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EXECUTION COPY
J. Crew Operating Corp.
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10 3/8 SENIOR SUBORDINATED NOTES DUE 2007
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INDENTURE
DATED AS OF OCTOBER 17, 1997
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STATE STREET BANK AND TRUST COMPANY
TRUSTEE
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Indenture, dated as of October 17, 1997 among J. Crew
Operating Corp., a Delaware corporation (the "Company"), as
issuer, each of C&W Outlet, Inc., a New York corporation, Xxxxx
Xxxxxx Inc., a Delaware corporation, Xxxxxxxx & Xxxxx, Inc., a
New Jersey corporation, H.F.D. No. 55, Inc., a Delaware
corporation, J. Crew, Inc., a New Jersey corporation, J. Crew
International, Inc., a Delaware corporation, J. Crew Services,
Inc., a New York corporation, and Popular Club Plan, Inc., a New
Jersey corporation, as guarantors (each a "Guarantor") and
together with any subsidiary that executes a Subsidiary Guarantee
substantially in the form of Exhibit D attached hereto, (the
"Guarantors") and State Street Bank and Trust Company, as trustee
(the "Trustee").
The Company, the Guarantors and the Trustee agree as
follows for the benefit of each other and for the equal and
ratable benefit of the holders of the Company's 10 3/8% Senior
Subordinated Notes due 2007 (the "Senior Subordinated Notes") and
the exchange 10 3/8% Senior Subordinated Notes due 2007 (the
"Exchange Senior Subordinated Notes" and, together with the
Senior Subordinated Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Acquired Debt" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time
such other Person is merged with or into or became a Subsidiary
of such specified Person, and (ii) Indebtedness secured by a Lien
encumbering any asset acquired by such specified Person or
assumed in connection with the acquisition of any asset used or
useful in a Permitted Business acquired by such specified Person;
provided that such Indebtedness was not incurred in connection
with, or in contemplation of, such other Person merging with or
into or becoming a Subsidiary of such specified Person, or such
acquisition, as the case may be.
"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
purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided that beneficial
ownership of 10% or more of the voting securities of a Person
shall be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer
or exchange of beneficial interests in a Global Note, the rules
and procedures of the Depositary that apply to such transfer and
exchange.
"Asset Sale" means (i) the sale, lease (other than an
operating lease), conveyance or other disposition of any assets
or rights (including, without limitation, by way of a sale and
leaseback) other than in the ordinary course of business
consistent with past practices (provided that the sale, lease
(other than an operating lease), conveyance or other disposition
of all or substantially all of the assets of the Company and its
Restricted Subsidiaries taken as a whole will be governed by the
provisions of this Indenture described in Sections 4.13 and 5.01
and not by the provisions of Section 4.10 hereof, and (ii) the
sale by the Company and the issue or sale by any of the
Restricted Subsidiaries of the Company
of Equity Interests of any of the Company's Subsidiaries, in the
case of either clause (i) or (ii), whether in a single
transaction or a series of related transactions that have a fair
market value (as determined in good faith by the Board of
Directors) in excess of $1.0 million or for net cash proceeds in
excess of $1.0 million. Notwithstanding the foregoing: (i) a
transfer of assets by the Company to a Wholly Owned Restricted
Subsidiary of the Company (other than a Receivables Subsidiary)
or by a Wholly Owned Restricted Subsidiary of the Company (other
than a Receivables Subsidiary) to the Company or to a Wholly
Owned Restricted Subsidiary of the Company (other than a
Receivables Subsidiary), (ii) an issuance of Equity Interests by
a Restricted Subsidiary of the Company to the Company or to a
Wholly Owned Restricted Subsidiary of the Company (other than a
Receivables Subsidiary), (iii) a Restricted Payment that is
permitted by Section 4.07 hereof, (iv) the sale and leaseback of
any assets within 90 days of the acquisition of such assets, (v)
foreclosures on assets, (vi) the clearance of inventory and (vii)
the sale, conveyance or other disposition of accounts receivables
and related assets customarily transferred in an asset
securitization transaction involving accounts receivable to a
Receivables Subsidiary or by a Receivables Subsidiary, in
connection with a Qualified Receivables Transaction, in each
case, will not be deemed to be Asset Sales.
"Attributable Debt" in respect of a sale and leaseback
transaction means, at the time of determination, the present
value (discounted at the rate of interest implicit in such
transaction, determined in accordance with GAAP) of the
obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback
transaction (including any period for which such lease has been
extended or may, at the option of the lessor, be extended).
"Bankruptcy Law" means Title 11, U.S. Code or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors of the
Company or any authorized committee of such board of directors.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability
in respect of a capital lease that would at such time be required
to be capitalized on a balance sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participation, rights or
other equivalents (however designated) of corporate stock, (iii)
in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited)
and (iv) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) securities issued or
unconditionally and fully guaranteed or insured by the full faith
and credit of the United States government or any agency or
instrumentality thereof having maturities of not more than one
year from the date of acquisition, (ii) obligations issued or
fully guaranteed by any state of the United States of America or
any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one
of the two highest ratings obtainable from either Standard &
Poor's Ratings Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's"), (iii) certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of
acquisition, bankers'
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acceptances with maturities not exceeding one year and overnight
bank deposits, in each case with any lender party to the New
Credit Facility or with any domestic commercial bank having
capital and surplus in excess of $250.0 million, (iv) repurchase
obligations with a term of not more than seven days for
underlying securities of the types described in clauses (i) and
(iii), above entered into with any financial institution meeting
the qualifications specified in clause (iii) above, (v)
commercial paper having one of the two of the highest ratings
obtainable from either Moody's or S&P and in each case maturing
within one year after the date of acquisition and (vi)
investments in funds investing exclusively in investments of the
types described in clauses (i) through (v) above.
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means the occurrence of any of the
following: (i) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially
all of the assets of the Company and its Subsidiaries taken as a
whole to any "person" (as such term is used in Section 13(d)(3)
of the Exchange Act), other than the Principals and their Related
Parties, (ii) the adoption of a plan relating to the liquidation
or dissolution of the Company, (iii) the consummation of any
transaction (including, without limitation, any merger or
consolidation) the result of which is that (A) any "person" (as
defined above), other than the Principal and their Related
Parties, becomes the "beneficial owner" (as such term is defined
in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly, of 40% or more of the Voting Stock of the Company
(measured by voting power rather than number of shares) and (B)
the Principals and their Related Parties beneficially own,
directly or indirectly, in the aggregate a lesser percentage of
the Voting Stock of the Company than such other "person", (iv)
the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors or (v) the
Company consolidates with, or merges with or into, any Person, or
any Person consolidates with, or merges with or into, the
Company, in any such event pursuant to a transaction in which any
of the outstanding Voting Stock of the Company is converted into
or exchanged for cash, securities or other property, other than
any such transaction where (A) the Voting Stock of the Company
outstanding immediately prior to such transaction is converted
into or exchanged for Voting Stock (other than Disqualified
Stock) of the surviving or transferee Person and (B) either (1)
the "beneficial owners" (as defined above) of the Voting Stock of
the Company immediately prior to such transaction own, directly
or indirectly through one or more subsidiaries, not less than a
majority of the total Voting Stock of the surviving or transferee
corporation immediately after such transaction or (2) if,
immediately prior to such transaction the Company is a direct or
indirect subsidiary of any other Person (such other Person, the
"Holding Company"), then the "beneficial owners" (as defined
above) of the Voting Stock of such Holding Company immediately
prior to such transaction own, directly or indirectly through one
or more subsidiaries, not less than a majority of the total
Voting Stock of the surviving or transferee corporation
immediately after such transaction.
"Chase" means Chase Securities Inc.
"Commission" means the Securities and Exchange Commission.
"Company" means J. Crew Operating Corp., a Delaware
corporation, and its permitted successors.
"Consolidated Cash Flow" means, with respect to any Person
for any period, the Consolidated Net Income of such Person for
such period plus (i) an amount equal to any extraordinary loss
plus any net loss realized in connection with an Asset Sale (to
the extent such losses were deducted in computing such
Consolidated Net Income of such Person and its Restricted
Subsidiaries), plus (ii) provision for taxes
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based on income or profits of such Person and its Restricted
Subsidiaries for such period, to the extent that such provision
for taxes was included in computing such Consolidated Net Income,
plus (iii) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued
and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net
payments (if any) pursuant to Hedging Obligations), to the extent
that any such expense was deducted in computing such Consolidated
Net Income, plus (iv) depreciation and amortization (including
amortization of goodwill and other intangibles but excluding
amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash charges (excluding any such non-cash
charge to the extent that it represents an accrual of or reserve
for cash charges in any future period or amortization of a
prepaid cash charge that was paid in a prior period) of such
Person and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were
deducted in computing such Consolidated Net Income, plus (v) any
interest expense on Indebtedness of another Person that is
Guaranteed by such Person or a Restricted Subsidiary of such
Person or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, to the extent that such interest
expense was deducted in computing such Consolidated Net Income,
minus (vi) non-cash items increasing such Consolidated Net Income
for such period, in each case, on a consolidated basis and
determined in accordance with GAAP. Notwithstanding the
foregoing, the provision for taxes based on the income or profits
of, and the depreciation and amortization and other non-cash
charges of, a Restricted Subsidiary of a Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to
the extent (and in the same proportion) that the Net Income of
such Restricted Subsidiary was included in calculating the
Consolidated Net Income of such Person.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person
and its Subsidiaries for such period, on a consolidated basis,
determined in accordance with GAAP, provided that (i) the Net
Income (but not loss) of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of
dividends or distributions paid in cash to the referent Person or
a Restricted Subsidiary thereof, (ii) the Net Income of any
Restricted Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by
that Restricted Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary
or its stockholders, (iii) the Net Income of any Person acquired
in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded, and (iv) the
cumulative effect of a change in accounting principles shall be
excluded.
"Continuing Directors" means, as of any date of
determination, any member of the Board of Directors of the
Company or any Holding Company of the Company who (i) was a
member of such Board of Directors on the date hereof immediately
after consummation of the Recapitalization or (ii) was nominated
for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were
either members of such Board at the time of such nomination or
election or are successor Continuing Directors appointed by such
Continuing Directors (or their successors).
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 13.02 hereof or such
other address as to which the Trustee may give notice to the
Company.
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"Credit Agent" means The Chase Manhattan Bank in its
capacity as Administrative Agent for the lenders party to the New
Credit Facility or any successor thereto or any person otherwise
appointed.
"Credit Facilities" means, with respect to the Company, one
or more debt facilities (including, without limitation, the New
Credit Facility) or commercial paper facilities with banks or
other institutional lenders providing for revolving credit loans,
term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed
to borrow from such lenders against such receivables) or letters
of credit, in each case, as amended, restated, modified, renewed,
refunded, replaced or refinanced in whole or in part from time to
time. Indebtedness under Credit Facilities outstanding on the
Issue Date shall be deemed to have been incurred on such date in
reliance on the exceptions provided by clauses (i) and (ii) of
the definition of Permitted Debt.
"Default" means any event that is or with the passage of
time or the giving of notice or both would be an Event of
Default.
"Definitive Notes" means Notes that are in the form of
EXHIBIT A-1 attached hereto (but without including the text
referred to in footnotes 1 and 3 thereto).
"Depositary" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified
in Section 2.03 hereof as the Depositary with respect to the
Notes, until a successor shall have been appointed and become
such pursuant to Section 2.06 of this Indenture, and, thereafter,
"Depositary" shall mean or include such successor.
"Designated Senior Debt" means (i) any Senior Debt
outstanding under the New Credit Facility and (ii) any other
Senior Debt permitted under this Indenture the principal amount
of which is $50 million or more and that has been designated by
the Company as "Designated Senior Debt."
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the
holder thereof), or upon the happening of any event, matures or
is mandatorily redeemable, pursuant to a sinking fund obligation
or otherwise, or redeemable at the option of the Holder thereof,
in whole or in part, on or prior to the date on which the Notes
mature; provided, however, that a class of Capital Stock shall
not be Disqualified Stock hereunder solely as the result of any
maturity or redemption that is conditioned upon, and subject to,
compliance with Section 4.07 hereof; and provided, further, that
Capital Stock issued to any plan for the benefit of employees of
the Company or its subsidiaries or by any such plan to such
employees shall not constitute Disqualified Stock solely because
it may be required to be repurchased by the Company in order to
satisfy applicable statutory or regulatory obligations.
"DLJ" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation.
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for,
Capital Stock).
"Equity Offering" means an offering of common stock (other
than Disqualified Stock) of the Company or Holdings, pursuant to
an effective registration statement filed with the Commission in
accordance with the Securities Act, other than an offering
pursuant to Form S-8 (or any successor thereto) provided, that in
the case of an Equity Offering by Holdings, Holdings contributes
to the common equity of the Company the portion of the net cash
proceeds thereof necessary to pay the aggregate redemption price
of the Notes to be redeemed in connection therewith.
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"Euroclear" means Xxxxxx Guaranty Trust Company of New
York, the Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934,
as amended.
"Exchange Offer" means the offer by the Company to Holders
to exchange Senior Subordinated Notes for Exchange Senior
Subordinated Notes.
"Exchange Offer Registration Statement" has the meaning set
forth in the Registration Rights Agreement.
"Exchange Senior Subordinated Notes" means the Company's
10 3/8% Senior Subordinated Notes due 2007, which will be issued
in exchange for the Company's Senior Subordinated Notes.
"Existing Indebtedness" means Indebtedness of the Company
and its Subsidiaries (other than Indebtedness under the New
Credit Facility) in existence on the date of this Indenture,
until such amounts are repaid.
"Fixed Charges" means, with respect to any Person for any
period, the sum, without duplication, of (i) the consolidated
interest expense of such Person and its Restricted Subsidiaries
for such period, whether paid or accrued (including, without
limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest
component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance
financings, and net payments (if any) pursuant to Hedging
Obligations; provided, however, that in no event shall any
amortization of deferred financing costs incurred in connection
with the Recapitalization be included in Fixed Charges), and (ii)
the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period,
and (iii) any interest expense on Indebtedness of another Person
that is Guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one
of its Restricted Subsidiaries (whether or not such Guarantee or
Lien is called upon), and (iv) the product of (a) (without
duplication) (1) all dividends paid or accrued in respect of
Disqualified Stock which are not treated as interest for tax
purposes for such period and (2) all cash dividend payments on
any series of preferred stock of such Person or any of its
Restricted Subsidiaries, other than dividend payments on Equity
Interests payable solely in Equity Interests (other than
Disqualified Stock) of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in
each case, on a consolidated basis and in accordance with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any
Person for any period, the ratio of the Consolidated Cash Flow of
such Person and its Restricted Subsidiaries for such period to
the Fixed Charges of such Person and its Restricted Subsidiaries
for such period. In the event that the Company or any of its
Restricted Subsidiaries incurs, assumes, Guarantees, repays or
redeems any Indebtedness (other than revolving credit borrowings)
or issues or redeems preferred stock subsequent to the
commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to the date on which the
event for which the calculation of the Fixed Charge Coverage
Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to
such incurrence, assumption, Guarantee, repayment or redemption
of Indebtedness, or such issuance or redemption of preferred
stock, as if the same had occurred at the beginning of the
applicable
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four-quarter reference period. In addition, for purposes of
making the computation referred to above, (i) acquisitions that
have been made by the Company or any of its Restricted
Subsidiaries, including through mergers or consolidations and
including any related financing transactions, during the
four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date shall be deemed to
have occurred on the first day of the four-quarter reference
period and Consolidated Cash Flow and Fixed Charges for such
reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of
Consolidated Net Income and shall reflect any pro forma expense
and cost reductions attributable to such acquisitions (to the
extent such expense and cost reduction would be permitted by the
Commission to be reflected in pro forma financial statements
included in a registration statement filed with the Commission),
and (ii) the Consolidated Cash Flow and Fixed Charges
attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded and Consolidated
Cash Flow shall reflect any pro forma expense or cost reductions
relating to such discontinuance or disposition (to the extent
such expense or cost reductions would be permitted by the
Commission to be reflected in pro forma financial statements
included in a registration statement filed with the Commission),
and (iii) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be
excluded, but only to the extent that the obligations giving rise
to such Fixed Charges will not be obligations of the referent
Person or any of its Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of
the accounting profession, which are in effect on the date
hereof; provided, however, that all reports and other financial
information provided by the Company to the Holders, the Trustee
and/or the Commission shall be prepared in accordance with GAAP,
as in effect on the date of such report or other financial
information.
"Global Notes" means the Rule 144A Global Notes, the
Regulation S Temporary Global Notes and the Regulation S
Permanent Global Notes and any Notes exchanged for any of the
foregoing in the Exchange Offer.
"Government Securities" means direct obligations of, or
obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full faith and
credit of the United States is pledged.
"Guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner (including, without
limitation, letters of credit and reimbursement agreements in
respect thereof), of all or any part of any Indebtedness.
"Guarantors" means, all Subsidiaries of the Company that
execute a Subsidiary Guarantee substantially in the form of
Exhibit D attached hereto.
"Hedging Obligations" means, with respect to any Person,
the obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar
agreements and (ii) other agreements or arrangements designed to
protect such Person against fluctuations in interest rates or the
value of foreign currencies.
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"Holder" means a Person in whose name a Note is registered.
"Holdings" means J. Crew Group, Inc., a New York
corporation, the corporate parent of the Company, or its
successors.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in
respect of borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the
balance deferred and unpaid of the purchase price of any property
or representing any Hedging Obligations, except any such balance
that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters
of credit and Hedging Obligations) would appear as a liability
upon a balance sheet of such Person prepared in accordance with
GAAP, as well as all indebtedness of others secured by a Lien on
any asset of such Person (whether or not such indebtedness is
assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any
other Person. The amount of any Indebtedness outstanding as of
any date shall be (i) the accreted value thereof, in the case of
any Indebtedness that does not require current payments of
interest, and (ii) the principal amount thereof, together with
any interest thereon that is more than 30 days past due, in the
case of any other Indebtedness.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including
Affiliates) in the forms of direct or indirect loans (including
guarantees of Indebtedness or other obligations), advances or
capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with
all items that are or would be classified as investments on a
balance sheet prepared in accordance with GAAP. If the Company or
any Restricted Subsidiary of the Company sells or otherwise
disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving
effect to any such sale or disposition, such Person is no longer
a Restricted Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of
in an amount determined as provided in the final paragraph of
Section 4.07 hereof.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Indirect Participant" means a Person who holds an interest
through a Participant.
"Initial Purchasers" means DLJ and Chase.
"Insolvency or Liquidation Proceedings" means (i) any
insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or proceeding,
relative to the Company or to the creditors of the Company, as
such, or to the assets of the Company or (ii) any liquidation,
dissolution, reorganization or winding up of the Company, whether
voluntary or involuntary and involving insolvency or bankruptcy,
or (iii) any assignment for the benefit of creditors or any other
marshalling of assets and liabilities of the Company.
"Institutional Accredited Investor" means an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
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"Issue Date" means the date on which notes are first issued
and authenticated under this Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on
which banking institutions in the City of New York, the city in
which the principal Corporate Trust Office of the Trustee is
located or at a place of payment are authorized by law,
regulation or executive order to remain closed. If a payment date
is a Legal Holiday at a place of payment, payment shall be made
at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any
kind in respect of such asset, whether or not filed, recorded or
otherwise perfected under applicable law (including any
conditional sale or other title retention agreement, any lease in
the nature thereof, and any option or other agreement to sell or
give a security interest therein).
"Liquidated Damages" means all liquidated damages then
owing pursuant to Section 5 of the Registration Rights Agreement.
"Net Income" means, with respect to any Person, the net
income (loss) of such Person, determined in accordance with GAAP
and before any reduction in respect of preferred stock dividends,
excluding, however, (i) any gain (but not loss), together with
any related provision for taxes on such gain (but not loss),
realized in connection with (a) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback
transactions) or (b) the extinguishment of any Indebtedness of
such Person or any of its Subsidiaries and (ii) any extraordinary
or nonrecurring gain (but not loss), together with any related
provision for taxes on such extraordinary or nonrecurring gain
(but not loss).
"Net Proceeds" means the aggregate cash proceeds received
by the Company or any of its Restricted Subsidiaries in respect
of any Asset Sale (including, without limitation, any cash
received upon the sale or other disposition of any non-cash
consideration received in any Asset Sale), net of the direct
costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, and sales
commissions) and any relocation expenses incurred as a result
thereof, taxes paid or payable as a result thereof (after taking
into account any available tax credits or deductions and any tax
sharing arrangements), amounts required to be applied to the
repayment of Indebtedness (other than Indebtedness under the
Credit Facilities) secured by a Lien on the asset or assets that
were the subject of such Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets
established in accordance with GAAP.
"New Credit Facility" means that certain credit facility,
dated as of October 17, 1997, by and among the Company, Holdings,
Chase and DLJ, as agents and lenders, providing for up to $70.0
million of term borrowings and $200.0 million of revolving credit
borrowings, including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection
therewith, and in each case as amended, extended, modified,
renewed, refunded, replaced or refinanced from time to time.
"Non-Recourse Debt" means Indebtedness (i) as to which
neither the Company nor any of its Restricted Subsidiaries (a)
provides credit support of any kind (including any undertaking,
agreement or instrument that would constitute Indebtedness), or
(b) is directly or indirectly liable (as a guarantor or
otherwise), and (ii) as to which the lenders have been notified
in writing that they will not have any recourse to the stock or
assets of the Company or any of its Restricted Subsidiaries,
including the stock of such Unrestricted Subsidiary.
9
"Note Custodian" means the Trustee when serving as
custodian for the Depositary with respect to the Notes in global
form, or any successor entity thereto.
"Obligations" means, with respect to any Indebtedness, any
principal, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering" means the offer and sale of the Notes of the
Company.
"Offerings" means the Offering and the concurrent offering
of the 13 1/8% Senior Discount Debentures due 2008 by Holdings
pursuant to an offering memorandum dated as of October 14, 1997.
"Officer" means, with respect to any Person, the Chairman
of the Board, the Chief Executive Officer, the President, the
Chief Operating Officer, the Chief Financial Officer, the
Treasurer, any Assistant Treasurer, the Controller, the Secretary
or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on
behalf of the Company by two Officers of the Company, one of whom
must be the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the
Company, that meets the requirements of Section 13.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel
who is reasonably acceptable to the Trustee, that meets the
requirements of Section 13.05 hereof. The counsel may be an
employee of or counsel to the Company, any Subsidiary of the
Company or the Trustee.
"Participant" means, with respect to DTC, Euroclear or
Cedel, a Person who has an account with DTC, Euroclear or Cedel,
respectively (and, with respect to DTC, shall include Euroclear
and Cedel).
"Permitted Business" means the design, manufacture,
importing, exporting, distribution, marketing, licensing and
wholesale and retail sale of apparel, housewares, home
furnishings and related items, and businesses reasonably related
thereto.
"Permitted Investments" means (a) any Investment in the
Company or in a Restricted Subsidiary of the Company (other than
a Receivables Subsidiary); (b) any Investment in Cash and Cash
Equivalents; (c) any Investment by the Company or any Restricted
Subsidiary in a Person, if as a result of such Investment (i)
such Person becomes a Restricted Subsidiary of the Company (other
than a Receivables Subsidiary) or (ii) such Person is merged,
consolidated or amalgamated with or into, or transfers or conveys
substantially all of its assets to, or is liquidated into, the
Company or a Restricted Subsidiary of the Company (other than a
Receivables Subsidiary); (d) any Restricted Investment made as a
result of the receipt of non-cash consideration from an Asset
Sale that was made pursuant to and in compliance with Section
4.10 hereof or any transaction not constituting an Asset Sale by
reason of the $1.0 million threshold contained in the definition
thereof; (e) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of
the Company; (f) Hedging Obligations entered into in the ordinary
course of the Company's or its Restricted Subsidiaries'
Businesses and otherwise in compliance with this Indenture; (g)
loans and advances to employees and officers of the Company and
its Restricted Subsidiaries in the ordinary course of business
for bona fide business purposes not in excess of $5 million at
any one time outstanding; (h) additional Investments not to
exceed $25 million at any one time outstanding; (i) Investments
in securities of trade creditors or customers received in
settlement of obligations or pursuant to any plan of
reorganization or similar arrangement
10
upon the bankruptcy or insolvency of such trade creditors or
customers; and (j) Investments by the Company or a Restricted
Subsidiary in a Receivables Subsidiary or any Investment by a
Receivables Subsidiary in any other Person, in each case, in
connection with a Qualified Receivables Transaction, provided,
that any Investment in any such Person is in the form of a
Purchase Money Note, any equity interest or interests in accounts
receivable and related assets generated by the Company or a
Restricted Subsidiary and transferred to any Person in connection
with a Qualified Receivables Transaction or any such Person
owning such accounts receivable.
"Permitted Junior Securities" means Equity Interests in the
Company or debt securities that are subordinated to all Senior
Debt (and any debt securities issued in exchange for Senior Debt)
to substantially the same extent as, or to a greater extent than,
the Notes are subordinated to Senior Debt pursuant to Article 10
of the Indenture.
