Exhibit 4.1
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EVENFLO COMPANY, INC.
11 3/4% Senior Notes due 2006
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INDENTURE
Dated as of August 20, 1998
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MARINE MIDLAND BANK,
Trustee
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TABLE OF CONTENTS
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ARTICLE 1. Definitions and Incorporation by Reference............... 1
SECTION 1.01. Definitions.............................................. 1
SECTION 1.02. Other Definitions........................................ 18
SECTION 1.03. Incorporation by Reference of Trust Indenture Act........ 19
SECTION 1.04. Rules of Construction.................................... 20
ARTICLE 2. The Securities........................................... 20
SECTION 2.01. Amount of Securities; Issuable in Series................. 20
SECTION 2.02. Form and Dating.......................................... 21
SECTION 2.03. Execution and Authentication............................. 22
SECTION 2.04. Registrar and Paying Agent............................... 22
SECTION 2.05. Paying Agent To Hold Money in Trust...................... 23
SECTION 2.06. Lists of Holders of Securities........................... 23
SECTION 2.07. Transfer and Exchange.................................... 24
SECTION 2.08. Replacement Securities................................... 24
SECTION 2.09. Outstanding Securities................................... 25
SECTION 2.10. Temporary Securities..................................... 25
SECTION 2.11. Cancellation............................................. 25
SECTION 2.12. Defaulted Interest....................................... 26
SECTION 2.13. CUSIP Numbers............................................ 26
ARTICLE 3. Redemption............................................... 27
SECTION 3.01. Notices to Trustee....................................... 27
SECTION 3.02. Selection of Securities To Be Redeemed................... 27
SECTION 3.03. Notice of Redemption..................................... 27
SECTION 3.04. Effect of Notice of Redemption........................... 28
SECTION 3.05. Deposit of Redemption Price.............................. 28
SECTION 3.06. Securities Redeemed in Part.............................. 28
ARTICLE 4. Covenants................................................ 29
SECTION 4.01. Payment of Securities.................................... 29
SECTION 4.02. SEC Reports.............................................. 29
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance
of Disqualified Stock................................... 29
SECTION 4.04. Limitation on Restricted Payments........................ 33
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
Subsidiaries............................................ 37
SECTION 4.06. Asset Sales.............................................. 39
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SECTION 4.07. Transactions with Affiliates............................. 42
SECTION 4.08. Change of Control........................................ 43
SECTION 4.09. Compliance Certificate................................... 45
SECTION 4.10. Further Instruments and Acts............................. 45
SECTION 4.11. Limitation on Guarantees of Indebtedness by
Restricted Subsidiaries................................. 45
SECTION 4.12. Liens.................................................... 46
ARTICLE 5. Successor Company........................................ 47
SECTION 5.01. Merger, Consolidation, or Sale of All or Substantially
All Assets.............................................. 47
ARTICLE 6. Defaults and Remedies.................................... 48
SECTION 6.01. Events of Default........................................ 48
SECTION 6.02. Acceleration............................................. 50
SECTION 6.03. Other Remedies........................................... 51
SECTION 6.04. Waiver of Past Defaults.................................. 51
SECTION 6.05. Control by Majority...................................... 51
SECTION 6.06. Limitation on Suits...................................... 52
SECTION 6.07. Rights of Holders to Receive Payment..................... 52
SECTION 6.08. Collection Suit by Trustee............................... 52
SECTION 6.09. Trustee May File Proofs of Claim......................... 52
SECTION 6.10. Priorities............................................... 53
SECTION 6.11. Undertaking for Costs.................................... 53
SECTION 6.12. Waiver of Stay or Extension Laws......................... 53
ARTICLE 7. Trustee.................................................. 53
SECTION 7.01. Duties of Trustee........................................ 53
SECTION 7.02. Rights of Trustee........................................ 55
SECTION 7.03. Individual Rights of Trustee............................. 56
SECTION 7.04. Trustee's Disclaimer..................................... 56
SECTION 7.05. Notice of Defaults....................................... 56
SECTION 7.06. Reports by Trustee to Holders............................ 56
SECTION 7.07. Compensation and Indemnity............................... 56
SECTION 7.08. Replacement of Trustee................................... 57
SECTION 7.09. Successor Trustee by Merger.............................. 58
SECTION 7.10. Eligibility; Disqualification............................ 58
SECTION 7.11. Preferential Collection of Claims Against Company........ 59
ARTICLE 8. Discharge of Indenture; Defeasance....................... 59
SECTION 8.01. Discharge of Liability on Securities; Defeasance......... 59
SECTION 8.02. Conditions to Defeasance................................. 60
SECTION 8.03. Application of Trust Money............................... 61
SECTION 8.04. Repayment to Company..................................... 62
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SECTION 8.05. Indemnity for Government Obligations..................... 62
SECTION 8.06. Reinstatement............................................ 62
ARTICLE 9. Amendments............................................... 62
SECTION 9.01. Without Consent of Holders............................... 62
SECTION 9.02. With Consent of Holders.................................. 63
SECTION 9.03. Compliance with Trust Indenture Act...................... 64
SECTION 9.04. Revocation and Effect of Consents and Waivers............ 64
SECTION 9.05. Notation on or Exchange of Securities.................... 65
SECTION 9.06. Trustee To Sign Amendments............................... 65
SECTION 9.07. Payment for Consent...................................... 65
ARTICLE 10. Miscellaneous............................................ 65
SECTION 10.01. Trust Indenture Act Controls............................. 65
SECTION 10.02. Notices.................................................. 66
SECTION 10.03. Communication by Holders with Other Holders.............. 66
SECTION 10.04. Certificate and Opinion as to Conditions Precedent....... 66
SECTION 10.05. Statements Required in Certificate or Opinion............ 67
SECTION 10.06. When Securities Disregarded.............................. 67
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar............. 67
SECTION 10.08. Legal Holidays........................................... 67
SECTION 10.09. GOVERNING LAW............................................ 67
SECTION 10.10. No Recourse Against Others............................... 68
SECTION 10.11. Successors............................................... 68
SECTION 10.12. Multiple Originals....................................... 68
SECTION 10.13. Table of Contents; Headings.............................. 68
Appendix A - Provisions Relating to Original Securities, Additional
Securities, Private Exchange
Securities and Exchange Securities
Exhibit A - Form of Initial Security
Exhibit B - Form of Exchange Security
Exhibit C - Form of Certificate to be Delivered in Connection with
Transfers of Regulation S
Global Security
Exhibit D - Form of Transferee Letter of Representation
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INDENTURE dated as of August 20, 1998, between Evenflo Company, Inc.,
a Delaware corporation (the "Company"), and Marine Midland Bank, a New York
banking corporation and trust company, as trustee (the "Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of (i) the Company's 11 3/4%
Senior Notes due 2006 issued on the date hereof (the "Original Securities"),
(ii) any Additional Securities (as defined herein) that may be issued on any
Issuance Date (all such Securities in clauses (i) and (ii) being referred to
collectively as the "Initial Securities"), (iii) if and when issued as provided
in the Registration Rights Agreement (as defined in Appendix A hereto (the
"Appendix")), the Company's 11 3/4% Senior Notes due 2006 issued in the
Registered Exchange Offer (as defined in the Appendix) in exchange for any
Initial Securities (the "Exchange Securities") and (iv) if and when issued as
provided in the Registration Agreement, the Private Exchange Securities (as
defined in the Appendix, and together with the Initial Securities and any
Exchange Securities issued hereunder, the "Securities") issued in the Private
Exchange (as defined in the Appendix). Except as otherwise provided herein, the
Securities will be limited to $200,000,000 in aggregate principal amount
outstanding, of which $110,000,000 in aggregate principal amount will be
initially issued on the date hereof. Subject to the conditions set forth herein,
the Company may issue up to $90,000,000 aggregate principal amount of Additional
Securities.
ARTICLE 1.
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Acquired Indebtedness" 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 Restricted Subsidiary of such specified Person,
including, without limitation, Indebtedness Incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Restricted Subsidiary of such specified Person, and (ii) Indebtedness secured by
a Lien encumbering any asset acquired by such specified Person.
"Additional Securities" means up to $90,000,000 aggregate principal
amount of 11 3/4% Senior Notes due 2006 issued under the terms of this Indenture
subsequent to the Closing Date, other than Exchange Securities issued in
exchange for Original Securities.
"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, however,
that beneficial ownership of 10.0% or more of the voting securities of a Person
shall be deemed to be control.
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"Applicable Premium" means, with respect to a Security on any
Redemption Date, the greater of (i) 1.0% of the principal amount of such
Security and (ii) the excess of (A) the present value at such time of (l) the
redemption price of such Security at August 15, 2002 (such redemption price
being described under paragraph 5 of the Securities) plus (2) all required
interest payments due on such Security through August 15, 2002 (excluding
accrued but unpaid interest), computed using a discount rate equal to the
Treasury Rate on such Redemption Date plus 50 basis points over (B) the
principal amount of such Security.
"Asset Sale" means (i) the sale, conveyance, transfer or other
disposition (whether in a single transaction or a series of related
transactions) of property or assets (including by way of a sale and leaseback)
of the Company or any Restricted Subsidiary (each referred to in this definition
as a "disposition") or (ii) the issuance or sale of Equity Interests of any
Restricted Subsidiary (whether in a single transaction or a series of related
transactions), in each case, other than:
(a) a disposition of Cash Equivalents or Investment Grade Securities
or obsolete or worn out equipment in the ordinary course of business or
inventory or goods held for sale in the ordinary course of business;
(b) the disposition of all or substantially all of the assets of the
Company in a manner permitted pursuant to Section 5.01 or any disposition
that constitutes a Change of Control pursuant to this Indenture;
(c) the making of any Restricted Payment or Permitted Investment that
is permitted to be made, and is made, pursuant to Section 4.04(a);
(d) any disposition of assets with an aggregate fair market value of
less than $1.0 million;
(e) any disposition of property or assets by a Restricted Subsidiary
to the Company or by the Company or a Restricted Subsidiary to a
Wholly-Owned Restricted Subsidiary;
(f) any exchange of like property pursuant to Section 1031 of the Code
for use in a Similar Business;
(g) any financing transaction with respect to property built or
acquired by the Company or any Restricted Subsidiary after the Closing
Date, including, without limitation, sale-leasebacks and asset
securitizations;
(h) foreclosures on assets;
(i) sales of accounts receivable, or participations therein, in
connection with any Receivables Facility; and
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(j) any sale of Equity Interests in, or Indebtedness or other
securities of, an Unrestricted Subsidiary.
"Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capitalized 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 and reflected as a
liability on a balance sheet (excluding the footnotes thereto) 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, participations, 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) U.S. dollars, (ii) securities issued or
directly and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof, (iii) certificates of deposit, time deposits 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 commercial bank having capital
and surplus in excess of $500.0 million, (iv) repurchase obligations for
underlying securities of the types described in clauses (ii) and (iii) of this
definition entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v) commercial paper rated A-l
or the equivalent thereof by Xxxxx'x or S&P and in each case maturing within one
year after the date of acquisition, (vi) investment funds investing 95.0% of
their assets in securities of the types described in clauses (i)-(v) above,
(vii) readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the two
highest rating categories obtainable from either Xxxxx'x or S&P and (viii)
Indebtedness or preferred stock issued by Persons with a rating of "A" or higher
from S&P or "A2" or higher from Xxxxx'x.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease or transfer, 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; or
(ii) the Company becomes aware of (by way of a report or any other
filing pursuant to Section 13(d) of the Exchange Act, proxy, vote, written
notice or otherwise) the acquisition by any Person or group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any
successor provision), including any group acting for the purpose of
acquiring, holding or disposing of securities (within the meaning of Rule
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13d-5(b)(1) under the Exchange Act), other than the Permitted Holders and
their Related Parties, in a single transaction or in a related series of
transactions, by way of merger, consolidation or other business combination
or purchase of beneficial ownership (within the meaning of Rule 13d-3 under
the Exchange Act, or any successor provision) of 50.0% or more of the total
Voting Stock of the Company.
"Closing Date" means the date of this Indenture.
"Code" means the Internal Revenue Code of 1986, as amended.
"Common Stock" means the Company's shares of common stock, par value
$0.01 per share.
"consolidated" with respect to any Person refers to such Person
consolidated with its Restricted Subsidiaries, and excludes from such
consolidation any Unrestricted Subsidiary as if such Unrestricted Subsidiary
were not an Affiliate of such Person.
"Consolidated Depreciation and Amortization Expense" means with
respect to any Person for any period, the total amount of depreciation and
amortization expense of such Person and its Restricted Subsidiaries for such
period on a consolidated basis and otherwise determined in accordance with GAAP.
"Consolidated Interest Expense" means, with respect to any period, the
sum, without duplication, of: (a) consolidated interest expense of such Person
and its Restricted Subsidiaries for such period, to the extent such expense was
deducted in computing Consolidated Net Earnings (including amortization of
original issue discount, non-cash interest payments, the interest component of
Capitalized Lease Obligations, and net payments and receipts (if any) pursuant
to Hedging Obligations to the extent included in Consolidated Interest Expense,
excluding amortization of deferred financing fees) and (b) consolidated
capitalized interest of such Person and its Restricted Subsidiaries for such
period, whether paid or accrued; provided, however, that Receivables Fees shall
be deemed not to constitute Consolidated Interest Expense.
"Consolidated Net Earnings" means, with respect to any Person for any
period, the aggregate of the Net Earnings, of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, and otherwise determined
in accordance with GAAP; provided, however, that (i) any net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto)
shall be excluded, (ii) the Net Earnings for such period shall not include the
cumulative effect of a change in accounting principles during such period, (iii)
any net after-tax earnings (loss) from discontinued operations and any net
after-tax gains or losses on disposal of discontinued operations shall be
excluded, (iv) any net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to asset dispositions other than in the ordinary
course of business (as determined in good faith by the Board of Directors of the
Company) shall be excluded, (v) the Net Earnings for such period of any Person
that is not a Subsidiary, or is an Unrestricted 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 or other payments paid in cash (or to
the extent converted into cash) to the referent Person or a Wholly-Owned
Restricted
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Subsidiary thereof in respect of such period, (vi) the Net Earnings of any
Person acquired in a pooling of interests transaction shall not be included for
any period prior to the date of such acquisition and (vii) the Net Earnings for
such period of any Restricted Subsidiary shall be excluded to the extent that
the declaration or payment of dividends or similar distributions by that
Restricted Subsidiary of its Net Earnings is not at the date of determination
permitted without any prior governmental approval (which has not been obtained)
or, directly or indirectly, by the operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule, or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, unless
such restriction with respect to the payment of dividends or in similar
distributions has been legally waived.
"Contingent Obligations" means, with respect to any Person, any
obligation of such Person guaranteeing any leases, dividends or other
obligations that do not constitute Indebtedness ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor or (iii)
to purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation against loss in respect
thereof.
"Credit Facilities" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Senior Credit Facility) or
commercial paper facilities with banks or other institutional lenders or
indentures 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), letters of credit or other long-term indebtedness, in each case,
as amended, restated, modified, renewed, refunded, replaced or refinanced in
whole or in part from time to time.
"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. "Designated Noncash
Consideration" means the fair market value of noncash consideration received by
the Company or one of its Restricted Subsidiaries in connection with an Asset
Sale that is so designated as Designated Noncash Consideration pursuant to an
Officers' Certificate, setting forth the basis of such valuation, executed by
the principal executive officer and the principal financial officer of the
Company, less the amount of cash or Cash Equivalents received in connection with
a subsequent sale of such Designated Noncash Consideration.
"Designated Preferred Stock" means preferred stock of the Company
(other than Disqualified Stock) that is issued for cash (other than to a
Restricted Subsidiary) and is so designated as Designated Preferred Stock,
pursuant to an Officers' Certificate executed by the principal executive officer
and the principal financial officer of the Company, on the issuance
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date thereof, the cash proceeds of which are excluded from the calculation set
forth in Section 4.04(a)(3).
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which, by its terms (or by the terms of any security into
which it is convertible or for which it is putable or exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, in each case prior to the date 91 days
after the earlier of the maturity date of the Securities or the date the
Securities are no longer outstanding; provided, however, that if such Capital
Stock is issued to any employee or to any plan for the benefit of employees of
the Company or its Subsidiaries or by any such plan to such employees, such
Capital Stock shall not constitute Disqualified Stock solely because it may be
required to be repurchased by the Company or its Subsidiaries in order to
satisfy applicable statutory or regulatory obligations, provided, further, that
any Capital Stock that would constitute Disqualified Stock solely because the
holders thereof (or of any security into which it is convertible or for which it
is putable or exchangeable) have the right to require the issuer to repurchase
such Capital Stock (or such security into which it is convertible or for which
it is putable or exchangeable) upon the occurrence of any of the events
constituting an Asset Sale or a Change of Control shall not constitute
Disqualified Stock if such Capital Stock (and all such securities into which it
is convertible or for which it is putable or exchangeable) provides that the
issuer thereof will not repurchase or redeem any such Capital Stock (or any such
security into which it is convertible or for which it is putable or
exchangeable) pursuant to such provisions prior to compliance by the Company
with the provisions of this Indenture described under Sections 4.06 or 4.08, as
the case may be.
"EBITDA" means, with respect to any Person for any period, the
Consolidated Net Earnings of such Person for such period plus (a) provision for
taxes based on income or profits of such Person for such period deducted in
computing Consolidated Net Earnings, plus (b) Consolidated Interest Expense of
such Person for such period and any Receivables Fees paid by such Person or any
of its Restricted Subsidiaries during such period, in each case to the extent
the same was deducted in calculating such Consolidated Net Earnings, plus (c)
Consolidated Depreciation and Amortization Expense of such Person for such
period to the extent such depreciation and amortization were deducted in
computing Consolidated Net Earnings, plus (d) any expenses or charges related to
any Equity Offering, Permitted Investment or Indebtedness permitted to be
Incurred by this Indenture (including such expenses or charges related to the
Transactions) or any costs incurred in the cancellation of stock options and, in
each case, deducted in such period in computing Consolidated Net Earnings, plus
(e) the amount of any restructuring charge deducted in such period in computing
Consolidated Net Earnings, plus (f) without duplication, any other non-cash
charges reducing Consolidated Net Earnings for such period (excluding any such
charge which requires an accrual of a cash reserve for anticipated cash charges
for any future period), plus (g) the amount of any minority interest expense
deducted in calculating Consolidated Net Earnings, less, without duplication (h)
non-cash items increasing Consolidated Net Earnings of such Person for such
period (excluding any items which represent the reversal of any accrual of, or
cash reserve for, anticipated cash charges in any prior period).
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"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 any public or private sale of common stock or
preferred stock of the Company (excluding Disqualified Stock), other than (i)
public offerings with respect to the Company's Common Stock registered on Form
S-8 and (ii) any such public or private sale that constitutes an Excluded
Contribution.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Excluded Contributions" means the net cash proceeds received by the
Company after the closing of the Transactions from (a) contributions to its
equity capital other than contributions from the issuance of Disqualified Stock
and (b) the sale (other than to a Subsidiary or to any Company or Subsidiary
management equity plan or stock option plan or any other management or employee
benefit plan or agreement) of Capital Stock (other than Disqualified Stock) of
the Company, in each case designated as Excluded Contributions pursuant to an
Officers' Certificate executed by the principal executive officer and the
principal financial officer of the Company on the date such capital
contributions are made or the date such Equity Interests are sold, as the case
may be, the cash proceeds of which are excluded from the calculation set forth
in Section 4.04(a)(3).
"Excluded Guarantee" shall have the meaning assigned to it in Section
4.11(a).
"Existing Indebtedness" means Indebtedness of the Company or its
Restricted Subsidiaries in existence on the Closing Date, plus interest accruing
thereon, after application of the net proceeds of the sale of the Securities as
described the Offering Memorandum.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of EBITDA of such Person for such period to the Fixed
Charges of such Person for such period. In the event that the Company or any of
its Restricted Subsidiaries Incurs, assumes, guarantees or redeems any
Indebtedness or issues or redeems Disqualified Stock or preferred stock
subsequent to the commencement of the period for which the Fixed Charge Coverage
Ratio is being calculated but prior to 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 or redemption of Indebtedness, or such
issuance or redemption of Disqualified Stock or preferred stock, as if the same
had occurred at the beginning of the applicable four-quarter period. For
purposes of making the computation referred to above, Investments, acquisitions,
dispositions, mergers, consolidations and discontinued operations (as determined
in accordance with GAAP) that have been made by the Company or any of its
Restricted Subsidiaries during the four-quarter reference period or subsequent
to such reference period and on or prior to or simultaneously with the
Calculation Date shall be calculated on a pro forma basis assuming that all such
Investments, acquisitions, dispositions, discontinued operations, mergers and
consolidations (and the reduction of any associated fixed charge obligations and
the change in EBITDA resulting
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therefrom) had occurred on the first day of the four-quarter reference period.
