Execution Copy
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J. Crew Group, Inc.
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13 1/8% SENIOR DISCOUNT DEBENTURES DUE 2008
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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 between J. Crew
Group, Inc., a New York corporation (the "Company") and State
Street Bank and Trust Company, as trustee (the "Trustee").
The Company 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 13 1/8% Senior Discount Debentures
due 2008 (the "Senior Discount Notes") and the exchange 13 1/8%
Senior Discount Debentures due 2008 (the "Exchange Senior
Discount Notes" and, together with the Senior Discount Notes, the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accreted Value" means, as of any date of determination
prior to October 15, 2002, with respect to any Note, the sum of
(a) the initial offering price (which shall be calculated by
discounting the aggregate principal amount at maturity of such
Note at a rate of 13 1/8% per annum, compounded semi-annually on
each April 15 and October 15 from October 15, 2002 to the date of
issuance) of such Note and (b) the portion of the excess of the
principal amount of such Note over such initial offering price
which shall have been accreted thereon through such date, such
amount to be so accreted on a daily basis at a rate of 13 1/8% per
annum of the initial offering price of such Note, compounded
semi-annually on each April 15 and October 15 from the date of
issuance of the Notes through the date of determination, computed
on the basis of a 360-day year of twelve 30-day months.
"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 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
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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' 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 Xxxxx'x 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) 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.
"Chase" means Chase Securities Inc.
"Commission" means the Securities and Exchange Commission.
"Company" means J. Crew Group, Inc., a New York
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 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
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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 any of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or any of its Restricted Subsidiaries, in
each case, to the extent that such interest expense is 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
Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded,
and (iii) 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 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 10.02 hereof or such
other address as to which the Trustee may give notice to the
Company.
"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,
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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
clause (i) 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.
"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, 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).
"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 Discount Notes for Exchange Senior Discount
Notes.
"Exchange Offer Registration Statement" has the meaning
set forth in the Registration Rights Agreement.
"Exchange Senior Discount Notes" means the Company's 13 1/8%
Senior Discount Debentures due 2008, which will be issued in
exchange for the Company's Senior Discount Notes.
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"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 included in the interest expense
of such Person 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 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 (ii) 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
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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.
"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.
"Holder" means a Person in whose name a Note is registered.
"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.
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"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.
"Issue Date" means the date on which notes are first issued
and authenticated under this Indenture.
"J. Crew Corp." means J. Crew Operating Corp., a Delaware corporation.
"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.
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"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, J. Crew
Corp. and 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.
"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 as contemplated by the Offering Memorandum.
"Offerings" means the Offering and the concurrent
offering of the 10 3/8% Senior Subordinated Notes due 2007 by J.
Crew Corp. pursuant to an offering memorandum dated as of October
14, 1997.
"Offering Memorandum" means the Offering Memorandum, dated
October 14, 1997, relating to the Company's offering and
placement of the Senior Discount Notes.
9
"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 10.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel
who is reasonably acceptable to the Trustee, that meets the
requirements of Section 10.05 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 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 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 on assets of Restricted Subsidiaries
securing Indebtedness of Restricted Subsidiaries permitted to be
incurred under this Indenture; (iii) Liens securing the Notes;
(iv) Liens securing the Company's obligations under the New
Credit Facility; (v) Liens of the
10
Company or a Wholly Owned Restricted Subsidiary on assets of any
Restricted Subsidiary of the Company; (vi) 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; (vii) 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; (viii) 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; (ix) 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); (x) 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; (xi) 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; (xii) 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;
(xiii) 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 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; (xiv) 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; (xv) 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; (xvi)
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; (xvii) Liens securing Hedging
Obligations which Hedging Obligations relate to Indebtedness that
is otherwise permitted under this Indenture; (xviii) 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
11
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; (xix) leases or subleases granted to others not
interfering in any material respect with the business of the
Company or its Restricted Subsidiaries; (xx) 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 (xxi) 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.
"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
12
becomes a Wholly Owned Restricted Subsidiary 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 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 (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 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.
13
"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
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).