"Permitted Liens" means (i) Liens existing as of the Issue
Date to the extent and in the manner such Liens are in effect on
the Issue Date; (ii) Liens securing Senior Debt and Liens on
assets of Restricted Subsidiaries securing Guarantees of Senior
Debt permitted to be incurred under this Indenture; (iii) Liens
securing the Notes and the Subsidiary Guarantees; (iv) Liens of
the Company or a Wholly Owned Restricted Subsidiary on assets of
any Restricted Subsidiary of the Company; (v) Liens securing
Permitted Refinancing Indebtedness which is incurred to refinance
any Indebtedness which has been secured by a Lien permitted under
this Indenture and which has been incurred in accordance with the
provisions hereof; provided, however, that such Liens (A) are not
materially less favorable to the Holders and are not materially
more favorable to the lienholders with respect to such Liens than
the Liens in respect of the Indebtedness being refinanced and (B)
do not extend to or cover any property or assets of the Company
or any of its Restricted Subsidiaries not securing the
Indebtedness so refinanced; (vi) Liens for taxes, assessments or
governmental charges or claims either (A) not delinquent or (B)
contested in good faith by appropriate proceedings and as to
which the Company or its Restricted Subsidiaries shall have set
aside on its books such reserves as may be required pursuant to
GAAP; (vii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, supplies, materialmen, repairmen and
other Liens imposed by law incurred in the ordinary course of
business for sums not yet delinquent for a period of more than 60
days or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall
have been made in respect thereof; (viii) Liens incurred or
deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security or similar obligations, including any
Lien securing letters of credit issued in the ordinary course of
business consistent with past practice in connection therewith,
or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money); (ix) judgment Liens not giving rise to an Event of
Default so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated
for the review of such judgement shall not have been finally
terminated or the period within which such proceedings may be
initiated shall not have expired; (x) easements, rights-of-way,
zoning restrictions and other similar charges or encumbrances in
respect of real property not interfering in any material respect
with the ordinary conduct of the business of the Company or any
of its Restricted Subsidiaries; (xi) any interest or title of a
lessor under any lease, whether or not characterized as capital
or operating; provided that such Liens do not extend to any
property or assets which is not leased property subject to such
lease; (xii) Liens securing Capital Lease Obligations and
purchase money Indebtedness incurred in accordance with Section
4.09 hereof; provided, however, that (A) the Indebtedness shall
not exceed the cost of such property or assets being acquired or
constructed and shall not be secured by any property or assets of
the Company or any Restricted Subsidiary of the Company other
than the property or assets of the Company or any Restricted
Subsidiary
11
of the Company other than the property and assets being acquired
or constructed and (B) the Lien securing such Indebtedness shall
be created within 90 days of such acquisition or construction;
(xiii) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in
respect of bankers' acceptances issued or created for the account
of such Person to facilitate the purchase, shipment or storage of
such inventory or other goods; (xiv) Liens securing reimbursement
obligations with respect to letters of credit which encumber
documents and other property relating to such letters of credit
and products and proceeds thereof; (xv) Liens encumbering
deposits made to secure obligations arising from statutory,
regulatory, contractual, or warranty requirements of the Company
or any of its Restricted Subsidiaries, including rights of offset
and set-off; (xvi) Liens securing Hedging Obligations which
Hedging Obligations relate to Indebtedness that is otherwise
permitted under this Indenture; (xvii) Liens securing Acquired
Debt incurred in accordance with Section 4.09 hereof; provided
that (A) such Liens secured such Acquired Debt at the time of and
prior to the incurrence of such Acquired Debt by the Company or a
Restricted Subsidiary of the Company and were not granted in
connection with, or in anticipation of, the incurrence of such
Acquired Debt by the Company or a Restricted Subsidiary of the
Company and (B) such Liens do not extend to or cover any property
or assets of the Company or any of its Restricted Subsidiaries
other than the property or assets that secured the Acquired Debt
prior to the time such Indebtedness became Acquired Debt of the
Company or a Restricted Subsidiary of the Company and are not
more favorable to the lienholders than those securing the
Acquired Debt prior to the incurrence of such Acquired Debt by
the Company or a Restricted Subsidiary of the Company; (xviii)
leases or subleases granted to others not interfering in any
material respect with the business of the Company or its
Restricted Subsidiaries; (xix) Liens arising out of consignment
or similar arrangements for the sale of goods entered into by the
Company or any Restricted Subsidiary in the ordinary course of
business; and (xx) Liens or assets of a Receivables Subsidiary
arising in connection with a Qualified Receivables Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness
of the Company or any of its Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, refinance,
prepay, retire, renew, replace, defease or refund Indebtedness of
the Company or any of its Subsidiaries (other than such
Indebtedness described in clauses (i), (vi), (vii), (viii), (ix),
(x), (xi), (xiii) and (xiv) of Section 4.09 hereof); provided
that: (i) the principal amount (or accreted value, if applicable)
of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus
accrued interest on, the Indebtedness so extended, refinanced,
renewed, prepaid, retired, replaced, defeased or refunded (plus
the amount of reasonable expenses incurred in connection
therewith including premiums paid, if any, to the holders
thereof); (ii) such Permitted Refinancing Indebtedness has a
final maturity date at or later than the final maturity date of,
and has a Weighted Average Life to Maturity equal to or greater
than the Weighted Average Life to Maturity of, the Indebtedness
being extended, refinanced, renewed, prepaid, retired, replaced,
defeased or refunded; (iii) if the Indebtedness being extended,
refinanced, renewed, prepaid, retired, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in
right of payment to, the Notes on terms at least as favorable to
the Holders of Notes as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is
incurred either by the Company or by the Restricted Subsidiary
who is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded.
"Person" means an individual, partnership, corporation,
limited liability company, unincorporated organization, trust or
joint venture, or a governmental agency or political subdivision
thereof.
"Principals" means TPG Partners II, L.P., a Delaware
limited partnership.
12
"Private Placement Legend" means the legend initially set
forth on the Senior Discount Notes in the form set forth in
Section 2.06(g) hereof.
"Purchase Money Note" means a promissory note evidencing a
line of credit, or evidencing other Indebtedness owed to the
Company or any Restricted Subsidiary in connection with a
Qualified Receivables Transaction, which note shall be repaid
from cash available to the maker of such note, other than amounts
required to be established as reserves pursuant to agreement,
amounts paid to investors in respect of interest, principal and
other amounts owing to such investors and amounts paid in
connection with the purchase of newly generated receivables.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act.
"Qualified Proceeds" means any of the following or any
combination of the following: (i) cash, (ii) Cash Equivalents,
(iii) long-term assets that are used or useful in a Permitted
Business and (iv) the Capital Stock of any Person engaged
primarily in a Permitted Business if, in connection with the
receipt by the Company or any Restricted Subsidiary of the
Company of such Capital Stock, (a) such Person becomes a
Wholly-Owned Restricted Subsidiary and a Guarantor or (b) such
Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or any Wholly-Owned Restricted
Subsidiary of the Company that is a Guarantor.
"Qualified Receivables Transaction" means any transaction
or series of transactions that may be entered into by the Company
or any Restricted Subsidiary pursuant to which the Company or any
Restricted Subsidiary may sell, convey or otherwise transfer to
(a) a Receivables Subsidiary (in the case of a transfer by the
Company or any Restricted Subsidiary) and (b) any other Person
(in the case of a transfer by a Receivables Subsidiary), or may
grant a security interest in, any accounts receivable (whether
now existing or arising in the future) of the Company or any
Restricted Subsidiary and any asset related thereto including,
without limitation, all collateral securing such accounts
receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, proceeds of such accounts
receivable and other assets which are customarily transferred, or
in respect of which security interests are customarily granted,
in connection with asset securitization transactions involving
accounts receivable.
"Receivables" means, with respect to any Person or entity,
all of the following property and interests in property of such
Person or entity, whether now existing or existing in the future
or hereafter acquired or arising: (i) accounts, (ii) accounts
receivable incurred in the ordinary course of business, including
without limitation, all rights to payment created by or arising
from sales of goods, leases of goods or the rendition of services
no matter how evidenced, whether or not earned by performance,
(iii) all rights to any goods or merchandise represented by any
of the foregoing after creation of the foregoing, including,
without limitation, returned or repossessed goods, (iv) all
reserves and credit balances with respect to any such accounts
receivable or account debtors, (v) all letters of credit,
security, or guarantees for any of the foregoing, (vi) all
insurance policies or reports relating to any of the foregoing,
(vii) all collection or deposit accounts relating to any of the
foregoing, (viii) all proceeds of the foregoing and (ix) all
books and records relating to any of the foregoing.
"Receivables Subsidiary" means a Wholly Owned Restricted
Subsidiary (other than a Guarantor) which engages in no
activities other than in connection with the financing of
accounts receivables and which is designated by the Board of
Directors of the Company (as provided below) as a Receivables
Subsidiary (a) no portion of the Indebtedness or any other
Obligations (contingent or otherwise) of which (i) is guaranteed
by the Company or any other Restricted Subsidiary (excluding
guarantees of obligations
13
(other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings), (ii) is
recourse to or obligates the Company or any other Restricted
Subsidiary in any way other than pursuant to Standard
Securitization Undertakings or (iii) 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, (b) with which neither the Company nor any other
Restricted Subsidiary has any material contract, agreement,
arrangement or understanding (except in connection with a
Purchase Money Note or Qualified Receivables Transaction) other
than on terms no less favorable to the Company or such other
Restricted Subsidiary than those that might be obtained at the
time from persons that are not Affiliates of the Company, other
than fees payable in the ordinary course of business in
connection with servicing accounts receivable, and (c) to which
neither the Company nor any other Restricted Subsidiary has any
obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve certain levels of
operating results. Any such designation by the Board of Directors
of the Company shall be evidenced to the Trustee by filing with
the Trustee a certified copy of the resolution of the Board of
Directors of the Company giving effect to such designation and an
Officers' Certificate certifying, to the best of such officer's
knowledge and belief after consulting with counsel, that such
designation complied with the foregoing conditions.
"Receivables Transaction" means (i) the sale or other
disposition to a third party of Receivables or an interest
therein, or (ii) the sale or other disposition of Receivables or
an interest therein to a Receivables Subsidiary followed by a
financing transaction in connection with such sale or disposition
of such Receivables (whether such financing transaction is
effected by such Receivables Subsidiary or by a third party to
whom such Receivables Subsidiary sells such Receivables or
interests therein); provided that in each of the foregoing, the
Company or its Subsidiaries receive at least 80% of the aggregate
principal amount of any Receivables financed in such transaction.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of the date hereof, among the Company,
the Guarantors and the Initial Purchasers.
"Regulation S" means Regulation S promulgated under the
Securities Act.
"Regulation S Global Notes" means the Regulation S
Temporary Global Notes or the Regulation S Permanent Global Notes
as applicable.
"Regulation S Permanent Global Notes" means the permanent
global notes that do not contain the paragraphs referred to in
footnote 1 to the form of Note attached hereto as EXHIBIT A-2 and
that are deposited with and registered in the name of the
Depositary or its nominee, representing a series of Notes sold in
reliance on Regulation S.
"Regulation S Temporary Global Notes" means the temporary
global notes that contain the paragraphs referred to in footnote
1 to the form of Note attached hereto as EXHIBIT A-2 and that are
deposited with and registered in the name of the Depositary or
its nominee, representing a series of Notes sold in reliance on
Regulation S.
"Related Party" with respect to any Principal means (A) any
controlling stockholder or a majority of (or more) owned
Subsidiary of such Principal or, in the case of an individual,
any spouse or immediate family member of such Principal, or (B)
any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority (or more) controlling interest of
which consist of such Principal and/or such other Persons
referred to in the immediately preceding clause (A).
14
"Responsible Officer" when used with respect to the
Trustee, means any officer within the Corporate Trust
Administration of the Trustee (or any successor group of the
Trustee) or any other officer of the trustee customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity
with the particular subject.
"Restricted Beneficial Interest" means any beneficial
interest of a Participant or Indirect Participant in the Rule
144A Global Note or the Regulation S Global Note.
"Restricted Broker Dealer" has the meaning set forth in the
Registration Rights Agreement.
"Restricted Global Notes" means the Rule 144A Global Notes
and the Regulation S Global Notes, all of which shall bear the
Private Placement Legend.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Notes" means the permanent global notes
that contain the paragraph referred to in footnote 1 and the
additional schedule referred to in footnote 3 to the form of the
Note attached hereto as EXHIBIT A-1, and that is deposited with
and registered in the name of the Depositary or its nominee,
representing a series of Notes sold in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means (i) all Indebtedness of the Company or
any Guarantor outstanding under Credit Facilities and all Hedging
Obligations with respect thereto, (ii) other Indebtedness of the
Company or any of its Guarantor permitted to be incurred under
the terms of the Indenture, unless the instrument under which
such Indebtedness is incurred expressly provides that it is on a
parity with or subordinated in right of payment to the Notes and
(iii) all Obligations with respect to the foregoing.
Notwithstanding anything to the contrary in the foregoing, Senior
Debt will not include (w) any liability for federal, state, local
or other taxes owed or owing by the Company, (x) any Indebtedness
of the Company to any of its Subsidiaries or other Affiliates,
(y) any trade payables or (z) any Indebtedness that is incurred
in violation of the Indenture.
"Senior Discount Debentures" means Holdings' 13 1/8% Senior
Discount Debentures due 2008.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Act, as such
Regulation is in effect on the date hereof.
15
"Standard Securitization Undertakings" means
representations, warranties, covenants and indemnities entered
into by the Company or any Restricted Subsidiary which are
reasonably customary in an accounts receivable transaction.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on
which such payment of interest or principal was scheduled to be
paid in the original documentation governing such Indebtedness,
and shall not include any contingent obligations to repay, redeem
or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (i) any
corporation, association or other business entity of which more
than 50% of the total Voting Stock thereof is at the time owned
or controlled, directly or indirectly, by such Person or one or
more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a
Subsidiary of such Person or (b) the only general partners of
which are such Person or of one or more Subsidiaries of such
Person (or any combination thereof).
"Tax Sharing Agreement" means, the tax sharing agreement
among Holdings, the Company and any one or more of the Company's
subsidiaries, as amended from time to time, so long as the method
of calculating the amount of the Company's (or any Restricted
Subsidiary's) payments, if any, to be made thereunder is not less
favorable to the Company than as provided in such agreement as in
effect on the Issue Date, as determined in good faith by the
Board of Directors of the Company.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
xx.xx. 77aaa-77bbbb), as amended, as in effect on the date
hereof.
"Transfer Restricted Securities" means Notes or beneficial
interests therein that bear or are required to bear the Private
Placement Legend.
"Trustee" means State Street Bank and Trust Company until a
successor replaces it in accordance with the applicable
provisions of this Indenture, and thereafter means the successor.
"Unrestricted Global Notes" means one or more Global Notes
that do not and are not required to bear the Private Placement
Legend.
"Unrestricted Subsidiary" means any Subsidiary of the
Company that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution; but only
to the extent that such Subsidiary: (a) is not party to any
agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary unless the terms of any such
agreement, contract, arrangement or understanding are no less
favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons who are not
Affiliates of the Company; (b) is a Person with respect to which
neither the Company nor any of its Restricted Subsidiaries has
any direct or indirect obligation (x) to subscribe for additional
Equity Interests or (y) to maintain or preserve such Person's
financial condition or to cause such Person to achieve any
specified levels of operating results; and (c) has not guaranteed
or otherwise directly or indirectly provided credit support for
any Indebtedness of the Company or any of its Restricted
Subsidiaries. Any such designation by the Board of Directors
shall be evidenced to the Trustee by filing with a Trustee a
certified copy of the Board Resolution giving effect to such
designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was
permitted by Section 4.07 hereof. If, at any time, any
Unrestricted
16
Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by
a Restricted Subsidiary of the Company as of such date. The Board
of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided
that such designation shall be deemed to be an incurrence of
Indebtedness and issuance of preferred stock by a Restricted
Subsidiary of the Company of any outstanding Indebtedness or
outstanding issue of preferred stock of such Unrestricted
Subsidiary and such designation shall only be permitted if (i)
such Indebtedness and preferred stock is permitted to be incurred
under Section 4.09 hereof, (ii) such Subsidiary becomes a
Subsidiary Guarantor and (iii) no Default or Event of Default
would exist following such designation.
"Voting Stock" of any Person as of any date means the
Capital Stock of such Person that is at the time entitled to vote
in the election of the Board of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to
any Indebtedness at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (a)
the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal,
including payment at final maturity, in respect thereof, by (b)
the number of years (calculated to the nearest one-twelfth) that
will elapse between such date and the making of such payment, by
(ii) the then outstanding principal amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Restricted
Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors'
qualifying shares) shall at the time be owned by such Person or
by one or more Wholly Owned Restricted Subsidiaries of such
Person or by such Person and one or more "Wholly Owned
Subsidiaries of such Person.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"Affiliate Transaction"..................................4.11
"Asset Sale Offer".......................................4.10
"Change of Control Offer"................................4.13
"Change of Control Payment"..............................4.13
"Change of Control Payment Date".........................4.13
"Covenant Defeasance"....................................8.03
"Custodian"..............................................6.01
"DTC"....................................................2.03
"Electronic Message".....................................2.02
"Event of Default".......................................6.01
"Excess Proceeds"........................................4.10
"Guaranteed Debt"........................................4.17
"incur"..................................................4.09
"Legal Defeasance".......................................8.02
"Offer Amount"...........................................3.09
"Offer Period"...........................................3.09
"Pari Passu Indebtedness"................................4.10
"Paying Agent"...........................................2.03
17
"Payment Default"........................................6.01
"Permitted Debt".........................................4.09
"Purchase Date"..........................................3.09
"Registrar"..............................................2.03
"Repurchase Offer".......................................3.09
"Restricted Payments"....................................4.07
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in, and made a part
of, this Indenture.
The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each
Guarantor and any successor obligor upon the Notes.
All other terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined
by the Commission rule under the TIA have the meanings so
assigned to them therein.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it herein;
(2) an accounting term not otherwise defined herein has
the meaning assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in
the plural include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the
Securities Act shall be deemed to include substitute,
replacement or successor sections or rules adopted by
the Commission from time to time.
18
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of EXHIBIT A-1 or EXHIBIT A-2
attached hereto. The Notes may have notations, legends or
endorsements required by law, stock exchange rule or usage. Each
Note shall be dated the date of its authentication. The Notes
initially shall be issued in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this
Indenture and the Company, the Guarantors and the Trustee, by
their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
(a) Global Notes. Notes offered and sold to QIBs in
reliance on Rule 144A shall be issued initially in the form of
Rule 144A Global Notes, which shall be deposited on behalf of the
purchasers of the Notes represented thereby with a custodian of
the Depositary, and registered in the name of the Depositary or a
nominee of the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The
aggregate principal amount of the Rule 144A Global Notes may from
time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depositary or its nominee as
hereinafter provided.
Notes offered and sold in reliance on Regulation S shall be
issued initially in the form of the Regulation S Temporary Global
Note, which shall be deposited on behalf of the purchasers of the
Notes represented thereby with the Trustee, as custodian for the
Depositary, and registered in the name of the Depositary or the
nominee of the Depositary for the accounts of designated agents
holding on behalf of Euroclear or Cedel, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.
The "40-day restricted period" (as defined in Regulation S) shall
be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depositary, together with copies of
certificates from Euroclear and Cedel certifying that they have
received certification of non-United States beneficial ownership
of 100% of the aggregate principal amount of the Regulation S
Temporary Global Notes (except to the extent of any beneficial
owners thereof who acquired an interest therein pursuant to
another exemption from registration under the Securities Act and
who will take delivery of a beneficial ownership interest in a
Rule 144A Global Note, all as contemplated by Section 2.06(a)(ii)
hereof), and (ii) an Officers' Certificate from the Company
certifying as to the same matters covered in clause (i) above.
Following the termination of the 40-day restricted period,
beneficial interests in the Regulation S Temporary Global Note
shall be exchanged for beneficial interests in Regulation S
Permanent Global Notes pursuant to the Applicable Procedures.
Simultaneously with the authentication of Regulation S Permanent
Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Notes. The aggregate principal amount of the Regulation S
Temporary Global Notes and the Regulation S Permanent Global
Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depositary
or its nominee, as the case may be, in connection with transfers
of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding
Notes as shall be specified therein and each shall provide that
it shall represent the aggregate amount of outstanding Notes from
time to time endorsed thereon and that the aggregate amount of
outstanding Notes represented thereby may from time to time be
reduced or increased, as appropriate, to reflect exchanges,
redemptions and transfers of interests. Any endorsement of a
Global Note to reflect the amount of any increase or decrease in
the
19
amount of outstanding Notes represented thereby shall be made by
the Trustee or the Note Custodian, at the direction of the
Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the
Euroclear System" and "Terms and Conditions Governing Use of
Euroclear" and the "Management Regulations" and "Instructions to
Participants" of Cedel shall be applicable to interests in the
Regulation S Temporary Global Notes and the Regulation S
Permanent Global Notes that are held by Participants through
Euroclear or Cedel. The Trustee shall have no obligation to
notify Holders of any such procedures or to monitor or enforce
compliance with the same.
Except as set forth in Section 2.06 hereof, the Global
Notes may be transferred, in whole and not in part, only to
another nominee of the Depositary or to a successor of the
Depositary or its nominee.
(b) Book-Entry Provisions. This Section 2.01(b) shall
apply only to Rule 144A Global Notes and Regulation S Permanent
Global Notes deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in
accordance with this Section 2.01(b) and Section 2.02,
authenticate and deliver the Global Notes that (i) shall be
registered in the name of the Depositary or the nominee of the
Depositary and (ii) shall be delivered by the Trustee to the
Depositary or pursuant to the Depositary's instructions or held
by the Trustee as custodian for the Depositary.
Participants shall have no rights either under this
Indenture with respect to any Global Note held on their behalf by
the Depositary or by the Note Custodian as custodian for the
Depositary or under such Global Note, and the Depositary may be
treated by the Company, the Trustee and any agent of the Company
or the Trustee as the absolute owner of such Global Note 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
Depositary or impair, as between the Depositary and its
Participants, the operation of customary practices of such
Depositary governing the exercise of the rights of an owner of a
beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated
form shall be substantially in the form of EXHIBIT A-1 attached
hereto (but without including the text referred to in footnotes 1
and 3 thereto).
SECTION 2.02. EXECUTION AND AUTHENTICATION.
One Officer of the Company shall sign the Notes for the
Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Notes and may be in facsimile form.
If an Officer of the Company whose signature is on a Note
no longer holds that office at the time the Note is
authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Note has been authenticated under
this Indenture. The form of Trustee's certificate of
authentication to be borne by the Notes shall be substantially as
set forth in EXHIBIT A-1 OR EXHIBIT A-2 hereto.
20
The Trustee shall, upon a written order of the Company
signed by an Officer of the Company, authenticate Notes for
original issue up to an aggregate principal amount at maturity of
Notes stated in the Notes. The aggregate principal amount at
maturity of Notes outstanding at any time shall not exceed such
amount except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable
to the Company to authenticate Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate
of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain (i) an office or agency where
Notes may be presented for registration of transfer or for
exchange ("Registrar") and (ii) an office or agency where Notes
may be presented for payment ("Paying Agent"). The Registrar
shall keep a register of the Notes and of their transfer and
exchange. The Company may appoint one or more additional paying
agents. The term "Paying Agent" includes any additional paying
agent. The Company may change any Paying Agent or Registrar
without notice to any Holder. The Company shall notify the
Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee
shall act as such. The Company or any of its Subsidiaries may act
as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with
respect to the Global Notes. The Company initially appoints the
Trustee to act as the Registrar and Paying Agent with respect to
the Definitive Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the
Trustee to agree in writing that the Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money held by
the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Notes, and shall
notify the Trustee of any default by the Company in making any
such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money held by it to the
Trustee. The Company at any time may require a Paying Agent to
pay all money held by it to the Trustee. Upon payment over to the
Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the
Company or a Subsidiary acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders
all money held by it as Paying Agent. Upon the occurrence of
events specified in Section 6.01(vii) or (viii) hereof, the
Trustee shall serve as Paying Agent for the Notes.
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 all Holders and shall otherwise comply
with TIA ss. 312(a). If the Trustee is not the Registrar, the
Company and the Guarantors shall furnish to the Trustee at least
21
seven (7) 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 the Holders of Notes and
the Company shall otherwise comply with TIA ss. 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be
effected through the Depositary, in accordance with this
Indenture and the procedures of the Depositary therefor, which
shall include restrictions on transfer comparable to those set
forth herein to the extent required by the Securities Act.
Beneficial interests in a Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial
interest in the same Global Note in accordance with the transfer
restrictions set forth in the legend in subsection (g) of this
Section 2.06. Transfers of beneficial interests in the Global
Notes to Persons required to take delivery thereof in the form of
an interest in another Global Note shall be permitted as follows:
(i) Rule 144A Global Note to Regulation S Global Note.
If, at any time, an owner of a beneficial interest
in a Rule 144A Global Note deposited with the
Depositary (or the Trustee as custodian for the
Depositary) wishes to transfer its beneficial
interest in such Rule 144A Global Note to a Person
who is required or permitted to take delivery
thereof in the form of an interest in a Regulation
S Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the
exchange of such interest for an equivalent
beneficial interest in a Regulation S Global Note
as provided in this Section 2.06(a)(i). Upon
receipt by the Trustee of (1) instructions given
in accordance with the Applicable Procedures from
a Participant directing the Trustee to credit or
cause to be credited a beneficial interest in the
Regulation S Global Note in an amount equal to the
beneficial interest in the Rule 144A Global Note
to be exchanged, (2) a written order given in
accordance with the Applicable Procedures
containing information regarding the Participant
account of the Depositary and the Euroclear or
Cedel account to be credited with such increase,
and (3) a certificate in the form of EXHIBIT B-1
hereto given by the owner of such beneficial
interest stating that the transfer of such
interest has been made in compliance with the
transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S, then the Trustee,
as Registrar, shall instruct the Depositary to
reduce or cause to be reduced the aggregate
principal amount at maturity of the applicable
Rule 144A Global Note and to increase or cause to
be increased the aggregate principal amount at
maturity of the applicable Regulation S Global
Note by the principal amount at maturity of the
beneficial interest in the Rule 144A Global Note
to be exchanged or transferred, to credit or cause
to be credited to the account of the Person
specified in such instructions, a beneficial
interest in the Regulation S Global Note equal to
the reduction in the aggregate principal amount at
maturity of the Rule 144A Global Note, and to
debit, or cause to be debited, from the account of
the Person making such exchange or transfer the
beneficial interest in the Rule 144A Global Note
that is being exchanged or transferred.
(ii) Regulation S Global Note to Rule 144A Global Note. If,
at any time, after the expiration of the 40-day restricted
period, an owner of a beneficial interest in a
22
Regulation S Global Note deposited with the
Depositary or with the Trustee as custodian for
the Depositary wishes to transfer its beneficial
interest in such Regulation S Global Note to a
Person who is required or permitted to take
delivery thereof in the form of an interest in a
Rule 144A Global Note, such owner shall, subject
to the Applicable Procedures, exchange or cause
the exchange of such interest for an equivalent
beneficial interest in a Rule 144A Global Note as
provided in this Section 2.06(a)(ii). Upon
receipt by the Trustee of (1) instructions from
Euroclear or Cedel, if applicable, and the
Depositary, directing the Trustee, as Registrar,
to credit or cause to be credited a beneficial
interest in the Rule 144A Global Note equal to
the beneficial interest in the Regulation S
Global Note to be exchanged, such instructions to
contain information regarding the Participant
account with the Depositary to be credited with
such increase, (2) a written order given in
accordance with the Applicable Procedures
containing information regarding the participant
account of the Depositary and (3) a certificate
in the form of EXHIBIT B-2 attached hereto given
by the owner of such beneficial interest stating
(A) if the transfer is pursuant to Rule 144A,
that the Person transferring such interest in a
Regulation S Global Note reasonably believes that
the Person acquiring such interest in a Rule 144A
Global Note is a QIB and is obtaining such
beneficial interest in a transaction meeting the
requirements of Rule 144A and any applicable blue
sky or securities laws of any state of the United
States, (B) that the transfer complies with the
requirements of Rule 144 under the Securities
Act, (C) if the transfer is to an Institutional
Accredited Investor that such transfer is in
compliance with the Securities Act and a
certificate in the form of EXHIBIT C attached
hereto and, if such transfer is in respect of an
aggregate principal amount of less than $250,000,
an Opinion of Counsel acceptable to the Company
that such transfer is in compliance with the
Securities Act or (D) if the transfer is pursuant
to any other exemption from the registration
requirements of the Securities Act, that the
transfer of such interest has been made in
compliance with the transfer restrictions
applicable to the Global Notes and pursuant to
and in accordance with the requirements of the
exemption claimed, such statement to be supported
by an Opinion of Counsel from the transferee or
the transferor in form reasonably acceptable to
the Company and to the Registrar and in each
case, in accordance with any applicable
securities laws of any state of the United States
or any other applicable jurisdiction, then the
Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the
aggregate principal amount at maturity of such
Regulation S Global Note and to increase or cause
to be increased the aggregate principal amount at
maturity of the applicable Rule 144A Global Note
by the principal amount at maturity of the
beneficial interest in the Regulation S Global
Note to be exchanged or transferred, and the
Trustee, as Registrar, shall instruct the
Depositary, concurrently with such reduction, to
credit or cause to be credited to the account of
the Person specified in such instructions a
beneficial interest in the applicable Rule 144A
Global Note equal to the reduction in the
aggregate principal amount at maturity of such
Regulation S Global Note and to debit or cause to
be debited from the account of the Person making
such transfer the beneficial interest in the
Regulation S Global Note that is being exchanged
or transferred.
