Exhibit 4.4
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SFC NEW HOLDINGS, INC.
$197,646,000
13 1/4% SERIES A SENIOR SUBORDINATED NOTES DUE 2003
and
UP TO $200,000,000
13 1/4% SERIES B SENIOR SUBORDINATED NOTES DUE 2003
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INDENTURE
Dated as of June 11, 1999
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U.S. TRUST COMPANY OF TEXAS, N.A.
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Trustee
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TABLE OF CONTENTS
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ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE..........................1
Section 1.1 Definitions....................................................1
Section 1.2 Other Definitions.............................................18
Section 1.3 Incorporation by Reference of Trust Indenture Act.............18
Section 1.4 Rules of Construction.........................................19
ARTICLE 2 THE NOTES..........................................................19
Section 2.1 Form and Dating...............................................19
Section 2.2 Execution and Authentication; Payments-in-Kind................20
Section 2.3 Registrar and Paying Agent....................................21
Section 2.4 Paying Agent to Hold Money in Trust...........................21
Section 2.5 Holder Lists..................................................22
Section 2.6 Transfer and Exchange.........................................22
Section 2.7 Replacement Notes.............................................28
Section 2.8 Outstanding Notes.............................................29
Section 2.9 Treasury Notes................................................29
Section 2.10 Temporary Notes...............................................29
Section 2.11 Cancellation..................................................30
Section 2.12 Defaulted Interest............................................30
ARTICLE 3 REDEMPTION.........................................................30
Section 3.1 Notices to Trustee............................................30
Section 3.2 Selection of Notes to Be Redeemed.............................30
Section 3.3 Notice of Redemption..........................................31
Section 3.4 Effect of Notice of Redemption................................32
Section 3.5 Deposit of Redemption Price...................................32
Section 3.6 Notes Redeemed in Part........................................32
Section 3.7 Optional Redemption...........................................32
Section 3.8 Mandatory Redemption..........................................33
Section 3.9 Offer to Purchase by Application of Excess Proceeds...........33
ARTICLE 4 COVENANTS..........................................................35
Section 4.1 Payment of Notes..............................................35
Section 4.2 Maintenance of Office or Agency...............................36
Section 4.3 Reports.......................................................36
Section 4.4 Compliance Certificate........................................37
Section 4.5 Taxes.........................................................38
Section 4.6 Stay, Extension and Usury Laws................................38
Section 4.7 Restricted Payments...........................................38
Section 4.8 Dividend and Other Payment Restrictions
Affecting Subsidiaries........................................40
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Section 4.9 Incurrence of Indebtedness and Issuance
of Preferred Stock............................................40
Section 4.10 Asset Sales...................................................43
Section 4.11 Transactions with Affiliates..................................44
Section 4.12 Liens.........................................................45
Section 4.13 Accounts Receivable Subsidiary................................45
Section 4.14 Corporate Existence...........................................47
Section 4.15 Offer to Repurchase Upon Change of Control....................48
Section 4.16 No Senior Subordinated Indebtedness...........................49
ARTICLE 5 SUCCESSORS.........................................................49
Section 5.1 Merger, Consolidation, or Sale of Assets......................49
Section 5.2 Successor Corporation Substituted.............................50
ARTICLE 6 DEFAULTS AND REMEDIES..............................................51
Section 6.1 Events of Default.............................................51
Section 6.2 Acceleration..................................................53
Section 6.3 Other Remedies................................................53
Section 6.4 Waiver of Past Defaults.......................................54
Section 6.5 Control by Majority...........................................54
Section 6.6 Limitation on Suits...........................................54
Section 6.7 Rights of Holders of Notes to Receive Payment.................55
Section 6.8 Collection Suit by Trustee....................................55
Section 6.9 Trustee May File Proofs of Claim..............................55
Section 6.10 Priorities....................................................56
Section 6.11 Undertaking for Costs.........................................56
ARTICLE 7 TRUSTEE............................................................57
