surrendered by the Depository to the Trustee
located at its principal corporate trust office in Atlanta,
Georgia, to be so transferred, in whole or from time to time
in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such
Global Security, an equal aggregate principal amount of
Definitive Securities of authorized denominations. Any
portion of a Global Security transferred pursuant to this
Section 2.4 shall be executed, authenticated and delivered
only in denominations of $1,000 principal amount and any
integral multiple thereof and registered in such names as
the Depository shall direct. Any Definitive Security
delivered in exchange for an interest in the Transfer
Restricted Security shall, except as otherwise provided by
Section 2.3 (e) hereof, bear the restricted securities
legend and definitive security legend set forth in Exhibit 1
hereto.
(c) Subject to the provisions of Section 2.4(b)
hereof, the registered Holder of a Global Security shall be
entitled to grant proxies and otherwise authorize any
Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a
Holder is entitled to take under the Indenture or the
Securities.
(d) In the event of the occurrence of one of the
events specified in Section 2.4 (a) hereof, the Company
shall promptly make available to the Trustee a reasonable
supply of Definitive Securities in definitive, fully
registered form without interest coupons.
Appendix - 12
EXHIBIT 1
to
RULE 144A/REGULATION S APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR 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 DTC
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 THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
[FOR REGULATION S GLOBAL SECURITY ONLY] UNTIL 40
DAYS AFTER THE COMMENCEMENT OF THE OFFERING, AN OFFER OR
SALE OF NOTES WITHIN THE UNITED STATES BY A DEALER (AS
DEFINED IN THE U.S. SECURITIES ACT) MAY VIOLATE THE
REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT IF SUCH
OFFER OR SALE IS MADE OTHERWISE THAN IN ACCORDANCE WITH THE
RULE 144A THEREUNDER.]
[Restricted Securities Legend]
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS
SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
Ex. 1-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT
OF THE COMPANY THAT (A) THIS SECURITY MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE
COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I)
THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES AND OTHER
JURISDICTIONS, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
[Temporary Regulation S Global Security Legend]
EXCEPT AS SET FORTH BELOW, BENEFICIAL OWNERSHIP
INTERESTS IN THIS TEMPORARY REGULATION S GLOBAL SECURITY
WILL NOT BE EXCHANGEABLE FOR INTERESTS IN THE PERMANENT
REGULATION S GLOBAL SECURITY OR ANY OTHER SECURITY
REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED
HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS
ON TRANSFER, UNTIL THE EXPIRATION OF THE "40-DAY
DISTRIBUTION COMPLIANCE PERIOD" (WITHIN THE MEANING OF RULE
903(b)(2) OF REGULATION S UNDER THE SECURITIES ACT) AND THEN
ONLY UPON CERTIFICATION IN FORM REASONABLY SATISFACTORY TO
THE TRUSTEE THAT SUCH BENEFICIAL INTERESTS ARE OWNED EITHER
BY NON-U.S. PERSONS OR U.S. PERSONS WHO PURCHASED SUCH
INTERESTS IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION
UNDER THE SECURITIES ACT. DURING SUCH 40-DAY DISTRIBUTION
COMPLIANCE PERIOD, BENEFICIAL OWNERSHIP INTERESTS IN THIS
TEMPORARY REGULATION S GLOBAL SECURITY MAY ONLY BE SOLD,
PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK S.A./N.A., AS
OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING,
SOCIETE ANONYME AND ONLY (I) TO THE COMPANY, (II) IN THE
UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED
STATES IN A TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER
THE SECURITIES ACT, OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED
Ex. 1-2
STATES AND OTHER JURISDICTIONS. HOLDERS OF INTERESTS IN THIS TEMPORARY
REGULATION S GLOBAL SECURITY WILL NOTIFY ANY PURCHASER OF
THIS SECURITY OF THE RESALE RESTRICTIONS REFERRED TO ABOVE,
IF THEN APPLICABLE.