23
(b) Transfer and Exchange of Definitive Notes. When
Definitive Notes are presented by a Holder to the Registrar with
a request to register the transfer of the Definitive Notes or to
exchange such Definitive Notes for an equal principal amount of
Definitive Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested
only if the Definitive Notes are presented or surrendered for
registration of transfer or exchange, are endorsed and contain a
signature guarantee or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by
such Holder or by his attorney and contains a signature
guarantee, duly authorized in writing and the Registrar received
the following documentation (all of which may be submitted by
facsimile):
(i) in the case of Definitive Notes that are Transfer
Restricted Securities, such request shall be
accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder
for registration in the name of such Holder,
without transfer, or such Transfer
Restricted Security is being transferred to
the Company or any of its Subsidiaries, a
certification to that effect from such
Holder (in substantially the form of EXHIBIT
B-3 hereto); or
(B) if such Transfer Restricted Security is
being transferred to a QIB in accordance
with Rule 144A under the Securities Act or
pursuant to an exemption from registration
in accordance with Rule 144 under the
Securities Act or pursuant to an effective
registration statement under the Securities
Act, a certification to that effect from
such Holder (in substantially the form of
EXHIBIT B-3 hereto); or
(C) if such Transfer Restricted Security is
being transferred to a Non-U.S. Person in an
offshore transaction in accordance with Rule
904 under the Securities Act, a
certification to that effect from such
Holder (in substantially the form of EXHIBIT
B-3 hereto);
(D) if such Transfer Restricted Security is being
transferred to an Institutional Accredited Investor
in reliance on an exemption from the registration
requirements of the Securities Act other than those
listed in subparagraphs (B) and (C) above,
a certification to that effect from such Holder
(in substantially the form of EXHIBIT B-3 hereto),
a certification substantially in the form of
EXHIBIT C hereto, and, if such transfer is in
respect of an aggregate principal amount of Notes
of less than $250,000, an Opinion of Counsel acceptable
to the Company that such transfer is in compliance with
the Securities Act; or
(E) if such Transfer Restricted Security is
being transferred in reliance on any other
exemption from the registration requirements
of the Securities Act, a certification to
that effect from such Holder (in
substantially the form of EXHIBIT B-3
hereto) and an Opinion of Counsel from such
Holder or the transferee reasonably
acceptable to the Company and to the
Registrar to the effect that such transfer
is in compliance with the Securities Act.
24
(c) Transfer of a Beneficial Interest in a Rule 144A
Global Note or Regulation S Permanent Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Rule
144A Global Note or Regulation S Permanent Global Note may upon
request, subject to the Applicable Procedures, exchange such
beneficial interest for a Definitive Note. Upon receipt by the
Trustee of written instructions or such other form of
instructions as is customary for the Depositary (or Euroclear
or Cedel, if applicable), from the Depositary or its nominee on
behalf of any Person having a beneficial interest in a Rule
144A Global Note or Regulation S Permanent Global Note,
and, in the case of a Transfer Restricted Security,
the following additional information and documents
(all of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the
Depositary as being the beneficial owner, a
certification to that effect from such
Person (in substantially the form of EXHIBIT
B-4 hereto);
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule
144A under the Securities Act or pursuant to
an exemption from registration in accordance
with Rule 144 under the Securities Act or
pursuant to an effective registration
statement under the Securities Act, a
certification to that effect from the
transferor (in substantially the form of
EXHIBIT B-4 hereto);
(C) if such beneficial interest is being
transferred to an Institutional Accredited
Investor, pursuant to a private placement
exemption from the registration requirements
of the Securities Act (and based on an
opinion of counsel if the Company so
requests), a certification to that effect
from such Holder (in substantially the form
of EXHIBIT B-4 hereto) and a certificate
from the applicable transferee (in
substantially the form of EXHIBIT C hereto);
or
(D) if such beneficial interest is being transferred
in reliance on any other exemption from the registration
requirements of the Securities Act, a certification to
that effect from the transferor (in substantially the form
of EXHIBIT B-4 hereto) and an Opinion of Counsel from
the transferee or the transferor reasonably acceptable
to the Company and to the Registrar to the effect that
such transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the
direction of the Trustee, shall, in accordance with the
standing instructions and procedures existing between
the Depositary and the Note Custodian, cause the aggregate
principal amount of Rule 144A Global Notes or Regulation
S Permanent Global Notes, as applicable, to be
reduced accordingly and, following such reduction,
the Company shall execute and, the Trustee shall
authenticate and deliver to the transferee a Definitive
Note in the appropriate principal amount.
(ii) Definitive Notes issued in exchange for a beneficial
interest in a Rule 144A Global Note or Regulation S
Permanent Global Note, as applicable, pursuant to
25
this Section 2.06(c) shall be registered in such
names and in such authorized denominations as the
Depositary, pursuant to instructions from its
direct or Indirect Participants or otherwise,
shall instruct the Trustee. The Trustee shall
deliver such Definitive Notes to the Persons in
whose names such Notes are so registered.
Following any such issuance of Definitive Notes,
the Trustee, as Registrar, shall instruct the
Depositary to reduce or cause to be reduced the
aggregate principal amount at maturity of the
applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than
the provisions set forth in subsection (g) of this Section 2.06),
a Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor
Depositary or a nominee of such successor Depositary.
(e) Transfer and Exchange of a Definitive Note for a
Beneficial Interest in a Global Note. A Definitive Note may not
be transferred or exchanged for a beneficial interest in a Global
Note.
(f) Authentication of Definitive Notes in Absence of Depositary.
If at any time:
(i) the Depositary for the Notes notifies the Company
that the Depositary is unwilling or unable to
continue as Depositary for the Global Notes and a
successor Depositary for the Global Notes is not
appointed by the Company within 90 days after
delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the
issuance of Definitive Notes under this
Indenture,
then the Company shall execute, and the Trustee shall, upon
receipt of an authentication order in accordance with Section
2.02 hereof, authenticate and deliver, Definitive Notes in an
aggregate principal amount equal to the principal amount of the
Global Notes in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Note certificate
evidencing Global Notes and Definitive Notes (and
all Notes issued in exchange therefor or
substitution thereof) shall bear the legend (the
"Private Placement Legend") in substantially the
following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER
XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE
26
HOLDER OF THE SECURITY EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE
THE UNITED STATES TO A PERSON WHO 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, (b)
IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN
PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF THE SECURITIES
ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), THAT PRIOR TO SUCH TRANSFER,
FURNISHED THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS (THE FORM OF WHICH CAN BE
OBTAINED FROM THE TRUSTEE) AND, IF SUCH
TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN
$250,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, OR (e) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, IN
THE CASE OF CLAUSE (b), (c), (d) OR (e),
BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED
TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer
Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or
pursuant to an effective registration statement
under the Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Definitive Note that does not bear the
legend set forth in (i) above and rescind
any restriction on the transfer of such
Transfer Restricted Security upon receipt of
a certification from the transferring holder
substantially in the form of EXHIBIT B-4
hereto; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b)
hereof; provided, however, that with respect
to any request for an exchange of a Transfer
Restricted Security that is represented by a
Global Note for a Definitive Note that does
not bear the legend set forth in (i) above,
which request is made in
27
reliance upon Rule 144, the Holder thereof
shall certify in writing to the Registrar
that such request is being made pursuant to
Rule 144 (such certification to be
substantially in the form of EXHIBIT B-4
hereto).
(iii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer
Restricted Security represented by a Global Note)
in reliance on any exemption from the
registration requirements of the Securities Act
(other than exemptions pursuant to Rule 144A or
Rule 144 under the Securities Act) in which the
Holder or the transferee provides an Opinion of
Counsel to the Company and the Registrar in form
and substance reasonably acceptable to the
Company and the Registrar (which Opinion of
Counsel shall also state that the transfer
restrictions contained in the legend are no
longer applicable):
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the
Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security
for a Definitive Note that does not bear the
legend set forth in (i) above and rescind
any restriction on the transfer of such
Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such
Transfer Restricted Security shall not be
required to bear the legend set forth in (i)
above, but shall continue to be subject to
the provisions of Section 2.06(a) and (b)
hereof.
(iv) Notwithstanding the foregoing, upon the consummation
of the Exchange Offer in accordance with the Registration
Rights Agreement, the Company shall issue and, upon
receipt of an authentication order in accordance with Section
2.02 hereof, the Trustee shall authenticate (i) one or more
Unrestricted Global Notes in aggregate principal amount equal
to the principal amount of the Restricted Beneficial Interests
tendered for acceptance by persons that are not (x) broker-
dealers, (y) Persons participating in the distribution of the
Notes or (z) Persons who are affiliates (as defined in
Rule 144) of the Company and accepted for exchange in the
Exchange Offer and (ii) Definitive Notes that do not bear
the Private Placement Legend in an aggregate principal
amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer.
The Trustee shall be entitled to rely upon the authentication
order when authenticating the Notes without any obligation
to verify that the restrictions in the preceding sentence have
been complied with. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced
accordingly and the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the
Holders of Definitive Notes so accepted Definitive Notes in the
appropriate principal amount.
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been
exchanged for Definitive Notes, redeemed, repurchased or
cancelled, all Global Notes shall be returned to or retained and
cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial
interest in a Global Note is exchanged for Definitive Notes,
redeemed, repurchased or cancelled, the principal amount of Notes
28
represented by such Global Note shall be reduced accordingly and
an endorsement may be made on such Global Note, by the Trustee or
the Notes Custodian, at the direction of the Trustee, to reflect
such reduction but any failure to make such an endorsement shall
not affect the reductions.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and
exchanges, the Company shall execute and the
Trustee shall authenticate Global Notes and
Definitive Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for
any registration of transfer or exchange, but the
Company may require payment of a sum sufficient
to cover any stamp or transfer tax or similar
governmental charge payable in connection
therewith (other than any such stamp or transfer
taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 2.10,
3.06, 4.10, 4.13 and 9.05 hereto).
(iii) All Global Notes and Definitive Notes issued upon
any registration of transfer or exchange of
Global Notes or Definitive Notes shall be the
valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits
under this Indenture, as the Global Notes or
Definitive Notes surrendered upon such
registration of transfer or exchange.
(iv) The Registrar shall not be required: (A) to
issue, to register the transfer of or to
exchange Notes during a period beginning at the
opening of fifteen (15) Business Days before
the day of any selection of Notes for redemption
under Section 3.02 hereof and ending at
the close of business on the day of
selection, (B) to register the transfer
of or to exchange any Note so selected
for redemption in whole or in part,
except the unredeemed portion of any
Note being redeemed in part, or (C) to
register the transfer of or to exchange a Note
between a record date and the next succeeding
interest payment date.
(v) Prior to due presentment for the
registration of a transfer of any Note, the
Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note
is registered as the absolute owner of such
Note for the purpose of receiving payment of
principal of and interest on such Notes and
for all other purposes, and neither the
Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vi) The Trustee shall authenticate Global Notes
and Definitive Notes in accordance with the
provisions of Section 2.02 hereof.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the
Company and the Trustee receives evidence to their satisfaction
of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon the written order of the Company
signed by an Officer of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be
supplied by the Holder that is sufficient in the judgment of the
29
Trustee and the Company to protect the Company, the Trustee, any
Agent and any authenticating agent from any loss that any of them
may suffer if a Note is replaced. The Company and the Trustee may
charge for their expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this
Indenture equally and proportionately with all other Notes duly
issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it,
those delivered to it for cancellation, those reductions in the
interest in a Global Note effected by the Trustee in accordance
with the provisions hereof, and those described in this Section
2.08 as not outstanding. Except as set forth in Section 2.09
hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company or any Guarantor holds the
Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof
satisfactory to it that the replaced Note is held by a bona fide
purchaser.
If the principal amount of any Note is considered paid
under Section 4.01 hereof, it ceases to be outstanding and
interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary
or an Affiliate of any thereof) holds, on a redemption date or
maturity date, money sufficient to pay Notes payable on that
date, then on and after that date such Notes shall be deemed to
be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required
principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company or any Guarantor, or by
any Affiliate of the Company or any Guarantor shall be considered
as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes shown on the
Trustee's register as being owned shall be so disregarded.
Notwithstanding the foregoing, Notes that are to be acquired by
the Company or any Guarantor or an Affiliate of the Company or
any Guarantor pursuant to an exchange offer, tender offer or
other agreement shall not be deemed to be owned by such entity
until legal title to such Notes passes to such entity.
SECTION 2.10. TEMPORARY NOTES.
Until Definitive Notes are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Notes
upon a written order of the Company signed by an Officer of the
Company. Temporary Notes shall be substantially in the form of
Definitive Notes but may have variations that the Company
considers appropriate for temporary Notes. Without unreasonable
delay, the Company shall prepare and the Trustee shall upon
receipt of a written order of the Company signed by an Officer
authenticate Definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the
benefits of this Indenture.
30
SECTION 2.11. CANCELLATION.
The Company at any time may deliver to the Trustee for
cancellation any Notes previously authenticated and delivered
hereunder or which the Company may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly
cancelled by the Trustee. All Notes surrendered for registration
of transfer, exchange or payment, if surrendered to any Person
other than the Trustee, shall be delivered to the Trustee. The
Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or
cancellation. Subject to Section 2.07 hereof, the Company may not
issue new Notes to replace Notes that it has redeemed or paid or
that have been delivered to the Trustee for cancellation. All
cancelled Notes held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company,
unless by a written order, signed by an Officer of the Company,
the Company shall direct that cancelled Notes be returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Company defaults in a payment of interest on the
Notes, it shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special
record date, which date shall be at the earliest practicable date
but in all events at least five (5) Business Days prior to the
payment date, in each case at the rate provided in the Notes and
in Section 4.01 hereof. The Company shall fix or cause to be
fixed each such special record date and payment date, and shall
promptly thereafter, notify the Trustee of any such date. At
least fifteen (15) days before the special record date, the
Company (or the Trustee, in the name and at the expense of the
Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment date and
the amount of such interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of
Holders of the Notes entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture
shall be determined as provided for in TIA Section 316 (c).
SECTION 2.14. COMPUTATION OF INTEREST.
Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
SECTION 2.15. CUSIP NUMBER.
The Company in issuing the Notes may use a "CUSIP" number,
and if it does so, the Trustee shall use the CUSIP number in
notices of redemption or exchange as a convenience to Holders;
provided that any such notice may state that no representation is
made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes and that reliance may be
placed only on the other identification numbers printed on the
Notes. The Company shall promptly notify the Trustee of any
change in the CUSIP number.
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ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to the
optional redemption provisions of Section 3.07 hereof, it shall
furnish to the Trustee, at least 45 days but not more than 60
days before a redemption date (unless a shorter period is
acceptable to the Trustee) an Officers' Certificate setting forth
(i) the Section of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the
principal amount of Notes to be redeemed and (iv) the redemption
price.
If the Company is required to make an offer to purchase
Notes pursuant to Section 4.10 or 4.13 hereof, it shall furnish
to the Trustee, at least 45 days before the scheduled purchase
date, an Officers' Certificate setting forth (i) the section of
this Indenture pursuant to which the offer to purchase shall
occur, (ii) the terms of the offer, (iii) the principal amount of
Notes to be purchased, (iv) the purchase price, (v) the purchase
date and (vi) and further setting forth a statement to the effect
that (a) the Company or one its Subsidiaries has affected an
Asset Sale and there are Excess Proceeds aggregating more than
$10.0 million or (b) a Change of Control has occurred, as
applicable.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED OR PURCHASED.
If less than all of the Notes are to be redeemed at any
time, selection of Notes for redemption will be made by the
Trustee in compliance with the requirements of the principal
national securities exchange, if any, on which the Notes are
listed, or, if the Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and
appropriate; provided that no Notes of $1,000 or less shall be
redeemed in part. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the
redemption date to each Holder of Notes to be redeemed at its
registered address. Notices of redemption may not be conditional.
If any Note is to be redeemed in part only, the notice of
redemption that relates to such Note shall state the portion of
the principal amount thereof to be redeemed. A new Note in
principal amount equal to the unredeemed portion thereof will be
issued in the name of the Holder thereof upon cancellation of the
original Note. Notes called for redemption become due on the date
fixed for redemption. On and after the redemption date, interest
and Liquidated Damages ceases to accrue on Notes or portions of
them called for redemption unless the Company defaults in making
the redemption payment.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed by
first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed.
The notice shall identify the Notes to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price for the Notes and accrued interest,
and Liquidated Damages, if any;
32
(3) if any Note is being redeemed in part, the
portion of the principal amount of such Notes to
be redeemed and that, after the redemption date,
upon surrender of such Note, a new Note or Notes
in principal amount equal to the unredeemed
portion shall be issued upon surrender of the
original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest and Liquidated
Damages, if any, on Notes called for redemption
ceases to accrue on and after the redemption
date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for
redemption are being redeemed; and
(8) that no representation is made as to the
correctness or accuracy of the CUSIP number, if
any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice
of redemption in the Company's name and at the Company's expense;
provided, however, that the Company shall have delivered to the
Trustee, at least 45 days prior to the redemption date (or such
shorter period as shall be acceptable to the Trustee), an
Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in the
notice as provided in the preceding paragraph. The notice mailed
in the manner herein provided shall be conclusively presumed to
have been duly given whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any
defect in the notice to the Holder of any Note shall not affect
the validity of the proceeding for the redemption of any other
Note.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with
Section 3.03 hereof, Notes called for redemption become
irrevocably due and payable on the redemption date at the
redemption price plus accrued and unpaid interest and Liquidated
Damages, if any, to such date. A notice of redemption may not be
conditional.
SECTION 3.05. DEPOSIT OF REDEMPTION OR PURCHASE PRICE.
On or before 10:00 a.m. (New York City time) on each
redemption date or the date on which Notes must be accepted for
purchase pursuant to Section 4.10 or 4.13, the Company shall
deposit with the Trustee or with the Paying Agent money
sufficient to pay the redemption price of and accrued and unpaid
interest and Liquidated Damages, if any, on all Notes to be
redeemed or purchased on that date. The Trustee or the Paying
Agent shall promptly return to the Company upon its written
request any money deposited with the Trustee or the Paying Agent
by the Company in excess of the amounts necessary to pay the
redemption price of (including any applicable premium), accrued
interest and Liquidated Damages, if any, on all Notes to be
redeemed or purchased.
If Notes called for redemption or tendered in an Asset Sale
Offer or Change of Control Offer are paid or if the Company has
deposited with the Trustee or Paying Agent money sufficient to
pay the
33
redemption or purchase price of, unpaid and accrued interest and
Liquidated Damages, if any, on all Notes to be redeemed or
purchased, on and after the redemption or purchase date interest
and Liquidated Damages, if any, shall cease to accrue on the
Notes or the portions of Notes called for redemption or tendered
and not withdrawn in an Asset Sale Offer or Change of Control
Offer (regardless of whether certificates for such securities are
actually surrendered). If a Note is redeemed or purchased on or
after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose
name such Note was registered at the close of business on such
record date. If any Note called for redemption shall not be so
paid upon surrender for redemption because of the failure of the
Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal and Liquidated Damages, if any, from
the redemption or purchase date until such principal and
Liquidated Dames, if any, is paid, and to the extent lawful on
any interest not paid on such unpaid principal, in each case, at
the rate provided in the Notes and in Section 4.01 hereof.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the
Company shall issue and, upon the Company's written request, the
Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed
portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as set forth in the next paragraph, the Notes
will not be redeemable at the Company's option prior to October
15, 2002. Thereafter, the Notes will be subject to redemption at
any time at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth
below plus accrued and unpaid interest and Liquidated Damages
thereon, to the applicable redemption date, if redeemed during
the twelve-month period beginning on October 15 of the years
indicated below:
Year Percentage
2002 .................................... 105.188%
2003 .................................... 103.458%
2004 .................................... 101.729%
2005 and thereafter...................... 100.000%
(b) Notwithstanding the foregoing, at any time on or prior
to October 15, 2000, the Company may (but shall not have the
obligation to) redeem, on one or more occasions, up to an
aggregate of 35% of the principal amount of Notes originally
issued at a redemption price equal to 110.375% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the redemption date, with the net
cash proceeds of one or more Equity Offerings; provided that at
least 65% in aggregate principal amount of the Notes originally
issued remain outstanding immediately after the occurrence of
such redemption; and provided further, that such redemption shall
occur within 90 days of the date of the closing of such Equity
Offering.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Sections 3.09, 4.10 and 4.13
hereof, the Company shall not be required to make mandatory
redemption or sinking fund payments with respect to the Notes.
34
SECTION 3.09. REPURCHASE OFFERS.
In the event that the Company shall be required to commence
an offer to all Holders to repurchase Notes (a "Repurchase
Offer") pursuant to Section 4.10 hereof, an "Asset Sale," or
pursuant to Section 4.13 hereof, a "Change of Control Offer," the
Company shall follow the procedures specified below.
A Repurchase Offer shall commence no earlier than 30 days
and no later than 60 days after a Change of Control (unless the
Company is not required to make such offer pursuant to Section
4.13(c) hereof) or an Asset Sale Offer Triggering Event (as
defined below) (an "Asset Sale Offer Triggering Event"), as the
case may be, and remain open for a period of twenty (20) Business
Days following its commencement and no longer, except to the
extent that a longer period is required by applicable law (the
"Offer Period"). No later than five (5) Business Days after the
termination of the Offer Period (the "Purchase Date"), the
Company shall purchase the principal amount of Notes required to
be purchased pursuant to Section 4.10 hereof, in the case of an
Asset Sale Offer, or 4.13 hereof, in the case of a Change of
Control Offer (the "Offer Amount") or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the
Repurchase Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued
and unpaid interest and Liquidated Damages, if any, shall be paid
to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest or
Liquidated Damages, if any, shall be payable to Holders who
tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company
shall send, by first class mail, a notice to the Trustee and each
of the Holders, with a copy to the Trustee. The notice shall
contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to such Repurchase Offer. The
Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall describe
the transaction or transactions that constitute the Change of
Control or Asset Sale Offer Triggering Event as the case may be
and shall state:
(a) that the Repurchase Offer is being made pursuant to
this Section 3.09 and Section 4.10 or 4.13 hereof, as the
case may be, and the length of time the Repurchase Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the
Repurchase Offer shall cease to accrue interest and
Liquidated Damages, if any, after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant
to a Repurchase Offer shall be required to surrender the
Note, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Note, duly completed, or
transfer by book-entry transfer, to the Company, the
Depositary, or the Paying Agent at the address specified in
the notice not later than the close of business on the last
day of the Offer Period;
35
(f) that Holders shall be entitled to withdraw their
election if the Company, the Depositary or the Paying
Agent, as the case may be, receives, not later than the
expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of
the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the
Company shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof,
shall be purchased); and
(h) that Holders whose Notes were purchased only in part
shall be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered (or
transferred by book-entry transfer).
On or before 10:00 a.m. (New York City time) on each
Purchase Date, the Company shall irrevocably deposit with the
Trustee or Paying Agent in immediately available funds the
aggregate purchase price with respect to a principal amount of
Notes equal to the Offer Amount, together with accrued and unpaid
interest and Liquidated Damages, if any, thereon, to be held for
payment in accordance with the terms of this Section 3.09. On the
Purchase Date, the Company shall, to the extent lawful, (i)
accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant
to the Repurchase Offer, or if less than the Offer Amount has
been tendered, all Notes tendered, (ii) deliver or cause the
Paying Agent or depository, as the case may be, to deliver to the
Trustee Notes so accepted and (iii) deliver to the Trustee an
Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company, the Depositary or the
Paying Agent, as the case may be, shall promptly (but in any case
not later than three (3) Business Days after the Purchase Date)
mail or deliver to each tendering Holder an amount equal to the
purchase price of the Notes tendered by such Holder and accepted
by the Company for purchase, plus any accrued and unpaid interest
and Liquidated Damages, if any, thereon to the Purchase Date, and
the Company shall promptly issue a new Note, and the Trustee,
shall authenticate and mail or deliver such new Note, to such
Holder, equal in principal amount to any unpurchased portion of
such Holder's Notes surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce in a newspaper of
general circulation or in a press release provided to a
nationally recognized financial wire service the results of the
Repurchase Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09,
any purchase pursuant to this Section 3.09 shall be made pursuant
to the provisions of Sections 3.01, 3.02, 3.05 and 3.06 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF NOTES.
The Company shall pay or cause to be paid the principal of,
premium, if any, and interest on the Notes on the dates and in
the manner provided in the Notes. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and
in the amounts set forth in the Registration Rights Agreement.
Principal, premium and Liquidated Damages, if any, and interest,
shall be considered paid
36
for all purposes hereunder on the date the Paying Agent if other
than the Company or a Subsidiary thereof holds, as of 10:00 a.m.
(New York City time) money deposited by the Company in
immediately available funds and designated for and sufficient to
pay all such principal, premium and Liquidated Damages, if any,
and interest, then due.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
principal at the rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent lawful; it
shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of
interest and Liquidated Damages (without regard to any applicable
grace period) at the same rate to the extent lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain in the Borough of Manhattan, the
City of New York an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee or Registrar) where
Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The
Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or
more other offices or agencies where the Notes may be presented
or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, the City of New York for such purposes. The Company
shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of
any such other office or agency.
The Company hereby designates the Corporate Trust Office of
the Trustee as one such office or agency of the Company in
accordance with Section 2.03 hereof.
SECTION 4.03. COMMISSION REPORTS.
From and after the earlier of the effective date of the
Exchange Offer Registration Statement or the effective date of
the Shelf Registration Statement, whether or not required by the
rules and regulations of the Commission, so long as any Notes are
outstanding, the Company shall furnish to the Holders of Notes
(i) all quarterly and annual financial information that would be
required to be contained in a filing with the Commission on Forms
10-Q and 10-K if the Company were required to file such Forms,
including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its
consolidated Subsidiaries and, with respect to the annual
information only, a report thereon by the Company's certified
independent accountants and (ii) all current reports that would
be required to be filed with the Commission on Form 8-K if the
Company were required to file such reports, in each case within
the time periods set forth in the Commission's rules and
regulations. In addition, whether or not required by the rules
and regulations of the Commission at any time after the
consummation of the Exchange Offer contemplated by the
Registration Right Agreement, the Company shall file a copy of
all such information and reports with the Commission for public
availability within the time periods set forth in the
Commission's rules and regulations, (unless the Commission will
not accept such a filing) and make such
37
information available to securities analysts and prospective
investors upon request. In addition, at all times that the
Commission does not accept the filings provided for in the
preceding sentence, the Company and the Guarantors have agreed
that, for so long as any Notes remain outstanding, they shall
furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
The financial information to be distributed to Holders of
Notes shall be filed with the Trustee and mailed to the Holders
at their addresses appearing in the register of Notes maintained
by the Registrar, within 90 days after the end of the Company's
fiscal years and within 45 days after the end of each of the
first three quarters of each such fiscal year.