If since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of such period) shall have made any Investment,
acquisition, disposition, discontinued operation, merger or consolidation that
would have required adjustment pursuant to this definition, then the Fixed
Charge Coverage Ratio shall be calculated giving pro forma effect thereto for
such period as if such Investment, acquisition, disposition, discontinued
operation, merger or consolidation had occurred at the beginning of the
applicable four-quarter period. For purposes of this definition, whenever pro
forma effect is to be given to a transaction, the pro forma calculations shall
be made in good faith by a responsible financial or accounting officer of the
Company. If any Indebtedness bears a floating rate of interest and is being
given pro forma effect, the interest on such Indebtedness shall be calculated as
if the rate in effect on the Calculation Date had been the applicable rate for
the entire period (taking into account any Hedging Obligations applicable to
such Indebtedness). Interest on a Capitalized Lease Obligation shall be deemed
to accrue at an interest rate reasonably determined by a responsible financial
or accounting officer of the Company to be the rate of interest implicit in such
Capitalized Lease Obligation in accordance with GAAP. For purposes of making the
computation referred to above, interest on any Indebtedness under a revolving
credit facility computed on a pro forma basis shall be computed based upon the
average daily balance of such Indebtedness during the applicable period.
Interest on Indebtedness that may optionally be determined at an interest rate
based upon a factor of a prime or similar rate, a eurocurrency interbank offered
rate, or other rate, shall be deemed to have been based upon the rate actually
chosen, or, if none, then based upon such optional rate chosen as the Company
may designate.
"Fixed Charges" means, with respect to any Person for any period, the
sum of (a) Consolidated Interest Expense of such Person for such period and (b)
all cash dividend payments (excluding items eliminated in consolidation) on any
series of Disqualified Stock of such Person.
"Foreign Subsidiary" means a Restricted Subsidiary not organized or
existing under the laws of the United States, any State thereof, the District of
Columbia, or any territory thereof.
"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 Closing Date.
"Government Securities" means securities that are (a) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with
8
respect to any such Government Securities or a specific payment of principal of
or interest on any such Government Securities held by such custodian for the
account of the holder of such depository receipt; provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount received
by the custodian in respect of the Government Securities or the specific payment
of principal of or interest on the Government Securities evidenced by such
depository receipt.
"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 or other obligations.
"Guarantee" means any guarantee of the obligations of the Company
under this Indenture and the Securities by any Person in accordance with the
provisions of this Indenture. When used as a verb, "Guarantee" shall have a
corresponding meaning.
"Guarantor" means any Person that Incurs a Guarantee; provided that
upon the release and discharge of such Person from its Guarantee in accordance
with this Indenture, such Person shall cease to be a Guarantor.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) currency exchange or interest rate swap
agreements, currency exchange or interest rate cap agreements and currency
exchange or interest rate collar agreements and (ii) other agreements or
arrangements designed to protect such Person against fluctuations in currency
exchange or interest rates.
"Holder" or "Securityholder" means a holder of the Securities.
"Incur" means to directly or indirectly create, incur, issue, assume,
guarantee or otherwise become directly or indirectly liable, contingently or
otherwise; provided, however, that any Indebtedness or Capital Stock of a Person
existing at the time such Person becomes a Subsidiary (whether by merger,
consolidation, acquisition or otherwise) shall be deemed to be Incurred by such
Subsidiary at the time it becomes a Subsidiary. The term "Incurrence" when used
as a noun shall have a correlative meaning.
"Indebtedness" means, with respect to any Person, (a) any indebtedness
of such Person, whether or not contingent (i) in respect of borrowed money, (ii)
evidenced by bonds, notes, debentures or similar instruments or letters of
credit or bankers' acceptances (or, without double counting, reimbursement
agreements in respect thereof), (iii) representing the balance deferred and
unpaid of the purchase price of any property (including Capitalized Lease
Obligations), except any such balance that constitutes a trade payable or
similar obligation to a trade creditor, in each case accrued in the ordinary
course of business or (iv) representing any Hedging Obligations, if and to the
extent that any of the foregoing Indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet (excluding
the footnotes thereto) of such Person prepared in accordance with GAAP, (b) to
the
9
extent not otherwise included, any obligation by such Person to be liable for,
or to pay, as obligor, guarantor or otherwise, on the Indebtedness of another
Person (other than by endorsement of negotiable instruments for collection in
the ordinary course of business) and (c) to the extent not otherwise included,
Indebtedness of another Person secured by a Lien on any asset owned by such
Person (whether or not such Indebtedness is assumed by such Person); provided,
however, that Contingent Obligations Incurred in the ordinary course of business
shall be deemed not to constitute Indebtedness, and obligations under or in
respect of Receivables Facilities shall not be deemed to constitute Indebtedness
of a Person.
"Indemnity Agreement" means the agreement to be entered into between
the Company and Evenflo & Spaldings Holdings Corporation pursuant to which each
party will indemnify the other for all losses arising from the other's business
prior to the Transactions.
"Indenture" means this Indenture as amended or supplemented from time
to time.
"Independent Financial Advisor" means an accounting, appraisal,
investment banking firm or consultant to Persons engaged in Similar Businesses
of nationally recognized standing that is, in the reasonable judgment of the
Company's Board of Directors, qualified to perform the task for which it has
been engaged.
"Investment Grade Securities" means (i) securities issued or directly
and fully guaranteed or insured by the U.S. government or any agency or
instrumentality thereof (other than Cash Equivalents), (ii) debt securities or
debt instruments with a rating of BBB- or higher by S&P or Baa3 or higher by
Moody's or the equivalent of such rating by such rating organization, or, if no
rating of S&P or Moody's then exists, the equivalent of such rating by any other
nationally recognized securities rating agency, but excluding any debt
securities or instruments constituting loans or advances among the Company and
its Subsidiaries, and (iii) investments in any fund that invests exclusively in
investments of the type described in clauses (i) and (ii) which fund may also
hold immaterial amounts of cash pending investment and/or distribution.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including guarantees), advances or capital contributions (excluding accounts
receivable, trade credit, advances to customers, 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 issued by any other Person and investments that
are required by GAAP to be classified on the balance sheet (excluding the
footnotes thereto) of the Company in the same manner as the other investments
included in this definition to the extent such transactions involve the transfer
of cash or other property. For purposes of the definition of "Unrestricted
Subsidiary" and Section 4.04, (i) "Investments" shall include the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of a Subsidiary of the Company at the time that
such Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary, the
Company shall be deemed to continue to have a permanent "Investment" in an
Unrestricted Subsidiary
10
equal to an amount (if positive) equal to (x) the Company's "Investment" in such
Subsidiary at the time of such redesignation less (y) the portion (proportionate
to the Company's equity interest in such Subsidiary) of the fair market value of
the net assets of such Subsidiary at the time of such redesignation and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued at
its fair market value at the time of such transfer, in each case as determined
in good faith by the Board of Directors.
"Issuance Date" with respect to any Initial Securities, means the date
on which such Initial Securities are originally issued.
"KKR" means Kohlberg Kravis Xxxxxxx & Co. L.P.
"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, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction);
provided that in no event shall an operating lease be deemed to constitute a
Lien.
"Liquidated Damages" shall have the meaning assigned to it in the
Registration Rights Agreement.
"Management Group" means the group consisting of the Officers of the
Company.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Earnings" means, with respect to any Person, the net earnings
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends.
"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 Designated Noncash Consideration received in any Asset Sale),
net of the direct costs relating to such Asset Sale and the sale or disposition
of such Designated Noncash Consideration (including, without limitation, legal,
accounting and investment banking fees, and brokerage and sales commissions),
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 related thereto), amounts required
to be applied to the repayment of principal, premium (if any) and interest on
Indebtedness required (other than required by Section 4.06(b)(i)) to be paid as
a result of such transaction and any deduction of appropriate amounts to be
provided by the Company as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such transaction and
retained by the Company after such sale or other disposition thereof, including,
without limitation, pension and other post-employment benefit liabilities and
11
liabilities related to environmental matters or against any indemnification
obligations associated with such transaction.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements (including, without limitation, reimbursement
obligations with respect to letters of credit and banker's acceptances), damages
and other liabilities, and guarantees of payment of such principal, interest,
penalties, fees, indemnifications, reimbursements, damages and other
liabilities, payable under the documentation governing any Indebtedness.
"Offer Period" means the period from the date of a Change of Control
until and including the Change of Control Payment Date.
"Offering Memorandum" means the Offering Memorandum dated August 13,
1998, relating to the Company's 11 3/4% Senior Notes due 2006.
"Officer" means the Chairman of the Board, the President, any
Executive Vice President, Senior Vice President or Vice President, the
Treasurer, the Controller or the Secretary of the Company.
"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 set
forth in this Indenture.
"Opinion of Counsel" means a written opinion from legal counsel who is
reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company or the Trustee.
"Permitted Holders" means KKR and any of its Affiliates and the
Management Group.
"Permitted Investments" means (a) any Investment in the Company or any
Restricted Subsidiary; (b) any Investment in cash and Cash Equivalents or
Investment Grade Securities; (c) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person that is engaged in a Similar Business if
as a result of such Investment (i) such Person becomes a Restricted Subsidiary
or (ii) such Person, in one transaction or a series of related transactions, 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; (d) any Investment in securities or other assets not
constituting cash or Cash Equivalents and received in connection with an Asset
Sale made pursuant to Section 4.06 or any other disposition of assets not
constituting an Asset Sale; (e) any Investment existing on the Closing Date; (f)
advances to employees not in excess of $5.0 million outstanding at any one time,
in the aggregate; (g) any Investment acquired by the Company or any of its
Restricted Subsidiaries (i) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such other Investment or accounts receivable or (ii) as a
result
12
of a foreclosure by the Company or any of its Restricted Subsidiaries with
respect to any secured Investment or other transfer of title with respect to any
secured Investment in default; (h) Hedging Obligations permitted under Section
4.03(b)(x); (i) loans and advances to officers, directors and employees for
business-related travel expenses, moving expenses and other similar expenses, in
each case Incurred in the ordinary course of business; (j) any Investment in a
Similar Business (other than an Investment in an Unrestricted Subsidiary) having
an aggregate fair market value, taken together with all other Investments made
pursuant to this clause (j) that are at that time outstanding, not to exceed the
greater of (x) $25.0 million or (y) 10% of Total Assets at the time of such
Investment (with the fair market value of each Investment being measured at the
time made and without giving effect to subsequent changes in value); (k)
Investments the payment for which consists of Equity Interests of the Company
(exclusive of Disqualified Stock); provided, however, that such Equity Interests
shall not increase the amount available for Restricted Payments under Section
4.04(a)(3); (l) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (l) that
are at that time outstanding, not to exceed the greater of (x) $15.0 million or
(y) 5.0% of Total Assets at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value); (m) any transaction to the extent it
constitutes an investment that is permitted by and made in accordance with the
provisions of Section 4.07(b) (except transactions described in clauses (ii) and
(vi) of such Section 4.07(b)); (n) any Investment by Restricted Subsidiaries in
other Restricted Subsidiaries and Investments by Subsidiaries that are not
Restricted Subsidiaries in other Subsidiaries that are not Restricted
Subsidiaries; (o) Investments relating to any special purpose Wholly-Owned
Subsidiary of the Company organized in connection with a Receivables Facility
that, in the good faith determination of the Board of Directors of the Company,
are necessary or advisable to effect such Receivables Facility; and (p)
guarantees (including Guarantees) of Indebtedness permitted under Section 4.03.
"Permitted Liens" means, with respect to any Person (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or to secure public or statutory obligations of such Person
or deposits or cash or U.S. government bonds to secure surety or appeal bonds to
which such Person is a party, or for contested taxes or import or custom duties
or for the payment of rent, in each case incurred in the ordinary course of
business; (b) Liens imposed by law, including carriers', warehousemen's,
mechanics', materialmen and repairmen Liens, in each case for sums not yet due
or being contested in good faith by appropriate proceedings, if a reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof; (c) Liens for taxes, assessments or other
governmental charges not yet subject to penalties for non-payment or which are
being contested in good faith by appropriate proceedings provided reserves
required pursuant to GAAP have been taken on the books of the Company or its
Restricted Subsidiaries, as the case may be; (d) Liens in favor of issuers of
surety or performance bonds or bankers' acceptance or letters of credit issued
pursuant to the request of and for the account of such Person in the ordinary
course of its business; provided, however, that such letters of credit do not
constitute Indebtedness; (e) encumbrances, easements or reservations of, or
rights of others for, licenses, rights of way, sewers, electric lines,
13
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties which do
not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person; (f)
Liens securing a Hedging Obligation, so long as the related Indebtedness is, and
is permitted to be under this Indenture, secured by a Lien on the same property;
(g) leases and subleases of real property which do not materially interfere with
the ordinary conduct of the business of the Company or any of its Restricted
Subsidiaries; (h) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings which
may have been duly initiated for the review of such judgment have not been
finally terminated or the period within which such proceedings may be initiated
has not expired; (i) Liens for the purpose of securing the payment (or the
refinancing of the payment) of all or a part of the purchase price of, or
Capitalized Lease Obligations with respect to, assets or property acquired or
constructed in the ordinary course of business provided that (x) the aggregate
principal amount of Indebtedness secured by such Liens is otherwise permitted to
be Incurred under this Indenture and does not exceed the cost of the assets or
property so acquired or constructed and (y) such Liens are created within 90
days of construction or acquisition of such assets or property and do not
encumber any other assets or property of the Company or any Restricted
Subsidiary other than such assets or property and assets affixed or appurtenant
thereto; (j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's Liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a depository
institution; provided that such deposit account is not a pledged cash collateral
account; (k) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by the Company and its
Restricted Subsidiaries in the ordinary course of business; (l) Liens existing
on the Issuance Date; (m) Liens on property or shares of stock of a Person at
the time such Person becomes a Subsidiary; provided, however, that such Liens
are not created, Incurred or assumed in connection with, or in contemplation of,
such other Person becoming a Subsidiary; provided further, however, that any
such Lien may not extend to any other property owned by the Company or any
Restricted Subsidiary; (n) Liens on property at the time the Company or a
Subsidiary acquired the property, including any acquisition by means of a merger
or consolidation with or into the Company or any Restricted Subsidiary;
provided, however, that such Liens are not created, Incurred or assumed in
connection with, or in contemplation of, such acquisition; provided, further,
however, that such Liens may not extend to any other property owned by the
Company or any Restricted Subsidiary; (o) Liens securing Indebtedness or other
obligations of a Subsidiary owing to the Company or a Wholly-Owned Subsidiary;
(p) Liens securing the Securities and Guarantees; (q) Liens securing
Indebtedness incurred to refinance Indebtedness that was previously so secured,
provided that (A) such Liens are not materially less favorable to the Holders
and (B) any such Lien is limited to all or part of the same property or assets
(plus improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or, under the written arrangements under which
the original Lien arose, could secure) the obligations to which such Liens
relate; (r) Liens on assets Incurred in connection with a Receivables Facility;
(s) Liens securing Indebtedness and other obligations under a senior credit
agreement or other senior bank facility, including, without limitation, the
Senior Credit Facility, and related Hedging Obligations and Liens on assets of
Restricted Subsidiaries securing guarantees of Indebtedness and other
obligations under a senior credit agreement or other senior
14
bank facility, including, without limitation, the Senior Credit Facility,
permitted to be Incurred under this Indenture; (t) 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; (u)
Liens securing Indebtedness permitted to be Incurred pursuant to Section
4.03(b)(xiii); and (v) Liens created, Incurred or existing in respect of
unfunded pension obligations or any similar obligations of the Company or any of
its Restricted Subsidiaries or any Guarantor.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"preferred stock" means any Equity Interest with preferential rights
of payment of dividends or upon liquidation, dissolution, or winding up.
"principal" of a Security means the principal of the Security plus the
premium, if any, payable on the Security that is due or overdue or is to become
due at the relevant time.
"Receivables Facility" means one or more receivables financing
facilities, as amended from time to time, pursuant to which the Company and/or
any of its Restricted Subsidiaries sells its accounts receivable to a Person
that is not a Restricted Subsidiary.
"Receivables Fees" means distributions or payments made directly or by
means of discounts with respect to any participation interest issued or sold in
connection with, and other fees paid to a Person that is not a Restricted
Subsidiary in connection with, any Receivables Facility.
"Redemption Date" shall mean, with respect to any redemption of
Securities, the date of redemption with respect thereto.
"Related Parties" means any Person controlled by a Permitted Holder,
including any partnership or limited liability company of which a Permitted
Holder or its Affiliates is the general partner or managing member, as the case
may be.
"Representative" means the trustee, agent or representative (if any)
for an issue of Senior Indebtedness of the Company. "Restricted Investment"
means an Investment other than a Permitted Investment.
"Restricted Subsidiary" means, at any time, any direct or indirect
Subsidiary of the Company that is not then an Unrestricted Subsidiary; provided,
however, that upon the occurrence of an Unrestricted Subsidiary ceasing to be an
Unrestricted Subsidiary, such Subsidiary shall be included in the definition of
"Restricted Subsidiary."
"S&P" means Standard and Poor's Ratings Group.
"SEC" means the Securities and Exchange Commission.
15
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Senior Credit Facility" means that certain revolving credit facility
described in the Offering Memorandum among the Company and the lenders from time
to time parties thereto, including any collateral documents, instruments and
agreements executed in connection therewith, and any amendments, supplements,
modifications, extensions, renewals, restatements or refundings thereof and any
indentures or credit facilities or commercial paper facilities with banks or
other institutional lenders that replace, refund or refinance any part of the
loans, notes, other credit facilities or commitments thereunder, including any
such replacement, refunding or refinancing facility or indenture that increases
the amount borrowable thereunder or alters the maturity thereof; provided,
however, that if at any time there is more than one facility which could
constitute the Senior Credit Facility, the Company shall designate to the
Trustee pursuant to an Officers' Certificate executed by the principal executive
officer and principal financial officer of the Company which one of such
facilities shall be the Senior Credit Facility for purposes of the subordination
and acceleration provisions of this Indenture.
"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 Securities Act, as such Regulation is in effect on
the date hereof.
"Similar Business" means a business, the majority of whose revenues
are derived from the design, manufacture, import and/or distribution of juvenile
and infant products, or any line of business engaged in by the Company or its
Subsidiaries on the Closing Date, or any business or activity that is reasonably
similar thereto or a reasonable extension, development or expansion thereof or
ancillary thereto.
"Subordinated Indebtedness" means (a) with respect to the Company, any
Indebtedness of the Company which is by its terms subordinated in right of
payment to the Securities and (b) with respect to any Guarantor, any
Indebtedness of such Guarantor which is by its terms subordinated in right of
payment to the Guarantee of such Guarantor.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association, or other business entity (other than a partnership, joint venture,
limited liability company or similar entity) of which more than 50.0% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time of determination 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, joint venture, limited
liability company or similar entity of which (x) more than 50.0% of the capital
accounts, distribution rights, total equity and voting interests or general or
limited partnership interests, as applicable, are owned or controlled, directly
or indirectly, by such Person or one or more of the other Subsidiaries of that
Person or a combination thereof whether in the form of membership, general,
special or limited partnership or otherwise and (y) such Person or any
Wholly-Owned Restricted Subsidiary of such Person is a controlling general
partner or otherwise controls such entity.
16
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Total Assets" means the total consolidated assets of the Company and
its Restricted Subsidiaries as shown on the most recent balance sheet (excluding
the footnotes thereto) of the Company.
"Transactions" means (i) the transactions contemplated by the stock
purchase agreement dated August 20, 1998, between KKR 1996 Fund L.P. and Lisco,
Inc., pursuant to which KKR 1996 Fund L.P. will acquire 51% of the outstanding
common stock of the Company and 100% of the outstanding preferred stock of the
Company, including the distribution of such preferred stock by the Company to
Lisco, Inc., (ii) the transactions contemplated by the stock purchase agreement
dated August 20, 1998, between Great Star Corporation and Lisco, Inc., pursuant
to which Great Star Corporation will acquire 6.6% of the outstanding common
stock of the Company, (iii) the repayment by the Company of approximately $110.0
million of intercompany debt owed to Spalding & Evenflo Companies, Inc. and its
Affiliates, (iv) the offering of $110.0 million of Securities by the Company and
(v) the entering into of the Senior Credit Facility on the Issuance Date.