BENEFICIAL INTERESTS IN THIS TEMPORARY REGULATION
S GLOBAL SECURITY MAY BE EXCHANGED FOR INTERESTS IN A RULE
144A GLOBAL SECURITY ONLY IF (1) SUCH EXCHANGE OCCURS IN
CONNECTION WITH A TRANSFER OF THE SECURITIES IN COMPLIANCE
WITH RULE 144A AND (2) THE TRANSFEROR OF THE REGULATION S
GLOBAL SECURITY FIRST DELIVERS TO THE TRUSTEE A WRITTEN
CERTIFICATE (IN THE FORM ATTACHED TO THIS CERTIFICATE) TO
THE EFFECT THAT THE REGULATION S GLOBAL SECURITY BEING
TRANSFERRED TO A PERSON (A) WHO THE TRANSFEROR REASONABLY
BELIEVES TO BE A QUALIFIED INSTITUTIONAL BUYER WITHIN THE
MEANING OF RULE 144A (B) WHO IS PURCHASING FOR ITS OWN
ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, AND (C)
IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
BENEFICIAL INTEREST IN A RULE 144A GLOBAL SECURITY
MAY BE TRANSFERRED TO A PERSON WHO TAKES DELIVERY IN THE
FORM OF AN INTEREST IN THE REGULATION S GLOBAL SECURITY,
WHETHER BEFORE OR AFTER THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, ONLY IF THE TRANSFEROR FIRST
DELIVERS TO THE TRUSTEE A WRITTEN CERTIFICATE (IN THE FORM
ATTACHED TO THIS CERTIFICATE) TO THE EFFECT THAT IF SUCH
TRANSFER IS BEING MADE IN ACCORDANCE WITH RULE 903 OR 904 OF
REGULATION S OR RULE 144 (IF AVAILABLE) AND THAT, IF SUCH
TRANSFER OCCURS PRIOR TO THE EXPIRATION OF THE 40-DAY
DISTRIBUTION COMPLIANCE PERIOD, THE INTEREST TRANSFERRED
WILL BE HELD IMMEDIATELY THEREAFTER THROUGH EUROCLEAR BANK
S.A./N.A. OR CLEARSTREAM BANKING SOCIETE ANONYME.
[Definitive Securities Legend]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL
DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH
CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
Ex. 1-3
CUSIP No. _____
No. ____________ $ ____________
8 1/8% Senior Notes Due May 1, 2013
Xxxxxxxx-Van Heusen Corporation, a Delaware
corporation, promises to pay to Cede & Co., or registered
assigns, the principal sum of Dollars on ____________,
2013.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set
forth on the other side of this Security.
Dated:
Xxxxxxxx-Van Heusen Corporation
By:
Name:
Title:
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SUNTRUST BANK,
as Trustee, certifies
that this is one of
the Securities referred to
in the Indenture.
by
Authorized Signatory
Ex. 1-4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
[FORM OF REVERSE SIDE OF SECURITY]
8 1/8% Senior Notes Due May 1, 2013
1. Interest
Xxxxxxxx-Van Heusen Corporation, a Delaware corporation
(such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the
"Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above;
provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate
of 0.25% per annum (increasing by an additional 0.25% per
annum after each consecutive 90-day period that occurs after
the date on which such Registration Default occurs up to a
maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default
shall occur to but excluding the date on which all
Registration Defaults have been cured or otherwise cease to
exist. The Company will pay interest semiannually in
arrears on May 1 and November 1 of each year, commencing
November 1, 2003. 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 May 5, 2003.
Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company will pay interest on
overdue principal at the above rate and will pay interest on
overdue installments of interest at such rate to the extent
lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the April
15 or October 15 immediately preceding the interest payment
date even if Securities are canceled after the record date
and on or before the interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal
payments. The Company will 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.
Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, and
interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository
Trust Company. The Company will make all payments in
respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the
registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be
made by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to
the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the
Trustee may accept in its discretion).
Ex. 1-5
3. Paying Agent and Registrar
Initially, SunTrust Bank, a state banking association
(the "Trustee") will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar
or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture
dated as of May 5, 2003 (the "Indenture"), between the
Company and the Trustee. 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. Sections 77aaa-77bbbb) as in effect on the date of
the Indenture (the "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such
terms, and Holders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its
compliance with Section 5.03 of the Indenture, to issue
Additional Securities pursuant to Section 2.13 of the
Indenture. The Securities issued on the Issue Date and any
Additional Securities will be treated as a single class for
all purposes under the Indenture. Subject to Section 5.14,
the Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur or guarantee
additional indebtedness; pay dividends or make distributions
on, or redeem or repurchase capital stock or subordinated
indebtedness; make other restricted payments, including
investments; sell or otherwise dispose of assets, including
capital stock of subsidiaries; enter into transactions with
affiliates; create certain liens; issue stock of
subsidiaries; enter into sale/leaseback transactions; or
consolidate or merge or sell all or substantially all of the
Company's assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and
qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be
entitled to redeem the Securities at its option prior to May
1, 2008.