The Company shall provide the Trustee with a sufficient
number of copies of all reports and other documents and
information and, if requested by the Company and at the Company's
expense, the Trustee will deliver such reports to the Holders
under this Section 4.03.
SECTION 4.04. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate
stating that a review of the activities of the Company and its
Subsidiaries during the preceding fiscal year has been made under
the supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and
fulfilled its obligations under this Indenture (including, with
respect to any Restricted Payments made during such year, the
basis upon which the calculations required by Section 4.07 hereof
were computed, which calculations may be based on the Company's
latest available financial statements), and further stating, as
to each such Officer signing such certificate, that, to the best
of his or her knowledge, each entity has kept, observed,
performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance
of any of the terms, provisions and conditions of this Indenture
(or, if a Default or Event of Default shall have occurred,
describing all such Defaults or Events of Default of which he or
she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that, to the best of
his or her knowledge, no event has occurred and remains in
existence by reason of which payments on account of the principal
of, premium or Liquidated Damages, if any, or interest on the
Notes is prohibited or if such event has occurred, a description
of the event and what action the Company is taking or proposes to
take with respect thereto.
So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, in
connection with the year-end financial statements delivered
pursuant to Section 4.03 hereof, the Company shall use its best
efforts to deliver a written statement of the Company's
independent public accountants (who shall be a firm of
established national reputation) that in making the examination
necessary for certification of such financial statements, nothing
has come to their attention that would lead them to believe that
the Company has violated any provisions of Article Four or
Section 5.01 hereof or, if any such violation has occurred,
specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of
any such violation. In the event that such written statement of
the Company's independent public accountants cannot be obtained,
the Company shall deliver an Officers' Certificate certifying
that it has used its best efforts to obtain such statements and
was unable to do so.
The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officers'
Certificate specifying
38
such Default or Event of Default and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.05. TAXES.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency all material taxes,
assessments and governmental levies, except such as are contested
in good faith and by appropriate proceedings and with respect to
which appropriate reserves have been taken in accordance with
GAAP.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
The Company and each Guarantor covenants (to the extent
that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay, extension or usury law
wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and
the Company and each Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not, by resort to
any such law, 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 has been
enacted.
SECTION 4.07. RESTRICTED PAYMENTS.
From and after the date hereof the Company shall not, and
shall not permit any of its Restricted Subsidiaries to, directly
or indirectly: (i) declare or pay any dividend or make any other
payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without
limitation, any such dividend, distribution or other payment made
as a payment in connection with any merger or consolidation
involving the Company), other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of
the Company or dividends or distributions payable to the Company
or any Wholly Owned Subsidiary of the Company; (ii) purchase,
redeem or otherwise acquire or retire for value (including,
without limitation, any such purchase, redemption or other
acquisition or retirement for value made as a payment in
connection with any merger or consolidation involving the
Company) any Equity Interests of the Company or any Restricted
Subsidiary (other than any such Equity Interests owned by the
Company or any Restricted Subsidiary of the Company); (iii) make
any payment on or with respect to, or purchase, redeem, defease
or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes, except a payment of interest or a
payment of principal at Stated Maturity; or (iv) make any
Restricted Investment (all such payments and other actions set
forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and
immediately after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred
and be continuing; and
(b) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto, have
been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in the first paragraph of Section 4.09
hereof; and
(c) such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by
the Company and its Restricted Subsidiaries after the date
hereof
39
(excluding Restricted Payments permitted by clauses (ii),
(iii), (iv), (vi), (vii), (viii), (x) and (xi) of the next
succeeding paragraph), is less than the sum (without
duplication) of (i) 50% of the Consolidated Net Income of
the Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing
after the date hereof to the end of the Company's most
recently ended fiscal quarter for which internal financial
statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such
period is a deficit, less 100% of such deficit), plus (ii)
100% of the aggregate Qualified Proceeds received by the
Company from contributions to the Company's capital or the
issue or sale subsequent to the date hereof of Equity
Interests of the Company (other than Disqualified Stock) or
of Disqualified Stock or debt securities of the Company
that have been converted into such Equity Interests (other
than Equity Interests (or Disqualified Stock or convertible
debt securities) sold to a Subsidiary of the Company and
other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified
Stock), plus (iii) to the extent that any Restricted
Investment that was made after the date hereof is sold for
Qualified Proceeds or otherwise liquidated or repaid
(including, without limitation, by way of a dividend or
other distribution, a repayment of a loan or advance or
other transfer of assets) for in whole or in part, the
lesser of (A) the Qualified Proceeds with respect to such
Restricted Investment, (less the cost of disposition, if
any) and (B) the initial amount of such Restricted
Investment, plus (iv) upon the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary, the
lesser of (x) the fair market value of such Subsidiary or
(y) the aggregate amount of all Investments made in such
Subsidiary subsequent to the Issue Date by the Company and
its Restricted Subsidiaries, plus (v) $15.0 million.
The foregoing provisions will not prohibit (i) the payment
of any dividend within 60 days after the date of declaration
thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture; (ii) the
redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests
of the Company or any Guarantor in exchange for, or out of the
net cash proceeds of the substantially concurrent sale (other
than to a Restricted Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock);
provided that the amount of any such net cash proceeds that are
utilized for any such redemption, repurchase, retirement,
defeasance or other acquisition shall be excluded from clause (c)
(ii) of the preceding paragraph; (iii) the defeasance,
redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness in exchange for, or with the net cash
proceeds from, an incurrence of Permitted Refinancing
Indebtedness; (iv) the payment of any dividend (or the making of
a similar distribution or redemption) by a Restricted Subsidiary
of the Company to the holders of its common Equity Interests on a
pro rata basis; (v) so long as no Default or Event of Default
shall have occurred and is continuing, the repurchase, redemption
or other acquisition or retirement for value of any Equity
Interests of the Company, Holdings or any Restricted Subsidiary
of the Company, held by any member of the Company's (or any of
its Subsidiaries') management, employees or consultants pursuant
to any management, employee or consultant equity subscription
agreement or stock option agreement in effect as of the date of
the Indenture; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests
shall not exceed the sum of (A) $10.0 million and (B) the
aggregate cash proceeds received by the Company from any
reissuance of Equity Interests by Holdings or the Company to
members of management of the Company and its Restricted
Subsidiaries (provided that the cash proceeds referred to in this
clause (B) shall be excluded from clause (c)(ii), of the
preceding paragraph); (vi) payments required to be made under the
Tax Sharing Agreement; (vii) distributions made by the Company on
the date hereof, the proceeds of which are utilized solely to
consummate the Recapitalization; (viii) the payment of dividends
or the making of loans or advances by the Company to Holdings not
to exceed $1.5 million in any fiscal year for costs and expenses
incurred by Holdings in its
40
capacity as a holding company or for services rendered by
Holdings on behalf of the Company; (ix) so long as no Default or
Event of Default has occurred and is continuing, the declaration
and payment of dividends to holders of any class or series of
Disqualified Stock of the Company or any Guarantor issued after
the date hereof in accordance with Section 4.09; (x) so long as
(A) no Default or Event of Default has occurred and is continuing
and (B) immediately before and immediately after giving effect
thereto, the Company would have been permitted to incur at least
$1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph described
under Section 4.09, from and after October 15, 2002, payments of
cash dividends to Holdings in an amount sufficient to enable
Holdings to make payments of interest required to be made in
respect of the Senior Discount Debentures in accordance with the
terms thereof in effect on the date of the Indenture, provided
such interest payments are made with the proceeds of such
dividends; and (xi) the payment of dividends by the Company to
Holdings of not more than 20% of the net proceeds from any sale
of all or substantially all of the Capital Stock or assets of the
Company's Popular Club Plan business or Xxxxxxxx & Xxxxx business
(as each such business is constituted on the Issue Date),
provided that such dividends shall only be permitted to the
extent that Holdings immediately utilizes the proceeds thereof to
repay, redeem, repurchase or otherwise retire outstanding Senior
Discount Debentures.
The Board of Directors may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation
would not cause a Default or an Event of Default. For purposes of
making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to
be Restricted Payments at the time of such designation and will
reduce the amount available for Restricted Payments under the
first paragraph of this covenant. All such outstanding
Investments will be deemed to constitute Investments in an amount
equal to the greater of (i) the net book value of such
Investments at the time of such designation and (ii) the fair
market value of such Investments at the time of such designation.
Such designation will only be permitted if such Restricted Payment
would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
The amount of (i) all Restricted Payments (other than cash)
shall be the fair market value on the date of the Restricted
Payment of the asset(s) or securities proposed to be transferred
or issued by the Company or such Restricted Subsidiary, as the
case may be, pursuant to the Restricted Payment and (ii)
Qualified Proceeds (other than cash) shall be the fair market
value on the date of receipt thereof by the Company of such
Qualified Proceeds. The fair market value of any non-cash
Restricted Payment and Qualified Proceeds shall be determined by
the Board of Directors whose resolution with respect thereto
shall be delivered to the Trustee, such determination to be based
upon an opinion or appraisal issued by an accounting, appraisal
or investment banking firm of national standing if such fair
market value exceeds $10.0 million. Not later than the date of
making any Restricted Payment, the Company shall deliver to the
Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the
calculations required by Section 4.07 were computed, together with
a copy of any fairness opinion or appraisal required by this Indenture.
SECTION 4.08. DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Restricted
Subsidiary to (i)(a) pay dividends or make any other
distributions to the Company or any of its Restricted
Subsidiaries (1) on its Capital Stock or (2) with respect to any
other interest or participation in, or measured by, its profits,
or (b) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted
41
Subsidiaries or (iii) transfer any of its properties or assets to
the Company or any of its Restricted Subsidiaries, except for
such encumbrances or restrictions existing under or by reason of
(a) the New Credit Facility, as in effect as of the date hereof,
and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings
thereof, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive with respect
to such dividend and other payment restrictions than those
contained in the New Credit Facility, as in effect on the date
hereof, (b) the Indenture and the Notes, (c) applicable law or
any applicable rule, regulation or order, (d) any agreement or
instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as
in effect at the time of such acquisition (except to the extent
such agreement or instrument was created or entered into in
connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or
the properties or assets of any Person, other than the Person, or
the property or assets of the Person, so acquired, (e) by reason
of customary non-assignment provisions in leases, licenses,
encumbrances, contracts or similar assets entered into or
acquired in the ordinary course of business and consistent with
past practices, (f) purchase money obligations for property
acquired in the ordinary course of business that impose
restrictions of the nature described in clause (iii) above on the
property so acquired, (g) any Purchase Money Note, or other
Indebtedness or contractual requirements incurred with respect to
a Qualified Receivables Transaction relating to a Receivables
Subsidiary, (h) Permitted Refinancing Indebtedness, provided that
the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than
those contained in the agreements governing the Indebtedness
being refinanced and (i) contracts for the sale of assets
containing customary restrictions with respect to a Subsidiary
pursuant to an agreement that has been entered into for the sale
or disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary.
SECTION 4.09. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, issue, assume, guarantee or otherwise become directly or
indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired
Debt) and that the Company will not issue any Disqualified Stock
and will not permit any of its Restricted Subsidiaries to issue
any shares of preferred stock; provided, however, that the
Company or any of its Restricted Subsidiaries may incur
Indebtedness (including Acquired Debt) or issue shares of
Disqualified Stock if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which
internal financial statements are available immediately preceding
the date on which such additional Indebtedness is incurred or
such Disqualified Stock is issued would have been at least 2.0 to
1.0, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had
been issued, as the case may be, at the beginning of such
four-quarter period.
The provisions of the first paragraph of this covenant will
not apply to the incurrence of any of the following items of
Indebtedness (collectively, "Permitted Debt"):
(i) the incurrence by the Company (and the guarantee
thereof by the Guarantors) of Indebtedness under Credit
Facilities; provided that the aggregate principal amount of all
Indebtedness (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and the Guarantors thereunder) outstanding under all
Credit Facilities after giving effect to such incurrence,
including all Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (i),
does not exceed an amount equal to $270.0 million less the
aggregate
42
principal of all principal payments thereunder constituting
permanent reductions of such Indebtedness pursuant to and in
accordance with Section 4.10;
(ii) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the Subsidiary Guarantees;
(iii) the incurrence by the Company or any of its
Restricted Subsidiaries of Indebtedness represented by Capital
Lease Obligations, mortgage financings or purchase money
obligations, in each case incurred for the purpose of financing
all or any part of the purchase price or cost of construction or
improvements of property used in the business of the Company or
such Restricted Subsidiary, in an aggregate principal amount not
to exceed $25.0 million at any time outstanding;
(iv) other Indebtedness of the Company and its Restricted
Subsidiaries outstanding on the Issue Date;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange
for, or the net proceeds of which are used to refund, refinance
or replace Indebtedness (other than intercompany Indebtedness)
that is permitted by this Indenture to exist or be incurred;
(vi) the incurrence of intercompany Indebtedness (A)
between or among the Company and any Wholly Owned Restricted
Subsidiaries of the Company or (B) by a Restricted Subsidiary
that is not a Wholly Owned Restricted Subsidiary to the Company
or a Wholly Owned Subsidiary; provided, however, that (i) if the
Company is the obligor on such Indebtedness, such Indebtedness is
expressly subordinated to the prior payment in full in cash of
all Obligations with respect to the Notes and (ii)(A) any
subsequent issuance or transfer of Equity Interests that results
in any such Indebtedness being held by a Person other than the
Company or a Wholly Owned Restricted Subsidiary of the Company
and (B) any sale or other transfer of any such Indebtedness to a
Person that is not either the Company or a Wholly Owned
Restricted Subsidiary of the Company shall be deemed, in each
case, to constitute an incurrence of such Indebtedness by the
Company or such Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of the
Guarantors of Hedging Obligations that are incurred for the
purpose of fixing or hedging (i) interest rate risk with respect
to any floating rate Indebtedness that is permitted by the terms
of this Indenture to be outstanding or (ii) the value of foreign
currencies purchased or received by the Company in the ordinary
course of business;
(viii) Indebtedness incurred in respect of workers'
compensation claims, self-insurance obligations, performance,
surety and similar bonds and completion guarantees provided by
the Company or a Guarantor in the ordinary course of business;
(ix) Indebtedness arising from guarantees of Indebtedness
of the Company or any Subsidiary or the agreements of the Company
or a Restricted Subsidiary providing for indemnification,
adjustment of purchase price or similar obligations, in each
case, incurred or assumed in connection with the disposition of
any business, assets or Capital Stock of a Restricted Subsidiary,
or other guarantees of Indebtedness incurred by any person
acquiring all or any portion of such business, assets or Capital
Stock of a Restricted Subsidiary for the purpose of financing
such acquisition, provided that the maximum aggregate liability
in respect of all such Indebtedness shall at no time exceed the
gross proceeds actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;
43
(x) Indebtedness of a Receivables Subsidiary that is not
recourse to the Company or any other Restricted Subsidiary of the
Company (other than Standard Securitization Undertakings)
incurred in connection with a Qualified Receivables Transaction;
(xi) the guarantee by the Company or any of the Guarantors
of Indebtedness of the Company or a Guarantor that was permitted
to be incurred by another provision of this covenant;
(xii) the incurrence by the Company or any of its
Restricted Subsidiaries of Acquired Debt in an aggregate
principal amount at any time outstanding not to exceed $20.0
million;
(xiii) Indebtedness arising from the honoring by a bank or
other financial institution of a check, draft or similar
instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary
course of business; provided, however, that such Indebtedness is
extinguished within five business days of incurrence; and
(xiv) the incurrence by the Company or any Restricted
Subsidiary of additional Indebtedness in an aggregate principal
amount (or accreted value, as applicable) at any time
outstanding, including all Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this
clause (xiv), not to exceed $10.0 million.
For purposes of determining compliance with this covenant,
in the event that an item of Indebtedness meets the criteria of
more than one of the categories of Permitted Debt described in
clauses (i) through (xiv) above or is entitled to be incurred
pursuant to the first paragraph of this covenant, the Company
shall, in its sole discretion, classify such item of Indebtedness
in any manner that complies with this covenant and such item of
Indebtedness will be treated as having been incurred pursuant to
only one of such clauses or pursuant to the first paragraph
hereof. Accrual of interest, the accretion of accreted value and
the payment of interest in the form of additional Indebtedness
will not be deemed to be an incurrence of Indebtedness for
purposes of this covenant.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (i)
the Company (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least
equal to the fair market value (evidenced by a resolution of the
Board of Directors set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests
issued or sold or otherwise disposed of and (ii) at least 75% of
the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of (A) cash or Cash
Equivalents or (B) Qualified Proceeds; provided that the
aggregate fair market value of Qualified Proceeds (other than
cash or Cash Equivalents), which may be received in consideration
for asset sales pursuant to this clause (ii)(B) shall not exceed
$7.5 million since the Issue Date; provided, further, that the
amount of (x) any liabilities (as shown on the Company's or such
Restricted Subsidiary's most recent balance sheet), of the
Company or any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated
to the Notes or any Guarantee thereof) that are assumed by the
transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary
from further liability and (y) any securities, notes or other
obligations received by the Company or any such Restricted
Subsidiary from such transferee that are converted by the Company
or such Restricted Subsidiary into cash (to extent of the cash
received) within 180 days following the closing of such Asset
Sale, shall be deemed to be cash for purposes of this provision.
44
Within 360 days after the receipt of any Net Proceeds from
an Asset Sale, the Company or its Restricted Subsidiaries may
apply such Net Proceeds, at its option, (a) to repay Senior Debt
or Guarantor Senior Debt, or (b) to the investment in, or the
making of a capital expenditure or the acquisition of other
property or assets in each case used or useable in a Permitted
Business, or Capital Stock of any Person primarily engaged in a
Permitted Business if, as a result of the acquisition by the
Company or any Restricted Subsidiary thereof, such Person becomes
a Restricted Subsidiary, or (c) a combination of the uses
described in clauses (a) and (b). Pending the final application
of any such Net Proceeds, the Company or its Restricted
Subsidiaries may temporarily reduce Senior Debt or otherwise
invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from Asset Sales, other than 20%
of the net proceeds from any sale of all or substantially all of
the Capital Stock or assets of the Company's Popular Club Plan
business or Xxxxxxxx & Xxxxx business (as each such business is
constituted on the Issue Date) which are utilized to repay,
redeem, repurchase or otherwise retire outstanding Senior
Discount Debentures, that are not applied or invested as provided
in the first sentence of this paragraph will be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $10.0 million (an "Asset Sale Offer Triggering
Event"), the Company will be required to make an offer to all
Holders of Notes and, to the extent required by the terms of any
Pari Passu Indebtedness ranking pari passu with the Notes ("Pari
Passu Indebtedness") to all holders of such Pari Passu
Indebtedness (an "Asset Sale Offer"), to purchase the maximum
principal amount of Notes and any such Pari Passu Indebtedness
that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount
thereof plus accrued and unpaid interest and Liquidated Damages
thereon, if any, to the date of purchase, in accordance with the
procedures set forth in Section 3.09 hereof or such Pari Passu
Indebtedness, as applicable. To the extent that the aggregate
principal amount of Notes and any such Pari Passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company or its Restricted Subsidiaries may use any
remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes and any such Pari Passu
Indebtedness surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Upon completion of such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.
SECTION 4.11. TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to or Investment in,
or sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from,
or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an
"Affiliate Transaction"), unless (i) such Affiliate Transaction
is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such
Restricted Subsidiary with an unrelated Person and (ii) the
Company delivers to the Trustee (a) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a resolution
of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause
(i) above and that such Affiliate Transaction has been approved
by a majority of the disinterested members of the Board of
Directors and (b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate
consideration in excess of $10.0 million, an opinion as to the
fairness to the Holders of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or
investment banking firm of national standing; provided that (v)
transactions with suppliers or other purchasers or sales of goods
or services, in each case in the ordinary course of business
(including, without limitation, pursuant to joint venture
agreements) and otherwise in accordance with the terms of this
Indenture which are fair to the Company, in the good faith
determination of the
45
Board of Directors of the Company or the senior management of the
Company and are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated
party, (w) any employment agreements, stock option or other
compensation agreements or plans (and the payment of amounts or
the issuance of securities thereunder) and other reasonable fees,
compensation, benefits and indemnities paid or entered into by
the Company or any of its Restricted Subsidiaries in the ordinary
course of business of the Company or such Restricted Subsidiary
to or with the officers, directors or employees of the Company or
its Restricted Subsidiaries, (x) transactions between or among
the Company and/or its Restricted Subsidiaries, (y) sales or
other transfers or dispositions of accounts receivable and other
related assets customarily transferred in an asset securitization
transaction involving accounts receivable to a Receivables
Subsidiary in a Qualified Receivables Transaction, and
acquisitions of Permitted Investments in connection with a
Qualified Receivables Transaction and (z) Restricted Payments
(other than Restricted Investments) that are permitted by Section
4.07 hereof, in each case, shall not be deemed Affiliate
Transactions.
SECTION 4.12. LIENS.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create,
incur, assume or suffer to exist any Lien securing Indebtedness
or trade payables on any asset now owned or hereafter acquired,
or any income or profits therefrom or assign or convey any right
to receive income therefrom for purposes of security, except
Permitted Liens, unless (x) in the case of Liens securing
Indebtedness that is expressly subordinate or junior in right of
payment to the Notes, the Notes are secured by a Lien on such
property, assets or proceeds that is senior in priority to such
Liens, (with the same relative priority as such subordinate or
junior Indebtedness shall have with respect to the Notes and
Subsidiary Guarantees) and (y) in all other cases, the Notes are
secured by such Lien on an equal and ratable basis.
SECTION 4.13. OFFER TO PURCHASE UPON CHANGE OF CONTROL.
Upon the occurrence of a Change of Control, each Holder of
Notes will have the right to require the Company to repurchase
all or any part (equal to $1,000 or an integral multiple thereof)
of such Holder's Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash equal to
101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the
date of purchase (the "Change of Control Payment"). Within 30
days following any Change of Control, the Company shall mail a
notice to each Holder describing the transaction or transactions
that constitute the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be
no earlier than 30 days (or such shorter time period as may be
permitted under applicable law, rules and regulations) and no
later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"), pursuant to the procedures
required by Section 3.09 hereof and described in such notice. The
Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the 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
hereof relating to such Change of Control Offer, the Company will
comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations described
hereof by virtue thereof.
On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment all Notes or
portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal
to the Change of Control Payment in respect of all
46
Notes or portions thereof so tendered and (3) deliver or cause to
be delivered to the Trustee the Notes so accepted together with
an Officers' Certificate stating the aggregate principal amount
of Notes or portions thereof being purchased by the Company. The
Paying Agent will promptly mail to each Holder of Notes so
tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes
surrendered, if any; provided that each such new Note will be in
a principal amount of $1,000 or an integral multiple thereof. The
Company shall publicly announce the results of the Change of
Control Offer on or as soon as practicable after the Change of
Control Payment Date in accordance with Section 3.09 hereof.
The Change of Control provisions described above will be
applicable whether or not any other provisions of this Indenture
are applicable. Except as described above with respect to a
Change of Control, this Indenture does not contain provisions
that permit the Holders of the Notes to require that the Company
repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction.
Prior to complying with the provisions of the preceding
paragraphs, but in any event within 90 days following a Change of
Control, the Company shall either repay all outstanding
Indebtedness of its Subsidiaries or obtain the requisite
consents, if any, under the New Credit Facility and the Senior
Subordinated Notes to permit the repurchase of the Notes required
by this section. The Company will not be required to purchase any
Debentures until it has complied with the preceding sentence, but
the Company's failure to make a Change of Control Offer when
required or to purchase tendered Notes when tendered would
constitute an Event of Default under this Indenture.
The Company shall not be required to make a Change of
Control Offer upon 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 herein 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.
SECTION 4.14. CORPORATE EXISTENCE.
Subject to Section 4.13 and Article 5 hereof, as the case
may be, the Company and each Guarantor shall do or cause to be
done all things necessary to preserve and keep in full force and
effect its corporate existence and the corporate, partnership or
other existence of each of its Subsidiaries in accordance with
the respective organizational documents (as the same may be
amended from time to time) of the Company or any such Subsidiary
and the rights (charter and statutory), licenses and franchises
of the Company and its Subsidiaries; provided that the Company
shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its
Subsidiaries, taken as a whole, and that the loss thereof is not
adverse in any material respect to the Holders of the Notes.
SECTION 4.15. BUSINESS ACTIVITIES.
The Company shall not, and shall not permit any Restricted
Subsidiary to engage in any business other than a Permitted
Businesses.
47
SECTION 4.16. SENIOR SUBORDINATED DEBT.
Notwithstanding the provisions of Section 4.09 hereof, (i)
the Company shall not incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to any Senior Debt and senior in
any respect in right of payment to the Notes, and (ii) no
Guarantor shall incur, create, issue, assume, guarantee or
otherwise become liable for any Indebtedness that is subordinate
or junior in right of payment to Senior Debt of such Guarantor
and senior in any respect in right of payment to such Guarantor's
Subsidiary Guarantees.
SECTION 4.17. LIMITATION ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS.
The Company shall not permit any Restricted Subsidiary to
guarantee the payment of any Indebtedness of the Company or any
Indebtedness of any other Restricted Subsidiary, (in each case,
the "Guaranteed Debt"), unless (i) if such Restricted Subsidiary
is not a Guarantor, such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to the indenture
providing for a Subsidiary Guarantee of payment of the Notes by
such Restricted Subsidiary, (ii) if the Notes or the Subsidiary
Guarantee (if any) of such Restricted Subsidiary are subordinated
in right of payment to the Guaranteed Debt, the Subsidiary
Guarantee under the supplemental indenture shall be subordinated
to such Restricted Subsidiary's guarantee with respect to the
Guaranteed Debt substantially to the same extent as the Notes or
the Subsidiary Guarantee are subordinated to the Guaranteed Debt
under the Indenture, (iii) if the Guaranteed Debt is by its
express terms subordinated in right of payment to the Notes or
the Subsidiary Guarantee (if any) of such Restricted Subsidiary,
any such guarantee of such Restricted Subsidiary with respect to
the Guaranteed Debt shall be subordinated in right of payment to
such Restricted Subsidiary's Subsidiary Guarantee with respect to
the Notes substantially to the same extent as the Guaranteed Debt
is subordinated to the Notes or the Subsidiary Guarantee (if any)
of such Restricted Subsidiary, (iv) such Restricted Subsidiary
subordinates rights of reimbursement, indemnity or subrogation or
any other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted
Subsidiary under its Subsidiary Guarantee to its obligation under
its Subsidiary Guarantee, and (v) such Restricted Subsidiary
shall deliver to the Trustee an opinion of counsel to the effect
that (A) such Subsidiary Guarantee of the Notes has been duly
authorized, executed and delivered, and (B) such Subsidiary
Guarantee of the Notes constitutes a valid, binding and
enforceable obligation of such Restricted Subsidiary, except
insofar as enforcement thereof may be limited by bankruptcy,
insolvency or similar laws (including, without limitations, all
laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION OF SALE OF ASSETS.