"Treasury Rate" means, as of any Redemption Date, the yield to
maturity as of such Redemption Date of U.S. Treasury securities with a constant
maturity (as compiled and published in the most recent Federal Reserve
Statistical Release H. 15 (519) which has become publicly available at least two
Business Days prior to the Redemption Date (or, if such Statistical Release is
no longer published, any publicly available source of similar market data)) most
nearly equal to the period from the Redemption Date to August 15, 2002;
provided, however, that if the period from the Redemption Date to August 15,
2002 is less than one year, the weekly average yield on actually traded U.S.
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary of the Company (including any existing Subsidiary
and any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary unless such Subsidiary or any of its Subsidiaries owns any Equity
Interests of, or owns, or holds any Lien on, any property of, the Company or any
Subsidiary of
17
the Company (other than any Subsidiary of the Subsidiary to be so designated),
provided that (a) any Unrestricted Subsidiary must be an entity of which shares
of the capital stock or other equity interests (including partnership interests)
entitled to cast at least a majority of the votes that may be cast by all shares
or equity interests having ordinary voting power for the election of directors
or other governing body are owned, directly or indirectly, by the Company, (b)
the Company certifies that such designation complies with Section 4.04 and (c)
each of (I) the Subsidiary to be so designated and (II) its Subsidiaries has not
at the time of designation, and does not thereafter, create, Incur, issue,
assume, guarantee or otherwise become directly or indirectly liable with respect
to any Indebtedness pursuant to which the lender has recourse to any of the
assets of the Company or any of its Restricted Subsidiaries. The Board of
Directors may designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that, immediately after giving effect to such designation,
(i) the Company could Incur $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test described in Section 4.03(a) or (ii) the Fixed
Charge Coverage Ratio for the Company and its Restricted Subsidiaries would be
greater than such ratio for the Company and its Restricted Subsidiaries
immediately prior to such designation, in each case on a pro forma basis taking
into account such designation. Any such designation by the Board of Directors
shall be notified by the Company to the Trustee by promptly filing with the
Trustee a copy of the board resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"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 or Disqualified Stock, as the case may be, at any date, the
quotient obtained by dividing (i) the sum of the products of the number of years
from the date of determination to the date of each successive scheduled
principal payment of such Indebtedness or redemption or similar payment with
respect to such Disqualified Stock multiplied by the amount of such payment, by
(ii) the sum of all such payments.
"Wholly-Owned Restricted Subsidiary" is any Wholly-Owned Subsidiary
that is a Restricted Subsidiary.
"Wholly-Owned Subsidiary" of any Person means a Subsidiary of such
Person, 100% 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 Subsidiaries of such Person and one
or more Wholly-Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"......................................... 4.07
"Asset Sale Offer".............................................. 4.06(b)
18
Defined in
Term Section
---- -------
"Asset Sale Purchase Date"...................................... 4.06(b)
"Bankruptcy Law"................................................ 6.01
"Change of Control Offer"....................................... 4.08(a)
"Change of Control Payment"..................................... 4.08(a)
"Change of Control Payment Date"................................ 4.08(b)
"covenant defeasance option".................................... 8.01(b)
"CUSIP"......................................................... 2.13
"Custodian"..................................................... 6.01
"Event of Default".............................................. 6.01
"Excess Proceeds"............................................... 4.06(b)
"legal defeasance option"....................................... 8.01(b)
"Legal Holiday"................................................. 11.08
"non-payment default"........................................... 10.03
"Offered Price"................................................. 4.06(b)
"Paying Agent".................................................. 2.04
"Payment Blockage Notice"....................................... 10.03
"Payment Blockage Period"....................................... 10.03
"payment default"............................................... 10.03
"protected purchaser"........................................... 2.08
"Refinancing Indebtedness"...................................... 4.03(b)(xv)
"Refunding Capital Stock"....................................... 4.04(b)
"Registrar"..................................................... 2.04
"Restricted Payments"........................................... 4.04(a)
"Retired Capital Stock"......................................... 4.04(b)
"Successor Company"............................................. 5.01(a)(i)
"Successor Guarantor"........................................... 5.01(b)(i)
SECTION 1.03. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA, which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, any Guarantor
and any other obligor on the indenture securities.
19
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any preferred stock shall be (i) the
maximum liquidation value of such preferred stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
preferred stock, whichever is greater.
ARTICLE 2.
The Securities
SECTION 2.01. Amount of Securities; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is $200,000,000. The Securities may be issued in one or more
series. All Securities of any one series shall be substantially identical except
as to denomination.
With respect to any Additional Securities issued after the Closing
Date (except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities pursuant to
Section 2.07, 2.08, 2.10 or 3.06 or the Appendix and, except for Securities
which, pursuant to Section 2.03 are deemed never to have been authenticated and
delivered hereunder), there shall be (i) established in or pursuant to a
resolution of the Board of
20
Directors and (ii) (A) set forth or determined in the manner provided in an
Officer's Certificate or (B) established in one or more indentures supplemental
hereto, prior to the issuance of such Additional Securities:
(1) whether such Additional Securities shall be issued as part of a
new or existing series of Securities and the title of such Additional
Securities (which shall distinguish the Additional Securities of the series
from Securities of any other series);
(2) the aggregate principal amount of such Additional Securities which
may be authenticated and delivered under this Indenture shall be in an
aggregate principal amount not to exceed $90,000,000 (except for Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the same series pursuant
to Section 2.07, 2.08, 2.10 or 3.06 or the Appendix and except for
Securities which, pursuant to Section 2.03, are deemed never to have been
authenticated and delivered hereunder);
(3) the issue price and Issuance Date of such Additional Securities,
including the date from which interest on such Additional Securities shall
accrue;
(4) if applicable, that such Additional Securities shall be issuable
in whole or in part in the form of one or more Global Securities (as
defined in the Appendix) and, in such case, the respective depositaries for
such Global Securities, the form of any legend or legends which shall be
borne by such Global Securities in addition to or in lieu of those set
forth in Exhibit A hereto and any circumstances in addition to or in lieu
of those set forth in Section 2.3 of the Appendix in which any such Global
Security may be exchanged in whole or in part for Additional Securities
registered, or any transfer of such Global Security in whole or in part may
be registered, in the name or names of Persons other than the depositary
for such Global Security or a nominee thereof; and
(5) if applicable, that such Additional Securities shall not be issued
in the form of Initial Securities as set forth in Exhibit A, but shall be
issued in the form of Exchange Securities as set forth in Exhibit B.
If any of the terms of any Additional Securities are established by
action taken pursuant to a resolution of the Board of Directors, a copy of an
appropriate record of such action shall be certified by the Secretary or any
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate or any indenture supplemental hereto
setting forth the terms of the Additional Securities.
SECTION 2.02. Form and Dating. Provisions relating to the Original
Securities, the Additional Securities, the Private Exchange Securities and the
Exchange Securities are set forth in the Appendix, which is hereby incorporated
in and expressly made a part of this Indenture. The (i) Original Securities and
the Trustee's certificate of authentication, Private Exchange Securities and the
Trustee's certificate of authentication and (ii) any Additional
21
Securities (if issued as Transfer Restricted Securities (as defined in the
Appendix)) and the Trustee's certificate of authentication shall each be
substantially in the form of Exhibit A hereto, which is hereby incorporated in
and expressly made a part of this Indenture. The Exchange Securities and any
Additional Securities issued other than as Transfer Restricted Securities and
the Trustee's certificate of authentication shall each be substantially in the
form of Exhibit B hereto, which is hereby incorporated in and expressly made a
part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication.
SECTION 2.03. Execution and Authentication. One or more Officers shall
sign the Securities for the Company by manual or facsimile signature.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities as set forth in the Appendix.
The Trustee may appoint an authenticating agent reasonably acceptable
to the Company to authenticate the Securities. Any such appointment shall be
evidenced by an instrument signed by a Trust Officer, a copy of which shall be
furnished to the Company. Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as any
Registrar, Paying Agent or agent for service of notices and demands.
SECTION 2.04. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent, and the
term "Registrar" includes any co-registrars. The Company initially appoints the
Trustee as (i) Registrar and Paying Agent in connection with the Securities and
(ii) the Securities Custodian (as defined in the Appendix) with respect to the
Global Securities.
The Company shall enter into an appropriate agency agreement with any
Registrar or Paying Agent not a party to this Indenture, which shall incorporate
the terms of the TIA. The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall notify the Trustee of the
name and address of any such agent. If the Company
22
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.07.
The Company or any of its domestically organized Wholly-Owned Subsidiaries may
act as Paying Agent or Registrar.
The Company may remove any Registrar or Paying Agent upon written
notice to such Registrar or Paying Agent and to the Trustee; provided, however,
that no such removal shall become effective until (1) acceptance of an
appointment by a successor as evidenced by an appropriate agreement entered into
by the Company and such successor Registrar or Paying Agent, as the case may be,
and delivered to the Trustee or (2) notification to the Trustee that the Trustee
shall serve as Registrar or Paying Agent until the appointment of a successor in
accordance with clause (1) above. The Registrar or Paying Agent may resign at
any time upon written notice; provided, however, that the Trustee may resign as
Paying Agent or Registrar only if the Trustee also resigns as Trustee in
accordance with Section 7.08.
SECTION 2.05. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent (or if the Company or a Subsidiary is acting as Paying
Agent, segregate and hold in trust for the benefit of the Persons entitled
thereto) a sum sufficient to pay such principal and interest when so becoming
due. The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders of Securities or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company in making any such payment. If the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.
SECTION 2.06. Lists of Holders of Securities. 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 Securityholders. If the Trustee is
not the Registrar, the Company shall furnish, or cause the Registrar to furnish,
to the Trustee, in writing at least five Business Days before each interest
payment date and at such other times as the Trustee may request in writing, a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
23
SECTION 2.07. Transfer and Exchange. The Securities shall be issued in
registered form and shall be transferable only upon the surrender of a Security
for registration of transfer. When a Security is presented to the Registrar with
a request to register a transfer, the Registrar shall register the transfer as
requested if the requirements of Section 8-401(a) of the Uniform Commercial Code
are met. When Securities are presented to the Registrar with a request to
exchange them for an equal principal amount of Securities of other
denominations, the Registrar shall make the exchange as requested if the same
requirements are met. To permit registration of transfers and exchanges, the
Company shall execute and the Trustee shall authenticate Securities at the
Registrar's request. The Company may require payment of a sum sufficient to pay
all taxes, assessments or other governmental charges in connection with any
transfer or exchange pursuant to this Section. The Company shall not be required
to make and the Registrar need not register transfers or exchanges of Securities
selected for redemption (except, in the case of Securities to be redeemed in
part, the portion thereof not to be redeemed) or any Securities for a period of
15 days before a selection of Securities to be redeemed.
Prior to the due presentation for registration of transfer of any
Security, the Company, the Trustee, the Paying Agent and the Registrar may deem
and treat the Person in whose name a Security is registered as the absolute
owner of such Security for the purpose of receiving payment of principal of and
interest, if any, on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and none of the Company, the Trustee,
the Paying Agent or the Registrar shall be affected by notice to the contrary.
Any Holder of a Global Security shall, by acceptance of such Global
Security, agree that transfers of beneficial interests in such Global Security
may be effected only through a book-entry system maintained by (i) the Holder of
such Global Security (or its agent) or (ii) any Holder of a beneficial interest
in such Global Security, and that ownership of a beneficial interest in such
Global Security shall be required to be reflected in a book entry.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.08. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i)
satisfies the Company or the Trustee within a reasonable time after he has
notice of such loss, destruction or wrongful taking and the Registrar does not
register a transfer prior to receiving such notification, (ii) makes such
request to the Company or the Trustee prior to the Security being acquired by a
protected purchaser as defined in Section 8-303 of the Uniform Commercial Code
(a "protected purchaser") and (iii) satisfies any other reasonable requirements
of the Trustee. If required by the Trustee or the Company, such Holder shall
furnish an indemnity bond sufficient in the judgment of the Trustee to protect
the Company, the Trustee, the Paying Agent and the Registrar from any loss that
any of them may suffer if a Security is replaced. The Company and the Trustee
may charge the Holder for their expenses in
24
replacing a Security. In the event any such mutilated, lost, destroyed or
wrongfully taken Security has become or is about to become due and payable, the
Company in its discretion may pay such Security instead of issuing a new
Security in replacement thereof.
Every replacement Security is an additional obligation of the Company.
The provisions of this Section 2.08 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, lost, destroyed or wrongfully taken
Securities.
SECTION 2.09. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security does not cease to be outstanding because
the Company or an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.08, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a protected purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a Redemption Date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.10. Temporary Securities. In the event that Definitive
Securities (as defined in the Appendix) are to be issued under the terms of this
Indenture, until such Definitive Securities are ready for delivery, the Company
may prepare and the Trustee shall authenticate temporary Securities. Temporary
Securities shall be substantially in the form of Definitive Securities but may
have variations that the Company considers appropriate for temporary Securities.
Without unreasonable delay, the Company shall prepare and the Trustee shall
authenticate Definitive Securities and deliver them in exchange for temporary
Securities upon surrender of such temporary Securities at the office or agency
of the Company, without charge to the Holder. In addition, the Temporary
Regulation S Global Security (as defined in the Appendix) may also be issued in
temporary form.
SECTION 2.11. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver canceled Securities to the Company pursuant to written
direction by an Officer. The Company may not issue new Securities to replace
Securities it has redeemed, paid or delivered to the Trustee for cancellation.
The Trustee shall not
25
authenticate Securities in place of canceled Securities other than pursuant to
the terms of this Indenture.
SECTION 2.12. Defaulted Interest. If the Company defaults in a payment
of interest on the Securities, the Company shall pay the defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the Persons who are
Holders of Securities on a subsequent special record date. The Company shall fix
or cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail or cause to be
mailed to each Holders of Securities a notice that states the special record
date, the payment date and the amount of defaulted interest to be paid.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Securities may
use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided,
however, that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee after the Company becomes aware, through written
notice, of a change in the "CUSIP" numbers.
26
ARTICLE 3.
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the Redemption Date and the principal amount of Securities
to be redeemed.
The Company shall give each notice to the Trustee provided for in this
Section at least 60 days before the Redemption Date unless the Trustee consents
to a shorter period. Such notice shall be accompanied by an Officers'
Certificate from the Company to the effect that such redemption will comply with
the conditions herein. If fewer than all the Securities are to be redeemed, the
record date relating to such redemption shall be selected by the Company and
given to the Trustee, which record date shall be not fewer than 15 days after
the date of notice to the Trustee. Any such notice may be canceled at any time
prior to notice of such redemption being mailed to any Holder and shall thereby
be void and of no effect.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed in compliance with the requirements of the principal national
securities exchange, if any, on which such Securities are listed, or, if such
Securities are not so listed, on a pro rata basis, by lot or by such other
method as the Trustee shall deem fair and appropriate (and in such manner as
complies with applicable legal requirements); provided that no Securities of
$1,000 or less shall be purchased or redeemed in part. Provisions of this
Indenture that apply to Securities called for redemption also apply to portions
of Securities called for redemption. The Trustee shall notify the Company
promptly of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more than
60 days before a date for redemption of Securities, the Company, or the Trustee
at the Company's direction, shall mail a notice of redemption by first-class
mail, postage prepaid, to each Holder of Securities to be redeemed at such
Holder's registered address; provided that in the event the Trustee is to mail
such notice, the Company shall deliver to the Trustee, at least 45 days prior to
the Redemption Date, an Officer's Certificate requesting that the Trustee give
such notice and setting forth the information to be stated in such notice as
provided in the following items.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the redemption price and the amount of accrued interest to the
Redemption Date;
(3) the name and address of the Paying Agent;
27
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and principal amounts of the particular Securities
to be redeemed (or the portion thereof);
(6) that, unless the Company defaults in making such redemption
payment, interest on Securities (or portion thereof) called for redemption
ceases to accrue on and after the Redemption Date;
(7) the CUSIP number, if any, printed on the Securities 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
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the Redemption Date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest, if any, to the Redemption
Date; provided, however, that if the Redemption Date is after a regular record
date or a special record date and on or prior to the interest payment date, the
accrued interest shall be payable to the Securityholder of the redeemed
Securities registered on the relevant record date. Failure to give notice or any
defect in the notice to any Holder shall not affect the validity of the notice
to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00 a.m. on the
Redemption Date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption that have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. A new Security in principal
amount equal to the unredeemed portion of any Security redeemed in part will be
issued in the name of the Holder thereof upon cancellation of the original
Security. On and after the Redemption Date unless the Company defaults in
payment of the redemption price, interest shall cease to accrue on Securities or
portions thereof called for redemption.
28
ARTICLE 4.
Covenants
SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC Reports. Commencing with the period ended September
30, 1998, whether or not the Company is subject to the reporting requirements of
Section 13 or 15(d) of the Exchange Act, the Company shall deliver to the
Trustee and each Holder and to prospective purchasers of Securities identified
to the Company by the Initial Purchasers, within 15 days after it is or would
have been required to file such with the SEC, (a) within 90 days after the end
of each fiscal year, annual reports on Form 10-K (or any successor or comparable
form) containing the information required to be contained therein (or required
in such successor or comparable form); (b) within 45 days after the end of each
of the first three fiscal quarters of each fiscal year, reports on Form 10-Q (or
any successor or comparable form); (c) promptly from time to time after the
occurrence of an event required to be therein reported, such other reports on
Form 8-K (or any successor or comparable form); and (d) any other information,
documents and other reports which the Company would be required to file with the
Commission if it were subject to Section 13 or 15(d) of the Exchange Act.
Notwithstanding the foregoing, such requirements shall be deemed satisfied prior
to the Exchange Offer or the effectiveness of the Shelf Registration Statement
by the filing with the Commission of an exchange offer registration statement
and/or a shelf registration statement as required by the Registration Rights
Agreement (as defined in the Appendix), and any amendments thereto, with such
financial information that satisfies Regulation S-X of the Securities Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. Limitation on Incurrence of Indebtedness and Issuance of
Disqualified Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to Incur any Indebtedness (including Acquired Indebtedness) and the
Company shall not issue
29
any shares of Disqualified Stock and shall not permit any of its Restricted
Subsidiaries to issue any shares of preferred stock; provided, however, that the
Company may Incur Indebtedness (including Acquired Indebtedness) or issue shares
of Disqualified Stock if the Fixed Charge Coverage Ratio for the Company's and
its Restricted Subsidiaries' most recently ended four full fiscal quarters for
which internal financial statements are available immediately preceding the date
on which such additional Indebtedness is Incurred or such Disqualified Stock is
issued would have been at least 2.0 to 1.0, determined on a pro forma basis
(including a pro forma application of the net proceeds therefrom), as if the
additional Indebtedness had been Incurred, or the Disqualified Stock had been
issued, as the case may be, and the application of proceeds therefrom had
occurred at the beginning of such four-quarter period.