Section 7.1 Duties of Trustee.............................................57
Section 7.2 Rights of Trustee.............................................58
Section 7.3 Individual Rights of Trustee..................................58
Section 7.4 Trustee's Disclaimer..........................................59
Section 7.5 Notice of Defaults............................................59
Section 7.6 Reports by Trustee to Holders of the Notes....................59
Section 7.7 Compensation and Indemnity....................................59
Section 7.8 Replacement of Trustee........................................60
Section 7.9 Successor Trustee by Merger, Etc..............................61
Section 7.10 Eligibility; Disqualification.................................62
Section 7.11 Preferential Collection of Claims Against Company.............62
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE...........................62
Section 8.1 Option to Effect Legal Defeasance or
Covenant Defeasance...........................................62
Section 8.2 Legal Defeasance and Discharge................................62
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Section 8.3 Covenant Defeasance...........................................63
Section 8.4 Conditions to Legal or Covenant Defeasance....................63
Section 8.5 Deposited Money and Government Securities
to Be Held in Trust; Other Miscellaneous Provisions...........65
Section 8.6 Repayment to Company..........................................65
Section 8.7 Reinstatement.................................................66
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER...................................66
Section 9.1 Without Consent of Holders of Notes...........................66
Section 9.2 With Consent of Holders of Notes..............................67
Section 9.3 Compliance with Trust Indenture Act...........................68
Section 9.4 Revocation and Effect of Consents.............................69
Section 9.5 Notation on or Exchange of Notes..............................69
Section 9.6 Trustee to Sign Amendments, Etc...............................69
ARTICLE 10 SUBORDINATION......................................................69
Section 10.1 Agreement to Subordinate......................................69
Section 10.2 Certain Definitions...........................................70
Section 10.3 Liquidation; Dissolution; Bankruptcy..........................70
Section 10.4 Default on Designated Senior Debt.............................71
Section 10.5 Acceleration of Notes.........................................72
Section 10.6 When Distribution Must Be Paid Over...........................72
Section 10.7 Notice by Company.............................................73
Section 10.8 Subrogation...................................................73
Section 10.9 Relative Rights...............................................73
Section 10.10 Subordination May Not be Impaired by Company..................73
Section 10.11 Payment, Distribution.........................................74
Section 10.12 Rights of Trustee and Paying Agent............................74
Section 10.13 Authorization to Effect Subordination.........................74
Section 10.14 Amendments....................................................75
Section 10.15 Limited Waiver................................................75
ARTICLE 11 MISCELLANEOUS......................................................75
Section 11.1 Trust Indenture Act Controls..................................75
Section 11.2 Notices.......................................................75
Section 11.3 Communication by Holders of Notes with
Other Holders of Notes........................................76
Section 11.4 Certificate and Opinion as to Conditions Precedent............77
Section 11.5 Statements Required in Certificate or Opinion.................77
Section 11.6 Rules by Trustee and Agents...................................77
Section 11.7 No Personal Liability of Directors, Officers,
Employees and Stockholders....................................77
Section 11.8 Governing Law.................................................78
Section 11.9 No Adverse Interpretation of Other Agreements.................78
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Section 11.10 Successors....................................................78
Section 11.11 Severability..................................................78
Section 11.12 Counterpart Originals.........................................78
Section 11.13 Table of Contents, Headings, Etc..............................78
SCHEDULES
Schedule 1 - First Tier Subsidiaries
Schedule 2 - Transaction Liens
Schedule 3 - SFC Sale Assets
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Certificate of Transferor
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INDENTURE dated as of June 11, 1999 between SFC New Holdings, Inc.,
a Delaware corporation (the "Company"), and U.S. Trust Company of Texas, N.A.,
as trustee (the "Trustee").
The Company and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the 13 1/4% Series
A Senior Subordinated Notes due 2003 (the "Series A Notes") and the 13 1/4%
Series B Senior Subordinated Notes due 2003 (the "Series B Notes" and, together
with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.1 Definitions.