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all
or substantially all of its properties or assets in one or more
related transactions, to another Person unless (i) the Company is
the surviving corporation or the Person formed by or surviving
any such consolidation or merger (if other than the Company) or
to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation or
limited liability company organized or existing under the laws of
the United States, any state thereof or the District of Columbia;
(ii) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such
sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all
48
the obligations of the Company under the Notes and this Indenture
pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee; (iii) immediately after such
transaction no Default or Event of Default exists; and (iv)
except in the case of a merger of the Company with or into a
Wholly Owned Restricted Subsidiary of the Company (other than a
Receivables Subsidiary), the Company or the entity or Person
formed by or surviving any such consolidation or merger (if other
than the Company), or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made at
the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of
the applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed
Charge Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof.
For purposes of this Section 5.01, 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. Clause (iv) of the foregoing paragraph will not prohibit
(a) a merger between the Company and a Wholly Owned Subsidiary of
Holdings created for the purpose of holding the Capital Stock of
the Company, (b) a merger between the Company and a Wholly Owned
Restricted Subsidiary of the Company or (c) a merger between the
Company and an Affiliate incorporated solely for the purpose of
reincorporating the Company in another State of the United States
so long as, in the case of each of clause (a), (b) and (c), the
amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or
substantially all of the assets of the Company in accordance with
Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so
that from and after the date of such consolidation, merger, sale,
lease, conveyance or other disposition, the provisions of this
Indenture referring to the "Company" shall refer instead to the
successor corporation and not to the Company), and shall exercise
every right and power of the Company under this Indenture with
the same effect as if such successor Person had been named as the
Company herein; provided, that, (i) solely for the purposes of
computing Consolidated Net Income for purposes of clause (b) of
the first paragraph of Section 4.07 hereof, the Consolidated Net
Income of any person other than the Company and its Subsidiaries
shall be included only for periods subsequent to the effective
time of such merger, consolidation, combination or transfer of
assets; and (ii) in the case of any sale, assignment, transfer,
lease, conveyance, or other disposition of less than all of the
assets of the predecessor Company, the predecessor Company shall
not be released or discharged from the obligation to pay the
principal of or interest and Liquidated Damages, if any, on the
Notes.
49
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following constitutes an "Event of Default":
(i) default for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to,
the Notes (whether or not prohibited by the Article 10
hereof);
(ii) default in payment when due of the principal of or premium,
if any, on the Notes (whether or not prohibited by Article 10
hereof);
(iii) failure by the Company or any of its Restricted
Subsidiaries for 30 days after notice by the Trustee
or by the Holders of at least 25% in principal amount
of Notes then outstanding to comply with the
provisions described under Sections 4.07, 4.09, 4.10
or 4.13;
(iv) failure by the Company or any of its Restricted
Subsidiaries for 60 days after notice by the
Trustee or by the Holders of at least 25% in
principal amount of Notes then outstanding to
comply with any of its other agreements in this
Indenture or the Notes;
(v) default under any mortgage, indenture or instrument
under which there may be issued or by
which there may be secured or evidenced
Subsidiaries any Indebtedness for money borrowed
by the Company or any of its Restricted
(or the payment of which is guaranteed
by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or
Guarantee now exists, or is created after the
date hereof, which default (a) is caused by
a failure to pay principal of such Indebtedness
after giving effect to any grace period provided
in such Indebtedness (a "Payment Default")
or (b) results in the acceleration of such
Indebtedness prior to its stated maturity and,
in each case, the principal amount of any such
Indebtedness, together with the principal
amount of any other such Indebtedness
under which there has been a Payment Default
or the maturity of which has been so accelerated,
aggregates $20.0 million or more;
(vi) failure by the Company or any of its Subsidiaries
to pay final judgments aggregating in excess of
$20.0 million (net of any amounts with respect to
which a reputable and credit worthy insurance
company has acknowledged liability in writing),
which judgments are not paid, discharged or
stayed for a period of 60 days;
(vii) the Company or any of its Significant
Subsidiaries or any group of Subsidiaries that,
taken as a whole would constitute a Significant
Subsidiary, pursuant to or within the meaning of
any Bankruptcy Law:
(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,
50
(d) makes a general assignment for the benefit of
its creditors, or
(e) generally is not paying its debts as they become
due; or
(viii) a court of competent jurisdiction enters an order
or decree under any Bankruptcy Law that:
(a) is for relief against the Company or any of its
Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an
involuntary case;
(b) appoints a Custodian of the Company or any of its
Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or
substantially all of the property of the Company
or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; or
(c) orders the liquidation of the Company or any of
its Significant Subsidiaries or any group of
Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect
for 60 consecutive days.
(ix) except as permitted herein, any Subsidiary Guarantee
shall be held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason
to be in full force and effect or any Guarantor, or
any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary
Guarantee;
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the
then outstanding Notes may declare all the Notes to be due and
payable immediately. Notwithstanding the foregoing, in the case
of an Event of Default as described in clause (vii) or (viii) of
Section 6.01 hereof, all outstanding Notes will become due and
payable without further action or notice. Upon such declaration,
all principal of and accrued interest and Liquidated Damages, if
any, on the Notes shall be due and payable immediately. Holders
of the Notes may not enforce this Indenture or the Notes except
as provided in this Indenture. In the event of a declaration of
acceleration of the Notes because an Event of Default has
occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (v) of Section 6.01 hereof, the
declaration of acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described in clause
(v) of Section 6.01 hereof have rescinded the declaration of
acceleration in respect of such Indebtedness within 30 days of
the date of such declaration and if (y) the annulment of the
acceleration of the Notes would not conflict with any judgment or
decree of a court of competent jurisdiction and (z) all existing
Events of Default, except nonpayment of principal or interest on
the Notes that became due solely because of the acceleration of
the Notes, have been cured or waived.
51
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the
Trustee may pursue any available remedy to collect the payment of
principal, premium, if any, interest and Liquidated Damages, if
any, on the Notes or to enforce the performance of any provision
of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Holder of a
Note 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. All remedies
are cumulative to the extent permitted by law.
The Company is required to deliver to the Trustee annually
a statement regarding compliance with this Indenture, and the
Company is required upon becoming aware of any Default or Event
of Default, to deliver to the Trustee a statement specifying such
Default or Event of Default.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may on behalf
of the Holders of all of the Notes waive any existing Default or
Event of Default and its consequences under this Indenture
(including any acceleration (other than an automatic acceleration
resulting from an Event of Default under clause (vii) or (viii)
of Section 6.01 hereof) except a continuing Default or Event of
Default in the payment of interest on, or the principal of, the
Notes (other than as a result of an acceleration), which shall
require the consent of all of the Holders of the Notes then
outstanding.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to
the Trustee or exercising any trust power conferred on it.
However, (i) the Trustee may refuse to follow any direction that
conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes
or that may involve the Trustee in personal liability, and (ii)
the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction. In case an
Event of Default shall occur (which shall not be cured), the
Trustee will be required, in the exercise of its power, to use
the degree of care of a prudent man in the conduct of his own
affairs. Notwithstanding any provision to the contrary in this
Indenture, the Trustee is under no obligation to exercise any of
its rights or powers under this Indenture at the request of any
Holder of Notes, unless such Holder shall offer to the Trustee
security and indemnity satisfactory to it against any loss,
liability or expense.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this
Indenture, the Subsidiary Guarantees or the Notes only if:
(a) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default or the Trustee
receives such notice from the Company;
52
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity
satisfactory to the Trustee against any loss,
liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and,
if requested, the provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not
give the Trustee a direction inconsistent with the
request.
A Holder of a Note may not use this Indenture to prejudice
the rights of another Holder of a Note or to obtain a preference
or priority over another Holder of a Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal,
premium, if any, interest, and Liquidated Damages, if any, on the
Note, on or after the respective due dates expressed in such Note
(including in connection with an offer to purchase), or to bring
suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(i) or (ii)
hereof occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of,
premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and such further amount as shall be
sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel) and the Holders of the
Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive
and distribute any money or other securities or property payable
or deliverable upon the conversion or exchange of the Notes or on
any such claims and any Custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the
Trustee any amount due to it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section
7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same
shall be secured by a Lien on, and shall be paid out of, any and
all distributions, dividends, money, securities and other
properties that the
53
Holders may be entitled to receive in such proceeding whether in
liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of
any Holder, or to authorize the Trustee to vote in respect of the
claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article
6, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expense and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid
on the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, ratably, without preference or
priority of any kind, according to the amounts due and payable on
the Notes for principal, premium, if any, interest, and
Liquidated Damages, if any, respectively;
Third: without duplication, to the Holders for any other
Obligations owing to the Holders under this Indenture and the Notes;
and
Fourth: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any
action taken or omitted by it as a 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 6.11
does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing
of which a Responsible Officer of the Trustee has
knowledge, the Trustee shall exercise such of the
rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise,
54
as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this
Indenture or the TIA and the Trustee need perform
only those duties that are specifically set forth
in this Indenture or the TIA and no others, and
no implied covenants or obligations shall be read
into this Indenture against the Trustee; and
(ii) 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 liabilities for
its own negligent action, its own negligent failure to
act, or its own willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 7.01;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts;
and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good
faith in accordance with a direction received by
it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b) and (c)
of this Section 7.01.
(e) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or incur any
liability. The Trustee shall be under no obligation to
exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such
Holder shall have offered to the Trustee security and
indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any
money received by it except as the Trustee may agree
in writing with the Company. Money held in trust by
the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on the truth of the
statements and correctness of the opinions contained
in, and shall be protected from acting or refraining
from acting upon, any document believed by it to be
genuine and to have been signed or presented by the
55
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 or both. 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. Prior to taking, suffering or
admitting any action, the Trustee may consult with counsel of the
Trustee's own choosing and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and
protection from liability in respect of any action taken, suffered
or omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and 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 that it believes
to be authorized or within the rights or powers
conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this
Indenture, any demand, request, direction or notice
from the Company or any Guarantor shall be sufficient
if signed by an Officer of the Company or Guarantor,
as applicable.
(f) The Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this
Indenture at the request or direction of any of the
Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity satisfactory
to the Trustee against the costs, expenses and
liabilities that might be incurred by it in compliance
with such request or direction.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may
become the owner of Notes and may otherwise deal with the
Company, the Guarantors or any Affiliate of the Company or any
Guarantor with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90
days, apply to the Commission for permission to continue as
Trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture,
the Subsidiary Guarantees or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes
or any money paid to the Company or upon the Company's direction
under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by
any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement
in the Notes or any other document in connection with the sale of
the Notes or pursuant to this Indenture other than its
certificate of authentication.
56
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing
and if it is known to a Responsible Officer of the Trustee, the
Trustee shall mail to Holders of Notes a notice of the Default or
Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment on any Note
pursuant to Section 6.01(i) or (ii) hereof, the Trustee may
withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes
remain outstanding, the Trustee shall mail to the Holders of the
Notes a brief report dated as of such reporting date that
complies with TIA ss. 313(a) (but if no event described in TIA
ss. 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b). The Trustee shall also transmit
by mail all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with
the Commission and each stock exchange on which the Company has
informed the Trustee in writing the Notes are listed in
accordance with TIA Section 313(d). The Company shall promptly
notify the Trustee when the Notes are listed on any stock exchange
and of any delisting thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company and the Guarantors shall pay to the Trustee
from time to time reasonable compensation for its acceptance of
this Indenture and services hereunder. To the extent permitted by
law, the Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company and
the Guarantors shall reimburse the Trustee promptly upon request
for all reasonable disbursements, advances and expenses incurred
or made by it in addition to the compensation for its services.
Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by
it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the
costs and expenses of enforcing this Indenture against the
Company and the Guarantors (including this Section 7.07) and
defending itself against any claim (whether asserted by the
Company and the Guarantors or any Holder or any other person) or
liability in connection with the exercise or performance of any
of its powers or duties hereunder except to the extent any such
loss, liability or expense may be attributable to its negligence
or bad faith. The Trustee shall notify the Company and the
Guarantors promptly of any claim for which it may seek indemnity.
Failure by the Trustee to so notify the Company and the
Guarantors shall not relieve the Company of its obligations
hereunder. The Company and the Guarantors shall defend the claim
and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company and the Guarantors shall
pay the reasonable fees and expenses of such counsel. The Company
and the Guarantors need not pay for any settlement made without
its consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under
this Section 7.07 shall survive the satisfaction and discharge of
this Indenture.
57
To secure the Company's and the Guarantors payment
obligations in this Section 7.07, the Trustee shall have a Lien
prior to the Notes on all money or property held or collected by
the Trustee, except that held in trust to pay principal, interest
and Liquidated Damages, if any, on particular Notes. Such Lien
shall survive the satisfaction and discharge of this Indenture
and the resignation or removal of the Trustee.
When the Trustee incurs expenses or renders services after
an Event of Default specified in Section 6.01 (vii) or (viii)
hereof occurs, the expenses and the compensation for the services
(including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of
a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the
Company. The Holders of a majority in principal amount of the
then outstanding Notes may remove the Trustee by so notifying the
Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee
under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists
in the office of Trustee for any reason, the Company shall
promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in
principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by
the Company.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company, or the Holders of at least 10% in principal
amount of the then outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee, after written request by any Holder of a
Note who has been a Holder of a Note for at least six months,
fails to comply with Section 7.10 hereof, such Holder of a Note
may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of 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 the duties of the Trustee under
58
this Indenture. The successor Trustee shall mail a notice of its
succession to the Holders of the Notes. The retiring Trustee
shall promptly transfer all property held by it as Trustee to the
successor Trustee, provided that all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in
Section 7.07 hereof. Notwithstanding replacement of the Trustee
pursuant to this Section 7.08, the Company's obligations under
Section 7.07 hereof shall continue for the benefit of the
retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee or any Agent consolidates, merges or
converts into, or transfers all or substantially all of its
corporate trust business to, another corporation, the successor
corporation without any further act shall be the successor
Trustee or any Agent, as applicable.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the
United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power,
that is subject to supervision or examination by federal or state
authorities. The Trustee and its direct parent shall at all times
have a combined capital surplus of at least $50.0 million as set
forth in its most recent annual report of condition.
This Indenture shall always have a Trustee who satisfies
the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee
is subject to TIA Section 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to 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 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT
DEFEASANCE.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officers' Certificate,
at any time, elect to have either Section 8.02 or Section 8.03
hereof be applied to all Notes and Subsidiary Guarantees then
outstanding upon compliance with the conditions set forth below
in this Article 8.
SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.02, the Company and each
Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be deemed to have been
discharged from their respective obligations with respect to all
Notes and Subsidiary Guarantees then outstanding on the date the
conditions set forth below are satisfied ("Legal Defeasance").
For this purpose, Legal Defeasance means that the Company shall
be deemed to have paid and discharged the entire Indebtedness
represented by the Notes outstanding, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.05
and the other
59
Sections of this Indenture referred to in (a) and (b) below, and
to have satisfied all their respective other obligations under
such Notes and Subsidiary Guarantees and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging the same), except for
the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of
outstanding Notes to receive payments in respect of the principal
amount, premium, if any, and interest and Liquidated Damages on
such Notes when such payments are due from the trust referred to
in Section 8.04(a); (b) the Company's obligations with respect to
such Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10,
4.02 and 4.03 hereof; (c) the rights, powers, trusts, duties and
immunities of the Trustee and the Company's obligations in con-
nection therewith; and (d) the provisions of this Section 8.02.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 hereof of
the option applicable to this Section 8.03, the Company and each
Guarantor shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from its
obligations under the covenants contained in Article 5 and in
Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15,
4.16, 4.17, 5.01 and 11.01 hereof with respect to the outstanding
Notes and Subsidiary Guarantees on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes and Subsidiary Guarantees shall
thereafter be deemed not "outstanding" for the purposes of any
direction, waiver, consent or declaration or act of Holders (and
the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all
other purposes hereunder (it being understood that such Notes
shall not be deemed outstanding for accounting purposes). For
this purpose, Covenant Defeasance means that, with respect to the
outstanding Notes and Subsidiary Guarantees, the Company or any
of its Subsidiaries may omit to comply with and shall have no
liability in respect of any term, condition or limitation set
forth in any such covenant, whether directly or indirectly, by
reason of any reference elsewhere herein to any such covenant or
by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default
under Section 6.01 hereof, but, except as specified above, the
remainder of this Indenture and such Notes and Subsidiary
Guarantees shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, subject to the satisfaction of
the conditions set forth in Section 8.04 hereof, Sections 6.01(iii)
through 6.01(v) hereof shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE.
The following shall be the conditions to the application of
either Section 8.02 or Section 8.03 hereof to the outstanding
Notes and Subsidiary Guarantees:
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the
Trustee, in trust, for the benefit of the Holders
of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof,
in such amounts as shall be sufficient, in the
opinion of a nationally recognized firm of
independent public accountants, to pay the
principal amount, premium, if any, and interest
and Liquidated Damages, if any, on the outstanding
Notes on the stated maturity or on the applicable
redemption date, as the case may be, and the
Company must specify whether the Notes are being
defeased to maturity or to a particular redemption
date;
60
(b) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of
counsel in the United States reason- ably
acceptable to the Trustee confirming that (A) the
Company has received from, or there has been
published by, the Internal Revenue Service a
ruling or (B) since the date hereof, 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, subject to customary assumptions and
exclusions, the Holders of the outstanding Notes
shall not recognize income, gain or loss for
federal income tax purposes as a result of such
Legal Defeasance and shall 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 Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in
the United States reasonably acceptable to the Trustee
confirming that, subject to customary assumptions and
exclusions, the Holders of the outstanding Notes shall
not recognize income, gain or loss for federal income
tax purposes as a result of such Covenant Defeasance
and shall 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;
(d) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than
a Default or Event of Default resulting from the
financing of amounts to be applied to such deposit) or
insofar as Events of Default from bankruptcy or
insolvency events are concerned, at any time in the
period ending on the 91st day after the date of
deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a
default under any material agreement or instrument
(other than this Indenture) to which the Company or
any of its Subsidiaries is a party or by which the
Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an
opinion of counsel to the effect that, subject to
customary assumptions and exclusions (which
assumptions and exclusions shall not relate to the
operation of Section 547 of the United States
Bankruptcy Code or any analogous New York State law
provision), after the 91st day following the deposit,
the trust funds shall not be subject to the effect of
any applicable bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not
made by the Company with the intent of preferring the
Holders of Notes over the other creditors of the
Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or
others; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an opinion of counsel, each
stating that all conditions precedent provided for
relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT SECURITIES TO BE
HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS.
61
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the "Trustee") pursuant to Section
8.04 hereof in respect of the then outstanding Notes shall be
held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the
Company acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, interest and
Liquidated Damages, if any, but such money need not be segregated
from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash
or non-callable Government Securities deposited pursuant to
Section 8.04 hereof or the principal and interest received in
respect thereof other than any such tax, fee or other charge
which by law is for the account of the Holders of the outstanding
Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time
at the Company's written request and be relieved of all liability
with respect to any money or non-callable Government Securities
held by it as provided in Section 8.04 hereof which, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered
under Section 8.04(a) hereof), are in excess of the amount
thereof that would then be required to be deposited to effect an
equivalent Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REPAYMENT TO THE COMPANY.
Any money deposited with the Trustee or any Paying Agent,
or then held by the Company, in trust for the payment of the
principal of, premium, if any, interest or Liquidated Damages, if
any, on any Note and remaining unclaimed for one year after such
principal, and premium, if any, or interest, if any, or
Liquidated Damages, if any, have become due and payable shall be
paid to the Company on its written request or (if then held by
the Company) shall be discharged from such trust; and the Holder
of such Note shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in
the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30
days from the date of such notification or publication, any
unclaimed balance of such money then remaining shall be repaid to
the Company.
SECTION 8.07. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any
United States dollars or non-callable Government Securities in
accordance with Section 8.02 hereof or Section 8.03 hereof, as
the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Company
and the Guarantors under this Indenture, and the Notes and the
Subsidiary Guarantees shall be revived and reinstated as though
no deposit had occurred pursuant to Section 8.02 hereof or
Section 8.03 hereof, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 hereof or Section 8.03 hereof, as
the case may be; provided, however, that, if the Company makes
any payment of principal of, premium, if any, interest or
Liquidated Damages, if any, on any Note
62
following the reinstatement of its obligations, the Company shall
be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF THE NOTES.
Notwithstanding Section 9.02 of this Indenture, without the
consent of any Holder of Notes the Company and the Trustee may
amend or supplement this Indenture, the Notes or the Subsidiary
Guarantees:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to
or in place of certificated Notes;
(c) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes in
the case of a merger, or consolidation pursuant to
Article 5 or Article 11 hereof, as applicable;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that
does not adversely affect the legal rights hereunder
of any Holder of the Notes; or
(e) to comply with requirements of the Commission in order
to effect or maintain the qualification of this
Indenture under the TIA.
(f) to allow any Subsidiary to Guarantee the Notes.
Upon the written request of the Company accompanied by a
resolution of its Board of Directors of the Company authorizing
the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section
9.06 hereof, the Trustee shall join with the Company or the
Guarantors in the execution of any amended or supplemental
indenture authorized or permitted by the terms of this Indenture
and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be
obligated to enter into such amended or supplemental indenture
that affects its own rights, duties or immunities under this
Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02 or as
provided in Section 10.13 or Section 12.13 of this Indenture,
this Indenture, the Notes and the Subsidiary Guarantees may be
amended or supplemented with the consent of the Holders of at
least a majority in principal amount at maturity of the Notes
then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or a tender offer or
exchange offer for Notes), and any existing default or compliance
with any provision of this Indenture, the Notes or the Subsidiary
Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes
(including, without limitation, consents obtained in connection
with a purchase of or a tender offer or exchange offer for the
Notes).
63
Upon the request of the Company accompanied by a resolution
of its Board of Directors authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the
Trustee of evidence satisfactory to the Trustee of the consent of
the Holders of Notes as aforesaid, and upon receipt by the
Trustee of an Officers' Certificate and an Opinion of Counsel,
the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental indenture unless such
amended or supplemental indenture affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise,
in which case the Trustee may, but shall not be obligated to,
enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of
any proposed amendment or waiver, but it shall be sufficient if
such consent approves the substance thereof. After an amendment,
supplement or waiver under this Section 9.02 becomes effective,
the Company shall mail to the Holders of each Note affected
thereby a notice briefly describing the amendment, supplement or
waiver. Any failure of the Company to mail such notice, or any
defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or
waiver.
Subject to Sections 6.04, 6.07, 10.13 and 12.13 hereof, the
Holders of a majority in aggregate principal amount of the Notes
then outstanding may amend or waive compliance in a particular
instance by the Company or the Guarantors with any provision of
this Indenture or the Notes or the Subsidiary Guarantees.
However, without the consent of each Holder affected, an
amendment, or waiver may not (with respect to any Note held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity
of any Notes or alter the provisions with respect to
the redemption of the Notes (other than provisions
relating to Sections 3.09, 4.10 and 4.13 hereof);
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or premium, if any, or interest on the
Notes (except a rescission of acceleration of the
Notes by the Holders of at least a majority in
aggregate principal amount at maturity of the Notes
and a waiver of the payment default that resulted from
such acceleration);
(e) make any Note payable in money other than that stated
in the Notes;
(f) make any change in Section 6.04 or 6.07 hereof;
(g) waive a redemption payment with respect to any Note
(other than a payment described in Section 4.10 or
4.13 hereof); or
(h) except as otherwise permitted herein, release any
Guarantor from any of its obligations under its
Subsidiary Guarantee or this Indenture, or amend the
provisions herein relating to the release of
Guarantors; or
(i) make any change in the amendment and waiver provisions
of this Article 9.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture, the
Subsidiary Guarantees or the Notes shall be set forth in an
amended or supplemental indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective,
a consent to it by a Holder of a Note is a continuing consent by
the Holder and every subsequent Holder of a Note or portion of a
Note that evidences the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note.
However, any such Holder or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or
amendment becomes effective. When an amendment, supplement or
waiver becomes effective in accordance with its terms, it
thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue
and the Trustee shall authenticate new Notes that reflect the
amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new
Note shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental
indenture authorized pursuant to this Article 9 if the amendment
or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company and the
Guarantors may not sign an amendment or supplemental indenture
until their respective Boards of Directors approve it. In signing
or refusing to sign any amended or supplemental indenture the
Trustee shall be entitled to receive and (subject to Section 7.01
hereof) shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel stating that the execution
of such amended or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company
and the Guarantors in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder of Notes by accepting a
Note agrees, that the Indebtedness evidenced by the Note is
subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior payment in full of all
Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
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SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the
Company of any kind, whether in cash, property or securities in a
liquidation or dissolution of the Company or in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, an assignment for the
benefit of creditors or any marshalling of the Company's assets
and liabilities, whether voluntary or involuntary, the holders of
Senior Debt of the Company will be entitled to receive payment in
full in cash of all Obligations due in respect of such Senior
Debt (including interest after the commencement of any such
proceeding at the rate specified in the applicable Senior Debt)
before the Holders of Notes will be entitled to receive any
payment or distribution of any kind with respect to the Notes,
and until all Obligations with respect to Senior Debt are paid in
full, any payment or distribution to which the Holders of Notes
would be entitled shall be made to the holders of Senior Debt
(except that Holders of Notes may receive and retain Permitted
Junior Securities and payments made from the trust described
under Section 8.02 and 8.03).
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company also shall not make any payment upon or in
respect of the Notes (except in Permitted Junior securities or
from the trust described under Section 8.02 and 8.03) if (i) a
default in the payment of the principal of premium, if any, or
interest on Designated Senior Debt occurs and is continuing or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the Designated
Senior Debt as to which such default relates to accelerate its
maturity, and in the case of this clause (ii) only, and the
Trustee receives a notice of such default invoking the provisions
described in this paragraph (a "Payment Blockage Notice") from
the holders of any Designated Senior Debt or any agent or trustee
therefor. Payments on the Notes may and shall be resumed (a) in
the case of a payment default, upon the date on which such
default is cured or waived and (b) in case of a nonpayment
default, the earlier of the date on which such nonpayment default
is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless a payment
default has occurred and is continuing (as a result of the
maturity of any Designated Senior Debt having been accelerated).
No new period of payment blockage (other than for a payment
default) may be commenced unless and until (i) 360 days have
elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal,
premium, if any, and interest on the Notes that have come due
have been paid in full in cash. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default
shall have been cured or waived for a period of not less than 90
days.
Whenever the Company is prohibited from making any payment
in respect of the Notes, the Company also shall be prohibited
from making, directly or indirectly, any payment of any kind on
account of the purchase or other acquisition of the Notes. If any
Holder receives any payment or distribution that such Holder is
not entitled to receive with respect to the Notes, such Holder
shall be required to pay the same over to the holders of Senior
Debt.
SECTION 10.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event
of Default, the Company shall promptly notify holders of Senior
Debt of the acceleration.