(b) The foregoing limitations shall not apply to:
(i) the Incurrence by the Company or its Restricted Subsidiaries of
Indebtedness under Credit Facilities and the issuance and creation of
letters of credit and bankers' acceptances thereunder (with letters of
credit and bankers' acceptances being deemed to have a principal amount
equal to the face amount thereof) up to an aggregate principal amount of
$100.0 million outstanding at any one time;
(ii) the Incurrence by the Company of Indebtedness represented by the
Securities issued on the Closing Date;
(iii) Existing Indebtedness (other than Indebtedness described in
clauses (i) and (ii));
(iv) Indebtedness (including Capitalized Lease Obligations) Incurred
by the Company or any of its Restricted Subsidiaries, to finance the
purchase, lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of any
Person owning such assets) in an aggregate principal amount which, when
aggregated with the principal amount of all other Indebtedness then
outstanding and Incurred pursuant to this clause (iv) and including all
Refinancing Indebtedness Incurred to refund, refinance or replace any other
Indebtedness Incurred pursuant to this Section 4.03(b)(iv), does not exceed
the greater of (x) $15.0 million or (y) 10.0% of Total Assets;
(v) Indebtedness Incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including, without
limitation, letters of credit in respect of workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; provided, however, that
upon the drawing of such letters of credit or the Incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or Incurrence;
(vi) Indebtedness arising from agreements of the Company or a
Restricted Subsidiary providing for indemnification, adjustment of purchase
price or similar
30
obligations, in each case, Incurred or assumed in connection with the
disposition of any business, assets or a Subsidiary, other than guarantees
of Indebtedness Incurred by any Person acquiring all or any portion of such
business, assets or a Subsidiary for the purpose of financing such
acquisition; provided, however, that (a) such Indebtedness is not reflected
as a dollar amount on the balance sheet of the Company or any Restricted
Subsidiary (contingent obligations referred to in a footnote to financial
statements shall not be deemed to be reflected on such balance sheet for
purposes of this clause (a)) and (b) the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
including noncash proceeds (the fair market value of such noncash proceeds
being measured at the time received and without giving effect to any
subsequent changes in value) actually received by the Company and its
Restricted Subsidiaries in connection with such disposition;
(vii) Indebtedness of the Company to a Restricted Subsidiary; provided
that any such Indebtedness is made pursuant to an intercompany note and is
subordinated in right of payment to the Securities; provided further that
any subsequent issuance or transfer of any Capital Stock or any other event
which will result in any such Restricted Subsidiary ceasing to be a
Restricted Subsidiary or any other subsequent transfer of any such
Indebtedness (except to the Company or another Restricted Subsidiary) shall
be deemed, in each case to be an Incurrence of such Indebtedness;
(viii) shares of preferred stock of a Restricted Subsidiary issued to
the Company or another Restricted Subsidiary; provided that any subsequent
issuance or transfer of any Capital Stock or any other event which results
in any such Restricted Subsidiary ceasing to be a Restricted Subsidiary or
any other subsequent transfer of any such shares of preferred stock (except
to the Company or another Restricted Subsidiary) shall be deemed, in each
case, to be an issuance of such shares of preferred stock;
(ix) Indebtedness of a Restricted Subsidiary to the Company or another
Restricted Subsidiary; provided that (a) any such Indebtedness is made
pursuant to an intercompany note and (b) if a Guarantor Incurs such
Indebtedness from a Restricted Subsidiary that is not a Guarantor such
Indebtedness is subordinated in right of payment to the Guarantee of such
Guarantor; provided further that any subsequent transfer of any such
Indebtedness (except to the Company or another Restricted Subsidiary) shall
be deemed, in each case, to be an Incurrence of such Indebtedness;
(x) Hedging Obligations that are Incurred in the ordinary course of
business (a) for the purpose of fixing or hedging interest rate risk with
respect to any Indebtedness that is permitted by the terms of this
Indenture to be outstanding or (b) for the purpose of fixing or hedging
currency exchange rate risk with respect to any currency exchanges;
(xi) obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business;
(xii) Indebtedness of any Guarantor in respect of such Guarantor's
Guarantee;
31
(xiii) Indebtedness and Disqualified Stock of the Company and
Indebtedness and preferred stock of any of its Restricted Subsidiaries not
otherwise permitted under this Section 4.03 in an aggregate principal
amount or liquidation preference, which when aggregated with the principal
amount and liquidation preference of all other Indebtedness and
Disqualified Stock then outstanding and Incurred pursuant to this Section
4.03 (b)(xiii), does not exceed $20.0 million at any one time outstanding;
provided, however, that Indebtedness of Foreign Subsidiaries, which when
aggregated with the principal amount of all other Indebtedness of Foreign
Subsidiaries then outstanding and Incurred pursuant to this Section
4.03(b)(xiii), does not exceed $15.0 million (or the equivalent thereof in
any other currency) at any one time outstanding (it being understood that
any Indebtedness Incurred pursuant to this Section 4.03(b)(xiii) shall
cease to be deemed Incurred or outstanding for purposes of this Section
4.03(b)(xiii) but shall be deemed to be Incurred for purposes of Section
4.03(a) from and after the first date on which the Company could have
Incurred such Indebtedness under Section 4.03(a) without reliance on this
Section 4.03(b)(xiii);
(xiv) (a) any guarantee by the Company of Indebtedness or other
obligations of any of its Restricted Subsidiaries so long as the Incurrence
of such Indebtedness Incurred by such Restricted Subsidiary is permitted
under the terms of this Indenture and (b) any Excluded Guarantee of a
Restricted Subsidiary;
(xv) the Incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness which serves to refund, refinance or
restructure any Indebtedness Incurred as permitted under Section 4.03(a)
and clauses (ii) and (iii) of this Section 4.03(b), this clause (xv) and
clause (xvi) below or any Indebtedness issued to so refund, refinance or
restructure such Indebtedness including additional Indebtedness Incurred to
pay premiums and fees in connection therewith (the "Refinancing
Indebtedness") prior to its respective maturity; provided, however, that
such Refinancing Indebtedness (a) has a Weighted Average Life to Maturity
at the time such Refinancing Indebtedness is Incurred which is not less
than the remaining Weighted Average Life to Maturity of Indebtedness being
refunded or refinanced, (b) to the extent such Refinancing Indebtedness
refinances Indebtedness subordinated or pari passu to the Securities, such
Refinancing Indebtedness is subordinated or pari passu to the Securities at
least to the same extent as the Indebtedness being refinanced or refunded
and (c) shall not include (1) Indebtedness of a Subsidiary that refinances
Indebtedness of the Company or (2) Indebtedness of the Company or a
Restricted Subsidiary that refinances Indebtedness of an Unrestricted
Subsidiary;
(xvi) Indebtedness or Disqualified Stock of Persons that are acquired
by the Company or any of its Restricted Subsidiaries or merged into a
Restricted Subsidiary in accordance with the terms of this Indenture;
provided that such Indebtedness or Disqualified Stock is not Incurred in
contemplation of such acquisition or merger; and provided further that
after giving effect to such acquisition or merger, either (a) the Company
would be permitted to Incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in Section
4.03(a) or (b) the Fixed
32
Charge Coverage Ratio is greater than immediately prior to such acquisition
or merger; and
(xvii) Indebtedness Incurred in respect of the Indemnity Agreement.
(c) For purposes of determining compliance with this Section 4.03, in
the event that an item of Indebtedness meets the criteria of more than one of
the categories of permitted Indebtedness described in clauses (i) through (xvii)
of Section 4.03(b) or is entitled to be Incurred pursuant to Section 4.03(a),
the Company shall, in its sole discretion, classify such item of Indebtedness in
any manner that complies with this Section 4.03 and such item of Indebtedness
shall be treated as having been Incurred pursuant to only one of such clauses or
pursuant to Section 4.03(a) except as otherwise set forth in Section
4.03(b)(xiii). Accrual of interest, the accretion of accreted value and the
payment of interest in the form of additional Indebtedness shall not be deemed
to be an Incurrence of Indebtedness for purposes of this Section 4.03.
SECTION 4.04. Limitation on Restricted Payments.
(a) 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 distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests, including any dividend or distribution payable
in connection with any merger or consolidation (other than (A) dividends or
distributions by the Company payable in Equity Interests (other than
Disqualified Stock) of the Company or (B) dividends or distributions by a
Restricted Subsidiary so long as, in the case of any dividend or distribution
payable on or in respect of any class or series of securities issued by a
Subsidiary other than a Wholly-Owned Subsidiary, the Company or a Restricted
Subsidiary receives at least its pro rata share of such dividend or distribution
in accordance with its Equity Interests in such class or series of securities);
(ii) purchase, redeem, defease or otherwise acquire or retire for value any
Equity Interests of the Company or any direct or indirect parent of the Company;
(iii) make any principal payment on, or redeem, repurchase, defease or otherwise
acquire or retire for value in each case, prior to any scheduled repayment, or
maturity, any Subordinated Indebtedness (other than Indebtedness permitted under
clauses (vii) and (ix) of Section 4.03(b)); 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 such Restricted Payment:
(1) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(2) immediately after giving effect to such transaction on a pro forma
basis, the Company could Incur $1.00 of additional Indebtedness pursuant to
Section 4.03(a); and
33
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the Closing Date (including Restricted Payments
permitted by clauses (i), (ii) (with respect to the payment of dividends on
Refunding Capital Stock pursuant to clause (b) thereof), (v) (only to the
extent that amounts paid pursuant to such clause are greater than amounts
that could have been paid pursuant to such clause if $2.5 million and $5.0
million were substituted in such clause for $5.0 million and $10.0 million,
respectively), (vi) and (ix) of Section 4.04(b), but excluding all other
Restricted Payments permitted by Section 4.04(b)), is less than the sum of
(i) 50% of the Consolidated Net Earnings of the Company for the period
(taken as one accounting period) from the fiscal quarter that first begins
after the Closing Date 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, in the case such Consolidated Net
Earnings for such period is a deficit, minus 100% of such deficit), plus
(ii) 100% of the aggregate net cash proceeds and the fair market value, as
determined in good faith by the Board of Directors, of marketable
securities received by the Company since immediately after the closing of
the Transactions from the issue or sale of Equity Interests of the Company
(including Retired Capital Stock, but excluding cash proceeds and
marketable securities received from the sale of Equity Interests to members
of management, directors or consultants of the Company and its Subsidiaries
after the Closing Date to the extent such amounts have been applied to
Restricted Payments made in accordance with Section 4.04(b)(v) and
excluding Excluded Contributions) or debt securities of the Company that
have been converted into such Equity Interests of the Company (other than
Refunding Capital Stock or Equity Interests or convertible debt securities
of the Company sold to a Restricted Subsidiary of the Company and other
than Disqualified Stock or debt securities that have been converted into
Disqualified Stock), plus (iii) 100% of the aggregate amount of cash and
marketable securities contributed to the capital of the Company following
the Closing Date (excluding Excluded Contributions), plus (iv) 100% of the
aggregate amount received in cash and the fair market value of marketable
securities (other than Restricted Investments) received from (A) the sale
or other disposition (other than to the Company or a Restricted Subsidiary)
of Restricted Investments made by the Company and its Restricted
Subsidiaries or (B) a dividend from, or the sale (other than to the Company
or a Restricted Subsidiary) of the stock of, an Unrestricted Subsidiary
(other than an Unrestricted Subsidiary the Investment in which was made by
the Company or a Restricted Subsidiary pursuant to Section 4.04(b)(vii) or
Section 4.04(b)(x)).
(b) The foregoing provisions shall not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at the date of declaration such payment would have
complied with the provisions of this Indenture;
34
(ii) (a) the redemption, repurchase, retirement or other acquisition
of any Equity Interests (the "Retired Capital Stock") or Subordinated
Indebtedness of the Company in exchange for, or out of the proceeds of the
substantially concurrent sale (other than to a Restricted Subsidiary) of,
Equity Interests of the Company (other than any Disqualified Stock) (the
"Refunding Capital Stock"), and (b) if immediately prior to the retirement
of Retired Capital Stock, the declaration and payment of dividends thereon
was permitted under Section 4.04(b)(vi), the declaration and payment of
dividends on the Refunding Capital Stock in an aggregate amount per year no
greater than the aggregate amount of dividends per annum that was
declarable and payable on such Retired Capital Stock immediately prior to
such retirement; provided, however, that at the time of the declaration of
any such dividends, no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof;
(iii) distributions or payments of Receivables Fees;
(iv) the redemption, repurchase or other acquisition or retirement of
Subordinated Indebtedness of the Company made by exchange for, or out of
the proceeds of the substantially concurrent sale of, new Indebtedness of
the Company so long as (A) the principal amount of such new Indebtedness
does not exceed the principal amount of the Subordinated Indebtedness being
so redeemed, repurchased, acquired or retired for value (plus the amount of
any premium required to be paid under the terms of the instrument governing
the Subordinated Indebtedness being so redeemed, repurchased, acquired or
retired), (B) such Indebtedness is subordinated to the Securities at least
to the same extent as such Subordinated Indebtedness so purchased,
exchanged, redeemed, repurchased, acquired or retired for value, (C) such
Indebtedness has a final scheduled maturity date equal to or later than the
final scheduled maturity date of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired and (D) such Indebtedness has a
Weighted Average Life to Maturity equal to or greater than the remaining
Weighted Average Life to Maturity of the Subordinated Indebtedness being so
redeemed, repurchased, acquired or retired;
(v) a Restricted Payment to pay for the repurchase, retirement or
other acquisition or retirement for value of common Equity Interests of the
Company held by any future, present or former employee, director or
consultant of the Company, any Subsidiary of the Company or Evenflo &
Spalding Holdings Corporation or any subsidiary thereof pursuant to any
management equity plan or stock option plan or any other management or
employee benefit plan or agreement; provided, however, that the aggregate
Restricted Payments made under this Section 4.04(b)(v) does not exceed in
any calendar year $5.0 million (with unused amounts in any calendar year
being carried over to succeeding calendar years subject to a maximum
(without giving effect to the following proviso) of $10.0 million in any
calendar year); provided further that such amount in any calendar year may
be increased by an amount not to exceed (A) the cash proceeds from the sale
of Equity Interests of the Company to members of management, directors or
consultants of the Company and its Subsidiaries that occurs after the
Closing Date (to the extent the cash proceeds from the sale of such Equity
Interest have not
35
otherwise been applied to the payment of Restricted Payments by virtue of
Section 4.04(a)(3)) plus (B) the cash proceeds of key man life insurance
policies received by the Company and its Restricted Subsidiaries after the
Closing Date less (C) the amount of any Restricted Payments previously made
pursuant to clauses (A) and (B) of this Section 4.04(b)(v); and provided
further that cancellation of Indebtedness owing to the Company from members
of management of the Company or any of its Restricted Subsidiaries in
connection with a repurchase of Equity Interests of the Company shall not
be deemed to constitute a Restricted Payment for purposes of this Section
4.04 or any other provision of this Indenture;
(vi) the declaration and payment of dividends to holders of any class
or series of Designated Preferred Stock (other than Disqualified Stock)
issued after the Closing Date (including, without limitation, the
declaration and payment of dividends on Refunding Capital Stock in excess
of the dividends declarable and payable thereon pursuant to Section
4.04(b)(ii)); provided, however, that for the most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date of issuance of such Designated Preferred
Stock or the declaration of such excess dividends on Refunding Capital
Stock, after giving effect to such issuance or declaration on a pro forma
basis, the Company and its Restricted Subsidiaries would have had a Fixed
Charge Coverage Ratio of at least 2.0 to 1.0;
(vii) Investments in Unrestricted Subsidiaries having an aggregate
fair market value, taken together with all other Investments made pursuant
to this Section 4.04(b)(vii) that are at that time outstanding, not to
exceed $10.0 million at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value);
(viii) repurchases of Equity Interests deemed to occur upon exercise
of stock options if such Equity Interests represent a portion of the
exercise price of such options;
(ix) the payment of dividends on the Company's Common Stock, following
the first public offering of the Company's Common Stock after the Closing
Date, of up to 6.0% per annum of the net proceeds received by the Company
in such public offering, other than public offerings with respect to the
Company's Common Stock registered on Form S-8;
(x) Investments in Restricted Subsidiaries that are made with Excluded
Contributions;
(xi) the payment of dividends on Disqualified Stock which is issued in
accordance with Section 4.03;
(xii) other Restricted Payments in an aggregate amount not to exceed
$10.0 million; provided, however, that at the time of, and after giving
effect to, any Restricted Payment permitted under clauses (iv), (v), (vi),
(vii), (viii), (ix), (xi), and (xii), no Default or Event of Default shall
have occurred and be continuing or would occur as a
36
consequence thereof; and provided further that for purposes of determining
the aggregate amount expended for Restricted Payments in accordance with
Section 4.04(a)(3), only the amounts expended under clauses (i), (ii) (with
respect to the payment of dividends on Refunding Capital Stock pursuant to
clause (b) thereof), (v) (only to the extent that amounts paid pursuant to
such clause are greater than amounts that would have been paid pursuant to
such clause if $2.5 million and $5.0 million were substituted in such
clause for $5.0 million and $10.0 million, respectively), (vi) and (ix)
shall be included; and
(xiii) the repurchase, redemption or other acquisition or retirement
for value of preferred stock or Subordinated Indebtedness of the Company or
any of its Restricted Subsidiaries pursuant to a "change of control" or
"asset sale" covenant set forth in the indenture or certificate of
designations pursuant to which the same is issued; provided that such
repurchase, redemption or other acqusition or retirement for value shall
only me permitted if all of the terms and conditions in such provisions
have been complied with and such repurchases, redemptions or other
acquisitions or retirements for value are made in accordance with such
indenture or certificate of designations pursuant to which the same is
issued and provided further that the Company has repurchased all Securities
required to be repurchased by the Company pursuant to the terms and
conditions described under Sections 4.06 and 4.08, as the case may be,
prior to the repurchase, redemption or other acquisition or retirement for
value of such preferred stock or Subordinated Indebtedness pursuant to the
"change of control" or "asset sale" covenant included in such indenture or
certificate of designations.
As of the Closing Date, all of the Company's Subsidiaries shall be
Restricted Subsidiaries. The Company shall not permit any Unrestricted
Subsidiary to become a Restricted Subsidiary except pursuant to the second to
last sentence of the definition of "Unrestricted Subsidiary." For purposes of
designating any Restricted Subsidiary as an Unrestricted Subsidiary, all
outstanding Investments by the Company and its Restricted Subsidiaries (except
to the extent repaid) in the Subsidiary so designated shall be deemed to be
Restricted Payments in an amount determined as set forth in the last sentence of
the definition of "Investments." Such designation shall be permitted only if a
Restricted Payment in such amount would be permitted at such time (whether
pursuant to Section 4.04(a) or under clauses (vii), (x) and (xii) of Section
4.04(b)) and if such Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. Unrestricted Subsidiaries shall not be subject to any
of the restrictive covenants set forth in this Indenture.
SECTION 4.05. Dividend and Other Payment Restrictions Affecting
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 consensual encumbrance or consensual restriction
on the ability of any Restricted Subsidiary to:
(a) (i) pay dividends or make any other distributions to the Company
or any of its Restricted Subsidiaries (1) on its Capital Stock or (2) with
respect to any other interest or participation in, or measured by, its
profits, or (ii) pay any Indebtedness owed to the Company or any of its
Restricted Subsidiaries;
37
(b) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(c) sell, lease or transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries, except (in each case) for
such encumbrances or restrictions existing under or by reason of:
(1) contractual encumbrances or restrictions in effect on the
Closing Date, including pursuant to the Senior Credit Facility and its
related documentation;
(2) this Indenture, the Securities and the provisions of the
Company's certificate of incorporation relating to the preferred stock
of the Company to be issued on the Issuance Date and any certificate
of designations or revision to the certificate of incorporation
relating to preferred stock issued in exchange for, or as a
refinancing, refunding or replacement of, the preferred stock issued
on the Issuance Date;
(3) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions of the nature
discussed in clause (c) above on the property so acquired;
(4) applicable law or any applicable rule, regulation or order;
(5) any agreement or other instrument of a Person acquired by the
Company or any Restricted Subsidiary in existence at the time of such
acquisition (but not created in contemplation thereof), 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;
(6) contracts for the sale of assets, including, without
limitation, 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;
(7) secured Indebtedness otherwise permitted to be Incurred
pursuant to Sections 4.03 and 4.12 that limit the right of the debtor
to dispose of the assets securing such Indebtedness;
(8) restrictions on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of
business;
(9) other Indebtedness or preferred stock of Restricted
Subsidiaries permitted to be Incurred subsequent to the Closing Date
pursuant to Section 4.03;
38
(10) customary provisions in joint venture agreements and other
similar agreements entered into in the ordinary course of business;
(11) customary provisions contained in leases and other
agreements entered into in the ordinary course of business;
(12) restrictions created in connection with any Receivables
Facility that, in the good faith determination of the Board of
Directors of the Company, are necessary or advisable to effect such
Receivables Facility; or
(13) any encumbrances or restrictions of the type referred to in
clauses (a), (b) and (c) of this Section 4.05 imposed by any
amendments, modifications, restatements, renewals, increases,
supplements, refundings, replacements or refinancings of the
contracts, instruments or obligations referred to in clauses (1)
through (12) above, provided that such amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacements or refinancings are, in the good faith judgment of the
Company's Board of Directors, no more restrictive with respect to such
dividend and other payment restrictions than those contained in the
dividend or other payment restrictions prior to such amendment,
modification, restatement, renewal, increase, supplement, refunding,
replacement or refinancing.
SECTION 4.06. Asset Sales.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, cause, make or suffer to exist an Asset Sale, unless (x)
the Company, or its Restricted Subsidiaries, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair
market value (as determined in good faith by the Company) of the assets
sold or otherwise disposed of and (y) at least 75.0% of the consideration
therefor received by the Company, or such Restricted Subsidiary, as the
case may be, is in the form of cash or Cash Equivalents; provided that the
amount of (i) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of the
Company or any Restricted Subsidiary (other than liabilities that are by
their terms subordinated to the Securities), that are assumed by the
transferee of any such assets, (ii) any notes or other obligations received
by the Company or such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received) within 180 days following the closing of such
Asset Sale and (iii) any Designated Noncash Consideration received by the
Company or any of its Restricted Subsidiaries in such Asset Sale having an
aggregate fair market value, taken together with all other Designated
Noncash Consideration received pursuant to this clause (iii) that is at
that time outstanding, not to exceed the greater of (x) $25.0 million or
(y) 10% of Total Assets at the time of the receipt of such Designated
Noncash Consideration (with the fair market value of each item of
Designated Noncash Consideration being measured at the time received and
39
without giving effect to subsequent changes in value), shall be deemed to
be cash for purposes of this provision and for no other purpose.