"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.
14
"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 Subordinated Notes" means J. Crew Corp.'s 10 3/8%
Senior Subordinated Notes due 2007.
"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.
"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).
"TIA" means the Trust Indenture Act of 1939 (15 U.S.
Code Sections 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.
15
"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 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, and (ii) 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
16
"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
"incur"..................................................4.09
"Legal Defeasance".......................................8.02
"Offer Amount"...........................................3.09
"Offer Period"...........................................3.09
"Pari Passu Indebtedness"................................4.10
"Paying Agent"...........................................2.03
"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 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;
17
(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.
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 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.
18
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 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 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).
19
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.
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
20
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 Section 312(a). If the Trustee is not the Registrar, the
Company shall furnish to the Trustee at least 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 Section 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
21
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 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
22
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.
(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,
23
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.
(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
24
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 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
Beneficial Interests 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:
25
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER
SECTION 5 OF THE UNITED STATES 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
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
26
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 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
27
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.
(v) Original Issue Discount Legend. Each Note shall
bear a legend in substantially the following form:
"FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE
DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF
THIS SECURITY, THE ISSUE PRICE IS $529.98, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $470.02, THE
ISSUE DATE IS OCTOBER 17, 1997 AND THE YIELD TO
MATURITY IS 13.125% PER ANNUM."
(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
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
28
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
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 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.
29
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 by any Affiliate of
the Company 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 an Affiliate of the Company
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.
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.
30
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.
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
31
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 cease 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;
(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.
32
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 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, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on October 15 of the
years indicated below:
33
Year Percentage
2002 .................................... 106.563%
2003 .................................... 104.375%
2004 .................................... 102.188%
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 113.125% of the Accreted
Value thereof, plus 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% of the aggregate principal
amount at maturity 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.
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), 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
34
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;
(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 Xxxxxx 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
35
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 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
36
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 operation 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, the Company shall file a copy
of all such information and reports with the Commission for
public availability (unless the Commission will not accept such a
filing) and make such 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 has agreed
that, for so long as any Notes remain outstanding, it 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
37
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 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 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 (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
38
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 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 or would occur as a consequence thereof; 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 (excluding Restricted Payments permitted by clauses
(ii), (iii), (iv) and (vi) 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 hereof; (ii) the redemption,
repurchase, retirement, defeasance or other acquisition of any
subordinated Indebtedness or Equity Interests of the Company 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
39
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, or
any Restricted Subsidiary of the Company, held by any member of
the Company's (or any of its Restricted 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 hereof; 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 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) distributions made by the Company
on the date hereof, the proceeds of which are utilized solely to
consummate the Recapitalization; and (vii) 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 issued after the date
hereof in accordance with Section 4.09.
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. DIVIDENDS 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
40
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
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 and the Senior Subordinated Notes, 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 or the Senior Subordinated Notes, as the case may be, 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 1.75
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 Company shall not incur any Indebtedness that is
contractually subordinated in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also
contractually subordinated in right of payment to the Notes on
substantially identical terms; provided, however, that no
Indebtedness of the Company shall be deemed to be contractually
subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being unsecured.
41
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) Indebtedness of the Company and its Restricted
Subsidiaries 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 its Restricted
Subsidiaries 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
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 of Indebtedness
represented by the Notes and the incurrence by J. Crew Corp. and
its Subsidiaries of Indebtedness represented by the Senior
Subordinated Notes and any guarantee thereof;
(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
Restricted Subsidiaries 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 Restricted Subsidiary in the ordinary course of
business;
42
(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;
(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 any Restricted Subsidiary of the
Company of Indebtedness of any Restricted Subsidiary of the
Company 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 $30.0 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. ASSETS 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
43
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)
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.