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SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of a Note
receives any payment of any Obligations with respect to the Notes
at a time when such payment is prohibited by Section 10.03
hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt
as their interests may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior
Debt may have been issued (the "Representative"), as their
respective interests may appear, for application to the payment
of all Obligations with respect to Senior Debt remaining unpaid
to the extent necessary to pay such Obligations in full in
accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of
Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 10, and no
implied covenants or obligations with respect to the holders of
Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt, and shall not be liable to
any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders of the Notes or the Company or any other
Person money or assets to which any holders of Senior Debt shall
be entitled by virtue of this Article 10, except if such payment
is made as a result of the willful misconduct or gross negligence
of the Trustee.
SECTION 10.06. NOTICE BY THE COMPANY.
The Company shall promptly notify the Trustee and the
Paying Agent of any facts known to the Company that would cause a
payment of any Obligations with respect to the Notes to violate
this Article, which notice shall specifically refer to this
Article 10, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Debt as provided in this
Article.
SECTION 10.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes
are paid in full, Holders of the Notes shall be subrogated
(equally and ratably with all other pari passu indebtedness) to
the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied
to the payment of Senior Debt. A distribution made under this
Article to holders of Senior Debt that otherwise would have been
made to Holders of the Notes is not, as between the Company and
Holders of the Notes, a payment by the Company on the Notes.
SECTION 10.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the
Notes and holders of Senior Debt. Nothing in this Indenture
shall:
(1) impair, as between the Company and Holders of the
Notes, the obligations of the Company, which are absolute
and unconditional, to pay principal of and interest on the
Notes in accordance with their terms;
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(2) affect the relative rights of Holders of the Notes
and creditors of the Company other than their rights in
relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes
from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and
owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of the Notes.
If the Company fails because of this Article to pay
principal of or interest on a Note on the due date, the failure
is still a Default or Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE COMPANY.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by the Company or any
Holder or by the failure of the Company or any Holder to comply
with this Indenture.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt, or any of them, may, at
any time and from time to time, without the consent of or notice
to the Holders of the Notes, without incurring any liabilities to
any Holder of any Notes and without impairing or releasing the
subordination and other benefits provided in this Indenture or
the obligations of the Holders of the Notes to the holders of the
Senior Debt, even if any right of reimbursement or subrogation or
other right or remedy of any Holder of Notes is affected,
impaired or extinguished thereby, do any one or more of the
following:
(1) change the manner, place or terms of payment or
change or extend the time of payment of, or renew,
exchange, amend, increase or alter, the terms of any Senior
Debt, any security therefor or guaranty thereof or any
liability of any obligor thereon (including any guarantor)
to such holder, or any liability incurred directly or
indirectly in respect thereof or otherwise amend, renew,
exchange, extend, modify, increase or supplement in any
manner any Senior Debt or any instrument evidencing or
guaranteeing or securing the same or any agreement under
which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon,
enforce or otherwise deal with in any manner and in any
order any property pledged, mortgaged or otherwise securing
Senior Debt or any liability of any obligor thereon, to
such holder, or any liability incurred directly or
indirectly in respect thereof;
(3) settle or compromise any Senior Debt or any other
liability of any obligor of the Senior Debt to such holder
or any security therefor or any liability incurred directly
or indirectly in respect thereof and apply any sums by
whomsoever paid and however realized to any liability
(including, without limitation, Senior Debt) in any manner
or order; and
(4) fail to take or to record or to otherwise perfect,
for any reason or for no reason, any lien or security
interest securing Senior Debt by whomsoever granted,
exercise or delay in or refrain from exercising any right
or remedy against any obligor or any guarantor or any other
person, elect any remedy and otherwise deal freely with any
obligor and any security for the Senior Debt or any
liability of any obligor to such holder or any liability
incurred directly or indirectly in respect thereof.
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SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of the Company
referred to in this Article 10, the Trustee and the Holders of
the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction or upon any certificate of
such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the
Holders of the Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Company, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article 10.
SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any
other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would
prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to
make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least three Business
Days prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to
the Notes to violate this Article, which notice shall
specifically refer to this Article 10. Only the Company or a
Representative may give the notice. Nothing in this Article 10
shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may
hold Senior Debt with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all
such purposes, including without limitation the timely filing of
a claim for the unpaid balance of the Notes held by such Holder
in the form required in any Insolvency or Liquidation Proceeding
and causing such claim to be approved. If the Trustee does not
file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.09 hereof at
least 30 days before the expiration of the time of such claim,
the Representatives of the Designated Senior Debt, including the
Credit Agent, are hereby authorized to file an appropriate claim
for and on behalf of the Holders of the Notes.
SECTION 10.13. AMENDMENTS.
Any amendment to the provisions of this Article 10 shall
require the consent of the Holders of at least 75% in aggregate
amount of Notes then outstanding if such amendment would
adversely affect the rights of the Holders of Notes.
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ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. NOTE GUARANTEE.
Subject to Section 11.06 hereof, each of the Guarantors
hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and
to the Trustee and its successors and assigns, irrespective of
the validity and enforceability of this Indenture, the Notes and
the Obligations of the Company hereunder and thereunder, that:
(a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Notes will be promptly paid in full when
due, subject to any applicable grace period, whether at maturity,
by acceleration, redemption or otherwise, and interest on the
overdue principal, premium, if any, (to the extent permitted by
law) interest on any interest, if any, and Liquidated Damages, if
any, on the Notes, and all other payment Obligations of the
Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full and performed, all in accordance
with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of
such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period,
whether at stated maturity, by acceleration, redemption or
otherwise. Failing payment when so due of any amount so
guaranteed for whatever reason the Guarantors will be jointly and
severally obligated to pay the same immediately. An Event of
Default under this Indenture or the Notes shall constitute an
event of default under the Subsidiary Guarantees, and shall
entitle the Holders to accelerate the Obligations of the
Guarantors hereunder in the same manner and to the same extent as
the Obligations of the Company. The Guarantors hereby agree that
their Obligations hereunder shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or
this Indenture, the absence of any action to enforce the same,
any waiver or consent by any Holder with respect to any
provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or
equitable discharge or defense of a Guarantor. Each Guarantor
hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against
the Company, protest, notice and all demands whatsoever and
covenants that this Note Guarantee will not be discharged except
by complete performance of the Obligations contained in the Notes
and this Indenture. If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the Guarantors,
or any Note Custodian, Trustee, liquidator or other similar
official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such
Holder, this Note Guarantee, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each
Guarantor agrees that it shall not be entitled to, and hereby
waives, any right of subrogation in relation to the Holders in
respect of any Obligations guaranteed hereby. Each Guarantor
further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the
maturity of the Obligations guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations
guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof,
such Obligations (whether or not due and payable) shall forthwith
become due and payable by the Guarantors for the purpose of this
Note Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the Holders
under the Subsidiary Guarantees.
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SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section
11.01, each Guarantor hereby agrees that a notation of such
Subsidiary Guarantee substantially in the form of EXHIBIT D shall
be endorsed by an Officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Guarantor, by
manual or facsimile signature, by an Officer of such Guarantor.
Each Guarantor hereby agrees that its Subsidiary Guarantee
set forth in Section 11.01 shall remain in full force and effect
notwithstanding any failure to endorse on each Note a notation of
such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on
the Subsidiary Guarantee no longer holds that office at the time
the Trustee authenticates the Note on which a Subsidiary
Guarantee is endorsed, the Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery
of the Subsidiary Guarantee set forth in this Indenture on behalf
of the Guarantors.
SECTION 11.03. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture shall prohibit a merger between a
Guarantor and another Guarantor or a merger between a Guarantor
and the Company.
(b) Subject to Section 11.04 hereof, no Guarantor may
consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another corporation, Person
or entity whether or not affiliated with such Guarantor unless,
subject to the provisions of the following paragraph, (i) the
Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) assumes all the obligations of
such Guarantor pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under this
Indenture and the Subsidiary Guarantees; and (ii) immediately
after giving effect to such transaction, no Default or Event of
Default exists.
(c) In the case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by
supplemental indenture, executed and delivered to the Trustee and
substantially in the form of EXHIBIT E hereto, of the Subsidiary
Guarantee endorsed upon the Notes and the due and punctual
performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person
shall succeed to and be substituted for the Guarantor with the
same effect as if it had been named herein as a Guarantor;
provided that, solely for purposes of computing Consolidated Net
Income for purposes of clause (b) of the first paragraph of
Section 4.07 hereof, the Consolidated Net Income of any Person
other than the Company and its Restricted Subsidiaries shall only
be included for periods subsequent to the effective time of such
merger, consolidation, combination or transfer of assets. Such
successor Person thereupon may cause to be signed any or all of
the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed
by the Company and delivered to the Trustee. All of the
Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in
accordance with the terms of this Indenture as though all of such
Subsidiary Guarantees had been issued at the date of the
execution hereof.
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SECTION 11.04. RELEASES FOLLOWING SALE OF ASSETS, MERGER, SALE
OF CAPITAL STOCK ETC..
In the event (a) of a sale or other disposition of all of
the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the capital
stock of any Guarantor, or (b) that the Company designates a
Guarantor to be an Unrestricted Subsidiary, or such Guarantor
ceases to be a Subsidiary of the Company, then such Guarantor (in
the event of a sale or other disposition, by way of such a
merger, consolidation or otherwise, of all of the capital stock
of such Guarantor or any such designation) or the entity
acquiring the property (in the event of a sale or other
disposition of all of the assets of such Guarantor) shall be
released and relieved of any obligations under its Subsidiary
Guarantee. In the case of a sale, assignment, lease, transfer,
conveyance or other disposition of all or substantially all of
the assets of a Guarantor, upon the assumption provided for in
clause (i) of the Section 11.03(b) hereof, such Guarantor shall
be discharged from all further liability and obligation under
this Indenture. Upon delivery by the Company to the Trustee of an
Officers' Certificate to the effect of the foregoing, the Trustee
shall execute any documents reasonably required in order to
evidence the release of any Guarantor from its Obligation under
its Subsidiary Guarantee. Any Guarantor not released from its
Obligations under its Subsidiary Guarantee shall remain liable
for the full amount of principal of, premium, if any, interest
and Liquidated Damages, if any, on the Notes and for the other
Obligations of such Guarantor under the Indenture as provided in
this Article 11.
SECTION 11.05. ADDITIONAL GUARANTORS.
Any Person that was not a Guarantor on the date of this
Indenture may become a Guarantor by executing and delivering to
the Trustee (a) a supplemental indenture in substantially the
form of EXHIBIT E, and (b) an Opinion of Counsel to the effect
that such supplemental indenture has been duly authorized and
executed by such Person and constitutes the legal, valid, binding
and enforceable obligation of such Person (subject to such
customary exceptions concerning creditors rights', fraudulent
transfers, public policy and equitable principles as may be
acceptable to the Trustee in its discretion).
SECTION 11.06. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Notes and this Indenture and
(ii) the amount, if any, which would not have (A) rendered such
Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the
State of New York) or (B) left such Guarantor with unreasonably
small capital at the time its Subsidiary Guarantee of the Notes
was entered into; provided that, it will be a presumption in any
lawsuit or other proceeding in which a Guarantor is a party that
the amount guaranteed pursuant to the Subsidiary Guarantee is the
amount set forth in clause (i) above unless any creditor, or
representative of creditors of such Guarantor, or debtor in
possession or trustee in bankruptcy of the Guarantor, otherwise
proves in such a lawsuit that the aggregate liability of the
Guarantor is the amount set forth in clause (ii) above. In making
any determination as to solvency or sufficiency of capital of a
Guarantor in accordance with the previous sentence, the right of
such Guarantor to contribution from other Guarantors, and any
other rights such Guarantor may have, contractual or otherwise,
shall be taken into account.
SECTION 11.07. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting
hereunder, the term "Trustee" as used in this Article 11 shall in
each case (unless the context shall otherwise require) be
construed as extending to and including such Paying Agent
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within its meaning as fully and for all intents and purposes as
if such Paying Agent were named in this Article 11 in place of
the Trustee.
ARTICLE 12
SUBORDINATION OF SUBSIDIARY GUARANTEE
SECTION 12.01. AGREEMENT TO SUBORDINATE.
The Guarantors agree, and each Holder of Notes by accepting
a Note agrees, that the Indebtedness evidenced by the Note is
subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior payment in full of all
Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the
subordination is for the benefit of the holders of Senior Debt.
SECTION 12.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any payment or distribution to creditors of the
Guarantors of any kind, whether in cash, property or securities
in a liquidation or dissolution of the Guarantors or in a
bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to any Guarantor or its property, an
assignment for the benefit of creditors or any marshalling of
such Guarantor's assets and liabilities, whether voluntary or
involuntary, the holders of Senior Debt will be entitled to
receive payment in full in cash of all Obligations due in respect
of such Senior Debt (including interest after the commencement of
any such proceeding at the rate specified in the applicable
Senior Debt) before the Holders of Notes will be entitled to
receive any payment or distribution of any kind with respect to
the Notes, and until all Obligations with respect to Senior Debt
are paid in full, any payment or distribution to which the
Holders of Notes would be entitled shall be made to the holders
of Senior Debt (except that Holders of Notes may receive and
retain Permitted Junior Securities and payments made from the
trust described under Section 8.02 and 8.03).
SECTION 12.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Guarantors also shall not make any payment upon or in
respect of the Notes (except in Permitted Junior securities or
from the trust described under Section 8.02 and 8.03) if (i) a
default in the payment of the principal of premium, if any, or
interest on Designated Senior Debt occurs and is continuing or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the Designated
Senior Debt as to which such default relates to accelerate its
maturity, and in the case of this clause (ii) only, and the
Trustee receives a notice of such default invoking the provisions
described in this paragraph (a "Payment Blockage Notice") from
the holders of any Designated Senior Debt or any agent or trustee
therefor. Payments on the Notes may and shall be resumed (a) in
the case of a payment default, upon the date on which such
default is cured or waived and (b) in case of a nonpayment
default, the earlier of the date on which such nonpayment default
is cured or waived or 179 days after the date on which the
applicable Payment Blockage Notice is received, unless a payment
default has occurred and is continuing (as a result of the
maturity of any Designated Senior Debt having been accelerated).
No new period of payment blockage (other than for a payment
default) may be commenced unless and until (i) 360 days have
elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal,
premium, if any, and interest on the Notes that have come due
have been paid in full in cash. No nonpayment default that
existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or be made,
73
the basis for a subsequent Payment Blockage Notice unless such
default shall have been cured or waived for a period of not less
than 90 days.
Whenever a Guarantor is prohibited from making any payment
in respect of the Notes, the Guarantor also shall be prohibited
from making, directly or indirectly, any payment of any kind on
account of the purchase or other acquisition of the Notes. If any
Holder receives any payment or distribution that such Holder is
not entitled to receive with respect to the Notes, such Holder
shall be required to pay the same over to the holders of Senior
Debt.
SECTION 12.04. ACCELERATION OF NOTES.
If payment of the Notes is accelerated because of an Event
of Default, the Guarantors shall promptly notify holders of
Senior Debt of the acceleration.
SECTION 12.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder of a Note
receives any payment of any Obligations with respect to the Notes
at a time when such payment is prohibited by Section 12.03
hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and
delivered, upon written request, to, the holders of Senior Debt
as their interests may appear or their Representative under the
indenture or other agreement (if any) pursuant to which Senior
Debt may have been issued, as their respective interests may
appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms,
after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee
undertakes to perform only such obligations on the part of the
Trustee as are specifically set forth in this Article 12, and no
implied covenants or obligations with respect to the holders of
Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary
duty to the holders of Senior Debt, and shall not be liable to
any such holders if the Trustee shall pay over or distribute to
or on behalf of Holders of the Notes or the Guarantors or any
other Person money or assets to which any holders of Senior Debt
shall be entitled by virtue of this Article 12, except if such
payment is made as a result of the willful misconduct or gross
negligence of the Trustee.
SECTION 12.06. NOTICE BY GUARANTOR
The Guarantors shall promptly notify the Trustee and the
Paying Agent of any facts known to the Guarantors that would
cause a payment of any Obligations with respect to the Notes to
violate this Article, which notice shall specifically refer to
this Article 12, but failure to give such notice shall not affect
the subordination of the Notes to the Senior Debt as provided in
this Article.
SECTION 12.07. SUBROGATION.
After all Senior Debt is paid in full and until the Notes
are paid in full, Holders of the Notes shall be subrogated
(equally and ratably with all other pari passu indebtedness) to
the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions
otherwise payable to the Holders of the Notes have been applied
to the payment of Senior Debt. A distribution made under this
Article to holders of Senior Debt that otherwise would have been
made to Holders of
74
the Notes is not, as between the Guarantor and Holders
of the Notes, a payment by the Guarantors on the Notes.
SECTION 12.08. RELATIVE RIGHTS.
This Article defines the relative rights of Holders of the
Notes and holders of Senior Debt. Nothing in this Indenture
shall:
(1) impair, as between the Guarantors and Holders of
the Notes, the obligations of the Guarantors, which are
absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders of the Notes
and creditors of the Guarantors other than their rights in
relation to holders of Senior Debt; or
(3) prevent the Trustee or any Holder of the Notes
from exercising its available remedies upon a Default or
Event of Default, subject to the rights of holders and
owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of the Notes.
If the Guarantors fail because of this Article to pay
principal of or interest on a Note on the due date, the failure
is still a Default or Event of Default.
SECTION 12.09. SUBORDINATION MAY NOT BE IMPAIRED BY THE GUARANTORS.
No right of any holder of Senior Debt to enforce the
subordination of the Indebtedness evidenced by the Notes shall be
impaired by any act or failure to act by any Guarantor or any
Holder or by the failure of any Guarantor or any Holder to comply
with this Indenture.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt, or any of them, may, at
any time and from time to time, without the consent of or notice
to the Holders of the Notes, without incurring any liabilities to
any Holder of any Notes and without impairing or releasing the
subordination and other benefits provided in this Indenture or
the obligations of the Holders of the Notes to the holders of the
Senior Debt, even if any right of reimbursement or subrogation or
other right or remedy of any Holder of Notes is affected,
impaired or extinguished thereby, do any one or more of the
following:
(1) change the manner, place or terms of payment or
change or extend the time of payment of, or renew,
exchange, amend, increase or alter, the terms of any Senior
Debt, any security therefor or guaranty thereof or any
liability of any obligor thereon (including any guarantor)
to such holder, or any liability incurred directly or
indirectly in respect thereof or otherwise amend, renew,
exchange, extend, modify, increase or supplement in any
manner any Senior Debt or any instrument evidencing or
guaranteeing or securing the same or any agreement under
which Senior Debt is outstanding;
(2) sell, exchange, release, surrender, realize upon,
enforce or otherwise deal with in any manner and in any
order any property pledged, mortgaged or otherwise securing
Senior Debt or any liability of any obligor thereon, to
such holder, or any liability incurred directly or
indirectly in respect thereof;
75
(3) settle or compromise any Senior Debt or any other
liability of any obligor of the Senior Debt to such holder
or any security therefor or any liability incurred directly
or indirectly in respect thereof and apply any sums by
whomsoever paid and however realized to any liability
(including, without limitation, Senior Debt) in any manner
or order; and
(4) fail to take or to record or to otherwise perfect,
for any reason or for no reason, any lien or security
interest securing Senior Debt by whomsoever granted,
exercise or delay in or refrain from exercising any right
or remedy against any obligor or any guarantor or any other
person, elect any remedy and otherwise deal freely with any
obligor and any security for the Senior Debt or any
liability of any obligor to such holder or any liability
incurred directly or indirectly in respect thereof.
SECTION 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to
holders of Senior Debt, the distribution may be made and the
notice given to their Representative.
Upon any payment or distribution of assets of any Guarantor
referred to in this Article 12, the Trustee and the Holders of
the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction or upon any certificate of
such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the
Holders of the Notes for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the
Senior Debt and other Indebtedness of the Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to
this Article 12.
SECTION 12.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 12 or any
other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts that would
prohibit the making of any payment or distribution by the
Trustee, and the Trustee and the Paying Agent may continue to
make payments on the Notes, unless the Trustee shall have
received at its Corporate Trust Office at least three Business
Days prior to the date of such payment written notice of facts
that would cause the payment of any Obligations with respect to
the Notes to violate this Article, which notice shall
specifically refer to this Article 12. Only a Guarantor or a
Representative may give the notice. Nothing in this Article 12
shall impair the claims of, or payments to, the Trustee under or
pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may
hold Senior Debt with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights.
SECTION 12.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Note by the Holder's acceptance thereof
authorizes and directs the Trustee on the Holder's behalf to take
such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 12, and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all
such purposes, including without limitation the timely filing of
a claim for the unpaid balance of the Notes held by such Holder
in the form required in any Insolvency or Liquidation Proceeding
and causing such claim to be approved. If the Trustee does not
file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.09 hereof at
least 30 days before the expiration
76
of the time of such claim, the Representatives of the Designated
Senior Debt, including the Credit Agent, are hereby authorized to
file an appropriate claim for and on behalf of the Holders of the
Notes.
SECTION 12.13. AMENDMENTS.
Any amendment to the provisions of this Article 12 shall
require the consent of the Holders of at least 75% in aggregate
amount of Notes then outstanding if such amendment would
adversely affect the rights of the Holders of Notes.
ARTICLE 13
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA ss.318(c), the imposed
duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company, the Guarantors
or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or
certified, return receipt requested), telecopier or overnight air
courier guaranteeing next day delivery, to the others' address:
If to the Company:
J. Crew Operating Corp.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Chief Financial Officer
With a copy to:
Xxxxxx Xxxxxxxx, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxx, Esq.
If to the Trustee:
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Department
77
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent
notices or communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days
after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and the next Business
Day after timely delivery to the courier, if sent by overnight
air courier promising next Business Day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail or by overnight air courier promising next
Business Day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to
a Holder or any defect in it shall not affect its sufficiency
with respect to other Holders.
If a notice or communication is mailed in the manner
provided above within the time prescribed, it is duly given,
whether or not the addressee receives it.
If the Company mails a notice or communication to Holders,
it shall mail a copy to the Trustee and each Agent at the same
time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER
HOLDERS OF NOTES.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture
or the Notes. The Company, the Trustee, the Registrar and anyone
else shall have the protection of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company or the
Guarantors to the Trustee to take any action under this Indenture
(other than the initial issuance of the Notes), the Company or
Guarantor shall furnish to the Trustee upon request:
(a) an Officers' Certificate in form and substance
reasonably satisfactory to the Trustee (which shall include
the statements set forth in Section 13.05 hereof) stating
that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this
Indenture relating to the proposed action have been
satisfied; and
(b) an Opinion of Counsel in form and substance
reasonably satisfactory to the Trustee (which shall include
the statements set forth in Section 13.05 hereof) stating
that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with
a condition or covenant provided for in this Indenture (other
than a certificate provided pursuant to TIA ss. 314(a)(4)) shall
comply with the provisions of TIA ss. 314(e) and shall include:
78
(a) a statement that the Person making such certificate
or opinion has read such covenant or condition;
(b) 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;
(c) a statement that, in the opinion of such Person,
he or she 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
satisfied; and
(d) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
satisfied.
SECTION 13.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make
reasonable rules and set reasonable requirements for its
functions.
SECTION 13.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES
AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder
of the Company or the Guarantors, as such, shall have any
liability for any obligations of the Company or any Guarantor
under the Notes, this Indenture, the Subsidiary Guarantees or for
any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by accepting
a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes.
SECTION 13.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND
BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY
GUARANTEES.
SECTION 13.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its
Subsidiaries or of any other Person. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
SECTION 13.10. SUCCESSORS.
All agreements of the Company and the Guarantors in this
Indenture, the Notes and the Subsidiary Guarantees shall bind
their respective successors and assigns. All agreements of the
Trustee in this Indenture shall bind its successors and assigns.
SECTION 13.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
79
SECTION 13.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
SECTION 13.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings
of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a
part of this Indenture and shall in no way modify or restrict any
of the terms or provisions hereof.
[Signatures on following page]
80
SIGNATURES
Dated as of October 17, 1997
J. CREW OPERATING CORP.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
C&W OUTLET, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
XXXXXXXX & XXXXX, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
XXXXX XXXXXX, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
H.F.D. NO. 55, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
J. CREW, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
J. CREW INTERNATIONAL, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
J. CREW SERVICES, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
POPULAR CLUB PLAN, INC.
By: /s/ Xxxxxxx X. XxXxxx
--------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: /s/ Xxxxxx X. Xxxx, Xx.
--------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
82
EXHIBIT A-1
-----------
(Face of Note)
10 3/8% Senior Subordinated Notes due 2007
No. ___ $_______________
CUSIP NO. [ ]
J. CREW OPERATING CORP.
promises to pay to _________________ or registered assigns, the
principal sum of ___________ Dollars ($___________) on October
15, 2007.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
J. CREW OPERATING CORP.
By:____________________________
Name:
Title:
This is one of the 10 3/8% Senior Subordinated Notes referred to
in the within-mentioned Indenture:
Dated: ____________________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________________
A-1-1
(Back of Note)
10 3/8% Senior Subordinated
Notes due 2007
[Unless and until it is exchanged in whole or in part
for Notes in definitive form, this Note may not be transferred
except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an
authorized representative of The Depository Trust Company (55
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"), to the issuer or its
agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
such other name as may be requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be 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 in as much
as the registered owner hereof, Cede & Co., has an interest
herein.]1
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES
TO A PERSON WHO 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, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF
THE SECURITIES ACT (AN "INSTITUTIONAL ACCREDITED
INVESTOR"), THAT PRIOR TO SUCH TRANSFER, FURNISHED THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS (THE FORM OF WHICH CAN BE OBTAINED FROM THE
TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN
AGGREGATE PRINCIPAL AMOUNT OF SECURITIES LESS THAN
$250,000, AN OPINION OF COUNSEL THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, OR (e) IN ACCORDANCE
WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND, IN THE CASE OF CLAUSE (b), (c),
(d) OR (e), BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION
AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
--------
1. This paragraph should be included only if the Note is issued in
global form.
A-1-2
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.]2
--------
2. This paragraph should be removed upon the exchange of
Senior Subordinated Notes for New Senior Subordinated Notes
in the Exchange Offer or upon the registration of the
Senior Subordinated Notes pursuant to the terms of the
Registration Rights Agreement.
A-1-3
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless
otherwise indicated.