(b) Within 365 days after the Company's or any Restricted Subsidiary's
receipt of the Net Proceeds of any Asset Sale, the Company or such
Restricted Subsidiary may apply the Net Proceeds from such Asset Sale, at
its option, (i) to permanently reduce (x) Obligations under the Senior
Credit Facility (and to correspondingly reduce commitments with respect
thereto) or other Indebtedness (other than Subordinated Indebtedness)
(provided that if the Company shall so reduce Obligations under such
Indebtedness, it shall equally and ratably reduce Obligations under the
Securities if the Securities are then prepayable or, if the Securities may
not be then prepaid, the Company shall make an offer (in accordance with
the procedures set forth below for an Asset Sale Offer) to all Holders to
purchase the amount of Securities that would otherwise be prepaid at a
price in cash equal to 100% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, to the date of
purchase) or (y) Indebtedness of a Wholly-Owned Restricted Subsidiary
(other than Indebtedness owed to the Company or another Restricted
Subsidiary), (ii) to an investment in any one or more businesses, capital
expenditures or acquisitions of other assets in each case, used or useful
in a Similar Business and/or (iii) to make an investment in properties or
assets that replace the properties and assets that are the subject of such
Asset Sale. Pending the final application of any such Net Proceeds, the
Company or such Restricted Subsidiary may temporarily reduce Indebtedness
under a revolving credit facility, if any, or otherwise invest such Net
Proceeds in Cash Equivalents or Investment Grade Securities. Any Net
Proceeds from the Asset Sale that are not invested or applied as provided
and within the time period set forth in the first sentence of this Section
4.06(b) shall be deemed to constitute "Excess Proceeds." When the aggregate
amount of Excess Proceeds exceeds $10.0 million, the Company shall make an
offer to all Holders (an "Asset Sale Offer") to purchase the maximum
principal amount of Securities, that is an integral multiple of $1,000,
that may be purchased out of the Excess Proceeds at an offer price in cash
in an amount equal to 100.0% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, to the date fixed for
the closing of such offer (the "Offered Price"). Within 10 Business Days
after the date on which the aggregate amount of Excess Proceeds exceeds
$10.0 million, the Company shall give to each Holder, with a copy to the
Trustee, a notice stating:
(i) that the Holder has the right to require the Company to
repurchase such Holder's Securities at the Offered Price, subject to
proration in the event the Excess Proceeds are less than the aggregate
Offered Price of all Securities tendered;
(ii) the date of purchase of Securities pursuant to the Asset
Sale Offer (the "Asset Sale Purchase Date"), which shall be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed;
(iii) that the Offered Price will be paid to Holders electing to
have Securities purchased on the Asset Sale Purchase Date, provided
that a Holder must surrender its
40
Security to the Paying Agent at the address specified in the notice
prior to the close of business at least five Business Days prior to
the Asset Sale Purchase Date;
(iv) any Security not tendered will continue to accrue interest
pursuant to its terms;
(v) that unless the Company defaults in the payment of the
Offered Price, any Security accepted for payment pursuant to the Asset
Sale Offer shall cease to accrue interest on and after the Asset Sale
Purchase Date;
(vi) that Holders will be entitled to withdraw their tendered
Securities and their election to require the Company to purchase such
Securities, provided that the Company receives, not later than the
close of business on the third Business Day preceding the Asset Sale
Purchase Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of the
Securities tendered for purchase, and a statement that such Holder is
withdrawing its election to have such Securities purchased;
(vii) that the Holders whose Securities are being purchased only
in part will be issued new Securities equal in principal amount to the
unpurchased portion of the Securities surrendered; which unpurchased
portion must be equal to $1,000 in principal amount or an integral
multiple thereof; and
(viii) the instructions a Holder must follow in order to have his
Securities purchased in accordance with this Section 4.06.
(c) To the extent that the aggregate amount of Securities tendered
pursuant to an Asset Sale Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for general corporate
purposes. If the aggregate principal amount of Securities surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall
select the Securities to be purchased in the manner described in Section
4.06(d). Upon completion of any such Asset Sale Offer, the amount of Excess
Proceeds shall be reset at zero.
(d) If more Securities are tendered pursuant to an Asset Sale Offer
than the Company is required to purchase, selection of such Securities for
purchase shall be made by the Trustee in compliance with the requirements
of the principal national securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro
rata basis, by lot or by such other method as the Trustee shall deem fair
and appropriate (and in such manner as complies with applicable legal
requirements); provided that no Securities of $1,000 or less shall be
purchased in part.
(e) Notices of purchase shall be mailed by first class mail, postage
prepaid, at least 30 but not more than 60 days before the Asset Sale
Purchase Date to each Holder of Securities to be purchased at such Holder's
registered address. If any Security is to be purchased in part only, any
notice of purchase that relates to such Security shall state the
41
portion of the principal amount thereof that has been or is to be
purchased. A new Security in principal amount equal to the unpurchased
portion of any Security purchased in part shall be issued in the name of
the Holder thereof upon cancellation of the original Security. On and after
the Asset Sale Purchase Date unless the Company defaults in payment of the
Offered Price, interest shall cease to accrue on Securities or portions
thereof purchased.
(f) The Company shall comply with the requirements of Rule 14e-l under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection with
the repurchase of the Securities pursuant to an Asset Sale Offer. To the
extent that the provisions of any securities laws or regulations conflict
with the provisions of this Indenture, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.
SECTION 4.07. Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, 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 of the Company (each of the foregoing, an
"Affiliate Transaction") involving aggregate consideration in excess of
$5.0 million, unless (i) such Affiliate Transaction is on terms that are
not materially 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 with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, a resolution adopted by
the majority of the Board of Directors of the Company approving such
Affiliate Transaction and set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with Section 4.07(a)(i).
(b) The foregoing provisions shall not apply to the following: (i)
transactions between or among the Company and/or any of its Restricted
Subsidiaries; (ii) Restricted Payments permitted by Section 4.04; (iii) the
payment of customary annual management, consulting and advisory fees and
related expenses to KKR and its Affiliates; (iv) the payment of reasonable
and customary fees paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Restricted
Subsidiary; (v) payments by the Company or any of its Restricted
Subsidiaries to KKR and its Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other
investment banking activities, including, without limitation, in connection
with acquisitions or divestitures which payments are approved by a majority
of the Board of Directors of the Company in good faith; (vi) transactions
in which the Company or any of its Restricted Subsidiaries, as the case may
be, delivers to
42
the Trustee a letter from an Independent Financial Advisor stating that
such transaction is fair to the Company or such Restricted Subsidiary from
a financial point of view or meets the requirements of Section 4.07(a)(i);
(vii) payments or loans to employees or consultants which are approved by a
majority of the Board of Directors of the Company in good faith; (viii) any
agreement as in effect as of the Closing Date or any amendment thereto (so
long as any such amendment is not disadvantageous to the Holders of the
Securities in any material respect) or any transaction contemplated
thereby; (ix) the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of, any
stockholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the
Closing Date and any similar agreements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the Company
or any of its Restricted Subsidiaries of obligations under any future
amendment to any such existing agreement or under any similar agreement
entered into after the Closing Date shall only be permitted by this clause
(ix) to the extent that the terms of any such amendment or new agreement
are not otherwise disadvantageous to the Holders of the Securities in any
material respect; (x) the Transactions and the payment of all fees and
expenses related to the Transactions; (xi) transactions with customers,
clients, suppliers, or purchasers or sellers of goods or services, in each
case in the ordinary course of business and otherwise in compliance with
the terms of this Indenture which are fair to the Company or its Restricted
Subsidiaries, in the reasonable determination of the Board of Directors of
the Company or the senior management thereof, or are on terms at least as
favorable as might reasonably have been obtained at such time from an
unaffiliated party; (xii) sales of accounts receivable, or participations
therein, in connection with any Receivables Facility; and (xiii) the
issuance of Equity Interests (other than Disqualified Stock) of the Company
to any Permitted Holder and their Related Parties.
SECTION 4.08. Change of Control.
(a) Upon the occurrence of a Change of Control, unless the Company has
elected to redeem the Securities in connection with such Change of Control
pursuant to paragraph 5 of the Securities, the Company shall make an offer
to purchase all or any part (equal to $1,000 or an integral multiple
thereof) of the Securities pursuant to the offer described below (the
"Change of Control Offer") at a price in cash (the "Change of Control
Payment") equal to 101.0% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase (subject to the rights of holders of record on the relevant record
date to receive interest due on the relevant interest payment date).
(b) Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder, with a copy to the Trustee, with the
following information: (1) a Change of Control Offer is being made pursuant
to this Section 4.08 and that all Securities properly tendered pursuant to
such Change of Control Offer will be accepted for payment; (2) the purchase
price and the purchase date, which shall be no earlier than 30 days nor
later than 60 days from the date such notice is mailed, except as may be
43
otherwise required by applicable law (the "Change of Control Payment
Date"); (3) any Security not properly tendered will remain outstanding and
continue to accrue interest; (4) unless the Company defaults in the payment
of the Change of Control Payment, all Securities accepted for payment
pursuant to the Change of Control Offer will cease to accrue interest on
the Change of Control Payment Date; (5) Holders electing to have any
Securities purchased pursuant to a Change of Control Offer will be required
to surrender the Securities, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Securities completed, to the Paying
Agent specified in the notice at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change of
Control Payment Date; (6) Holders will be entitled to withdraw their
tendered Securities and their election to require the Company to purchase
such Securities, provided that the Paying Agent receives, not later than
the close of business on the last day of the Offer Period, a telegram,
telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of Securities tendered for purchase, and a
statement that such Holder is withdrawing his tendered Securities and his
election to have such Securities purchased; and (7) that Holders whose
Securities are being purchased only in part will be issued new Securities
equal in principal amount to the unpurchased portion of the Securities
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
(c) On the Change of Control Payment Date, the Company shall, to the
extent permitted by law, (1) accept for payment all Securities or portions
thereof properly tendered pursuant to the Change of Control Offer, (2)
deposit with the Paying Agent an amount equal to the aggregate Change of
Control Payment in respect of all Securities or portions thereof so
tendered and (3) deliver, or cause to be delivered, to the Trustee for
cancellation the Securities so accepted together with an Officers'
Certificate stating that such Securities or portions thereof have been
tendered to and purchased by the Company. The Paying Agent shall promptly
mail to each Holder the Change of Control Payment for such Securities, and
the Trustee shall promptly authenticate and mail (or cause to be
transferred by book entry) to each Holder a new Security equal in principal
amount to any unpurchased portion of the Securities surrendered, if any,
provided, that each such new Security shall 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.
(d) The Company shall comply with the requirements of Rule 14e-l under
the Exchange Act and any other securities laws and regulations thereunder
to the extent such laws or regulations are applicable in connection with
the repurchase of the Securities pursuant to a Change of Control Offer. To
the extent that the provisions of any securities laws or regulations
conflict with the provisions of this Indenture, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations described in this Indenture by virtue
thereof.
(e) Prior to complying with the provisions of this covenant, but in
any event within 30 days following a Change of Control, the Company shall
either repay all
44
outstanding obligations under the Senior Credit Facility or obtain the
requisite consents thereunder to permit the purchase of the Securities
required by this covenant.
SECTION 4.09. Compliance Certificate. The Company shall (i) deliver to
the Trustee within 120 days after the end of each fiscal year of the Company,
commencing with the fiscal year ending on December 31, 1998, an Officers'
Certificate stating that in the course of the performance by the signers of
their duties as Officers of the Company they would normally have knowledge of
any Default and whether or not the signers know of any Default that occurred
during such period and (ii) within five Business Days, upon becoming aware of
any Default or Event of Default or any default under any document, instrument or
agreement representing Indebtedness of the Company or any Guarantor, deliver to
the Trustee a statement specifying such Default or Event of Default. The
certificate or statement shall describe the Default, if any, its status and what
action the Company is taking or proposes to take with respect thereto. The
Company also shall comply with Section 314(a)(4) of the TIA.
SECTION 4.10. Further Instruments and Acts. Upon request of the
Trustee, the Company shall execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 4.11. Limitation on Guarantees of Indebtedness by Restricted
Subsidiaries.
(a) The Company shall not permit any Restricted Subsidiary to
guarantee the payment of any Indebtedness of the Company or any other
Restricted Subsidiary unless (i) such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to the Indenture providing
for a Guarantee of payment of the Securities by such Restricted Subsidiary
except that if such Indebtedness is by its express terms subordinated in
right of payment to the Securities, any such guarantee of such Restricted
Subsidiary with respect to such Indebtedness shall be subordinated in right
of payment to such Restricted Subsidiary's Guarantee with respect to the
Securities substantially to the same extent as such Indebtedness is
subordinated to the Securities; (ii) such Restricted Subsidiary waives and
shall not in any manner whatsoever claim or take the benefit or advantage
of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result
of any payment by such Restricted Subsidiary under its Guarantee; and (iii)
such Restricted Subsidiary shall deliver to the Trustee an Opinion of
Counsel to the effect that (A) such Guarantee of the Securities has been
duly executed and authorized and (B) such Guarantee of the Securities
constitutes a valid, binding and enforceable obligation of such Restricted
Subsidiary, except insofar as enforcement thereof may be limited by
bankruptcy, insolvency or similar laws (including, without limitation, all
laws relating to fraudulent transfers) and except insofar as enforcement
thereof is subject to general principles of equity; provided that this
Section 4.11(a) shall not be applicable to any guarantee of any Restricted
Subsidiary (x) that (A) existed at the time such Person became a Restricted
Subsidiary of the Company and (B) was not Incurred in connection with, or
in contemplation of, such Person becoming a Restricted Subsidiary of the
Company or (y)
45
that guarantees the payment of Obligations of the Company or any Restricted
Subsidiary under the Senior Credit Facility or any other Credit Facility
(other than in respect of Subordinated Indebtedness) and any refunding,
refinancing or replacement thereof, in whole or in part, provided that such
refunding, refinancing or replacement thereof constitutes Indebtedness that
is not Subordinated Indebtedness and is not Incurred pursuant to a
registered offering of securities under the Securities Act or a private
placement of securities (including under Rule 144A) pursuant to an
exemption from the registration requirements of the Securities Act, which
private placement provides for registration rights under the Securities Act
(any guarantee excluded by operation of this clause (y) being an "Excluded
Guarantee").
(b) Notwithstanding the provisions of Section 4.11(a) and the other
provisions of this Indenture, any Guarantee by a Restricted Subsidiary of
the Securities shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person not an Affiliate of the Company, of all of the
Company's Capital Stock in, or all or substantially all the assets of, such
Restricted Subsidiary (which sale, exchange or transfer is not prohibited
by this Indenture) or (ii) the release or discharge of the guarantee which
resulted in the creation of such Guarantee, except a discharge or release
by or as a result of payment under such guarantee.
SECTION 4.12. Liens.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, Incur or suffer to exist
any Lien (other than Permitted Liens) upon any of its property or assets
(including Capital Stock), whether owned on the date of this Indenture or
thereafter acquired, securing any Indebtedness, unless contemporaneously
therewith effective provision is made to secure the Indebtedness due under
this Indenture and the Securities or, in respect of Liens on any Restricted
Subsidiary's property or assets, any Guarantee of such Restricted
Subsidiary, equally and ratably with (or prior to in the case of Liens with
respect to Subordinated Indebtedness) the Indebtedness secured by such Lien
for so long as such Indebtedness is so secured.
46
ARTICLE 5.
Successor Company
SECTION 5.01. Merger, Consolidation, or Sale of All or Substantially
All Assets.
(a) The Company shall not consolidate or merge with or into or wind up
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 any 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 will have been made is a corporation
organized or existing under the laws of the United States, any state
thereof, the District of Columbia, or any territory thereof (the
Company or such Person, as the case may be, being herein called the
"Successor Company");
(ii) the Successor Company (if other than the Company) expressly
assumes all the obligations of the Company under this Indenture and
the Securities pursuant to a supplemental indenture or other documents
or instruments in form reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists;
(iv) immediately after giving pro forma effect to such
transaction, as if such transaction had occurred at the beginning of
the applicable four-quarter period, (A) the Successor Company would be
permitted to Incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in Section 4.03(a)
or (B) the Fixed Charge Coverage Ratio for the Successor Company and
its Restricted Subsidiaries would be greater than such Ratio for the
Company and its Restricted Subsidiaries immediately prior to such
transaction;
(v) each Guarantor, if any, unless it is the other party to the
transactions described above, in which case Section 5.01(b) shall
apply, shall have by supplemental indenture confirmed that its
Guarantee shall apply to such Person's obligations under this
Indenture and the Securities; and
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture.
The Successor Company shall succeed to, and be substituted for, the
Company under this Indenture and the Securities. Notwithstanding the
foregoing Section 5.01 (a)(iv), (a) any Restricted Subsidiary may
consolidate with, merge into or transfer all or
47
part of its properties and assets to the Company and (b) the Company may
merge with an Affiliate incorporated solely for the purpose of
reincorporating the Company in another State of the United States so long
as the amount of Indebtedness of the Company and its Restricted
Subsidiaries is not increased thereby.
(b) Each Guarantor, if any, shall not, and the Company shall not
permit a Guarantor to, consolidate or merge with or into or wind up into
(whether or not such Guarantor is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions to, any Person unless:
(i) such Guarantor is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than
such Guarantor) or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made is a corporation
organized or existing under the laws of the United States, any state
thereof, the District of Columbia, or any territory thereof (such
Guarantor or such Person, as the case may be, being herein called the
"Successor Guarantor");
(ii) the Successor Guarantor (if other than such Guarantor)
expressly assumes all the obligations of such Guarantor under this
Indenture and such Guarantor's Guarantee pursuant to a supplemental
indenture or other documents or instruments in form reasonably
satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of
Default exists; and
(iv) the Guarantor shall have delivered or caused to be delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that such consolidation, merger or transfer and such
supplemental indenture (if any) comply with this Indenture.
The Successor Guarantor shall succeed to, and be substituted for, such
Guarantor under this Indenture and such Guarantor's Guarantee.
ARTICLE 6.
Defaults and Remedies
SECTION 6.01. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in payment when due and payable, upon
redemption, acceleration or otherwise, of principal of, or premium, if any,
on the Securities;
(2) the Company defaults in the payment when due of interest on, or
Liquidated Damages with respect to, the Securities and such default
continues for a period of 30 days;
48
(3) the Company or any Guarantor defaults in the performance, or
breaches any covenant, warranty or other agreement contained in this
Indenture or any Guarantee (other than a default in the performance, or
breach of a covenant, warranty or agreement which is specifically dealt
with in clauses (1) or (2) of this Section 6.01) and such default or breach
continues for a period of 30 days after the notice specified below;
(4) default under any mortgage, indenture or instrument under which
there is issued or by which there is 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 (other than Indebtedness owed to the Company or a Restricted
Subsidiary), whether such Indebtedness or guarantee now exists or is
created after the Closing Date, if both (A) such default either (1) results
from the failure to pay any such Indebtedness at its stated final maturity
(after giving effect to any applicable grace periods) or (2) relates to an
obligation other than the obligation to pay principal of any such
Indebtedness at its stated final maturity and results in the holder or
holders of such Indebtedness causing such Indebtedness to become due prior
to its stated maturity and (B) the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in
default for failure to pay principal at stated final maturity (after giving
effect to any applicable grace periods), or the maturity of which has been
so accelerated, aggregate $10.0 million or more at any one time
outstanding;
(5) failure by the Company or any Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Subsidiaries)
would constitute a Significant Subsidiary to pay final judgments
aggregating in excess of $10.0 million (net of any amounts with respect to
which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed
for a period of 60 days;
(6) the Company or any of its Significant Subsidiaries 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; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
49
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that remains unstayed and in effect for 60 days and:
(A) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case;
(B) appoints a Custodian of the Company or any of its Significant
Subsidiaries or for all or substantially all of the property of the
Company or any of its Significant Subsidiaries; or
(C) orders the winding up or liquidation of the Company or any of
its Significant Subsidiaries,
provided that clauses (A), (B) and (C) shall not apply to an Unrestricted
Subsidiary, unless such action or proceeding has a material adverse effect on
the interests of the Company or any of its Significant Subsidiaries; or
(8) any Guarantee shall for any reason cease to be in full force and
effect or be declared null and void or any responsible officer of the
Company or any Guarantor denies that it has any further liability under any
Guarantee or gives notice to such effect (other than by reason of the
termination of this Indenture or the release of any such Guarantee in
accordance with this Indenture).
The foregoing shall constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
A Default under clause (3) above is not an Event of Default until the
Trustee or the Holders of at least 30% in principal amount of the outstanding
Securities notify the Company of the Default and the Company does not cure such
Default within the time specified in clause (3) after receipt of such notice.