Within 395 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 Indebtedness
of a Restricted Subsidiary of the Company, 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) as
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 Indebtedness
of a Restricted Subsidiary of the Company 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 have been utilized to repay,
redeem, repurchase or otherwise retire outstanding Notes, 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 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 (or,
in the case of repurchases of Notes prior to October 15, 2002, at
a purchase price equal to 100% of the Accreted Value thereof plus
Liquidated Damages, as of the date of repurchase), 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 at maturity of Notes (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 or its Restricted Subsidiaries may use any
remaining Excess Proceeds for general corporate purposes. If the
aggregate principal amount at maturity (or Accreted Value, as the
case may be) 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
44
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 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 (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 or, in the case of repurchases of Notes prior to
October 15, 2002 at a purchase price equal to 101% of the
Accreted Value thereof as of the date of repurchase plus
Liquidated Damages, if any, (the "Change of Control Payment").
Within 65 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
45
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 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 Notes 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 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
46
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.
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 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
the Company 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
47
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.
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;
(ii) default in payment when due of principal of or premium,
if any, on the Notes;
(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 the 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 from the Trustee
or by the Holders of at least 25% in principal amount
of the Notes then outstanding to comply with any of
its other agreement 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 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 hereof, which default (a) is
caused by a failure to pay principal of such
Indebtedness after giving effect to any grace period
48
provided in such Indebtedness on the date of such
default (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,
(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.
The term "Custodian" means any receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
SECTION 6.02. ACCELERATION.
49
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 (if on or after October 15, 2002) or Accreted Value of
and Liquidated Damages, if any, on (if prior to October 15, 2002)
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.
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
50
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 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;
(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
such 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.
51
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 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
52
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,
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.
53
(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
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 shall be sufficient if signed by an
Officer of the Company.
(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
or any Affiliate of the Company 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
54
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
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.
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 Section 313(a) (but if no event described in TIA
Section 313(a) has occurred within the twelve months preceding the
reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 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 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 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 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 (including this
Section 7.07) and defending itself against any claim (whether
asserted by the Company or any Holder
55
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 promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall
not relieve the Company of its obligations hereunder. The Company
shall defend the claim and the Trustee shall cooperate in the
defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The
Company need not pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
To secure the Company's 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.
56
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 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.
57
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 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 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 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 Sections of this Indenture referred to
in (a) and (b) below, and to have satisfied all its other
obligations under such Notes 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 at maturity or Accreted Value (as applicable), 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 connection
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 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 and 5.01 hereof with respect
to the outstanding Notes on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes 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, 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 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 (v) hereof shall
not constitute Events of Default.
58
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:
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 at maturity of or
Accreted Value (as applicable) of, 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;
(b) in the case of Legal Defeasance, the Company shall
have delivered to the Trustee an opinion of counsel in the United
States reasonably 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
59
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.
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
60
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
under this Indenture and the Notes 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 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 or the Notes:
(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 obligations
to the Holders of the Notes in the case of a merger, or
consolidation pursuant to Article 5 hereof;
(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 or 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 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
61
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, this
Indenture and the Notes issued hereunder 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 or the Notes 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).
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 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 and 6.07 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 with any provision of this Indenture or
the Notes. 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) or
amend or modify the calculation of the Accreted Value
so as to reduce the amount of Accreted Value of the
Notes;
(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);
62
(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 or repurchase payment with respect
to any Note (other than a payment required by Section
4.10 or 4.13 hereof); or
(h) make any change in the amendment and waiver provisions
of this Article 9.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture 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 may not
sign an amendment or supplemental indenture until its Board of
Directors approves 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 in accordance with its
terms.
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ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section 318(c), the imposed
duties shall control.
SECTION 10.02. NOTICES.
Any notice or communication by the Company, the Subsidiary
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 Group, Inc.
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 X. Xxxx
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
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.
64
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 10.03. 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 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the
Trustee to take any action under this Indenture (other than the
initial issuance of the Notes), the Company 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 10.05 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 10.05 hereof) stating
that, in the opinion of such counsel, all such conditions
precedent and covenants have been satisfied.
SECTION 10.05. 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 Section 314(a)(4)) shall
comply with the provisions of TIA Section 314(e) and shall include:
(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
65
(d) a statement as to whether or not, in the opinion
of such Person, such condition or covenant has been
satisfied.