"Accounts Receivable Agreements" means (i) the Pooling Agreement,
dated as of November 16, 1994, as amended, among the Accounts Receivable
Subsidiary, the Company or SFC, as Master Servicer and The Chase Manhattan Bank,
as trustee on behalf of the Certificateholders, (ii) the Series 1998-1
Supplement to the Pooling Agreement, dated as of March 31, 1998, as amended,
among the Accounts Receivable Subsidiary, the Company or SFC, as Master
Servicer, and The Chase Manhattan Bank, as trustee on behalf of the
Certificateholders, (iii) the Servicing Agreement dated as of November 16, 1994,
as amended, among the Accounts Receivable Subsidiary, the Company or SFC, as
Master Servicer, certain subsidiaries of the Company, as Servicers, and The
Chase Manhattan Bank, as trustee, (iv) the Amended and Restated Receivables Sale
Agreement, dated as of November 16, 1994, as amended, among the Accounts
Receivable Subsidiary, the Company, as Master Servicer, and certain subsidiaries
of the Company, as Sellers and (v) any related instruments and agreements
executed in connection therewith, together with any replacement or additional
Pooling Agreements and Receivables Sale Agreements, and including any related
instruments and agreements executed in connection therewith, and in each case as
amended, supplemented, extended, modified, renewed, refunded, replaced or
refinanced from time to time, whether or not with the same parties.
"Accounts Receivable Discount" means, with respect to any account
receivable sold by the Company or any of its Subsidiaries to the Accounts
Receivable Subsidiary, (a) the difference between (i) the face amount of such
account receivable and (ii) the aggregate amount of consideration (after giving
effect to any subsequent adjustments thereto) received upon the sale of such
account receivable (with any Accounts Receivable Subsidiary Notes received as
consideration in such sale being valued at the principal amount thereof for this
purpose), less (b) the amount of such difference that is calculated on the basis
of, or with reference to, (i) the historical bad debt allowance or accounts
receivable write-offs of the seller of such account receivable, (ii) fees and
other operating expenses of the Accounts Receivable
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Subsidiary payable to Persons other than the Company and its Subsidiaries and
acquirors of accounts receivable or participation interests therein (in their
capacity as acquirors) to the extent that such fees and expenses do not exceed
such amounts as would be obtained in an arm's length transaction and (iii)
credits to the obligor of such account receivable applied to the face amount of
such account receivable in respect of discount expense (including prompt payment
and volume discounts), rebates, refunds, promotional allowances, billing error
expense and similar adjustments and allowances made by the seller of such
account receivable.
"Accounts Receivable Subsidiary" means a Wholly Owned Subsidiary of
the Company, designated as such by the Company, (a) that has total assets at the
time of such designation with a book value of $100,000 or less and (b) with
which neither the Company nor any other Subsidiary of the Company has any
obligation (i) to subscribe for additional shares of Capital Stock or other
equity interests therein (other than to finance the purchase of additional
accounts receivable of the Company and its Subsidiaries) or (ii) to maintain or
preserve such Accounts Receivable Subsidiary's financial condition or to cause
it to achieve certain levels of operating results.
"Accounts Receivable Subsidiary Notes" means the notes to be issued
by the Accounts Receivable Subsidiary for the purchase of accounts receivable.
"Acquired Debt" means, with respect to any specified Person,
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Subsidiary of such specified Person, including
Indebtedness incurred in connection with, or in contemplation of, such other
Person merging with or into or becoming a Subsidiary of such specified Person.
"Additional Exchange Offer" means the offer that may be made by the
Company in accordance with the terms of the Offering Circular to exchange Series
B Notes for Untendered SFC Notes.
"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 (i) beneficial ownership of 20% or more of the voting securities of a
Person shall be deemed to be control, (ii) no lender party to the Term Loan
Agreement or the Revolving Credit Agreement (or any of its affiliates) shall be
deemed to be an Affiliate of the Company or any of its Subsidiaries solely by
virtue of being party to the Term Loan Agreement or the Revolving Credit
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Agreement and (iii) an officer of a Person shall not be deemed an Affiliate of
such Person unless such officer directly or indirectly controls such Person.