On and after May 1, 2008, the Company shall be entitled
at its option to redeem all or a portion of the Securities
upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed in percentages of principal
amount on the redemption date), plus accrued interest to the
redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-
month period commencing on May 1 of the years set forth
below:
Period Price
2008 104.063%
2009 102.078%
2010 101.354%
2011 and thereafter 100.000%
Ex. 1-6
In addition, prior to May 1, 2006, the Company shall be
entitled at its option on one or more occasions to redeem
Securities (which includes Additional Securities, if any) in
an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes
Additional Securities, if any originally issued at a
redemption price (expressed as a percentage of principal
amount) of 108.125%, plus accrued and unpaid interest to
the redemption date, with the net cash proceeds of one or
more Equity Offerings; provided, however that:
(6) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each
such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and
(7) each such redemption occurs within 90 days after the
date of the related Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed 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. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date
is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied,
on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will
have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a repurchase price
equal to 101% of the principal amount of the Securities to
be repurchased plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of holders of
record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
8. Guarantee
The payment by the Company of the principal of, and
premium and interest on, the Securities is guaranteed by the
Subsidiary Guarantors, if any, on a joint and several basis,
on the terms set forth in the Indenture.
Ex. 1-7
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons
in denominations of $1,000 principal amount and whole
multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay
any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer or
exchange of any Securities selected for redemption (except,
in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest
payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated
as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent
shall pay the money back to the Company at its written
request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee
for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time
shall be entitled to terminate some or all of its
obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture and the Securities may be
amended with the written consent of the Holders of at least
a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may
be waived with the written consent of the Holders of a
majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee shall be entitled to
amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article
6 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated
Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guaranties, or to secure
the Securities, or to add additional covenants or surrender
rights and powers conferred on the Company or a Restricted
Subsidiary, or to comply with any requirement of the SEC in
connection with qualifying the Indenture
Ex. 1-8
under the Act, or to make any change that does not adversely affect the rights
of any Holder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i)
default in payment of interest on the Securities when due,
continued for 30 days; (ii) default in payment of principal
on the Securities when due at maturity, upon redemption
pursuant to paragraph 5 of the Securities, upon required
purchase, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required;
(iii) failure by the Company to comply with other agreements
in the Indenture or the Securities, in certain cases subject
to notice and lapse of time; (iv) certain accelerations or
payment default in respect of other Indebtedness of the
Company, any Subsidiary Guarantor or any Significant
Subsidiary if the amount accelerated (or if the amount of
such Indebtedness with respect to which such a payment is
not made after expiration of any applicable grace period)
exceeds $15.0 million; (v) certain events of bankruptcy or
insolvency with respect to the Company, any Subsidiary
Guarantor and the Significant Subsidiaries; (vi) certain
judgments or decrees for the payment of money in excess of
$15.0 million; and (vii) certain defaults with respect to
Subsidiary Guaranties. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture or the Securities unless it
receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it
determines that withholding notice is in the best interest
of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust
Indenture Act, 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 and
collect obligations owed to it by the Company or its
Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
No director, officer, employee, incorporator or
stockholder, as such, of the Company or any Subsidiary shall
have any liability for any obligations of the Company or
such Subsidiary under the Securities, any Subsidiary
Guaranty or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. By
Ex. 1-9
accepting a Security, each Holder waives and
releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent)
manually signs the certificate of authentication on the
other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with rights of survivorship and not as tenants
in common), CUST (= custodian), and U/G/M/A (= Uniform Gift
to Minors Act).
19. 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 and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written
request and without charge to the Holder a copy of the
Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Xxxxxxxx-Van Heusen Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
Ex. 1-10
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
Sign exactly as your name appears on the other side of this
Security.
In connection with any transfer of any of the Securities
evidenced by this certificate occurring prior to the
expiration of the period referred to in Rule 144(k) under
the Securities Act after the later of the date of original
issuance of such Securities and the last date, if any, on
which such Securities were owned by the Company or any
Affiliate of the Company, the undersigned confirms that such
Securities are being transferred in accordance with its
terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration
statement under the U.S. Securities Act of
1933, as amended (the "Securities Act"); or
(3) [ ] inside the United States to 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 such transfer is being made in
reliance on Rule 144A, in each case pursuant
to and in compliance with Rule 144A under the
Securities Act; or
(4) [ ] outside the United States in an offshore
transaction within the meaning of Regulation
S under the Securities Act in compliance with
Rule 904 under the Securities Act; or
Ex. 1-11
(5) [ ] pursuant to the exemption from
registration provided by Rule 144 under the
Securities Act.