Such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (4) or (8) and any event which with the giving
of notice or the lapse of time would become an Event of Default under clause (3)
or (5), its status and what action the Company is taking or proposes to take
with respect thereto.
SECTION 6.02. Acceleration. If any Event of Default (other than of a
type specified in clause Section 6.01(6) or (7)) occurs and is continuing under
this Indenture, the
50
Trustee or the Holders of at least 30.0% in principal amount of the then
outstanding Securities may declare the principal, premium, if any, interest and
any other monetary obligations on all the then outstanding Securities to be due
and payable immediately. Upon the effectiveness of such declaration, such
principal and interest shall be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising under Section 6.01(6) or
(7), all outstanding Securities shall ipso facto become due and payable without
further action or notice.
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 of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the then outstanding Securities issued thereunder
by notice to the Trustee may on behalf of the Holders of all of such Securities
waive any existing Default or Event of Default and its consequences except (i) a
continuing Default or Event of Default in the payment of interest on, premium,
if any, or the principal of any such Security held by a non-consenting Holder,
(ii) a Default arising from the failure to redeem or purchase any Security when
required pursuant to the terms of this Indenture or (iii) a Default in respect
of a provision that under Section 9.02 cannot be amended without the consent of
each Securityholder affected. In the event of any Event of Default specified in
Section 6.01(4), such Event of Default and all consequences thereof (including
without limitation any acceleration or resulting payment default) shall be
annulled, waived and rescinded, automatically and without any action by the
Trustee or the Holders, if within 20 days after such Event of Default arose (x)
the Indebtedness or guarantee that is the basis for such Event of Default has
been discharged, or (y) the holders thereof have rescinded or waived the
acceleration, notice or action (as the case may be) giving rise to such Event of
Default, or (z) if the default that is the basis for such Event of Default has
been cured. When a Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default.
SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be
51
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 30.0% in principal amount of the
Securities make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security or
indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Securities do
not give the Trustee a direction inconsistent with the request during such
60-day period.
A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and liquidated damages and interest on the Securities
held by such Holder, on or after the respective due dates expressed in the
Securities, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, any Subsidiary or
any Guarantor, their creditors or their property and, unless prohibited by law
or applicable regulations, may vote on behalf of the Holders in any election of
a trustee in bankruptcy or other Person performing similar functions and may
participate as a member, voting or otherwise, of any official committee of
creditors appointed in
52
such matter, and any Custodian in any such judicial proceeding is hereby
authorized by each Holder to make payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and its counsel, and any other amounts due the Trustee under Section 7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, and any liquidated damages
without preference or priority of any kind, according to the amounts due and
payable on the Securities for principal, any liquidated damages and interest,
respectively; and
THIRD: to the Company or any other obligor on the Securities.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, 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 pursuant to Section 6.07 or a suit by Holders of
more than 10.0% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. Neither the Company
nor any Guarantor (to the extent it may lawfully do so) shall at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of this
Indenture; and the Company and each Guarantor (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and shall not hinder, delay or impede the execution of any power herein
granted to the Trustee, but shall suffer and permit the execution of every such
power as though no such law had been enacted.
ARTICLE 7.
Trustee
SECTION 7.01. Duties of Trustee.
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(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use
the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such
Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture, but shall not be obligated to
recalculate or verify the contents thereof.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of Section 7.01(b);
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
54
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 7.01 and to the provisions of the
TIA.
(i) In the event that the Trustee is also acting as Registrar or
Paying Agent hereunder, the protections of this Article 7 shall also be
afforded to such Registrar or Paying Agent.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need
not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance
on the Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Trustee's conduct does not
constitute willful misconduct or negligence.
(e) The Trustee may consult with counsel, and the advice or Opinion of
Counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of
such counsel.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, note or other paper or document unless requested in
writing to do so by the Holders of not less than a majority in principal
amount of the Securities at the time outstanding, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney.
(g) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee
55
reasonable security or indemnity against the costs, expenses and
liabilities which might reasonably 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 or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying
agent may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within the earlier of 90 days after it
occurs or 30 days after it is known to a Trust Officer. Except in the case of a
Default in payment of principal of or interest on any Security (including
payments pursuant to the mandatory redemption provisions of such Security, if
any), the Trustee may withhold the notice if and so long as a committee of its
Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each June 30 beginning with the June 30 following the first
anniversary of this Indenture, and in any event prior to August 31 in each
subsequent year, the Trustee shall mail to each Securityholder a brief report
dated as of June 30 that complies with Section 313(a) of the TIA. The Trustee
shall also comply with Section 313(b) of the TIA.
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company and each Guarantor, if any, jointly and severally shall
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees) incurred by or in connection with the administration
of this trust and the performance of its duties hereunder. The Trustee shall
notify the Company of any claim for which it may seek indemnity promptly upon
obtaining actual
56
knowledge thereof; provided, however, that any failure so to notify the Company
shall not relieve the Company or any Guarantor of its indemnity obligations
hereunder. The Company shall defend the claim and the indemnified party shall
provide reasonable cooperation at the Company's expense in the defense of such
claim. Such indemnified parties together may have one separate counsel and the
Company and any Guarantor, as applicable, shall pay the fees and expenses of
such counsel; provided, however, that the Company shall not be required to pay
such fees and expenses if it assumes such indemnified parties' defense and, in
such indemnified parties' reasonable judgment, there is no conflict of interest
between the Company and any Guarantor, as applicable, and such parties in
connection with such defense. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by an indemnified
party through such party's own willful misconduct, negligence or bad faith.
The Trustee's right to receive payment of any amounts due under this
Section 7.07 shall not be subordinated to any other liability or indebtedness of
the Company (even though the Securities may be so subordinated).
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest and any liquidated damages on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the satisfaction or discharge of this Indenture, any rejection or
termination of this Indenture under any bankruptcy law or the resignation or
removal of the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(6) or (7) with respect to the Company, the
expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns, is removed by the Company or by the Holders of
a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of Trustee for any reason (the Trustee in
57
such event being referred to herein as the retiring Trustee), the Company shall
promptly appoint a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10.0% in principal amount of the Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture any of the Securities shall have been authenticated but not delivered,
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor trustee, and deliver such Securities so authenticated; and in
case at that time any of the Securities shall not have been authenticated, any
successor to the Trustee may authenticate such Securities either in the name of
any predecessor hereunder or in the name of the successor to the Trustee; and in
all such cases such certificates shall have the full force which it is anywhere
in the Securities or in this Indenture provided that the certificate of the
Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a). The Trustee shall have a
combined capital and surplus of at least $100,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
58
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8.
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance.
(a) Subject to Section 8.01(c), this Indenture shall be discharged and
shall cease to be of further effect as to all Securities issued hereunder,
when either (a) all such Securities theretofore authenticated and delivered
(except lost, stolen or destroyed Securities which have been replaced or
paid and Securities for whose payment money has theretofore been deposited
in trust) have been delivered to the Trustee for cancellation; or (b) (i)
all such Securities not theretofore delivered to such Trustee for
cancellation have become due and payable by reason of the making of a
notice of redemption or otherwise or will become due and payable within one
year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name and at the expense of the Company and the Company or
any Guarantor has irrevocably deposited or caused to be deposited with such
Trustee as trust funds in trust solely for the benefit of the Holders, cash
in U.S. dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient without consideration of any
reinvestment of interest and Liquidated Damages, if any, to pay and
discharge the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation for principal, premium, if any,
and accrued interest to the date of maturity or redemption; (ii) no Default
or Event of Default shall have occurred and be continuing on the date of
such deposit or shall occur as a result of such deposit and such deposit
will not result in a breach or violation of, or constitute a default under,
any other instrument to which the Company or any Guarantor is a party or by
which the Company or any Guarantor is bound; (iii) the Company or any
Guarantor has paid or caused to be paid all sums payable by it under this
Indenture and the Securities; and (iv) the Company has delivered
irrevocable instructions to the Trustee under this Indenture to apply the
deposited money toward the payment of such Securities at maturity or the
Redemption Date, as the case may be. In addition, the Company must deliver
an Officers' Certificate and an Opinion of Counsel to the Trustee stating
that all conditions precedent to satisfaction and discharge have been
satisfied. The Trustee, at the expense of the Company, shall execute proper
instruments acknowledging satisfaction and discharge of the Indenture upon
the occurrence of the foregoing.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time may
terminate (i) all of its obligations under the Securities and this
Indenture ("legal defeasance option") or (ii) its obligations under
Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.11 and
4.12 and the operation of Sections 5.01, 6.01(3), 6.01(4),
59
6.01(5) (with respect to Significant Subsidiaries of the Company only),
6.01(6) (with respect to Significant Subsidiaries of the Company only),
6.01(7) and 6.01(8) ("covenant defeasance option"). The Company may
exercise its legal defeasance option notwithstanding its prior exercise of
its covenant defeasance option. In the event that the Company terminates
all of its obligations under the Securities and this Indenture by
exercising either its legal defeasance option or its covenant defeasance
option, the obligations under any Guarantee shall each be terminated
simultaneously with the termination of such obligations.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Section 6.01(3) (as such
Section relates to Sections 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 4.08, 4.09,
4.10, 4.11 and 4.12), 6.01(4), 6.01(5) (with respect to Significant Subsidiaries
of the Company only), 6.01(6) (with respect to Significant Subsidiaries of the
Company only), 6.01(7) and 6.01(8) or because of the failure of the Company to
comply with Section 5.01.
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 2.10, 6.07,
7.07, 7.08 and in this Article 8 shall survive until the Securities have
been paid in full. Thereafter, the Company's obligations in Sections 7.07,
8.04 and 8.05 shall survive.
SECTION 8.02. Conditions to Defeasance. In order to exercise either
Legal Defeasance or Covenant Defeasance with respect to the Securities:
(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of, premium, if any, and interest
due on the outstanding Securities on the stated maturity date or on the
applicable Redemption Date, as the case may be, of such principal, premium,
if any, or interest on the outstanding Securities;
(ii) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States confirming that,
subject to customary assumptions and exclusions, (A) the Company has
received from, or there has been published by, the U.S. Internal Revenue
Service a ruling or (B) since the Closing Date, there has been a change in
the applicable U.S. federal income tax law, in either case to the effect
that, and based thereon such Opinion of Counsel in the United States shall
confirm that, subject to customary assumptions and exclusions, the Holders
will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Legal
60
Defeasance and will be subject to U.S. 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;
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee an Opinion of Counsel in the United States
confirming that, subject to customary assumptions and exclusions, the
Holders will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such Covenant Defeasance and will be subject to
such 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;
(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, with respect to certain
bankruptcy or insolvency Events of Default, on the 91st day after such date
of deposit;
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, the Senior Credit
Facilities or any other material agreement or instrument (other than this
Indenture) to which, the Company or any Guarantor is a party or by which
the Company or any Guarantor is bound;
(vi) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that, as of the date of such opinion and subject to
customary assumptions and exclusions following the deposit, the trust funds
will not be subject to the effect of any applicable bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally under
any applicable U.S. federal or state law, and that the Trustee has a
perfected security interest in such trust funds for the ratable benefit of
the Holders;
(vii) 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 defeating, hindering, delaying or defrauding any creditors of the
Company or any Guarantor or others; and
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States (which Opinion
of Counsel may be subject to customary assumptions and exclusions) each
stating that all conditions precedent provided for or relating to the Legal
Defeasance or the Covenant Defeasance, as the case may be, have been
complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or Government Securities deposited with it pursuant to this Article
8. It shall apply the deposited money and the money from Government Securities
through the Paying Agent and in accordance with this Indenture to the payment of
principal of and interest on the Securities.
61
SECTION 8.04. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon written request any money held by
them for the payment of principal or interest that remains unclaimed for two
years, and, thereafter, Securityholders entitled to the money must look to the
Company for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company shall
pay and shall indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against deposited Government Securities or the principal and
interest received on such Government Securities.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or Government Securities in accordance with this Article 8 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or Paying Agent is
permitted to apply all such money or Government Securities in accordance with
this Article 8; provided, however, that, if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or Government Securities
held by the Trustee or Paying Agent.
ARTICLE 9.
Amendments
SECTION 9.01. Without Consent of Holders. The Company, any Guarantor
(with respect to a Guarantee or the supplemental indenture to which it is a
party) and the Trustee may amend this Indenture, the Securities or the
Guarantees without notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(3) to comply with Article 5;
62
(4) to provide for the assumption of the Company's or any Guarantor's
obligations to Holders;
(5) to add Guarantees with respect to the Securities or to secure the
Securities;
(6) to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights
under this Indenture of any such Holder;
(7) to add to the covenants for the benefit of the Holders or to
surrender any right or power herein conferred upon the Company;
(8) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
(9) to evidence and provide for the acceptance and appointment under
this Indenture of a successor Trustee pursuant to Article 7; or
(10) to provide for the issuance of the Exchange Securities or
Additional Securities, which shall have terms substantially identical in
all material respects to the Original Securities (except that the transfer
restrictions contained in the Original Securities shall be modified or
eliminated, as appropriate), and which shall be treated, together with any
outstanding Original Securities, as a single issue of securities.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.02. With Consent of Holders. The Company, any Guarantor and
the Trustee may amend this Indenture, the Securities or the Guarantees without
notice to any Securityholder but with the written consent of the Holders of at
least a majority in principal amount of the Securities then outstanding
(including consents obtained in connection with a tender offer or exchange for
the Securities) and, subject to Article 6, any existing default or compliance
with any provision of this Indenture or the Securities may be waived with the
consent of the Holders of a majority in principal amount of the then outstanding
Securities (including consents obtained in connection with a purchase of or
tender offer or exchange offer for Securities). However, without the consent of
each Securityholder affected, an amendment may not (with respect to any
Securities held by a non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
63
(ii) reduce the principal of or change the fixed maturity of any
Security or alter or waive the provisions with respect to the redemption of
the Securities (other than provisions relating to Sections 4.06 or 4.08);
(iii) reduce the rate of or change the time for payment of interest on
any Security;
(iv) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on the Securities (except a rescission
of acceleration of the Securities by the Holders of at least a majority in
aggregate principal amount of such Securities and a waiver of the payment
default that resulted from such acceleration), or in respect of a covenant
or provision contained in this Indenture, any Guarantee or the Securities
which cannot be amended or modified without the consent of all Holders;
(v) make any Security payable in money other than that stated in such
Securities;
(vi) make any change to Section 6.04 or 6.07;
(vii) make any change to the second sentence of this Section 9.02; or
(viii) impair the right of any Holder to receive payment of principal
of, or interest on such Holder's Securities on or after the due dates
therefor or to institute suit for the enforcement of any payment on or with
respect to such Holder's Securities.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to Securityholders a notice briefly describing such
amendment. The failure to give such notice to all Securityholders, or any defect
therein, shall not impair or affect the validity of an amendment under this
Section 9.02.
SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent
to an amendment or a waiver by a Holder of a Security shall bind the Holder and
every subsequent Holder of that Security or portion of the Security that
evidences the same debt as the consenting Holder's Security, even if notation of
the consent or waiver is not made on the Security. However, any such Holder or
subsequent Holder may revoke the consent or waiver as to such Holder's Security
or portion of the Security if the Trustee receives the notice of revocation
before the date the amendment or waiver becomes effective. After an amendment or
waiver becomes effective, it shall bind every Securityholder. An amendment or
waiver becomes effective once both (i) the requisite number of consents have
been received by the Company or the
64
Trustee and (ii) such amendment or waiver has been executed by the Company and
the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for more than 120
days after such record date. SECTION 9.05. Notation on or Exchange of
Securities.
If an amendment changes the terms of a Security, the Trustee may
require the Holder of the Security to deliver it to the Trustee. The Trustee may
place an appropriate notation on the Security regarding the changed terms and
return it to the Holder. Alternatively, if the Company or the Trustee so
determines, the Company in exchange for the Security shall issue and the Trustee
shall authenticate a new Security that reflects the changed terms. Failure to
make the appropriate notation or to issue a new Security shall not affect the
validity of such amendment.
SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture and that such amendment
is the legal, valid and binding obligation of the Company and any Guarantors
enforceable against them in accordance with its terms, subject to customary
exceptions, and complies with the provisions hereof (including Section 9.03).
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 10.
Miscellaneous
SECTION 10.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
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SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Evenflo Company, Inc.
Northwoods Business Center II
000 Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention of: General Counsel
if to the Trustee:
Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of: Corporate Trust Services/Evenflo
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Holder shall be mailed to the
Holder at the Holder's address as it appears on the registration books of the
Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.
Notices to the Trustee shall be deemed effective only upon actual
receipt.
SECTION 10.03. Communication by Holders with Other Holders. Holders
may communicate pursuant to TIA Section 312(b) with other Holders with respect
to their rights under this Indenture or the Securities. The Company, 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 or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
66
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such
individual, such covenant or condition has been complied with.
SECTION 10.06. When Securities Disregarded. In determining whether the
Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company, any Guarantor or
by any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any Guarantor shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Securities which the Trustee knows are so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time shall be considered in any such determination.
SECTION 10.07. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.
SECTION 10.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 10.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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SECTION 10.10. No Recourse Against Others. No director, officer,
employee, incorporator or stockholder of the Company or any Guarantor, shall
have any liability for any obligations of the Company or the Guarantors under
the Securities, the Guarantees or this Indenture or for any claim based on, in
respect of, or by reason of such obligations or their creation. Each Holder by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Securities. Such
waiver may not be effective to waive liabilities under the federal securities
laws and it is the view of the Commission that such a waiver is against public
policy.
SECTION 10.11. Successors. All agreements of the Company and each
Guarantor in this Indenture and the Securities shall bind its successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 10.12. Multiple Originals. The parties may sign any number of
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
SECTION 10.13. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
EVENFLO COMPANY, INC.
By
------------------------------------------
Name:
Title:
MARINE MIDLAND BANK, as Trustee,
By
------------------------------------------
Name:
Title:
APPENDIX A
PROVISIONS RELATING TO ORIGINAL SECURITIES,
ADDITIONAL SECURITIES, PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1. Definitions
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary or Permanent Regulation S Global Security or
beneficial interest therein, the rules and procedures of the Depositary for such
Global Security, Euroclear and Cedel, in each case to the extent applicable to
such transaction and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Definitive Security" means a certificated Initial Security or
Exchange Security (bearing the Restricted Securities Legend if the transfer of
such Security is restricted by applicable law) that does not include the Global
Securities Legend.
"Depositary" means The Depository Trust Company, its nominees and
their respective successors.
"Effectiveness Target Date" shall have the meaning assigned to it in
the Registration Rights Agreement.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit A to this Indenture.
"IAI" means an institutional "accredited investor" as described in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, Merrill, Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated and BancAmerica
Xxxxxxxxx Xxxxxxxx.
"Private Exchange" means an offer by the Company, pursuant to the
Registration Rights Agreement, to issue and deliver to certain purchasers, in
exchange for the Initial Securities held by such purchasers as part of their
initial distribution, a like aggregate principal amount of Private Exchange
Securities.
1
"Private Exchange Securities" means the Securities of the Company
issued in exchange for Initial Securities pursuant to this Indenture in
connection with the Private Exchange pursuant to the Registration Rights
Agreement.
"Purchase Agreement" means (i) the Purchase Agreement dated August 13,
1998, among the Company and the Initial Purchasers and (ii) any other similar
Purchase Agreement relating to Additional Securities.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for their Initial Securities,
a like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Default" shall have the meaning assigned to it in the
Registration Rights Agreement.
"Registration Rights Agreement" means (i) the Registration Rights
Agreement dated as of August 20, 1998, among the Company and the Initial
Purchasers and (ii) any other similar Registration Rights Agreement relating to
Additional Securities.
"Regulation S" means Regulation S under the Securities Act, as
amended.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Period," with respect to any Securities, means the period
of 40 consecutive days beginning on and including the later of (i) the day on
which such Securities are first offered to persons other than distributors (as
defined in Regulation S under the Securities Act) in reliance on Regulation S
and (ii) the Issuance Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(e)(i) herein.
"Rule 501" means Rule 50l(a)(l), (2), (3) or (7) under the Securities
Act.
"Rule 144A" means Rule 144A under the Securities Act, as amended.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depositary) or any successor person thereto, who
shall initially be the Trustee.
"Shelf Registration Statement" means a registration statement filed by
the Company in connection with the offer and sale of Initial Securities pursuant
to the Registration Rights Agreement.
2
"Transfer Restricted Securities" means Definitive Securities and any
other Securities that bear or are required to bear the Restricted Securities
Legend.