"Agent" means any Registrar or Paying Agent.
"Archway" means Archway Cookies, LLC, a Delaware limited liability
company, and a Wholly Owned Subsidiary of Mother's.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Business Day" means each day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the liability in respect of a capital lease that would at
such time be required to be capitalized on the balance sheet in accordance with
GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, partnership interests.
"Cash Equivalents" means (i) cash, (ii) securities issued or
directly and fully guaranteed or insured by the United States government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (iii) certificates of deposit and Eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case, with any lender party to the Term Loan Agreement or the
Revolving Credit Agreement or with any domestic commercial bank having capital
and surplus in excess of $500,000,000, (iv) repurchase obligations with a term
of not more than seven days for underlying securities of the types described in
clauses (ii) and (iii) entered into with any financial institution meeting the
qualifications specified in clause (iii) above and (v) commercial paper issued
by any lender party to the Term Loan Agreement or the Revolving Credit Agreement
(or the parent company of any such lender) and commercial paper rated A-1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case maturing
within six months after the date of acquisition.
"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, Holdings, SFC Sub, SFC or
SFAC to any Person or group (as such term is used in Section 13(d)(3) of the
Exchange Act) (other than the Principals or their Specified Parties), (ii) the
adoption of a plan
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relating to the liquidation or dissolution of the Company, Holdings, SFC Sub,
SFAC or SFC, (iii) the consummation of any transaction the result of which is
that any Person or group (as defined above) (other than the Principals and their
Specified Parties) owns, directly or indirectly, more of the voting power of the
voting stock of the Company, Holdings, SFC Sub, SFAC or SFC other than the
Principals and their Specified Parties or (iv) the first day on which a majority
of the members of the Board of Directors of the Company, Holdings, SFC Sub, SFAC
or SFC are not Continuing Directors. For the purposes of the foregoing sentence,
any shares of voting stock that are required to be voted for a nominee of any
Principal or Specified Party pursuant to a binding agreement between the holder
thereof and such Principal or Specified Party will be deemed to be held by such
Principal or Specified Party, as the case may be, for purposes of determining
the percentage of voting power held by any Person.
"Consolidated Cash Flow" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (a) an
amount equal to any extraordinary loss plus any net loss realized in connection
with an Asset Sale (to the extent such losses were deducted in computing
Consolidated Net Income), plus (b) provision for taxes based on income or
profits to the extent such provision for taxes was included in computing
Consolidated Net Income, plus (c) consolidated interest expense of such Person
for such period, whether paid or accrued (including amortization of original
issue discount, non-cash interest payments and the interest component of any
payments associated with Capital Lease Obligations), to the extent such expense
was deducted in computing Consolidated Net Income, plus (d) all depreciation,
amortization (including amortization of goodwill and other intangibles) and
other non-cash charges (excluding any non-cash charge constituting an
extraordinary item of loss or expense and any non-cash charge that requires an
accrual of or a reserve for cash charges for any future period) of such Person
for such period to the extent such depreciation, amortization and other non-cash
charges were deducted in computing Consolidated Net Income, plus (e) one-third
of all operating lease payments of such Person paid or accrued during such
period, in each case, on a consolidated basis and determined in accordance with
GAAP, plus (f) without duplication, the amount of Accounts Receivable Discount
attributable to, and any commitment, availability or other fees payable to the
Accounts Receivable Subsidiary in respect of, sales of accounts receivable by
such Person and its Subsidiaries to the Accounts Receivable Subsidiary during
such period to the extent such amount was deducted in computing Consolidated Net
Income for such period.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that (i) the Net Income of any Person that is not a Subsidiary or that
is accounted for by the equity method of accounting shall be included only to
the extent of the amount of dividends or distributions paid to the referent
Person or a Wholly Owned Subsidiary of the referent Person, (ii) the Net Income
of any Subsidiary of the referent Person
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shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that Net Income is not at the date
of determination permitted without any prior governmental approval (which has
not been obtained) or, directly or indirectly, by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary or its stockholders, (iii)