Unless one of the boxes is checked, the Trustee will refuse
to register any of the Securities evidenced by this
certificate in the name of any person other than the
registered holder thereof; provided, however, that if box
(4) or (5) is checked, the Trustee shall be entitled to
require, prior to registering any such transfer of the
Securities, such legal opinions, certifications and other
information as the Company or Registrar has reasonably
requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities
Act, such as the exemption provided by Rule 144 under such
Act.
Signature
Signature Guarantee:
Signature must be guaranteed Signature
Signatures must be guaranteed by an "eligible guarantor
institution" 'meeting the requirements of the Registrar,
which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Ex. 1-12
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED
The undersigned represents and warrants that it is
purchasing this Security for its own account or an account
with respect to which it exercises sole investment
discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under
the Securities Act of 1933, as amended and is aware that the
sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding
the Company as the undersigned has requested pursuant to
Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim
the exemption from registration provided by Rule 144A.
Date:
NOTICE: To be executed by an
executive officer
Ex. 1-13
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global
Security have been made:
Date of Amount of Amount of Principal Signature
Exchange decrease increase amount of of
in in this authorized
principal principal Global officer of
amount of amount of Security Trustee or
this this following Securities
Global Global such Custodian
Security Security decrease
or
increase
Ex. 1-14
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Article 4 or Section 5.06 of the
Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Article 4 or Section
5.06 of the Indenture, state the amount in principal amount:
$
Date: Your Signature:
(Sign exactly as your name appears on
the other side of this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Ex. 1-15
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY * **]
_________________________
* If the Security is to be issued in global form add the Global
Securities Legend from Exhibit 1 to Appendix A and the attachment from such
Exhibit 1 captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES
OR DECREASES IN GLOBAL SECURITY".
** If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
Exhibit A - 1
CUSIP No. _____
No. ____________ $ ____________
8 1/8% Senior Notes Due May 1, 2013
Xxxxxxxx-Van Heusen Corporation, a Delaware
corporation, promises to pay to Cede & Co., or registered
assigns, the principal sum of Dollars on ____________,
2013.
Interest Payment Dates: May 1 and November 1.
Record Dates: April 15 and October 15.
Additional provisions of this Security are set
forth on the other side of this Security.
Dated:
Xxxxxxxx-Van Heusen Corporation
By:
Name:
Title:
By:
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
SUNTRUST BANK,
as Trustee, certifies
that this is one of
the Securities referred to
in the Indenture.
by
Authorized Signatory
Exhibit A-2
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY
OR PRIVATE EXCHANGE SECURITY]
[FORM OF REVERSE SIDE OF SECURITY]
8 1/8% Senior Notes Due May 1, 2013
1. Interest
Xxxxxxxx-Van Heusen Corporation, a Delaware corporation
(such corporation, and its successors and assigns under the
Indenture hereinafter referred to, being herein called the
"Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above[;
provided, however, that if a Registration Default (as
defined in the Registration Rights Agreement) occurs,
additional interest will accrue on this Security at a rate
of 0.25% per annum (increasing by an additional 0.25% per
annum after each consecutive 90-day period that occurs after
the date on which such Registration Default occurs up to a
maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default
shall occur to but excluding the date on which all
Registration Defaults have been cured or otherwise cease to
exist.]1 The Company will pay interest semiannually in
arrears on May 1 and November 1 of each year, commencing
November 1, 2003. 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 May 5. Interest will
be computed on the basis of a 360-day year of twelve 30-day
months. The Company will pay interest on overdue principal
at the above rate and will pay interest on overdue
installments of interest at such rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except
defaulted interest) to the Persons who are registered
holders of Securities at the close of business on the April
15 or October 15 immediately preceding the interest payment
date even if Securities are canceled after the record date
and on or before the interest payment date. Holders must
surrender Securities to a Paying Agent to collect principal
payments. The Company will 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.