SECTION 10.06. 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 10.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder
of the Company, as such, shall have any liability for any
obligations of the Company or any Subsidiary Guarantor under the
Notes, this 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 issuance of the Notes.
SECTION 10.08. GOVERNING LAW.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND
BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES.
SECTION 10.09. 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 10.10. SUCCESSORS.
All agreements of the Company in this Indenture and the
Notes shall bind their respective successors and assigns. All
agreements of the Trustee in this Indenture shall bind its
successors and assigns.
SECTION 10.11. 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.
SECTION 10.12. 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 10.13. 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.
66
[Signatures on following page]
67
SIGNATURES
Dated as of October 17, 1997
J. CREW GROUP, INC.
By: /s/ Xxxxxxx X. XxXxxx
---------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY
as Trustee
By: /s/ Xxxxxx Xxxx Xx.
-----------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A-1
(Face of Note)
13 1/8% Senior Discount Debentures due 2008
No. ___ $_______________
CUSIP NO.
J. CREW GROUP, INC.
promises to pay to _________________ or registered assigns, the
principal sum of ___________ Dollars ($___________) on October
15, 2008.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
J. CREW GROUP, INC.
By:______________________________
Name:
Title:
This is one of the 13 1/8%
Senior Discount Debentures referred to in the
within-mentioned Indenture:
Dated: ___________
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:__________________________________
A-1-1
(Back of Note)
13 1/8% Senior Discount
Debentures due 2008
[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 (00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
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 SECTION 5 OF THE UNITED STATES
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
FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL
ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE
ISSUE PRICE IS $529.98, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $470.02,
THE ISSUE DATE IS OCTOBER 17, 1997 AND THE YIELD TO
MATURITY IS 13.125% PER ANNUM.
--------
2 This paragraph should be removed upon the exchange of
Senior Discount Notes for Exchange Senior Discount Notes in
the Exchange Offer or upon the registration of the Senior
Discount 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 Group, Inc., a New York
corporation, or its successor (the "Company"), promises to pay
interest on the principal amount of this Note at the rate of
13 1/8% 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, 2003, 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 15, 2002; 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 (but after October 15, 2002),
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 15, 2002. 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 __, 1997 ("Indenture") between the
Company and the Trustee. The terms of the Notes include those
stated in the Indenture and those made a part of the Indenture by
reference
A-1-4
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 $142.0 million
in aggregate principal amount at maturity, 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............................................106.563%
2003............................................104.375%
2004............................................102.188%
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 of 113.125% of the Accreted Value thereof, plus
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 at maturity 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 Accreted Value thereof on the
date of purchase and Liquidated Damages, if any (if
such date of purchase is prior to October 15, 2002) or
101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase plus Liquidated
Damages (if such date of purchase is on or after
October 15,
A-1-5
2002). 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 Proceeds, at an offer price in cash in an
amount equal to 100% of the Accreted Value thereof on
the date of purchase (if such date of purchase is
prior to October 15, 2002) or 100% of the principal
amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of
purchase (if such date of purchase is on or after
October 15, 2002), in each case 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 at maturity (or Accreted
Value, as the case may be) 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.
A-1-6
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 and the Notes 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 or the Notes 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 or the Notes 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)(i) is caused by a
failure to pay principal of such Indebtedness after giving effect
to any grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its stated maturity
and, (B) 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, which judgments are not paid, discharged or stayed
for a period of 60 days; and (vii) certain events of bankruptcy
or insolvency with respect to the Company or any of its
Significant Subsidiaries
A-1-7
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 (if on or after October 15, 2002) or Accreted
Value of and Liquidated Damages, if any, on (if prior
to October 15, 2002) 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 or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the
Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company,
as such, shall have any liability for any obligations
of the Company 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
A-1-8
rights set forth in the Registration Rights Agreement,
dated as of the date hereof, among the Company, 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 Group, Inc.
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 face of this Note)
Tax Identification No.:___________
Signature Guarantee.
A-1-12
SCHEDULE OF EXCHANGES OF NOTES3
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 or
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.