the Net Income of any Person acquired in a pooling of interests transaction for
any period prior to the date of such acquisition shall be excluded and (iv) the
cumulative effect of a change in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person, the sum
of (i) the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries plus (ii) the respective amounts reported on such
Person's most recent balance sheet with respect to any series of preferred stock
(other than Disqualified Stock) that by its terms is not entitled to the payment
of dividends unless such dividends may be declared and paid only out of net
earnings in respect of the year of such declaration and payment, but only to the
extent of any cash received by such Person upon issuance of such preferred
stock, less (x) all write-ups (other than write-ups resulting from foreign
currency translations and write-ups of tangible assets of a going concern
business made within 12 months after the acquisition of such business)
subsequent to the date of this Indenture in the book value of any asset owned by
such Person or a consolidated Subsidiary of such Person, (y) all investments in
unconsolidated Subsidiaries and in Persons that are not Subsidiaries (except, in
each case, Permitted Investments), and (z) all unamortized debt discount and
expense and unamortized deferred charges, all of the foregoing determined in
accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company, Holdings, SFC Sub, SFC or SFAC,
as applicable who (i) was a member of such Board of Directors on the date of
this Indenture or (ii) was nominated for election or elected to such Board of
Directors with the affirmative vote of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.2 hereof or such other address as to which
the Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"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.
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"Definitive Notes" means Notes that are in the form of Exhibit A
attached hereto and that do not include the information called for by footnotes
1 and 2 thereof.
"Depository" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.3 hereof as
the Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disqualified Stock" means, with respect to the Notes, any Capital
Stock which, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or redeemable at the option of the holder thereof, in
whole or in part, on or prior to the date on which the Notes mature.
"85% Owned Subsidiary" of a Person means any Subsidiary of such
Person at least 85% of the outstanding Capital Stock or other ownership
interests (including at least 51% of the outstanding voting Capital Stock or
other voting ownership interests) of which are owned directly or indirectly by
such Person.
"11% Debenture Indenture" means that certain indenture, dated as of
the date hereof, by and between SFC Sub and United States Trust Company of New
York, as trustee, as amended or supplemented from time to time, relating to the
11% Debentures.
"11% Debentures" means, collectively, SFC Sub's 11% Series A Senior
Subordinated Discount Debentures due 2009 and SFC Sub's 11% Series B Senior
Subordinated Discount Debentures due 2009, issued pursuant to the 11% Debenture
Indenture.
"11 1/4% Senior Indenture" means that certain indenture, dated as of
the date hereof, by and between the Company and United States Trust Company of
New York, as trustee, as amended and supplemented from time to time, relating to
the 11 1/4% Senior Notes.
"11 1/4% Senior Notes" means, collectively, the Company's 11 1/4%
Series A Senior Notes due 2001 and the Company's 11 1/4% Series B Senior Notes
due 2001, issued pursuant to the 11 1/4% Senior Indenture.
"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).
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange Series A Notes for
Series B Notes.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than under the Term Loan Agreement, the Revolving Credit
Agreement the 12 1/8% Senior Indenture, the 11 1/4% Senior Indenture and this
Indenture) in existence on the date of this Indenture, until such amounts are
repaid.
"First Tier Subsidiaries" means direct Wholly Owned Subsidiaries of
the Company on the date of this Indenture as set forth on Schedule 1 attached
hereto and any such Subsidiaries acquired thereafter other than the Accounts
Receivable Subsidiary.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of the Consolidated Cash Flow 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 Subsidiaries incurs or redeems any Indebtedness (other
than revolving credit borrowings) or issues or redeems preferred stock or
consummates an Asset Sale or any Material Acquisition 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, then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, guarantee or redemption of
Indebtedness, or such issuance or redemption of preferred stock, or the
consummation of such Asset Sale or such Material Acquisition, as if the same had
occurred at the beginning of the applicable period. For purposes of calculating
the Fixed Charge Coverage Ratio of the Company for any period commencing prior
to the date of the Transaction, pro forma effect shall be given to the
Transaction and the financing thereof as if the same had occurred at the
beginning of such period.