Payments in respect of the Securities represented by a
Global Security (including principal, premium, if any, and
interest) will be made by wire transfer of immediately
available funds to the accounts specified by The Depository
Trust Company. The Company will make all payments in
________________
1 Insert if at the date of issuance of the Exchange Security or
Private Exchange Security (as the case may be) any Registration Default has
occurred with respect to the related Initial Securities during the interest
period in which such date of issuance occurs.
Exhibit A-3
respect of a certificated Security (including principal,
premium, if any, and interest) by mailing a check to the
registered address of each Holder thereof; provided,
however, that payments on a certificated Security will be
made by wire transfer to a U.S. dollar account maintained by
the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to
the Trustee or the Paying Agent to such effect designating
such account no later than 30 days immediately preceding the
relevant due date for payment (or such other date as the
Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, SunTrust Bank, a state banking association
(the "Trustee") will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar
or co-registrar without notice. The Company or any of its
domestically incorporated Wholly Owned Subsidiaries may act
as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture
dated as of May 5, 2003 (the "Indenture"), between the
Company and the Trustee. 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. Sections 77aaa-77bbbb) as in effect on the date of
the Indenture (the "Act"). Terms defined in the Indenture
and not defined herein have the meanings ascribed thereto in
the Indenture. The Securities are subject to all such
terms, and Holders are referred to the Indenture and the Act
for a statement of those terms.
The Securities are general unsecured obligations of the
Company. The Company shall be entitled, subject to its
compliance with Section 5.03 of the Indenture, to issue
Additional Securities pursuant to Section 2.13 of the
Indenture. The Securities issued on the Issue Date and any
Additional Securities will be treated as a single class for
all purposes under the Indenture. Subject to Section 5.14,
the Indenture contains covenants that limit the ability of
the Company and its subsidiaries to incur or guarantee
additional indebtedness; pay dividends or make distributions
on, or redeem or repurchase capital stock or subordinated
indebtedness; make other restricted payments, including
investments; sell or otherwise dispose of assets, including
capital stock of subsidiaries; enter into transactions with
affiliates; create certain liens; issue stock of
subsidiaries; enter into sale/leaseback transactions; or
consolidate or merge or sell all or substantially all of the
Company's assets and the assets of its subsidiaries. These
covenants are subject to important exceptions and
qualifications.
5. Optional Redemption
Except as set forth below, the Company shall not be
entitled to redeem the Securities at its option prior to May
1, 2008.
On and after May 1, 2008, the Company shall be entitled
at its option to redeem all or a portion of the Securities
upon not less than 30 nor more than 60 days' notice, at the
redemption prices (expressed in percentages of principal
amount on the redemption
Exhibit A-4
date), plus accrued interest to the
redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the
relevant interest payment date), if redeemed during the 12-
month period commencing on May 1 of the years set forth
below:
Period Price
2008 104.063%
2009 102.708%
2010 101.354%
2011 and thereafter 100.000%
In addition, prior to May 1, 2006, the Company shall be
entitled at its option on one or more occasions to redeem
Securities (which includes Additional Securities, if any) in
an aggregate principal amount not to exceed 35% of the
aggregate principal amount of the Securities (which includes
Additional Securities, if any originally issued at a
redemption price (expressed as a percentage of principal
amount) of 108.125%, plus accrued and unpaid interest to
the redemption date, with the net cash proceeds from one or
more Equity Offerings; provided, however that:
(1) at least 65% of such aggregate principal amount of
Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each
such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and
(2) each such redemption occurs within 90 days after the
date of the related Equity Offering.
6. Notice of Redemption
Notice of redemption will be mailed 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. Securities in denominations larger than $1,000
principal amount may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the
redemption price of and accrued interest on all Securities
(or portions thereof) to be redeemed on the redemption date
is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied,
on and after such date interest ceases to accrue on such
Securities (or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will
have the right to cause the Company to repurchase all or any
part of the Securities of such Holder at a repurchase price
equal to 101% of the principal amount of the Securities to
be repurchased plus accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of holders of
record on the relevant record date to receive interest due
on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.