A-1-13
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
13 1/8% Senior Discount Debentures due 2008
No. ___ $_______________
CUSIP NO.
J. CREW GROUP, INC.
promises to pay to _________________ or registered assigns, the
principal sum of ___________ Dollars ($___________) on October
15, 2008.
Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
J. CREW GROUP, INC.
By:______________________________
Name:
Title:
This is one of the 13 1/8%
Senior Discount Debentures 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)
13 1/8% Senior Discount Debentures due 2008
[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 (00
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("DTC"), to the issuer or its
agent for registration of transfer, exchange or payment, and any
certificate issued is registered in the name of Cede & Co. or
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.]4
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED
HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
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 SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.]5
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4. This paragraph should be included only if the Note is issued in global
form.
5. 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-2-2
[THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR DEFINITIVE 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 NOTE FOR
A REGULATION S PERMANENT GLOBAL NOTE AS CONTEMPLATED BY THE
INDENTURE.]
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 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.1
Capitalized terms used herein shall have the meanings
assigned to them in the Indenture referred to below unless
otherwise indicated.
1. INTEREST. J. Crew Group, Inc., a New York
corporation, or its successor (the "Company"), promises to pay
interest on the principal amount of this Note at the rate of
13 1/8% 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, 2003, 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 15, 2002; 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 (but after October 15, 2002),
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
-----------------------
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.
A-2-3
October 15, 2002. 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") between the
Company 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 $142.0 million in
aggregate principal amount at maturity, 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:
A-2-4
Year Percentage
2002............................................106.563%
2003............................................104.375%
2004............................................102.188%
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 of 113.125% of the Accreted Value thereof, plus
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 at maturity 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 Accreted Value thereof on the
date of purchase and Liquidated Damages, if any (if
such date of purchase is prior to October 15, 2002) or
101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if
any, thereon, to the date of purchase plus Liquidated
Damages (if such date of purchase is on or after
October 15, 2002). 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 Proceeds, at an offer price in cash in an
amount equal to 100% of the Accreted Value thereof on
the date of purchase (if such date of purchase is
prior to October 15, 2002) or 100% of the principal
amount thereof plus accrued and unpaid interest and
Liquidated Damages thereon, if any, to the date of
purchase (if such date of purchase is on or after
October 15, 2002), in each case 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
A-2-5
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 at
maturity (or Accreted Value, as the case may be) 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 and the Notes 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 or the Notes 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 or the Notes to cure any ambiguity, defect
or inconsistency, to provide for uncertificated Notes
in addition to or in place of certificated Notes, to
A-2-6
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)(i) is caused by a
failure to pay principal of such Indebtedness after giving effect
to any grace period provided in such Indebtedness on the date of
such default (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its stated maturity
and, (B) 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, which judgments are not paid, discharged or stayed
for a period of 60 days; and (vii) 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 (if on or after October 15, 2002) or Accreted
Value of and Liquidated Damages, if any, on (if prior
to October 15, 2002) 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
A-2-7
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 or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the
Trustee.
14. NO RECOURSE AGAINST OTHERS. No director, officer,
employee, incorporator or stockholder, of the Company,
as such, shall have any liability for any obligations
of the Company 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, 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-2-8
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 Group, Inc.
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Chief Financial Officer
A-2-9
Exhibit B-1
-----------
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 06115
Re: 13 1/8% Senior Discount Debentures due 2008 of J. Crew Group, Inc.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Group, Inc.,
a New York 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;
(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 Group, Inc.
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 06115
Re: 13 1/8% Senior Discount Debentures due 2008 of J. Crew Group, Inc.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Group, Inc.,
a New York 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 the Notes
surrendered to the Trustee herewith for exchange (the
"Surrendered Notes"), the Holder of such Surrendered Notes 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 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
B-2-1
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 Group, Inc.
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 DISCOUNT DEBENTURES
(Pursuant to Section 2.06(b) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 06115
Re: 13 1/8% Senior Discount Debentures due 2008 J. Crew Group, Inc.