1.2. Other Definitions
Term: Defined in Section:
----- -------------------
"Agent Members".............................................................................................2.1(b)
"IAI Global Security".......................................................................................2.1(a)
"Global Securities".........................................................................................2.1(a)
"Permanent Regulation S Global Security"....................................................................2.3(d)
"Regulation S Global Securities"............................................................................2.1(a)
"Rule 144A Global Security".................................................................................2.1(a)
"Temporary Regulation S Global Security"....................................................................2.1(a)
2. The Securities
2.1. Form and Dating
The Initial Securities issued on the date hereof will be (i) offered
and sold by the Company pursuant to the Purchase Agreement and (ii) resold,
initially only to (A) QIBs in reliance on Rule 144A and (B) Persons other than
U.S. Persons (as defined in Regulation S) in reliance on Regulation S. Such
Initial Securities may thereafter be transferred to, among others, QIBs,
purchasers in reliance on Regulation S and, except as set forth below, IAIs in
accordance with Rule 501. Additional Securities offered after the date hereof
may be offered and sold by the Company from time to time pursuant to one or more
Purchase Agreements in accordance with applicable law.
(a) Global Securities. Rule 144A Securities shall be issued initially
in the form of one or more permanent global Securities in definitive, fully
registered form (collectively, the "Rule 144A Global Security") and Regulation S
Securities shall be issued initially in the form of one or more temporary global
Securities (collectively, the "Temporary Regulation S Global Security"), in each
case without interest coupons and bearing the Global Securities Legend and
Restricted Securities Legend, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Securities Custodian,
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 provided in
this Indenture. One or more global securities in definitive, fully registered
form without interest coupons and bearing the Global Securities Legend and the
Restricted Securities Legend (collectively, the "IAI Global Security") shall
also be issued on the Closing Date, deposited with the Securities Custodian, 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 provided in this
Indenture to accommodate transfers of beneficial interests in the Securities to
IAIs subsequent to the initial distribution. Except as set forth in Section 2.3,
beneficial ownership interests in the Temporary Regulation S Global Security
will not be exchangeable for interests in the Rule 144A Global Security, the IAI
Global Security, a Permanent Regulation S Global Security (as defined below) or
any other Security without a Restricted Securities Legend until the expiration
of the Restricted Period. Upon the expiration of the Restricted Period,
beneficial interests in the Securities represented by the Temporary Regulation S
Global Security may be exchanged for interests in the Permanent Regulation S
Global Security as described below in Section 2.3(d). The Rule 144A Global
Security, the IAI Global Security, the Temporary Regulation S Global Security
and the Permanent Regulation S Global Security are each referred to herein as a
Global Security and are collectively referred to herein as "Global Securities."
The Temporary Regulation S Global Security and the
3
Permanent Regulation S Global Security are referred to herein as "Regulation S
Global Securities." The aggregate principal amount of the Global Securities may
from time to time be increased or decreased by adjustments made on the records
of the Trustee and the Depositary or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with
Section 2.2 and pursuant to an order of the Company, authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the Depositary for such Global Security or Global Securities or the nominee
of such Depositary and (b) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instructions or held by the Trustee as
Securities Custodian.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or by the Trustee as Securities Custodian or
under such Global Security, 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 Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by the Depositary or impair, as between the
Depositary and its Agent Members, the operation of customary practices of such
Depositary governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Definitive Securities. Except as provided in Section 2.3 or 2.4,
owners of beneficial interests in Global Securities will not be entitled to
receive physical delivery of certificated Securities.
2.2. Authentication. The Trustee shall authenticate and make available for
delivery upon a written order of the Company signed by two Officers (1) Original
Securities for original issue on the date hereof in an aggregate principal
amount of $110,000,000, (2) subject to the terms of this Indenture, Additional
Securities in an aggregate principal amount of up to $90,000,000 and (3) the (A)
Exchange Securities for issue only in a Registered Exchange Offer and (B)
Private Exchange Securities for issue only in the Private Exchange, in the case
of each of (A) and (B) pursuant to the Registration Rights Agreement and for a
like principal amount of Initial Securities exchanged pursuant thereto. Such
order shall specify the amount of the Securities to be authenticated, the date
on which the original issue of Securities is to be authenticated and whether the
Securities are to be Initial Securities, Exchange Securities or Private Exchange
Securities. The aggregate principal amount of Securities outstanding at any time
may not exceed $200,000,000 except as provided in Section 2.08 of this
Indenture.
2.3. Transfer and Exchange. (a) Transfer and Exchange of Definitive
Securities. When Definitive Securities are presented to the Registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal principal
amount of Definitive Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the
Definitive Securities surrendered for transfer or exchange:
4
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Registrar,
duly executed by the Holder thereof or his attorney duly authorized in
writing; and
(ii) are accompanied by the following additional information and
documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect (in
the form set forth on the reverse side of the Initial Security); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect (in the form set forth on the
reverse side of the Initial Security); or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144 under
the Securities Act or in reliance upon another exemption from the
registration requirements of the Securities Act, (i) a certification
to that effect (in the form set forth on the reverse side of the
Initial Security) and (ii) if the Company so requests, an Opinion of
Counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the legend set forth in
Section 2.3(e)(i).
(b) Restrictions on Transfer of a Definitive Security for a Beneficial
Interest in a Global Security. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by a written instrument of transfer in
form reasonably satisfactory to the Company and the Registrar, together with:
(i) certification (in the form set forth on the reverse side of the
Initial Security) that such Definitive Security is being transferred (A) to
a QIB in accordance with Rule I44A, (B) to an IAI that has furnished to the
Trustee a signed letter substantially in the form of Exhibit D or (C)
outside the United States in an offshore transaction within the meaning of
Regulation S and in compliance with Rule 904 under the Securities Act
together with a letter substantially in the form of Exhibit C; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Custodian to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Definitive Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Definitive Security so canceled. If no
5
Global Securities are then outstanding and the Global Security has not been
previously exchanged for certificated securities pursuant to Section 2.4, the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers' Certificate, a new Global Security in
the appropriate principal amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depositary, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depositary therefor. A
transferor of a beneficial interest in a Global Security shall deliver a
written order given in accordance with the Depositary's procedures
containing information regarding the participant account of the Depositary
to be credited with a beneficial interest in such Global Security or
another Global Security and such account shall be credited in accordance
with such order with a beneficial interest in the applicable Global
Security and the account of the Person making the transfer shall be debited
by an amount equal to the beneficial interest in the Global Security being
transferred. Transfers by an owner of a beneficial interest in the Rule
144A Global Security or the IAI Global Security to a transferee who takes
delivery of such interest through the Regulation S Global Security, whether
before or after the expiration of the Restricted Period, will be made only
upon receipt by the Trustee of a certification from the transferor to the
effect that such transfer is being made in accordance with Regulation S or
(if available) Rule 144 under the Securities Act and that, if such transfer
is being made prior to the expiration of the Restricted Period, the
interest transferred will be held immediately thereafter through Euroclear
or Cedel. In the case of a transfer of a beneficial interest in either the
Temporary Regulation S Global Security or the Rule 144A Global Security for
an interest in the IAI Global Security, the transferee must furnish a
signed letter substantially in the form of Exhibit D to the Trustee. In the
case of a transfer of an interest in either the Temporary Regulation S
Global Security or the Permanent Regulation S Global Security to an
interest in a Rule 144A Global Security or IAI Global Security, the
transferor must furnish a letter substantially in the form of Exhibit C to
the Trustee.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global Security,
the Registrar shall reflect on its books and records the date and an
increase in the principal amount of the Global Security to which such
interest is being transferred in an amount equal to the principal amount of
the interest to be so transferred, and the Registrar shall reflect on its
books and records the date and a corresponding decrease in the principal
amount of Global Security from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred 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.
(iv) In the event that a Global Security is exchanged for Definitive
Securities pursuant to Section 2.4 prior to the consummation of the
Registered Exchange Offer or the effectiveness of the Shelf Registration
Statement with respect to such Securities, such Securities may be exchanged
only in accordance with such procedures as are substantially consistent
with
6
the provisions of this Section 2.3 (including the certification
requirements set forth on the reverse of the Initial Securities intended to
ensure that such transfers comply with Rule 144A, Regulation S or such
other applicable exemption from registration under the Securities Act, as
the case may be) and such other procedures as may from time to time be
adopted by the Company.
(d) Restrictions on Transfer of Temporary Regulation S Global
Security.
(i) Prior to the expiration of the Restricted Period, interests in the
Temporary Regulation S Global Security may only be held through Euroclear
or Cedel. During the Restricted Period, beneficial ownership interests in
the Temporary Regulation S Global Security may only be sold, pledged or
transferred through Euroclear or Cedel in accordance with the Applicable
Procedures and only (A) to the Company, (B) so long as such security is
eligible for resale pursuant to Rule 144A, to a person whom the selling
holder reasonably believes is a QIB that purchases for its own account or
for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (C) in an offshore
transaction in accordance with Regulation S, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 (if
applicable) under the Securities Act, (E) to an IAI purchasing for its own
account, or for the account of such an IAI, in a minimum principal amount
of Securities of $250,000 or (F) pursuant to an effective registration
statement under the Securities Act, in each case in accordance with any
applicable securities laws of any state of the United States. Prior to the
expiration of the Restricted Period, transfers by an owner of a beneficial
interest in the Temporary Regulation S Global Security to a transferee who
takes delivery of such interest through the Rule 144A Global Security or
the IAI Global Security will be made only in accordance with Applicable
Procedures and upon receipt by the Trustee of a written certification from
the transferor of the beneficial interest in the form provided on the
reverse of the Initial Security to the effect that such transfer is being
made to (i) a person whom the transferor reasonably believes is a QIB
within the meaning of Rule 144A in a transaction meeting the requirements
of Rule 144A or (ii) an IAI purchasing for its own account, or for the
account of such an IAI, in a minimum principal amount of the Securities of
$250,000. Such written certification will no longer be required after the
expiration of the Restricted Period. In the case of a transfer of a
beneficial interest in the Regulation S Global Security for an interest in
the IAI Global Security, the transferee must furnish a signed letter
substantially in the form of Exhibit D to the Trustee.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Temporary Regulation S Global Security may be
exchanged for interests in a permanent global security in definitive, fully
registered form without the Restricted Security Legend (the "Permanent
Regulation S Global Security") upon certification to the Trustee that such
interests are owned either by non-U.S. persons or U.S. persons who
purchased such interests pursuant to an exemption from, or transfer not
subject to, the registration requirements of the Securities Act. Upon the
expiration of the Restricted Period, the Company shall prepare and execute
the Permanent Regulation S Global Security in accordance with the terms of
this Indenture and deliver it to the Trustee for authentication. The
Trustee shall retain the Permanent Regulation S Global Security as
Securities Custodian. Any transfers of beneficial ownership interests in
the Temporary Regulation S Global Security made in reliance on Regulation S
shall thenceforth be recorded by the Trustee by making an appropriate
increase in the principal amount of the Permanent Regulation S Global
Security and a corresponding decrease in the principal amount of the
Temporary Regulation S Global Security. At such time as the principal
amount of the
7
Temporary Regulation S Global Security has been reduced to zero, the
Trustee shall cancel the Temporary Regulation S Global Security and deliver
it to the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) or
(iv), each Security certificate evidencing the Global Securities and the
Definitive Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form (each defined term in the legend being defined as such for purposes of
the legend only):
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR
OF SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C)
FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) IN AN OFFSHORE TRANSACTION
COMPLYING WITH RULE 903 OR 904 OF REGULATION S, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 50l(a)(l), (2), (3) OR (7)
UNDER THE SECURITIES ACT THAT IS AN INSTITUTIONAL ACCREDITED INVESTOR
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL
AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH
A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (E) OR (F) TO REQUIRE THE
8
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
Each Definitive Security will also bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security that
is a Definitive Security, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Security that
does not bear the legends set forth above and rescind any restriction on
the transfer of such Transfer Restricted Security if the Holder certifies
in writing to the Registrar that its request for such exchange was made in
reliance on Rule 144 (such certification to be in the form set forth on the
reverse of the Initial Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to the
Restricted Securities Legend on such Initial Securities or such Private
Exchange Securities will cease to apply and any requirements that any such
Initial Securities or such Private Exchange Securities be issued in global
form will continue to apply.
(iv) Upon the consummation of a Registered Exchange Offer with respect
to the Initial Securities pursuant to which Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to Initial Securities that Initial
Securities be issued in global form will continue to apply, and Exchange
Securities in global form without the Restricted Securities Legend will be
available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Original or Additional Securities pursuant to which Holders of such
Original or Additional Securities are offered Private Exchange Securities
in exchange for their Original or Additional Securities, all requirements
pertaining to such Original or Additional Securities that Original or
Additional Securities be issued in global form will continue to apply, and
Private Exchange Securities in global form with the Restricted Securities
Legend will be available to Holders that exchange such Original or
Additional Securities in such Private Exchange.
(vi) Upon a sale or transfer after the expiration of the Restricted
Period of any Initial Security acquired pursuant to Regulation S, all
requirements that such Initial Security bear the Restricted Securities
Legend will cease to apply and the requirements requiring any such Initial
Security be issued in global form will continue to apply.
(vii) Any Additional Securities sold in a registered offering shall
not be required to bear the Restricted Securities Legend.
9
(f) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
Definitive Securities, transferred, redeemed, repurchased or canceled, such
Global Security shall be returned by the Depositary to the Trustee for
cancellation or retained and canceled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Security is exchanged for
Definitive Securities, transferred in exchange for an interest in another Global
Security, redeemed, repurchased or canceled, the principal amount of Securities
represented by such Global Security shall be reduced and an adjustment shall be
made on the books and records of the Trustee (if it is then the Securities
Custodian for such Global Security) with respect to such Global Security, by the
Trustee or the Securities Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate, Definitive Securities and
Global Securities at the Registrar's request.
(ii) No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge payable
in connection therewith (other than any such transfer taxes, assessments or
similar governmental charge payable upon exchange or transfer pursuant to
Section 3.06, 4.06, 4.08 and 9.05).
(iii) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent or the Registrar
may deem and treat the person in whose name a Security is registered as the
absolute owner of such Security for the purpose of receiving payment of
principal of and interest on such Security and for all other purposes
whatsoever, whether or not such Security is overdue, and none of the
Company, the Trustee, the Paying Agent or the Registrar shall be affected
by notice to the contrary.
(iv) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, a member of, or a participant in the
Depositary or any other Person with respect to the accuracy of the records
of the Depositary or its nominee or of any participant or member thereof,
with respect to any ownership interest in the Securities or with respect to
the delivery to any participant, member, beneficial owner or other Person
(other than the Depositary) of any notice (including any notice of
redemption or repurchase) or the payment of any amount, under or with
respect to such Securities. All notices and communications to be given to
the Holders and all payments to be made to Holders under the Securities
shall be given or made only to the registered Holders (which shall be the
Depositary or its nominee in the case of a Global Security). The rights of
beneficial owners in any Global Security shall be exercised only through
the Depositary subject to the applicable rules and procedures of the
Depositary. The Trustee may rely and shall be fully protected in relying
upon information furnished by the Depositary with respect to its members,
participants and any beneficial owners.
10
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depositary participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4. Definitive Securities
(a) A Global Security deposited with the Depositary or with the
Trustee as Securities Custodian pursuant to Section 2.1 shall be transferred to
the beneficial owners thereof in the form of Definitive Securities in an
aggregate principal amount equal to the principal amount of such Global
Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depositary notifies the Company that it is
unwilling or unable to continue as a Depositary for such Global Security or if
at any time the Depositary ceases to be a "clearing agency" registered under the
Exchange Act, and a successor depositary is not appointed by the Company within
90 days of such notice, or (ii) an Event of Default has occurred and is
continuing or (iii) the Company, in its sole discretion, notifies the Trustee in
writing that it elects to cause the issuance of certificated Securities under
this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depositary to
the Trustee, to be so transferred, in whole or from time to time in part,
without charge, and the Trustee shall authenticate and deliver, upon such
transfer of each portion of such Global Security, an equal aggregate principal
amount of Definitive Securities of authorized denominations. Any portion of a
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 and any integral
multiple thereof and registered in such names as the Depositary shall direct.
Any certificated Initial Security in the form of a Definitive Security delivered
in exchange for an interest in the Global Security shall, except as otherwise
provided by Section 2.3(e), bear the Restricted Securities Legend.
(c) Subject to the provisions of Section 2.4(b), the registered Holder
of a Global Security may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent
Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i), (ii) or (iii), the Company will promptly make available to
the Trustee a reasonable supply of Definitive Securities in fully registered
form without interest coupons.
11
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCHAS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION
HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR
OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
SUCH SECURITY), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR 904 OF
REGULATION S, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF RULE 50l(a)(l), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED
12
INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF SUCH
AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A MINIMUM PRINCIPAL AMOUNT
OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO OR
FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
[Each Definitive Security will also bear the following additional legend:]
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.
13
No. $
------------
11 3/4% Senior Note due 2006
CUSIP No.
-------
EVENFLO COMPANY, INC., a Delaware corporation, promises to pay to Cede
& Co., or registered assigns, the principal sum [of ________ Dollars] [listed on
the Schedule of Increases or Decreases in Global Security attached hereto]1 on
August 15, 2006.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
--------
1 Use the Schedule of Increases and Decreases language if Note is in Global
Form.
14
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
EVENFLO COMPANY, INC.,
by:
------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
MARINE MIDLAND BANK,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:
---------------------------------
Authorized Signatory
15
[FORM OF REVERSE SIDE OF SECURITY]
11 3/4% Senior Note due 2006
1. Interest
(a) EVENFLO COMPANY, INC., a Delaware corporation (such corporation,
and its successors and assigns under the Indenture hereinafter referred to,
being herein called the "Company"), promises to pay interest on the principal
amount of this Security at the rate per annum shown above. The Company will pay
interest semiannually on February 15 and August 15 of each year, commencing
February 15, 1999. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
August 20, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at the
rate borne by the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
(b) Liquidated Damages. The holder of this Security is entitled to the
benefits of a Registration Rights Agreement, dated as of August 20, 1998, among
the Company and the Initial Purchasers named therein (the "Registration Rights
Agreement"). Capitalized terms used in this paragraph (b) but not defined herein
have the meanings assigned to them in the Registration Rights Agreement. If (a)
the Company fails to file any of the Registration Statements required by the
Registration Rights Agreement on or before the date specified for such filing,
(b) any of such Registration Statements is not declared effective by the
Commission on or prior to the date specified for such effectiveness (the
"Effectiveness Target Date"), (c) the Company fails to consummate the Exchange
Offer within 30 Business Days of the Effectiveness Target Date with respect to
the Exchange Offer Registration Statement or (d) the Shelf Registration
Statement or the Exchange Offer Registration Statement is declared effective but
thereafter ceases to be effective or usable in connection with resales of
Transfer Restricted Securities during the periods specified in the Registration
Rights Agreement (each such event referred to in clauses (a) through (d) above a
"Registration Default"), then the Company will pay Liquidated Damages (as
defined in the Registration Rights Agreement) to each Holder of Securities.
Liquidated Damages will accrue, at an annual rate of 0.25% of the aggregate
principal amount of the Transfer Restricted Securities, on the date of such
Registration Default, payable in cash semi-annually in arrears on each interest
payment date, commencing on the date of such Registration Default. All accrued
Liquidated Damages will be paid by the Company on each interest payment date
until cured or waived to the Global Security Holder by wire transfer of
immediately available funds and to Holders of Certificated Securities by wire
transfer to the accounts specified by them or by mailing checks to their
registered addresses if no such accounts have been specified. Following the cure
of all Registration Defaults, the accrual of Liquidated Damages will cease. For
purposes of the foregoing, "Transfer Restricted Securities" means each Security
until (i) the date on which such Security has been exchanged by a Person for a
Security in the Exchange Offer, (ii) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iii) the date on which such Security
is distributed to the public pursuant to Rule 144 under the Securities Act.
Pursuant to the Registration Rights Agreement, the Company shall make available,
for a period of 90 days after the consummation of the Exchange Offer, a
prospectus meeting the requirements of the Securities Act to any broker-dealer
for use in connection with any resale of the Exchange Securities. The Liquidated
Damages due shall be payable on each interest payment date to the record holder
entitled to receive the interest payment to be made on such date.
16
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1 or August 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest),
by mailing a check to the registered address of each Holder thereof, provided,
however, that payments on the Securities may also be made, in the case of a
Holder of at least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Marine Midland Bank, a New York banking corporation and
trust company (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
August 20, 1998 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
xx.xx. 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are senior unsecured obligations of the Company limited
to $200,000,000 aggregate principal amount at any one time outstanding (subject
to Sections 2.01 and 2.08 of the Indenture). This Security is one of the
Original Securities referred to in the Indenture issued in an aggregate
principal amount of $110,000,000. The Securities include the Initial Securities
and any Exchange Securities issued in exchange for Initial Securities. The
Initial Securities and the Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, incur Indebtedness and
issue Disqualified Stock, enter into consensual restrictions upon the payment of
certain dividends and distributions by such Restricted Subsidiaries, enter into
or permit certain transactions with Affiliates, create or incur Liens, make
asset sales or guarantee Indebtedness. The Indenture also imposes limitations on
the ability of the Company to consolidate or merge with or into any other Person
or convey, transfer or lease all or substantially all of the property of the
Company.