1. INTEREST. J. Crew Operating Corp., a Delaware
corporation, or its successor (the "Company"), promises to pay
interest on the principal amount of this Note at the rate of
10 3/8% per annum and shall pay the Liquidated Damages, if any,
payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company will pay interest and
Liquidated Damages, if any, in United States dollars (except as
otherwise provided herein) semi-annually in arrears on April 15
and October 15, commencing on April 15, 1998, or if any such day
is not a Business Day, on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Notes shall accrue
from the most recent date to which interest has been paid or, if
no interest has been paid, from October 17, 1997; provided that
if there is no existing Default or Event of Default in the
payment of interest, and if this Note is authenticated between a
record date referred to on the face hereof and the next
succeeding Interest Payment Date, interest shall accrue from such
next succeeding Interest Payment Date, except in the case of the
original issuance of Notes, in which case interest shall accrue
from October 17, 1997. The Company shall pay interest (including
post-petition interest in any proceeding under any Bankruptcy
Law) on overdue principal at the rate equal to 1% per annum in
excess of the then applicable interest rate on the Notes to the
extent lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue
installments of interest and Liquidated Damages (without regard
to any applicable grace period) at the same rate to the extent
lawful. Interest shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if
any, on the applicable Interest Payment Date to the Persons who
are registered Holders of Notes at the close of business on the
April 1 or October 1 next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section
2.12 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment
of interest and Liquidated Damages, if any, may be made by check
mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of
immediately available funds shall be required with respect to
principal of, premium and Liquidated Damages, if any, and
interest on, all Global Notes. Such payment shall be in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street
Bank and Trust Company, the Trustee under the Indenture, shall
act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an
Indenture dated as of October 17, 1997 ("Indenture") among the
Company, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made a part of
the Indenture by
A-1-4
reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb) (the
"TIA"). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for
a statement of such terms. The Notes are general
unsecured Obligations of the Company limited to $150.0
million in aggregate principal amount, plus amounts,
if any, sufficient to pay premium or Liquidated
Damages, if any, and interest on outstanding Notes as
set forth in Paragraph 2 hereof.
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the
Notes shall not be redeemable at the Company's option
prior to October 15, 2002. Thereafter, the Notes shall
be subject to redemption at the option of the Company,
in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set
forth below together with accrued and unpaid interest
and any Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the
twelve-month period beginning on October 15 of the
years indicated below:
Year Percentage
2002............................................105.188%
2003............................................103.458%
2004............................................101.729%
2005 and thereafter.............................100.000%
Notwithstanding the foregoing, at any time prior
to October 15, 2000, the Company may (but shall not
have the obligation to) redeem, on one or more
occasions, up to an aggregate of 35% of the principal
amount of the Notes originally issued at a redemption
price equal to 110.375% of the principal amount
thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the redemption
date, with the net proceeds of one or more Equity
Offerings; provided that at least 65% of the aggregate
principal amount of the Notes originally issued remain
outstanding immediately after the occurrence of such
redemption; and provided, further, that such
redemption shall occur within 90 days of the date of
the closing of such Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory
redemption or sinking fund payments with respect to
the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each
Holder of Notes will have the right to require the
Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of
purchase. Within 65 days following any Change of
Control, the Company will mail a notice to each Holder
describing the transaction or transactions
A-1-5
that constitute the Change of Control setting forth
the procedures governing the Change of Control Offer
required by the Indenture.
(b) When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will be required to
make an offer to all Holders of Notes and, to the
extent required by the terms of any Pari Passu
Indebtedness to all holders of such Pari Passu
Indebtedness (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes and any such Pari
Passu Indebtedness that may be purchased out of the
Excess Proceeds, at an offer price in cash in an
amount equal to 100% of the principal amount thereof
plus accrued and unpaid interest and Liquidated
Damages thereon, if any, to the date of purchase, in
accordance with the procedures set forth in the
Indenture or such Pari Passu Indebtedness. To the
extent that the aggregate principal amount at maturity
of (or Accreted Value, as the case may be) and any
such Pari Passu Indebtedness tendered pursuant to an
Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal
amount of Notes and any Pari Passu Indebtedness
surrendered by holders thereof exceeds the amount of
Excess Proceeds, the Trustee shall select the Notes to
be purchased on a pro rata basis. Upon completion of
such offer to purchase, the amount of Excess Proceeds
shall be reset at zero.
(c) Holders of the Notes that are the subject of an
offer to purchase will receive a Change of Control
Offer or Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such
Notes purchased by completing the form titled "Option
of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be
mailed at least 30 days but not more than 60 days
before the redemption date to each Holder whose Notes
are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all
of the Notes held by a Holder are to be redeemed. On
and after the redemption date, interest and Liquidated
Damages, if any, ceases to accrue on the Notes or
portions thereof called for redemption unless the
Company defaults in making the redemption payment.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in initial denominations of
$1,000 and integral multiples of $1,000. The transfer of the
Notes may be registered and the Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by
the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
A-1-6
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the
following paragraphs and the provisions of the Indenture, the
Indenture, the Notes and the Subsidiary Guarantees may be amended
or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection
with a purchase of or, tender offer or exchange offer for Notes),
and any existing Default or Event of Default or compliance with
any provision of the Indenture, the Notes and the Subsidiary
Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or
exchange offer for Notes).
Without the consent of any Holder of Notes, the
Company and the Trustee may amend or supplement the
Indenture, the Notes or the Subsidiary Guarantees to
cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of
Notes in the case of a merger or consolidation, to
make any change that would provide any additional
rights or benefits to the Holders of Notes or that
does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with
requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the
Trust Indenture Act or to allow any Subsidiary to
guarantee the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include:
(i) default for 30 days in the payment when due of interest on or
Liquidated Damages, if any, with respect to the Notes; (ii)
default in payment when due of the principal of or premium, if
any, on the Notes; (iii) failure by the Company or any Restricted
Subsidiary for 30 days after notice from the Trustee or at least
25% in principal amount of the Notes to comply with the
provisions described in Sections 4.07, 4.09, 4.10 and 4.13 of the
Indenture; (iv) failure by the Company or any Subsidiary for 60
days after notice from the Trustee or the Holders of at least 25%
in principal amount of the Notes then outstanding to comply with
its other agreements in the Indenture or the Notes; (v) default
under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the
date of the Indenture, which default (a) is caused by a failure
to pay principal of such Indebtedness after giving effect to any
grace period provided in such Indebtedness (a "Payment Default")
or (b) results in the acceleration of such Indebtedness prior to
its stated maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated,
aggregates $20.0 million or more; (vi) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $20.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company
has acknowledged liability in writing), which judgments are not
paid, discharged or stayed for a period of 60 days; (vii) except
as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary
A-1-7
Guarantee; and (viii) certain events of bankruptcy or
insolvency with respect to the Company or any of its
Significant Subsidiaries
If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may
declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain
events of bankruptcy or insolvency, with respect to
the Company, all outstanding Notes will become due and
payable without further action or notice. Upon any
acceleration of maturity of the Notes, all principal
of and accrued interest and Liquidated Damages, if
any, on the Notes shall be due and payable
immediately. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, Holders of
a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Holders
of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default
relating to the payment of principal or interest) if
it determines that withholding notice is in their
interest. In the event of a declaration of
acceleration of the Notes because an Event of Default
has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause
(v) of the preceding paragraph, the declaration of
acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described
in clause (v) of the preceding paragraph have
rescinded the declaration of acceleration in respect
of such Indebtedness within 30 days of the date of
such declaration and if (a) the annulment of the
acceleration of Notes would not conflict with any
judgment or decree of a court of competent
jurisdiction and (b) all existing Events of Default,
except nonpayment of principal or interest on the
Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to,
accept deposits from, and perform services for the
Company, the Guarantors or their respective
Affiliates, and may otherwise deal with the Company,
the Guarantors or their respective Affiliates, as if
it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company
or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor
under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such
liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid
until authenticated by the manual signature
of the Trustee or an authenticating agent.
16. 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 right of
survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES.
In addition to the rights provided to Holders of the Notes under
the Indenture, Holders of Transfer
A-1-8
Restricted Securities (as defined in the Registration
Rights Agreement) shall have all the rights set forth
in the Registration Rights Agreement, dated as of the
date hereof, among the Company, the Guarantors and the
Initial Purchasers (the "Registration Rights
Agreement").
18. 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 Notes and the
Trustee may use CUSIP numbers in notices of redemption
as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of
redemption and reliance may be placed only on the
other identification numbers placed thereon.
A-1-9
The Company shall furnish to any Holder upon written
request and without charge a copy of the Indenture and/or the
Registration Rights Agreement. Requests may be made to:
J. Crew Operating Corp.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
A-1-10
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we)
assign and transfer this Note to
-----------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint------------------------------------------
to transfer this Note 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 face of this Note)
Signature Guarantee:
A-1-11
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by
the Company pursuant to Section 4.10 or 4.13 of the Indenture,
check the box below:
|__| Section 4.10 |__| Section 4.13
If you want to elect to have only part of the Note
purchased by the Company pursuant to Section 4.10 or Section 4.13
of the Indenture, state the amount you elect to have purchased:
$-----------
Date:----------------- Your Signature:---------------------
(Sign exactly as your name
appears on the Note)
Tax Identification No.:--------
Signature Guarantee.
A-1-12
3
SCHEDULE OF EXCHANGES OF NOTES
The following exchanges of a part of this Global Note for other
Notes have been made:
------------------------------------------------------------------------------
Signature
of
Principal Amount authorized
of this Global officer of
Amount of decrease Amount of increase Note following Trustee of
Date of in Principal Amount in Principal Amount such decrease Note
Exchange of this Global Note of this Global Note (or increase) Custodian
------------------------------------------------------------------------------
-------------------------
3. This should be included only if the Note is issued in global form.
X-0-00
XXXXXXX X-0
-----------
(Face of Regulation S Temporary Global Note)
10 3/8% Senior Subordinated Notes due 2007
No. $_______________
CUSIP NO.
J. CREW OPERATING CORP.
promises to pay to _________________ or registered assigns, the
principal sum of ___________ Dollars ($___________) on October
15, 2007.
Interest Payment Dates: October 15 and April 15
Record Dates: October 1 and April 1
J. CREW OPERATING CORP.
By:______________________________
Name:
Title:
This is one of the 10 3/8% Senior
Subordinated Notes referred to
in the within-mentioned Indenture:
Dated: ____________________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________________
A-2-1
(Back of Regulation S Temporary Global Note)
10 3/8% Senior Subordinated Notes due 2008
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR DEFINITIVE SENIOR SUBORDINATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS
REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF INTEREST HEREON PRIOR TO THE EXCHANGE OF THIS SENIOR
DISCOUNT NOTE FOR A REGULATION S TEMPORARY GLOBAL NOTE AS
CONTEMPLATED BY THE INDENTURE.]1
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
XXXXX XXXXXX, XXX XXXX, XXX XXXX) ("XXX"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
SUCH OTHER ENTITY AS MAY BE 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 IN AS MUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.2
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) INSIDE THE UNITED STATES
TO A PERSON WHO 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, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT, (d) TO AN
--------
1 These paragraphs should be removed upon the exchange of
Regulation S Temporary Global Notes for Regulation S Permanent
Global Notes pursuant to the terms of the Indenture.
2 This paragraph should be included only if the Note is issued in
global form.
A-2-2
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) OF THE SECURITIES ACT (AN
"INSTITUTIONAL ACCREDITED INVESTOR"), THAT PRIOR TO SUCH
TRANSFER, FURNISHED THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS
IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF SECURITIES
LESS THAN $250,000, AN OPINION OF COUNSEL THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, OR (e)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND, IN THE CASE OF
CLAUSE (b), (c), (d) OR (e), BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR
(3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN
EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM
IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.]3
Until this Regulation S Temporary Global Note is exchanged
for Regulation S Permanent Global Notes, the Holder hereof shall
not be entitled to receive payments of interest or Liquidated
Damages, if any, hereon although interest and Liquidated Damages,
if any, will continue to accrue; until so exchanged in full, this
Regulation S Temporary Global Note shall in all other respects be
entitled to the same benefits as other Senior Subordinated Notes
under the Indenture.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Regulation S Permanent Global
Notes or Rule 144A Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in
Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by
Article 2 of the Indenture. Upon exchange of this Regulation S
Temporary Global Note for one or more Regulation S Permanent
Global Notes or Rule 144A Global Notes, the Trustee shall cancel
this Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become
valid or obligatory until the certificate of authentication
hereon shall have been duly manually signed by the Trustee in
accordance with the Indenture. This Regulation S Temporary Global
Note shall be governed by and construed in accordance with the
laws of the State of the New York. All references to "$,"
"Dollars," "dollars" or "U.S. $" are to such coin or currency of
the United States of America as at the time shall be legal tender
for the payment of public and private debts therein.
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless
otherwise indicated.
1. INTEREST. J. Crew Operating Corp., a Delaware
corporation, or its successor (the "Company"),
promises to pay interest on the principal amount of
this Note at the rate of 10 3/8% per annum and shall
pay the Liquidated Damages, if any, payable pursuant
to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and
Liquidated Damages, if any, in United States dollars
(except as otherwise provided herein) semi-annually in
arrears on April 15 and October 15, commencing on
--------
3 This paragraph should be removed upon the exchange of
Notes for Exchange Senior Discount Notes in the Exchange
Offer or upon the registration of the Notes pursuant to the
terms of the Registration Rights Agreement.
A-2-3
April 15, 1998, or if any such day is not a Business
Day, on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Notes shall
accrue from the most recent date to which interest has
been paid or, if no interest has been paid, from
October 17, 1997; provided that if there is no
existing Default or Event of Default in the payment of
interest, and if this Note is authenticated between a
record date referred to on the face hereof and the
next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment
Date, except in the case of the original issuance of
Notes, in which case interest shall accrue from
October 17, 1997. The Company shall pay interest
(including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal at the
rate equal to 1% per annum in excess of the then
applicable interest rate on the Notes to the extent
lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law)
on overdue installments of interest and Liquidated
Damages (without regard to any applicable grace
period) at the same rate to the extent lawful.
Interest shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
2. METHOD OF PAYMENT. The Company will pay interest on
the Notes (except defaulted interest) and Liquidated Damages, if
any, on the applicable Interest Payment Date to the Persons who
are registered Holders of Notes at the close of business on the
April 1 or October 1 next preceding the Interest Payment Date,
even if such Notes are cancelled after such record date and on or
before such Interest Payment Date, except as provided in Section
2.12 of the Indenture with respect to defaulted interest. The
Notes shall be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the
Company maintained for such purpose within or without the City
and State of New York, or, at the option of the Company, payment
of interest and Liquidated Damages, if any, may be made by check
mailed to the Holders at their addresses set forth in the
register of Holders; provided that payment by wire transfer of
immediately available funds shall be required with respect to
principal of, premium and Liquidated Damages, if any, and
interest on, all Global Notes. Such payment shall be in such coin
or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, State Street
Bank and Trust Company, the Trustee under the Indenture, shall
act as Paying Agent and Registrar. The Company may change any
Paying Agent or Registrar without notice to any Holder. The
Company or any of its Subsidiaries may act in any such capacity.
4. INDENTURE. The Company issued the Notes under an
Indenture dated as of October 17, 1997 ("Indenture") among the
Company, the Guarantors and the Trustee. The terms of the Notes
include those stated in the Indenture and those made a part of
the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code Sections 77aaa-77bbbb) (the "TIA"). The Notes
are subject to all such terms, and Holders are referred to the
Indenture and such Act for a statement of such terms. The Notes
are general unsecured Obligations of the Company limited to
$150.0 million in aggregate principal amount, plus amounts, if
any, sufficient to pay premium or Liquidated Damages, if any, and
interest on outstanding Notes as set forth in Paragraph 2 hereof.
A-2-4
5. OPTIONAL REDEMPTION.
Except as set forth in the next paragraph, the
Notes shall not be redeemable at the Company's option
prior to October 15, 2002. Thereafter, the Notes shall
be subject to redemption at the option of the Company,
in whole or in part, upon not less than 30 nor more
than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set
forth below together with accrued and unpaid interest
and any Liquidated Damages, if any, thereon to the
applicable redemption date, if redeemed during the
twelve-month period beginning on October 15 of the
years indicated below:
Year Percentage
2002............................................105.188%
2003............................................103.458%
2004............................................101.729%
2005 and thereafter.............................100.000%
Notwithstanding the foregoing, at any time prior
to October 15, 2000, the Company may (but shall not
have the obligation to) redeem, on one or more
occasions, up to an aggregate of 35% of the principal
amount of the Notes originally issued at a redemption
price equal to 110.375% of the principal amount
thereof, plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the redemption
date, with the net proceeds of one or more Equity
Offerings; provided that at least 65% of the aggregate
principal amount of the Notes originally issued remain
outstanding immediately after the occurrence of such
redemption; and provided, further, that such
redemption shall occur within 90 days of the date of
the closing of such Equity Offering.
6. MANDATORY REDEMPTION.
Except as set forth in paragraph 7 below, the
Company shall not be required to make mandatory
redemption or sinking fund payments with respect to
the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, each
Holder of Notes will have the right to require the
Company to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's
Notes pursuant to the offer described below (the
"Change of Control Offer") at an offer price in cash
equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of
purchase. Within 65 days following any Change of
Control, the Company will mail a notice to each Holder
describing the transaction or transactions that
constitute the Change of Control setting forth the
procedures governing the Change of Control Offer
required by the Indenture.
(b) When the aggregate amount of Excess Proceeds
exceeds $10.0 million, the Company will be required to
make an offer to all Holders of Notes and, to the
extent required by the terms of any Pari Passu
Indebtedness to all holders of such Pari Passu
Indebtedness (an "Asset Sale Offer") to purchase the
maximum principal amount of Notes and any such Pari
Passu Indebtedness that may be purchased out of the
Excess
A-2-5
Proceeds, at an offer price in cash in an amount equal
to 100% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages thereon, if
any, to the date of purchase, in accordance with the
procedures set forth in the Indenture or such Pari
Passu Indebtedness. To the extent that the aggregate
principal amount at maturity of (or Accreted Value, as
the case may be) and any such Pari Passu Indebtedness
tendered pursuant to an Asset Sale Offer is less than
the Excess Proceeds, the Company may use any remaining
Excess Proceeds for general corporate purposes. If the
aggregate principal amount of Notes and any Pari Passu
Indebtedness surrendered by holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall
select the Notes to be purchased on a pro rata basis.
Upon completion of such offer to purchase, the amount
of Excess Proceeds shall be reset at zero.
(c) Holders of the Notes that are the subject of an
offer to purchase will receive a Change of Control
Offer or Asset Sale Offer from the Company prior to
any related purchase date and may elect to have such
Notes purchased by completing the form titled "Option
of Holder to Elect Purchase" appearing below.
8. NOTICE OF REDEMPTION. Notice of redemption shall be
mailed at least 30 days but not more than 60 days
before the redemption date to each Holder whose Notes
are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in
part but only in whole multiples of $1,000, unless all
of the Notes held by a Holder are to be redeemed. On
and after the redemption date, interest and Liquidated
Damages, if any, ceases to accrue on the Notes or
portions thereof called for redemption unless the
Company defaults in making the redemption payment.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in
registered form without coupons in initial denominations of
$1,000 and integral multiples of $1,000. The transfer of the
Notes may be registered and the Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may
require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by
the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for
redemption, except for the unredeemed portion of any Note being
redeemed in part. Also, it need not exchange or register the
transfer of any Notes for a period of 15 days before a selection
of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a
Note may be treated as its owner for all purposes.
11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to the
following paragraphs and to the provisions of the Indenture, the
Indenture, the Notes and the Subsidiary Guarantees may be amended
or supplemented with the consent of the Holders of at least a
majority in principal amount of the Notes then outstanding
(including, without limitation, consents obtained in connection
with a purchase of or, tender offer or exchange offer for Notes),
and any existing Default or Event of Default or compliance with
any provision of the Indenture, the Notes and the Subsidiary
Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or
exchange offer for Notes).
A-2-6
Without the consent of any Holder of Notes, the
Company and the Trustee may amend or supplement the
Indenture, the Notes or the Subsidiary Guarantees to
cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in
place of certificated Notes, to provide for the
assumption of the Company's obligations to Holders of
Notes in the case of a merger or consolidation, to
make any change that would provide any additional
rights or benefits to the Holders of Notes or that
does not adversely affect the legal rights under the
Indenture of any such Holder, to comply with
requirements of the Commission in order to effect or
maintain the qualification of the Indenture under the
Trust Indenture Act or to allow any Subsidiary to
guarantee the Notes.
12. DEFAULTS AND REMEDIES. Events of Default include:
(i) default for 30 days in the payment when due of interest on or
Liquidated Damages, if any, with respect to the Notes; (ii)
default in payment when due of the principal of or premium, if
any, on the Notes; (iii) failure by the Company or any Restricted
Subsidiary for 30 days after notice from the Trustee or at least
25% in principal amount of the Notes to comply with the
provisions described in Sections 4.07, 4.09, 4.10 and 4.13 of the
Indenture; (iv) failure by the Company or any Subsidiary for 60
days after notice from the Trustee or the Holders of at least 25%
in principal amount of the Notes then outstanding to comply with
its other agreements in the Indenture or the Notes; (v) default
under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by
the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the
date of the Indenture, which default (a) is caused by a failure
to pay principal of such Indebtedness after giving effect to any
grace period provided in such Indebtedness (a "Payment Default")
or (b) results in the acceleration of such Indebtedness prior to
its stated maturity and, in each case, the principal amount of
any such Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated,
aggregates $20.0 million or more; (vi) failure by the Company or
any of its Restricted Subsidiaries to pay final judgments
aggregating in excess of $20.0 million (net of any amounts with
respect to which a reputable and creditworthy insurance company
has acknowledged liability in writing), which judgments are not
paid, discharged or stayed for a period of 60 days; (vii) except
as permitted by the Indenture, any Subsidiary Guarantee shall be
held in any judicial proceeding to be unenforceable or invalid or
shall cease for any reason to be in full force and effect or any
Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Subsidiary Guarantee;
and (viii) certain events of bankruptcy or insolvency with
respect to the Company or any of its Significant Subsidiaries
If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may
declare all the Notes to be due and payable
immediately. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain
events of bankruptcy or insolvency, with respect to
the Company, all outstanding Notes will become due and
payable without further action or notice. Upon any
acceleration of maturity of the Notes, all principal
of and accrued interest and Liquidated Damages, if
any, on the Notes shall be due and payable
immediately. Holders of the Notes may not enforce the
Indenture or the Notes except as
A-2-7
provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount
of the then outstanding Notes may direct the Trustee
in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a
Default or Event of Default relating to the payment of
principal or interest) if it determines that
withholding notice is in their interest. In the event
of a declaration of acceleration of the Notes because
an Event of Default has occurred and is continuing as
a result of the acceleration of any Indebtedness
described in clause (v) of the preceding paragraph,
the declaration of acceleration of the Notes shall be
automatically annulled if the holders of any
Indebtedness described in clause (v) of the preceding
paragraph have rescinded the declaration of
acceleration in respect of such Indebtedness within 30
days of the date of such declaration and if (a) the
annulment of the acceleration of Notes would not
conflict with any judgment or decree of a court of
competent jurisdiction and (b) all existing Events of
Default, except nonpayment of principal or interest on
the Notes that became due solely because of the
acceleration of the Notes, have been cured or waived.
13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its
individual or any other capacity, may make loans to,
accept deposits from, and perform services for the
Company, the Guarantors or their respective
Affiliates, and may otherwise deal with the Company,
the Guarantors or their respective Affiliates, as if
it were not the Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company
or any Guarantor, as such, shall have any liability
for any obligations of the Company or any Guarantor
under the Notes or the Indenture or for any claim
based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of Notes by
accepting a Note waives and releases all such
liability. The waiver and release are part of the
consideration for the issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.
16. 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 right of
survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
17. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED
SECURITIES. In addition to the rights provided to
Holders of the Notes under the Indenture, Holders of
Transfer Restricted Securities (as defined in the
Registration Rights Agreement) shall have all the
rights set forth in the Registration Rights Agreement,
dated as of the date hereof, among the Company, the
Guarantors and the Initial Purchasers (the
"Registration Rights Agreement").
18. 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 Notes and the
Trustee may use CUSIP numbers in notices of redemption
as a convenience to the Holders. No representation is
made as to the accuracy of such numbers either as
printed on the Notes or as contained in any notice of
A-2-8
redemption and reliance may be placed only on the other
identification numbers placed thereon.
X-0-0
Xxxxxxx X-0
-----------
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(1) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: 10 3/8% Senior Subordinated Notes due 2007 of
J. Crew Operating Corp.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Operating
Corp. a Delaware corporation (the "Company") and State Street
Bank and Trust Company as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Indenture.
This letter relates to $ _______________ principal amount
of Notes which are evidenced by one or more Rule 144A Global
Notes and held with the Depositary in the name of
________________ (the "Transferor"). The Transferor has requested
a transfer of such beneficial interest in the Notes to a Person
who will take delivery thereof in the form of an equal principal
amount of Notes evidenced by one or more Regulation S Global
Notes, which amount, immediately after such transfer, is to be
held with the Depositary through Euroclear or Cedel or both.
In connection with such request and in respect of such
Notes, the Transferor hereby certifies that such transfer has
been effected in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance
with Rule 903 or Rule 904 under the United States Securities Act
of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any person acting on its behalf
reasonably believed and believes that the transferee
was outside the United States; or
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market
and neither the Transferor nor any person acting on
its behalf knows that the transaction was prearranged
with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
B-1-1
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial
interest being transferred as described above is to be
held with the Depositary through Euroclear or Cedel or
both.
Upon giving effect to this request to exchange a beneficial
interest in a Rule 144A Global Note for a beneficial interest in
a Regulation S Global Note, the resulting beneficial interest
shall be subject to the restrictions on transfer applicable to
Regulation S Global Notes pursuant to the Indenture and the
Securities Act and, if such transfer occurs prior to the end of
the 40-day restricted period associated with the initial offering
of Notes, the additional restrictions applicable to transfers of
interest in the Regulation S Temporary Global Note.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and Xxxxxxxxx,
Xxxxxx & Xxxxxxxx Securities Corporation and Chase Securities
Inc., the initial purchasers of such Notes being transferred.
Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the
Securities Act.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:
cc: J. Crew Operating Corp.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Chase Securities Inc.
B-1-2
EXHIBIT B-2
-----------
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO RULE 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: 10 3/8% Senior Subordinated Notes due 2007 of
J. Crew Operating Corp.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Operating
Corp., a Delaware corporation (the "Company") and State Street
Bank and Trust Company as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Indenture.
This letter relates to $_________ principal amount at
maturity of Notes which are evidenced by one or more Regulation S
Global Notes and held with the Depositary through Euroclear or
Cedel in the name of ______________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest
in the Notes to a Person who will take delivery thereof in the
form of an equal principal amount of the Notes evidenced by one
or more Rule 144A Global Notes, to be held with the Depositary.