Reference is hereby made to the Indenture, dated as of
October 17 , 1997 (the "Indenture"), between J. Crew Group, Inc.,
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 Notes in the name of ________ (the
"Transferor"). The Transferor has requested an exchange or
transfer of such Definitive Note(s) in the form of an equal
principal amount of Notes evidenced by one or more Definitive
Notes, to be delivered to the Transferor or, in the case of a
transfer of such Notes, to such Person as the Transferor
instructs the Trustee.
In connection with such request and in respect of the
Senior Discount Notes surrendered to the Trustee herewith for
exchange (the "Surrendered Notes"), the Holder of such
Surrendered Notes hereby certifies that:
[CHECK ONE]
|_| the Surrendered Notes are being acquired for the Transferor's
own account, without transfer;
or
|_| the Surrendered Notes are being transferred to the Company;
or
|_| the Surrendered 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 Notes are being transferred to a
Person that the Transferor reasonably believes is
purchasing the Surrendered 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 each case in a
transaction meeting the requirements of Rule 144A;
or
B-3-1
|_| the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
|_| the Surrendered 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
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 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
Discount 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
|_| the Surrendered 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 Discount 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 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 and Chase
Securities Inc., the initial purchasers of such Senior Discount
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 Group, Inc.
Xxxxxxxxx, Xxxxxx & 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 DISCOUNT NOTE
(Pursuant to Section 2.06(c) of the Indenture)
State Street Bank and Trust Company
000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 06115
Re: 13 1/8% Senior Discount Debentures due 2008 J. Crew Group, Inc.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Group, Inc.,
a New York 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 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 Notes evidenced by one or more
Definitive Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the
Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the
"Surrendered Notes"), the Holder of such Surrendered Notes hereby
certifies that:
[CHECK ONE]
|_| the Surrendered Notes are being transferred to the beneficial
owner of such Notes;
or
|_| the Surrendered 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 Notes are being transferred to a
Person that the Transferor reasonably believes is
purchasing the Surrendered 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 each case in a
transaction meeting they requirements of Rule 144A;
or
B-4-1
|_| the Surrendered Notes are being transferred in a transaction
permitted by Rule 144 under the Securities Act;
or
|_| the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
|_| the Surrendered 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 Discount 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 Discount 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 Discount 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 Discount 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 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 and Chase
Securities Inc., the initial purchasers of such Senior Discount
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 Group, Inc.
Xxxxxxxxx, Xxxxxx & 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 06115
Re: 13 1/8% Senior Discount Debentures due 2008 of J. Crew Group, Inc.
Reference is hereby made to the Indenture, dated as of
October 17, 1997 (the "Indenture"), between J. Crew Group, Inc.,
a Delaware corporation (the "Company") and _____________________,
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
Notes or 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
we reasonably believe 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
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 ............. 17
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....... 22
Section 2.04. Paying Agent to Hold
Money in Trust .................. 22
Section 2.05. Holder Lists..................... 23
Section 2.06. Transfer and Exchange............ 23
Section 2.07. Replacement Notes................ 31
Section 2.08. Outstanding Notes................ 32
Section 2.09. Treasury Notes................... 32
Section 2.10. Temporary Notes.................. 32
Section 2.11. Cancellation..................... 32
Section 2.12. Defaulted Interest............... 33
Section 2.13. Record Date...................... 33
Section 2.14. Computation of Interest.......... 33