17
5. Optional Redemption
Except as described below, the Securities will not be redeemable at
the Company's option prior to August 15, 2002. From and after August 15, 2002,
the Securities shall 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 thereon, if any, to the
applicable Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on August 15 of each
of the years indicated below:
Year Redemption Price
---- ----------------
2002........................................................................................ 105.875%
2003........................................................................................ 103.917%
2004........................................................................................ 101.958%
2005 and thereafter......................................................................... 100.000%
In addition, at any time or from time to time, on or prior to August
15, 2001, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of Securities originally issued under the Indenture on the
Closing Date at a redemption price equal to 111.75% of the aggregate principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages thereon,
if any, to the Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), with the net proceeds of one or more Equity Offerings; provided that at
least 65% of the aggregate principal amount of Securities originally issued
under the Indenture on the Closing Date (including the applicable Exchange
Securities) remains outstanding immediately after the occurrence of each such
redemption; provided further that each such redemption occurs within 60 days of
the date of closing of each such Equity Offering.
At any time on or prior to August 15, 2002, the Securities may also be
redeemed as a whole, but not in part, at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days
prior notice (but in no event more than 90 days after the occurrence of such
Change of Control) mailed by first-class mail to each Holder's registered
address, at a redemption price equal to 100% of the principal amount thereof
plus the Applicable Premium as of, and accrued and unpaid interest, if any, to,
the Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent on or before the Redemption
Date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
18
8. Change of Control
Upon a Change of Control, unless the Company has elected to redeem the
Securities in connection with such Change of Control, the Company shall, subject
to certain conditions specified in the Indenture, make an offer to repurchase
all of the Securities then outstanding at a purchase price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or to transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or Government Securities for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
13. Amendment, Waiver
Subject to certain exceptions, the Company, any Guarantor and the
Trustee may amend the Indenture, the Securities or the Guarantees with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange for the Securities) and, subject to Article 6, any
existing default or compliance with any provision of this Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a purchase of or tender offer or exchange offer for
Securities). Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder of Securities, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity,
19
omission, defect or inconsistency; to comply with Article 5 of the Indenture; to
provide for uncertificated Securities in addition to or in place of certificated
Securities; provided, however, that the uncertificated Securities are issued in
registered form for purposes of Section 163(f) of the Code or in a manner such
that the uncertificated Securities are described in Section 163(f)(2)(B) of the
Code; to provide for the assumption of the Company's or any Guarantor's
obligations to Holders; to add Guarantees with respect to the Securities or to
secure the Securities; to make any change that would provide any additional
rights or benefits to the Holders or that does not adversely affect the legal
rights under the Indenture of any such Holder; to add to the covenants for the
benefit of the Holders or to surrender any right or power herein conferred upon
the Company; to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, the Indenture under the TIA; to
evidence and provide for the acceptance and appointment under the Indenture of a
successor Trustee pursuant to Article 7 of the Indenture; or to provide for the
issuance of the Exchange Securities or Additional Securities, which shall have
terms substantially identical in all material respects to the Original
Securities (except that the transfer restrictions contained in the Original
Securities shall be modified or eliminated, as appropriate), and which shall be
treated, together with any outstanding Original Securities, as a single issue of
securities.
14. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company)
and is continuing, the Trustee or the Holders of at least 30% in principal
amount of the outstanding Securities may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs, the principal of and interest on all the Securities shall
become immediately due and payable without any declaration or other act on the
part of the Trustee or any Holders. Under certain circumstances, the Holders of
a majority in principal amount of the outstanding Securities may rescind any
such acceleration with respect to the Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing,
(ii) Holders of at least 30% in principal amount of the outstanding Securities
have requested the Trustee in writing to pursue the remedy, (iii) such Holders
have offered the Trustee reasonable security or indemnity against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee will be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
20
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
No director, officer, employee, incorporator or stockholder of the
Company or of any Guarantor, shall have any liability for any obligations of the
Company or the Guarantors under the Securities, the Guarantees or the Indenture
or for any claim based on, in respect of, or by reason of such obligations or
their creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Security.
21
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. see. or tax I.D. No.)
and irrevocably appoint _________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
----------------------------------------------------------------
Date: Your Signature:
--------------- ---------------
---------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
22
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR REGISTRATION OF
TRANSFER RESTRICTED SECURITIES
This certificate relates to $__________ principal amount of Securities held in
(check applicable space) ______ book-entry or _______ definitive form by the
undersigned.
The undersigned (check one box below):
/ / has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Security held by the Depositary a
Security or Securities in definitive, registered form of authorized
denominations and an aggregate principal amount equal to its beneficial
interest in such Global Security (or the portion thereof indicated
above);
/ / has equested the Trustee by written order to exchange or register the
transfer of a Security or Securities.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933, the undersigned confirms that such
Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) / / inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act of
1933) that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given
that such transfer is being made in reliance on Rule 144A,
in each case pursuant to and in compliance with Rule 144A
under the Securities Act of 1933; or
(4) / / outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act of 1933
in compliance with Rule 904 under the Securities Act of
1933; or
(5) / / to an institutional "accredited investor" (as defined in
Rule 50l(a)(l), (2), (3) or (7) under the Securities Act of
1933) that has furnished to the Trustee a signed letter
containing certain representations and agreements; or
(6) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any Person other
than the registered holder thereof, provided, however, that if box (4), (5) or
(6) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably
23
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933.
---------------------------------------
Your Signature
Signature Guarantee:
Date:
------------------------------ ---------------------------------------
Signature must be guaranteed by a Signature of Signature
participantin a recognized signature Guarantee
guaranty medallion rogram or other
signature guarantor acceptable to
the Trustee
24
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.
Dated:
------------------------------ ---------------------------------------
NOTICE: To be executed by an
executive officer
25
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ]. The
following increases or decreases in this Global Security have been made:
Amount of decrease Amount of increase Principal amount of Signature of
in Principal in Principal amount this Global Security authorized signature
Date of Amount of this of this Global following such of Trustee or
Exchange Global Security Security decrease or increase Securities Custodian
26
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Sale / / Change of Control / /
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.08 of the Indenture, state the amount:
$
Date: Your Signature:
------------------------------ ------------------------
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:
-----------------------------------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee
27
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. $_______
11 3/4% Senior Note due 2006
CUSIP No. ________
EVENFLO COMPANY, INC., a Delaware corporation, promises to pay to Cede
& Co., or registered assigns, the principal sum [of ______ Dollars] [listed on
the Schedule of Increases or Decreases in Global Security attached hereto]2 on
August 15, 2006.
Interest Payment Dates: February 15 and August 15.
Record Dates: February 1 and August 1.
----------
2 Use the Schedule of Increases and Decreases language if Note is in Global
Form.
28
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, the parties have caused this instrument to be duly
executed.
EVENFLO COMPANY, INC.,
by
---------------------------------------
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
MARINE MIDLAND BANK,
as Trustee, certifies
that this is one of the
Securities referred to in
the Indenture.
By:
--------------------------------
Authorized Signatory
----------
* If the Security is to be issued in global form, add the Global Securities
Legend and the attachment from Exhibit A captioned "TO BE ATTACHED TO
GLOBAL SECURITIES--SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY.
29
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
11 3/4% Senior Note due 2006
1. Interest
EVENFLO COMPANY, INC., a Delaware corporation (such corporation, and
its successors and assigns under the Indenture hereinafter referred to, being
herein called the "Company"), promises to pay interest on the principal amount
of this Security at the rate per annum shown above. The Company will pay
interest semiannually on February 15 and August 15 of each year, commencing
February 15, 1999. Interest on the Securities will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
August 20, 1998. Interest will be computed on the basis of a 360-day year of
twelve 30-day months. The Company shall pay interest on overdue principal at the
rate borne by the Securities, and it shall pay interest on overdue installments
of interest at the same rate to the extent lawful.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the February 1 or August 1 next preceding the interest payment
date even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States of America that at the time of payment is legal tender for
payment of public and private debts. Payments in respect of the Securities
represented by a Global Security (including principal, premium and interest)
will be made by wire transfer of immediately available funds to the accounts
specified by The Depository Trust Company. The Company will make all payments in
respect of a certificated Security (including principal, premium and interest),
by mailing a check to the registered address of each Holder thereof, provided,
however, that payments on the Securities may also be made, in the case of a
Holder of at least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, Marine Midland Bank, a New York banking corporation and
trust company (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of
August 20, 1998 (the "Indenture"), between the Company and the Trustee. The
terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C.
Sections 77aaa-77bbbb) as in effect on the date of the Indenture (the "TIA").
Terms defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are
30
subject to all such terms, and Securityholders are referred to the Indenture and
the TIA for a statement of those terms.
The Securities are senior unsecured obligations of the Company limited
to $200,000,000 million aggregate principal amount at any one time outstanding,
of which $110,000,000 in aggregate principal amount will be initially issued on
the Closing Date. Subject to the conditions set forth in the Indenture, the
Company may issue up to an additional $90,000,000 million aggregate principal
amount of Additional Securities. This Security is one of the Initial Securities
referred to in the Indenture. The Securities include the Original Securities,
the Additional Securities and any Exchange Securities and Private Exchange
Securities issued in exchange for the Initial Securities pursuant to the
Indenture. The Original Securities, the Additional Securities, the Exchange
Securities and the Private Exchange Securities are treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on the
ability of the Company and its Restricted Subsidiaries to, among other things,
make certain Investments and other Restricted Payments, incur Indebtedness and
issue Disqualified Stock, enter into consensual restrictions upon the payment of
certain dividends and distributions by such Restricted Subsidiaries, enter into
or permit certain transactions with Affiliates, create or incur Liens, make
asset sales or guarantee Indebtedness. The Indenture also imposes limitations on
the ability of the Company to consolidate or merge with or into any other Person
or convey, transfer or lease all or substantially all of the property of the
Company.
5. Optional Redemption
Except as described below, the Securities will not be redeemable at
the Company's option prior to August 15, 2002. From and after August 15, 2002,
the Securities shall 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 thereon, if any, to the
applicable Redemption Date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date), if redeemed during the twelve-month period beginning on August 15 of each
of the years indicated below:
Year Redemption Price
---- ----------------
2002................................................... 105.875%
2003................................................... 103.917%
2004................................................... 101.958%
2005 and thereafter.................................... 100.000%
In addition, at any time or from time to time, on or prior to August
15, 2001, the Company may, at its option, redeem up to 35% of the aggregate
principal amount of Securities originally issued under the Indenture on the
Closing Date at a redemption price equal to 111.75% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon, if any, to the
Redemption Date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant interest payment date), with
the net proceeds of one or more Equity Offerings; provided that at least 65% of
the aggregate principal amount of Securities originally issued under the
Indenture on the Closing Date (including the applicable Exchange Securities)
remains outstanding immediately after the occurrence of each such redemption;
provided further that each such redemption occurs within 60 days of the date of
closing of each such Equity Offering.
31
At any time on or prior to August 15, 2002, the Securities may also be
redeemed as a whole, but not in part, at the option of the Company upon the
occurrence of a Change of Control, upon not less than 30 nor more than 60 days'
prior notice (but in no event more than 90 days after the occurrence of such
Change of Control) mailed by first-class mail to each Holder's registered
address, at a redemption price equal to 100% of the principal amount thereof
plus the Applicable Premium as of, and accrued and unpaid interest, if any, to,
the Redemption Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
6. Sinking Fund
The Securities are not subject to any sinking fund.
7. Notice of Redemption
Notice of redemption shall be mailed by first-class mail at least 30
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at his or her registered address. Securities in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
Redemption Date is deposited with the Paying Agent on or before the Redemption
Date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.
8. Change of Control
Upon a Change of Control, unless the Company has elected to redeem the
Securities in connection with such Change of Control, the Company shall, subject
to certain conditions specified in the Indenture, make an offer to repurchase
all of the Securities then outstanding at a purchase price in cash equal to 101%
of the aggregate principal amount thereof plus accrued and unpaid interest, if
any, to the date of purchase (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date that is on or prior to the date of purchase) as provided in, and subject to
the terms of, the Indenture.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of $1,000 and whole multiples of $1,000. A Holder may transfer or exchange
Securities in accordance with the Indenture. Upon any transfer or exchange, the
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes required by
law or permitted by the Indenture. The Registrar need not register the transfer
of or exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be redeemed)
or to transfer or exchange any Securities for a period of 15 days prior to a
selection of Securities to be redeemed.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner of
it for all purposes.
32
11. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its written request unless an abandoned property law designates
another Person. After any such payment, Holders entitled to the money must look
only to the Company and not to the Trustee for payment.
12. Discharge and Defeasance
Subject to certain conditions, the Company at any time may terminate
some of or all its obligations under the Securities and the Indenture if the
Company deposits with the Trustee money or Government Securities for the payment
of principal and interest on the Securities to redemption or maturity, as the
case may be.
13. Amendment, Waiver
Subject to certain exceptions, the Company, any Guarantor and the
Trustee may amend the Indenture, the Securities or the Guarantees with the
written consent of the Holders of at least a majority in principal amount of the
Securities then outstanding (including consents obtained in connection with a
tender offer or exchange for the Securities) and, subject to Article 6, any
existing default or compliance with any provision of this Indenture or the
Securities may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Securities (including consents obtained
in connection with a purchase of or tender offer or exchange offer for
Securities). Subject to certain exceptions set forth in the Indenture, without
the consent of any Holder of Securities, the Company and the Trustee may amend
the Indenture or the Securities to cure any ambiguity, omission, defect or
inconsistency; to comply with Article 5 of the Indenture; to provide for
uncertificated Securities in addition to or in place of certificated Securities;
provided, however, that the uncertificated Securities are issued in registered
form for purposes of Section 163(f) of the Code or in a manner such that the
uncertificated Securities are described in Section 163(f)(2)(B) of the Code; to
provide for the assumption of the Company's or any Guarantor's obligations to
Holders; to add Guarantees with respect to the Securities or to secure the
Securities; to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal rights under
the Indenture of any such Holder; to add to the covenants for the benefit of the
Holders or to surrender any right or power herein conferred upon the Company; to
comply with any requirements of the SEC in connection with qualifying, or
maintaining the qualification of, the Indenture under the TIA; to evidence and
provide for the acceptance and appointment under the Indenture of a successor
Trustee pursuant to Article 7 of the Indenture; or to provide for the issuance
of the Exchange Securities or Additional Securities, which shall have terms
substantially identical in all material respects to the Original Securities
(except that the transfer restrictions contained in the Original Securities
shall be modified or eliminated, as appropriate), and which shall be treated,
together with any outstanding Original Securities, as a single issue of
securities.
14. Defaults and Remedies
If an Event of Default occurs (other than an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Company)
and is continuing, the Trustee or the Holders of at least 30% in principal
amount of the outstanding Securities may declare the principal of and accrued
but unpaid interest on all the Securities to be due and payable. If an Event of
Default relating to certain events of bankruptcy, insolvency or reorganization
of the Company occurs, the principal of and
33
interest on all the Securities shall become immediately due and payable without
any declaration or other act on the part of the Trustee or any Holders. Under
certain circumstances, the Holders of a majority in principal amount of the
outstanding Securities may rescind any such acceleration with respect to the
Securities and its consequences.
If an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the Holders unless such Holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no Holder may pursue any
remedy with respect to the Indenture or the Securities unless (i) such Holder
has previously given the Trustee notice that an Event of Default is continuing,
(ii) Holders of at least 30% in principal amount of the outstanding Securities
have requested the Trustee in writing to pursue the remedy, (iii) such Holders
have offered the Trustee reasonable security or indemnity against any loss,
liability or expense, (iv) the Trustee has not complied with such request within
60 days after the receipt of the request and the offer of security or indemnity
and (v) the Holders of a majority in principal amount of the outstanding
Securities have not given the Trustee a direction inconsistent with such request
within such 60-day period. Subject to certain restrictions, the Holders of a
majority in principal amount of the outstanding Securities are given the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or of exercising any trust or power conferred on the
Trustee. The Trustee, however, may refuse to follow any direction that conflicts
with law or the Indenture or that the Trustee determines is unduly prejudicial
to the rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under the Indenture, the Trustee will be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the TIA, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
16. No Recourse Against Others
No director, officer, employee, incorporator or stockholder of the
Company or of any Guarantor, shall have any liability for any obligations of the
Company or the Guarantors under the Securities, the Guarantees or the Indenture
or for any claim based on, in respect of, or by reason of such obligations or
their creation. Each Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Securities. Such waiver may not be effective to waive liabilities under the
federal securities laws and it is the view of the Commission that such a waiver
is against public policy.
17. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
34
18. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
19. Governing Law
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
20. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder of Securities upon written
request and without charge to the Holder a copy of the Indenture which has in it
the text of this Security.
35
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. see. or tax I.D. No.)
and irrevocably appoint _________ agent to transfer this Security on the books
of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: Your Signature:
----------------------- ------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security. Signature
must be guaranteed by a participant in a recognized signature guaranty medallion
program or other signature guarantor acceptable to the Trustee.
36
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the
Company pursuant to Section 4.06 (Asset Sale) or 4.08 (Change of Control) of the
Indenture, check the box:
Asset Sale / / Change of Control / /
If you want to elect to have only part of this Security
purchased by the Company pursuant to Section 4.06 or 4.08 of the Indenture,
state the amount:
$
Date: Your Signature:
----------------------- ------------------------------------
(Sign exactly as your name appears on the other side of the Security)
Signature Guarantee:
------------------------------------------------------------
Signature must be guaranteed by a participant in a recognized signature guaranty
medallion program or other signature guarantor acceptable to the Trustee.
37
EXHIBIT C
Form of Certificate to be Delivered in Connection
with Transfers of Regulation S Global Security
Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of: Corporate Trust Services/Evenflo
Re: EVENFLO COMPANY, INC. (the "Company")
11 3/4% Senior Notes due 2006 (the "Securities")
------------------------------------------------
Dear Ladies and Gentlemen:
In connection with our proposed sale of $________ aggregate
principal amount of the Securities, we confirm that such sale has been effect
pursuant to and in accordance with Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf knows that the transaction has been pre-arranged with a buyer in the
United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period
and the provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are
applicable thereto, we confirm that such sale has been made in accordance with
the applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may
be.
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. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------------------
Authorized Signature
38
EXHIBIT D
Form of
Transferee Letter of Representation
Evenflo Company, Inc.
c/o Marine Midland Bank
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention of: Corporate Trust Services/Evenflo
Ladies and Gentlemen:
This certificate is delivered to request a transfer of
$________ principal amount of the 11 3/4% Senior Notes due 2006 (the
"Securities") of Evenflo Company, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name
of the new beneficial owner as follows:
Name:
--------------------------------
Address:
-----------------------------
Taxpayer ID Number:
------------------
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
50l(a)(l), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the Securities,
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We, and any accounts for which we are acting, are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under the
Securities Act and, unless so registered, may not be sold except as permitted in
the following sentence. We agree on our own behalf and on behalf of any investor
account for which we are purchasing Securities to offer, sell or otherwise
transfer such Securities prior to the date that is two years after the later of
the date of original issue and the last date on which the Company or any
affiliate of the Company was the owner of such Securities (or any predecessor
thereto) (the "Resale Restriction Termination Date") only (a) to the Company,
(b) pursuant to a registration statement that has been declared effective under
the Securities Act, (c) in a transaction complying with the requirements of Rule
144A under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a qualified institutional investor under Rule 144A (a "QIB") that purchases
for its own account or for the account of a QIB and to whom notice is given that
the transfer is being made in reliance on Rule 144A, (d) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act, (e) to an institutional
39
"accredited investor" within the meaning of Rule 50l(a)(l), (2), (3) or (7)
under the Securities Act that is purchasing for its own account or for the
account of such an institutional "accredited investor," in each case in a
minimum principal amount of Securities of $250,000, or (f) pursuant to any other
available exemption from the registration requirements of the Securities Act,
subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" within the meaning of Rule
50l(a)(l), (2), (3) or (7) under the Securities Act and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the Trustee
reserve the right prior to the offer, sale or other transfer prior to the Resale
Termination Date of the Securities pursuant to clause (d), (e) or (f) above to
require the delivery of an Opinion of Counsel, certifications or other
information satisfactory to the Company and the Trustee.
TRANSFEREE: ,
---------------------------
by:
-----------------------------------
40