Exhibit A-5
8. Guarantee
The payment by the Company of the principal of, and
premium and interest on, the Securities is guaranteed by the
Subsidiary Guarantors, if any, on a joint and several basis,
on the terms set forth in the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons
in denominations of $1,000 principal amount and whole
multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay
any taxes and fees required by law or permitted by the
Indenture. The Registrar need not register the transfer or
exchange of any Securities selected for redemption (except,
in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest
payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated
as the owner of it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest
remains unclaimed for two years, the Trustee or Paying Agent
shall pay the money back to the Company at its written
request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the
money must look only to the Company and not to the Trustee
for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time
shall be entitled to terminate some or all of its
obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
13. Amendment, Waiver
Subject to certain exceptions set forth in the
Indenture, (i) the Indenture and the Securities may be
amended with the written consent of the Holders of at least
a majority in principal amount outstanding of the Securities
and (ii) any default or noncompliance with any provision may
be waived with the written consent of the Holders of a
majority in principal amount outstanding of the Securities.
Subject to certain exceptions set forth in the Indenture,
without the consent of any Holder, the Company, the
Subsidiary Guarantors and the Trustee shall be entitled to
amend the Indenture or the Securities to
Exhibit A-6
cure any ambiguity, omission, defect or inconsistency, or to comply
with Article 6 of the Indenture, or to provide for uncertificated
Securities in addition to or in place of certificated
Securities, or to add guarantees with respect to the
Securities, including Subsidiary Guaranties, or to secure
the Securities, or to add additional covenants or surrender
rights and powers conferred on the Company or a Restricted
Subsidiary, or to comply with any requirement of the SEC in
connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights
of any Holder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i)
default in payment of interest on the Securities when due,
continued for 30 days; (ii) default in payment of principal
on the Securities when due at maturity, upon redemption
pursuant to paragraph 5 of the Securities, upon required
purchase, upon acceleration or otherwise, or failure by the
Company to redeem or purchase Securities when required;
(iii) failure by the Company to comply with other agreements
in the Indenture or the Securities, in certain cases subject
to notice and lapse of time; (iv) certain accelerations or
payment default in respect other Indebtedness of the
Company, any Subsidiary Guarantor or any Significant
Subsidiary if the amount accelerated (or if the amount of
such Indebtedness with respect to which such a payment is
not made after expiration of any applicable grace period)
exceeds $15.0 million; (v) certain events of bankruptcy or
insolvency with respect to the Company, any Subsidiary
Guarantor and the Significant Subsidiaries; (vi) certain
judgments or decrees for the payment of money in excess of
$15.0 million; and (vii) certain defaults with respect to
Subsidiary Guaranties. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in
principal amount of the Securities may declare all the
Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will
result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.
Holders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse
to enforce the Indenture or the Securities unless it
receives indemnity or security reasonably satisfactory to
it. Subject to certain limitations, Holders of a majority in
principal amount of the Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold
from Holders notice of any continuing Default (except a
Default in payment of principal or interest) if it
determines that withholding notice is in the best interest
of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Trust
Indenture Act, 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 and
collect obligations owed to it by the Company or its
Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
Exhibit A-7
No director, officer, employee, incorporator or
stockholder, as such, of the Company or any Subsidiary shall
have any liability for any obligations of the Company or
such Subsidiary under the Securities, any Subsidiary
Guaranty or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder waives and
releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
17. Authentication
This Security shall not be valid until an authorized
signatory of the Trustee (or an authenticating agent)
manually signs the certificate of authentication on the
other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a
Holder or an assignee, such as TEN COM (= tenants in
common), TEN ENT (= tenants by the entireties), JT TEN (=
joint tenants with rights of survivorship and not as tenants
in common), CUST (= custodian), and U/G/M/A (= Uniform Gift
to Minors Act).
19. 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 and has directed the Trustee to use CUSIP numbers
in notices of redemption as a convenience to Holders. No
representation is made as to the accuracy of such numbers
either as printed on the Securities or as contained in any
notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
20. Governing Law.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK BUT
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS
OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
The Company will furnish to any Holder upon written
request and without charge to the Holder a copy of the
Indenture which has in it the text of this Security in
larger type. Requests may be made to:
Xxxxxxxx-Van Heusen Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Secretary
Exhibit A-8
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer
this Security on the books of the Company. The agent may
substitute another to act for him.
Date: Your Signature:
Sign exactly as your name appears on the other side of this
Security.
Exhibit A-9
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by
the Company pursuant to Article 4 or Section 5.06 of the
Indenture, check the box:
[ ]
If you want to elect to have only part of this Security
purchased by the Company pursuant to Article 4 or Section
5.06 of the Indenture, state the amount in principal amount:
$
Date: Your Signature:
(Sign exactly as your name appears on the
other side of this Security.)
Signature Guarantee:
(Signature must be guaranteed)
Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar,
which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
Exhibit A-10