Section 2.15. CUSIP Number..................... 33
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee............... 33
Section 3.02. Selection of Notes to be
Redeemed or Purchased ........... 34
Section 3.03. Notice of Redemption............. 34
Section 3.04. Effect of Notice of Redemption... 35
Section 3.05. Deposit of Redemption or
Purchase Price .................. 35
Section 3.06. Notes Redeemed in Part........... 36
Section 3.07. Optional Redemption.............. 36
Section 3.08. Mandatory Redemption............. 36
Section 3.09. Repurchase Offers................ 37
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes................. 38
i
Page
Section 4.02. Maintenance of Office or Agency.. 39
Section 4.03. Commission Reports............... 39
Section 4.04. Compliance Certificate........... 40
Section 4.05. Taxes............................ 41
Section 4.06. Stay, Extension and Usury Laws... 41
Section 4.07. Restricted Payments.............. 41
Section 4.08. Dividends and Other Payment
Restrictions Affecting
Restricted Subsidiaries.......... 43
Section 4.09. Incurrence of Indebtedness and
Issuance of Preferred Stock..... 44
Section 4.10. Assets Sales..................... 46
Section 4.11. Transactions With Affiliates..... 47
Section 4.12. Liens............................ 48
Section 4.13. Offer to Purchase Upon Change
of Control ...................... 48
Section 4.14. Corporate Existence.............. 50
Section 4.15. Business Activities.............. 50
ARTICLE 5
SUCCESSORS
Section 5.01. Xxxxxx, Consolidation of Sale
of Assets........................ 50
Section 5.02. Successor Corporation
Substituted...................... 51
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default................ 51
Section 6.02. Acceleration..................... 53
Section 6.03. Other Remedies................... 53
Section 6.04. Waiver of Past Defaults.......... 53
Section 6.05. Control by Majority.............. 54
Section 6.06. Limitation on Suits.............. 54
Section 6.07. Rights of Holders of Notes to
Receive Payment ................. 54
Section 6.08. Collection Suit by Trustee....... 54
Section 6.09. Trustee May File Proofs of Claim. 55
Section 6.10. Priorities....................... 55
Section 6.11. Undertaking for Costs............ 56
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee................ 56
Section 7.02. Rights of Trustee................ 57
Section 7.03. Individual Rights of Trustee..... 57
Section 7.04. Trustee's Disclaimer............. 58
Section 7.05. Notice of Defaults............... 58
Section 7.06. Reports by Trustee to Holders
of the Notes ................... 58
ii
Page
Section 7.07. Compensation and Indemnity....... 58
Section 7.08. Replacement of Trustee........... 59
Section 7.09. Successor Trustee by Xxxxxx, etc. 60
Section 7.10. Eligibility; Disqualification.... 60
Section 7.11. Preferential Collection of Claims
Against the Company.............. 60
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance
or Covenant Defeasance........... 61
Section 8.02. Legal Defeasance and Discharge... 61
Section 8.03. Covenant Defeasance.............. 61
Section 8.04. Conditions to Legal or Covenant
Defeasance ...................... 62
Section 8.05. Deposited Money and U.S.
Government Securities to be
Held in Trust; Other Miscellaneous
Provisions ...................... 63
Section 8.06. Repayment to the Company......... 63
Section 8.07. Reinstatement.................... 64
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders
of the Notes .................... 64
Section 9.02. With Consent of Holders of Notes. 65
Section 9.03. Compliance with Trust Indenture
Act ............................. 66
Section 9.04. Revocation and Effect of
Consents ........................ 66
Section 9.05. Notation on or Exchange of Notes. 66
Section 9.06. Trustee to Sign Amendments, etc.. 66
ARTICLE 10
MISCELLANEOUS
Section 10.01. Trust Indenture Act Controls.... 67
Section 10.02. Notices......................... 67
Section 10.03. Communication by Holders of
Notes with Other Holders of
Notes .......................... 68
Section 10.04. Certificate and Opinion as to
Conditions Precedent ........... 68
Section 10.05. Statements Required in Certificate
or Opinion ..................... 68
Section 10.06. Rules by Trustee and Agents..... 69
Section 10.07. No Personal Liability of Directors,
Officers, Employees and
Stockholders.................... 69
Section 10.08. Governing Law................... 69
Section 10.09. No Adverse Interpretation of
Other Agreements ............... 69
Section 10.10. Successors...................... 69
Section 10.11. Severability.................... 69
Section 10.12. Counterpart Originals........... 69
iii
Page
Section 10.13. Table of Contents,
Headings, etc. ................ 69
iv
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFEROR
Exhibit C FORM OF CERTIFICATE FROM ACQUIRING
INSTITUTIONAL ACCREDITED INVESTOR
v