In connection with such request and in respect of such
Notes, the Transferor hereby certifies that:
[CHECK ONE]
|_| such transfer is being effected pursuant to and in
accordance with Rule 144A under the United States
Securities Act of 1933, as amended (the "Securities
Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a
Person that the Transferor reasonably believes is
purchasing the Notes for its own account, or for one
or more accounts with respect to which such Person
exercises sole investment discretion, and such Person
and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A;
or
|_| such transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
|_| such transfer is being effected pursuant to an
exemption under the Securities Act other than Rule
144A, Rule 144 or Rule 904 and the Transferor further
certifies that the Transfer complies with the transfer
restrictions applicable to beneficial interests in
Global Notes and Definitive Notes
B-2-1
bearing the Private Placement Legend and the
requirements of the exemption claimed, which
certification is supported by (x) if such transfer is
in respect of a principal amount of Notes at the time
of Transfer of $250,000 or more, a certificate
executed by the Transferee in the form of EXHIBIT C to
the Indenture, or (y) if such Transfer is in respect
of a principal amount of Notes at the time of transfer
of less than $250,000, (1) a certificate executed in
the form of EXHIBIT C to the Indenture and (2) an
Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has
attached to this certification), to the effect that
(1) such Transfer is in compliance with the Securities
Act and (2) such Transfer complies with any applicable
blue sky securities laws of any state of the United
States;
or
|_| such transfer is being effected pursuant to an effective
registration statement under the Securities Act;
or
|_| such transfer is being effected pursuant to an exemption
from the registration requirements of the
Securities Act other than Rule 144A or Rule 144,
and the Transferor hereby further certifies that
the Notes are being transferred in compliance with
the transfer restrictions applicable to the
Global Notes and in accordance with the requirements
of the exemption claimed, which
certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee
(a copy of which the Transferor has attached to
this certification) in form reasonably acceptable
to the Company and to the Registrar, to
the effect that such transfer is in compliance with the
Securities Act;
and such Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United
States.
Upon giving effect to this request to exchange a beneficial
interest in Regulation S Global Notes for a beneficial interest
in 144A Global Notes, the resulting beneficial interest shall be
subject to the restrictions on transfer applicable to Rule 144A
Global Notes pursuant to the Indenture and the Securities Act.
B-2-2
This certificate and the statements contained herein are
made for your benefit and the benefit of the Company and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation and Chase
Securities Inc., collectively the initial purchasers of such
Notes being transferred. Terms used in this certificate and not
otherwise defined in the Indenture have the meanings set forth in
Regulation S under the Securities Act.
[Insert Name of Transferor]
By:___________________________
Name:
Title:
Dated:
cc: J. Crew Operating Corp.
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Chase Securities Inc.
B-2-3
EXHIBIT B-3
-----------
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE Senior Subordinated Notes
(Pursuant to Section 2.06(b) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: 10 3/8% Senior Subordinated Notes due 2007
J. Crew Operating Corp.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Operating
Corp., a Delaware corporation (the "Company") and State Street
Bank and Trust Company, as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Indenture.
This relates to $____ principal amount of Notes which are
evidenced by one or more Definitive Senior Subordinated Notes in
the name of _____ (the "Transferor"). The Transferor has requested
an exchange or transfer of such Definitive Senior Subordinated
Note(s) in the form of an equal principal amount of Senior
Subordinated Notes evidenced by one or more Definitive Senior
Subordinated Notes, to be delivered to the Transferor or, in the
case of a transfer of such Senior Subordinated Notes, to such
Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the
Senior Subordinated Notes surrendered to the Trustee herewith for
exchange (the "Surrendered Senior Subordinated Notes"), the
Holder of such Surrendered Senior Subordinated Notes hereby
certifies that:
[CHECK ONE]
|_| the Surrendered Senior Subordinated Notes are being
acquired for the Transferor's own account, without transfer;
or
|_| the Surrendered Senior Subordinated Notes are being
transferred to the Company;
or
|_| the Surrendered Senior Subordinated Notes are being
transferred pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the
Surrendered Senior Subordinated Notes are being
transferred to a Person that the Transferor reasonably
believes is purchasing the Surrendered Senior
Subordinated Notes for its own account, or for one or
more accounts with respect to which such Person
exercises sole investment discretion, and such Person
B-3-1
and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case
in a transaction meeting the requirements of Rule
144A;
or
|_| the Surrendered Senior Subordinated Notes are being
transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
|_| the Surrendered Senior Subordinated Notes are
being transferred pursuant to an exemption under
the Securities Act other than Rule 144A, Rule
144 or Rule 904 and the Transferor further
certifies that the Transfer complies with the
transfer restrictions applicable to beneficial interests
in Global Notes and Definitive Senior Subordinated
Notes bearing the Private Placement Legend
and the requirements of the exemption claimed,
which certification is supported by (x) if such
transfer is in respect of a principal amount
of Senior Subordinated Notes at the time of Transfer
of $100,000 or more, a certificate executed
by the Transferee in the form of EXHIBIT C to the
Indenture, or (y) if such Transfer is in respect
of a principal amount of Senior Subordinated
Notes at the time of transfer of less than $100,000,
(1) a certificate executed in the form of
EXHIBIT C to the Indenture and (2) an Opinion of
Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has
attached to this certification), to the effect that
(1) such Transfer is in compliance with the
Securities Act and (2) such Transfer complies with
any applicable blue sky securities laws of any
state of the United States;
or
|_| the Surrendered Senior Subordinated Notes are
being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| such transfer is being effected pursuant to
an exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule
144, and the Transferor hereby further certifies that
the Senior Subordinated Notes are being
transferred in compliance with the transfer restrictions
applicable to the Global Notes and in
accordance with the requirements of the exemption claimed,
which certification is supported by an
Opinion of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor
has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar,
to the effect that such transfer is in compliance
with the Securities Act;
and the Surrendered Senior Subordinated Notes are being
transferred in compliance with any applicable blue sky securities
laws of any state of the United States.
B-3-2
This certificate and the statements contained herein are
made for your benefit and the benefit of the Company and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, the initial
purchaser of such Senior Subordinated Notes being transferred.
Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the
Securities Act.
[Insert Name of Transferor]
By:_____________________
Name:
Title:
Dated:
cc: J. Crew Operating Corp.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Chase Securities Inc.
B-3-3
EXHIBIT B-4
-----------
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM RULE 144A GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE SENIOR SUBORDINATED NOTE
(Pursuant to Section 2.06(c) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: 10 3/8% Senior Subordinated Notes due 2007
J. Crew Operating Corp.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Operating
Corp., a Delaware corporation (the "Company") and State Street
Bank and Trust Company, as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Indenture.
This letter relates to $__________ principal amount of
Senior Subordinated Notes which are evidenced by a beneficial
interest in one or more Rule 144A Global Notes or Regulation S
Permanent Global Notes in the name of _______ (the "Transferor").
The Transferor has requested an exchange or transfer of such
beneficial interest in the form of an equal principal amount of
Senior Subordinated Notes evidenced by one or more Definitive
Senior Subordinated Notes, to be delivered to the Transferor or,
in the case of a transfer of such Senior Subordinated Notes, to
such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the
Senior Subordinated Notes surrendered to the Trustee herewith for
exchange (the "Surrendered Senior Subordinated Notes"), the
Holder of such Surrendered Senior Subordinated Notes hereby
certifies that:
[CHECK ONE]
|_| the Surrendered Senior Subordinated Notes are being
transferred to the beneficial owner of such
Senior Subordinated Notes;
or
|_| the Surrendered Senior Subordinated Notes are being
transferred pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the
Surrendered Senior Subordinated Notes are being
transferred to a Person that the Transferor reasonably
believes is purchasing the Surrendered Senior
Subordinated Notes for its own account, or for one or
more accounts with respect to which such Person
exercises sole investment discretion, and such Person
B-4-1
and each such account is a "qualified institutional
buyer" within the meaning of Rule 144A, in each case
in a transaction meeting they requirements of Rule
144A;
or
|_| the Surrendered Senior Subordinated Notes are
being transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
|_| the Surrendered Senior Subordinated Notes are
being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| the Surrendered Senior Subordinated Notes are
being transferred pursuant to an exemption under
the Securities Act other than Rule 144A,
Rule 144 or Rule 904 and the Transferor further
certifies that the Transfer complies with
the transfer restrictions applicable to beneficial interests
in Global Notes and Definitive Senior Subordinated
Notes bearing the Private Placement Legend
and the requirements of the exemption claimed,
which certification is supported by (x) if such
transfer is in respect of a principal amount of
Senior Subordinated Notes at the time of Transfer
of $250,000 or more, a certificate executed by
the Transferee in the form of EXHIBIT C to the
Indenture, or (y) if such Transfer is in respect
of a principal amount of Senior Subordinated
Notes at the time of transfer of less than $250,000,
(1) a certificate executed in the form of
EXHIBIT C to the Indenture and (2) an Opinion of
Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has
attached to this certification), to the effect that
(1) such Transfer is in compliance with the
Securities Act and (2) such Transfer complies with
any applicable blue sky securities laws
of any state of the United States;
or
|_| such transfer is being effected pursuant to an
exemption from the registration requirements of the
Securities Act other than Rule 144A or Rule 144,
and the Transferor hereby further certifies that
the Senior Subordinated Notes are being
transferred in compliance with the transfer restrictions
applicable to the Global Notes and in accordance
with the requirements of the exemption claimed,
which certification is supported by an Opinion
of Counsel, provided by the transferor or the
transferee (a copy of which the Transferor has
attached to this certification) in form reasonably
acceptable to the Company and to the Registrar,
to the effect that such transfer is in compliance
with the Securities Act;
and the Surrendered Senior Subordinated Notes are being
transferred in compliance with any applicable blue sky securities
laws of any state of the United States.
B-4-2
This certificate and the statements contained herein are
made for your benefit and the benefit of the Company and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, the initial
purchaser of such Senior Subordinated Notes being transferred.
Terms used in this certificate and not otherwise defined in the
Indenture have the meanings set forth in Regulation S under the
Securities Act.
[Insert Name of Transferor]
By:
Name:
Title:
Dated:
cc: J. Crew Operating Corp.
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation
Chase Securities Inc.
B-4-3
EXHIBIT C
---------
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Re: 10 3/8% Senior Subordinated Notes due 2007
of J. Crew Operating Corp.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Operating
Corp., a Delaware corporation (the "Company") and State Street
Bank and Trust Company, as trustee (the "Trustee"). Capitalized
terms used but not defined herein shall have the meanings given
to them in the Indenture.
In connection with our proposed purchase of
$__________ aggregate principal amount of:
(a) |_| Beneficial interests, or
(b) |_| Definitive Notes,
we confirm that:
1. We understand that any subsequent transfer of the
Senior Subordinated Notes of any interest therein is subject to
certain restrictions and conditions set forth in the Indenture
and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein
except in compliance with, such restrictions and conditions and
the Securities Act of 1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes
have not been registered under the Securities Act, and that the
Notes and any interest therein may not be offered or sold except
as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as
hereinafter stated, that if we should sell the Notes or any
interest therein, (A) we will do so only (1)(a) to a person who
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 144A, (b) in a
transaction meeting the requirements of Rule 144 under the
Securities Act, (c) outside the United States to a foreign person
in a transaction meeting the requirements of Rule 904 of the
Securities Act, or (d) in accordance with another exemption from
the registration requirements of the Securities Act (and based
upon an opinion of counsel), (2) to the Company or any of its
subsidiaries or (3) pursuant to an effective registration
statement and, in each case, in accordance with any applicable
securities laws of any State of the United States or any other
applicable jurisdiction and (B) we will, and each subsequent
holder will
C-1
be required to, notify any purchaser from it of the
security evidenced hereby of the resale restrictions set
forth in (A) above."
3. We understand that, on any proposed resale of the
Notes or beneficial interests, we will be required to furnish to
you and the Company such certifications, legal opinions and other
information as you and the Company may reasonably require to
confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by
us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act) and have such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the
economic risk of our or its investment.
5. We are acquiring the Notes or beneficial interests
therein purchased by us for our own account or for one or more
accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment
discretion.
6. We are not acquiring the Notes with a view to any
distribution thereof that would violate the Securities Act or the
securities laws of any State of the United States.
C-2
You and the Company are entitled to rely upon this
letter and are irrevocably authorized to produce this letter or a
copy hereof to any interested party in any administrative or
legal proceedings or official inquiry with respect to the matters
covered hereby.
------------------------------
[Insert Name of Accredited
Investor]
By:___________________________
Name:
Title:
Dated: ______________, ____
C-3
EXHIBIT D
---------
Note Guarantee
Subject to Section 11.06 of the Indenture, each Guarantor
hereby, jointly and severally, unconditionally guarantees to each
Holder of a Senior Subordinated Note authenticated and delivered
by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture,
the Senior Subordinated Notes and the Obligations of the Company
under the Senior Subordinated Notes or under the Indenture, that:
(a) the principal of, premium, if any, interest and Liquidated
Damages, if any, on the Senior Subordinated Notes will be
promptly paid in full when due, subject to any applicable grace
period, whether at maturity, by acceleration, redemption or
otherwise, and interest on overdue principal, premium, if any,
(to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Senior Subordinated
Notes and all other payment Obligations of the Company to the
Holders or the Trustee under the Indenture or under the Senior
Subordinated Notes will be promptly paid in full and performed,
all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Senior
Subordinated Notes or any of such other payment Obligations, the
same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so
due of any amount so guaranteed or any performance so guaranteed
for whatever reason, the Guarantors will be jointly and severally
obligated to pay the same immediately.
The obligations of the Guarantor to the Holders and to the
Trustee pursuant to this Note Guarantee and the Indenture are
expressly set forth in Article 11 of the Indenture, and reference
is hereby made to such Indenture for the precise terms of this
Note Guarantee. The terms of Article 11 of the Indenture are
incorporated herein by reference. This Note Guarantee is subject
to release as and to the extent provided in Section 11.04 of the
Indenture.
This is a continuing Guarantee and shall remain in full
force and effect and shall be binding upon each Guarantor and its
respective successors and assigns to the extent set forth in the
Indenture until full and final payment of all of the Company's
Obligations under the Senior Subordinated Notes and the Indenture
and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and
privileges herein conferred upon that party shall automatically
extend to and be vested in such transferee or assignee, all
subject to the terms and conditions hereof. This is a Note
Guarantee of payment and not a guarantee of collection.
This Note Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Senior
Subordinated Note to which this Note Guarantee relates shall have
been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Senior
Subordinated Notes and the Indenture and (ii) the amount, if any,
which would not have (A) rendered such Guarantor "insolvent" (as
such term is defined in the Bankruptcy Law and in the Debtor and
Creditor Law of the State of New York) or (B) left such Guarantor
with unreasonably small capital at the time its Note Guarantee of
the Senior Subordinated Notes was entered into; provided that, it
will be a presumption in any lawsuit or other proceeding in which
a Guarantor is a party that the amount guaranteed pursuant to the
Note Guarantee is the amount set forth in clause (i) above unless
any creditor, or representative of creditors of such Guarantor,
or debtor in possession or trustee in bankruptcy of such
Guarantor, otherwise proves in such a lawsuit that the aggregate
liability of the Guarantor is limited to the amount set forth in
clause (ii) above. The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a
Guarantor in accordance with the previous sentence, the right of
such Guarantors to contribution from other Guarantors and any
other rights such Guarantors may have, contractual or otherwise,
shall be taken into account.
Capitalized terms used herein have the same meanings given
in the Indenture unless otherwise indicated.
Dated as of ___________, 1997 C&W OUTLET, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 XXXXXXXX & XXXXX, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 XXXXX XXXXXX, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 H.F.D. NO. 55, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 J. CREW, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 J. CREW INTERNATIONAL, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 J. CREW SERVICES, INC.
By:_________________________
Name:
Title:
Dated as of ___________, 1997 POPULAR CLUB PLAN, INC.
By:_________________________
Name:
Title:
Exhibit E
---------
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"),
dated as of ___________, between Guarantor (the "New Guarantor"),
a subsidiary of J. Crew Operating Corp., a Delaware corporation
(the "Company"), and State Street Bank and Trust Company, as
trustee under the indenture referred to below (the "Trustee").
Capitalized terms used herein and not defined herein shall have
the meaning ascribed to them in the Indenture (as defined below).
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered
to the Trustee an indenture (the "Indenture"), dated as of
October 17, 1997, providing for the issuance of an aggregate
principal amount of $150,000,000 of 10 3/8% Senior Subordinated
Notes due 2007 (the "Senior Subordinated Notes");
WHEREAS, Section 11.05 of the Indenture provides that under
certain circumstances the Company may cause, and Section 11.03 of
the Indenture provides that under certain circumstances the
Company must cause, certain of its subsidiaries to execute and
deliver to the Trustee a supplemental indenture pursuant to which
such subsidiaries shall unconditionally guarantee all of the
Company's Obligations under the Senior Subordinated Notes
pursuant to a Note Guarantee on the terms and conditions set
forth herein; and
WHEREAS, pursuant to Section 9.01 of the Indenture, the
Trustee is authorized to execute and deliver this Supplemental
Indenture.
NOW THEREFORE, in consideration of the foregoing and for
other good and valuable consideration, the receipt of which is
hereby acknowledged, the New Guarantor and the Trustee mutually
covenant and agree for the equal and ratable benefit of the
Holders of the Senior Subordinated Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO NOTE GUARANTEE. The New Guarantor hereby
agrees, jointly and severally with all other Guarantors, to
guarantee the Company's Obligations under the Senior Subordinated
Notes and the Indenture on the terms and subject to the
conditions set forth in Article 11 of the Indenture and to be
bound by all other applicable provisions of the Indenture.
E-1
3. NO RECOURSE AGAINST OTHERS. No past, present or future
director, officer, employee, incorporator, shareholder or agent
of any Guarantor, as such, shall have any liability for any
obligations of the Company or any Guarantor under the Senior
Subordinated Notes, any Subsidiary Guarantees, the Indenture or
this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each
Holder by accepting a Senior Subordinated Note waives and
releases all such liability. The waiver and release are part of
the consideration for issuance of the Senior Subordinated Notes.
4. NEW YORK LAW TO GOVERN. The internal law of the State of New
York shall govern and be used to construe this Supplemental Indenture.
5. COUNTERPARTS The parties may sign any number of copies
of this Supplemental Indenture. Each signed copy shall be an
original, but all of them together represent the same agreement.
6. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
7. THE TRUSTEE. The Trustee shall not be responsible in any
manner whatsoever for or in respect of the validity or sufficiency of
this Supplemental Indenture or for or in respect of the correctness
of the recitals of fact contained herein, all of which recitals are made
solely by the New Guarantor.
E-2
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed and attested, all as
of the date first above written.
Dated: ________________ [NAME OF NEW GUARANTOR]
By: ____________________________
Name:
Title:
Dated: ________________
as Trustee,
By: ____________________________
Name:
Title:
E-3
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310 (a)(1) ................................... 7.10
(a)(2) ................................... 7.10
(a)(3) ................................... N.A.
(a)(4) ................................... N.A.
(a)(5) ................................... 7.10
(b) ...................................... 7.03; 7.10
(c) ...................................... N.A.
311 (a) ...................................... 7.11
(b) ...................................... 7.11
(c) ...................................... N.A.
312 (a) ...................................... 2.05
(b) ...................................... 10.03
(c) ...................................... 10.03
313 (a) ...................................... 7.06
(b)(1) ................................... 7.06
(b)(2) ................................... 7.06; 7.07
(c) ...................................... 7.06;10.02
(d) ...................................... 7.06
314 (a) ...................................... 4.03;10.05
(b) ...................................... N.A.
(c)(1) ................................... 10.04
(c)(2) ................................... 10.04
(c)(3) ................................... N.A.
(d) ...................................... N.A.
(e) ...................................... 10.05
(f) ...................................... N.A.
315 (a) ...................................... 7.01
(b) ...................................... 7.05,10.02
(c) ...................................... 7.01
(d) ...................................... 7.01
(e) ...................................... 6.11
316 (a)(last sentence) ....................... 2.09
(a)(1)(A) ................................ 6.05
(a)(1)(B) ................................ 6.04
(a)(2) ................................... 2.13
(b) ...................................... 6.07
(c) ...................................... N.A.
317 (a)(1) ................................... 6.08
(a)(2) ................................... 6.09
(b) ...................................... 2.04
318 (a) ...................................... 10.01
(b) ...................................... N.A.
(c) ...................................... 10.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions............................ 1
Section 1.02. Other Definitions...................... 17
Section 1.03 Incorporation by Reference
of Trust Indenture Act ................ 18
Section 1.04. Rules of Construction.................. 18
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating........................ 18
Section 2.02. Execution and Authentication........... 20
Section 2.03 Registrar and Paying Agent............. 21
Section 2.04. Paying Agent to Hold Money in Trust.... 21
Section 2.05. Holder Lists........................... 21
Section 2.06. Transfer and Exchange.................. 22
Section 2.07. Replacement Notes...................... 29
Section 2.08. Outstanding Notes...................... 30
Section 2.09 Treasury Notes......................... 30
Section 2.10. Temporary Notes........................ 30
Section 2.11. Cancellation........................... 30
Section 2.12. Defaulted Interest..................... 31
Section 2.13 Record Date............................ 31
Section 2.14. Computation of Interest................ 31
Section 2.15. CUSIP Number........................... 31
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee..................... 31
Section 3.02 Selection of Notes to be
Redeemed or Purchased.................. 32
Section 3.03 Notice of Redemption................... 32
Section 3.04 Effect of Notice of Redemption......... 33
Section 3.05 Deposit of Redemption or
Purchase Price ........................ 33
Section 3.06 Notes Redeemed in Part................. 34
Section 3.07 Optional Redemption.................... 34
Section 3.08 Mandatory Redemption................... 34
Section 3.09 Repurchase Offers...................... 34
Page
----
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes....................... 36
Section 4.02. Maintenance of Office or Agency........ 37
Section 4.03 Commission Reports..................... 37
Section 4.04. Compliance Certificate................. 38
Section 4.05. Taxes.................................. 38
Section 4.06. Stay, Extension and Usury Laws......... 39
Section 4.07. Restricted Payments.................... 39
Section 4.08. Dividends and Other Payment
Restrictions Affecting Restricted
Subsidiaries........................... 41
Section 4.09 Incurrence of Indebtedness and
Issuance of Preferred Stock ........... 42
Section 4.10. Assets Sales........................... 44
Section 4.11. Transactions With Affiliates........... 45
Section 4.12. Liens.................................. 46
Section 4.13 Offer to Purchase Upon Change of
Control ............................... 46
Section 4.14. Corporate Existence.................... 47
Section 4.15. Business Activities.................... 48
Section 4.16 Senior Subordinated Debt............... 48
Section 4.17 Limitations on Issuances of
Guarantees of Indebtedness ............ 48
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation of Sale
of Assets.............................. 48
Section 5.02. Successor Corporation Substituted...... 48
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default...................... 49
Section 6.02. Acceleration........................... 50
Section 6.03 Other Remedies......................... 51
Section 6.04. Waiver of Past Defaults................ 51
Section 6.05. Control by Majority.................... 51
Section 6.06. Limitation on Suits.................... 52
Section 6.07. Rights of Holders of Notes to
Receive Payment ....................... 52
Section 6.08. Collection Suit by Trustee............. 52
Section 6.09 Trustee May File Proofs of Claim....... 52
Section 6.10. Priorities............................. 53
Section 6.11. Undertaking for Costs.................. 53
ARTICLE 7
TRUSTEE
Page
----
Section 7.01. Duties of Trustee...................... 54
Section 7.02. Rights of Trustee...................... 55
Section 7.03 Individual Rights of Trustee........... 55
Section 7.04. Trustee's Disclaimer................... 55
Section 7.05. Notice of Defaults..................... 56
Section 7.06. Reports by Trustee to Holders
of the Notes .......................... 56
Section 7.07. Compensation and Indemnity............. 56
Section 7.08. Replacement of Trustee................. 57
Section 7.09 Successor Trustee by Merger, etc....... 58
Section 7.10. Eligibility; Disqualification.......... 58
Section 7.11. Preferential Collection of
Claims Against the Company ............ 58
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or
Covenant Defeasance ................... 58
Section 8.02. Legal Defeasance and Discharge......... 59
Section 8.03 Covenant Defeasance.................... 59
Section 8.04. Conditions to Legal or Covenant
Defeasance ............................ 59
Section 8.05. Deposited Money and U.S. Government
Securities to be Held in Trust;
Other Miscellaneous Provisions ....... 61
Section 8.06. Repayment to the Company............... 61
Section 8.07. Reinstatement.......................... 62
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of the
Notes.................................. 62
Section 9.02 With Consent of Holders of Notes....... 63
Section 9.03 Compliance with Trust Indenture Act.... 64
Section 9.04 Revocation and Effect of Consents...... 64
Section 9.05 Notation on or Exchange of Notes....... 64
Section 9.06 Trustee to Sign Amendments, etc........ 64
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate............... 65
Section 10.02. Liquidation; Dissolution; Bankruptcy... 65
Section 10.03. Default on Designated Senior Debt...... 65
Section 10.04. Acceleration of Notes.................. 66
Section 10.05. When Distribution Must Be Paid Over.... 66
Section 10.06. Notice by the Company.................. 66
Section 10.07. Subrogation............................ 66
Section 10.08. Relative Rights........................ 67
Section 10.09. Subordination May Not Be Impaired by
the Company ........................... 67
Section 10.10. Distribution or Notice to
Representative ........................ 68
Section 10.11. Rights of Trustee and Paying Agent..... 68
Section 10.12. Authorization to Effect Subordination.. 68
Page
Section 10.13. Amendments............................. 69
Section 11.01. Note Guarantee......................... 69
Section 11.02. Execution and Delivery of Note
Guarantee ............................. 70
Section 11.03. Guarantors May Consolidate, etc., on
Certain Terms ........................ 70
Section 11.04. Releases Following Sale of Assets,
Merger, Sale of Capital Stock
Etc.................................... 71
Section 11.05. Additional Guarantors.................. 71
Section 11.06. Limitation on Guarantor Liability...... 71
Section 11.07. "Trustee" to Include Paying Agent...... 72
ARTICLE 12
SUBORDINATION OF NOTE GUARANTEE
Section 12.01. Agreement to Subordinate............... 72
Section 12.02. Liquidation; Dissolution; Bankruptcy... 72
Section 12.03. Default on Designated Guarantor
Senior Debt ........................... 72
Section 12.04. Acceleration of Subsidiary Guarantees.. 73
Section 12.05. When Distribution Must Be Paid Over.... 73
Section 12.06. Notice by Guarantor.................... 74
Section 12.07. Subrogation............................ 74
Section 12.08. Relative Rights........................ 74
Section 12.09. Subordination May Not Be Impaired
by Guarantor ......................... 75
Section 12.10. Distribution or Notice to
Representative ....................... 75
Section 12.11. Rights of Trustee and Paying Agent..... 76
Section 12.12. Authorization to Effect Subordination.. 76
Section 12.13. Amendments............................. 76
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls........... 76
Section 13.02. Notices................................ 77
Section 13.03. Communication by Holders of Notes with
Other Holders of Notes ................ 78
Section 13.04. Certificate and Opinion as to
Conditions Precedent .................. 78
Section 13.05. Statements Required in Certificate
or Opinion ............................ 78
Section 13.06. Rules by Trustee and Agents............ 78
Section 13.07. No Personal Liability of Directors,
Officers, Employees and
Stockholders........................... 79
Section 13.08. Governing Law.......................... 79
Section 13.09. No Adverse Interpretation of
Other Agreements ...................... 79
Section 13.10. Successors............................. 79
Section 13.11. Severability........................... 79
Section 13.12. Counterpart Originals.................. 79
Section 13.13. Table of Contents, Headings, etc....... 79
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL
ACCREDITED INVESTOR
Exhibit D NOTE GUARANTEE
Exhibit E FORM OF SUPPLEMENTAL INDENTURE