"Fixed Charges" means, with respect to any Person for any period,
the sum of (a) consolidated interest expense of such Person for such period,
whether paid or accrued, to the extent such expense was deducted in computing
Consolidated Net Income (including amortization of original issue discount,
non-cash interest payments and the interest component of any payments associated
with Capital Lease Obligations but excluding amortization of deferred financing
fees), plus (b) the interest expense of any other Person for such period with
respect to Indebtedness that is guaranteed by the referent Person, plus (c) the
product of (i) all cash dividend payments (and non-cash dividend payments in the
case of a Person that is a Subsidiary) on any series of preferred stock of such
Person, times (ii) a fraction, the numerator of which is one and the denominator
of which is one minus the then current combined federal, state
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and local statutory tax rate of such Person, expressed as a decimal, plus (d)
one-third of all operating lease payments of such Person paid or accrued during
such period, in each case, on a consolidated basis and in accordance with GAAP,
plus (e) the amount of Accounts Receivable Discount attributable to, and any
commitment, availability or other fees payable to the Accounts Receivable
Subsidiary in respect of, sales of accounts receivable by such Person and its
Subsidiaries to the Accounts Receivable Subsidiary during such period.
"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 approved by a significant segment of the
accounting profession, which are in effect on the date of this Indenture.
"Global Note" means a Note that is in the form of Exhibit A attached
hereto that contains the paragraph referred to in footnote 1 and the additional
schedule referred to in footnote 2 thereto.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means SFAC New Holdings, Inc., a Delaware corporation and
a Subsidiary of SFC Sub.
"Indebtedness" means, with respect to any Person, the principal
amount of any indebtedness of such Person, whether or not contingent, in respect
of borrowed money or evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in respect
thereof) or representing Capital Lease Obligations or the balance deferred and
unpaid of the purchase price of any property (including pursuant to capital
leases) or representing any Hedging Obligations, except any such balance that
constitutes an accrued expense or trade payable, if and to the extent any of the
foregoing indebtedness (other than letters of credit and Hedging Obligations)
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise included,
the guarantee of items that would be included within this definition.
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"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Exchange Offers" means the exchange offers for the SFC
Notes made by the Company in accordance with the terms and conditions set forth
in the Offering Circular.
"Investments" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the forms of loans
(including guarantees), advances or capital contributions (excluding commission,
travel, relocation 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 and all other items that
are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in New York City or at a place of payment are authorized by law or
executive order to remain closed. If a payment date is a Legal Holiday at a
place of payment, payment may be made at that place on the next succeeding day
that is not a Legal Holiday, and no interest shall accrue for the intervening
period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, 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).
"Liquidated Damages" means all liquidated damages then owing
pursuant to the Registration Rights Agreement.
"Marketable Securities" means, in connection with any Asset Sale,
any readily marketable equity or debt securities that are received by the
Company or any Subsidiary of the Company as consideration for such Asset Sale
and are (a) traded on the New York Stock Exchange, the American Stock Exchange
or the National Association of Securities Dealers Automated Quotation National
Market System and (b) issued by a corporation that has outstanding one or more
issues of debt or preferred stock securities that are rated investment grade by
Xxxxx'x Investor Services, Inc. or Standard & Poor's Corporation; provided, that
in no event shall the excess of the aggregate amount of securities of any one
such corporation held immediately following the consummation of any Asset Sale
by the Company and its Subsidiaries over 10 times the average daily trading
volume of such securities during the 20 trading days immediately preceding the
consummation of such Asset Sale be deemed Marketable Securities.
10
"Material Acquisition" means any material acquisition of business,
Capital Stock, property or assets or any other material transaction as a result
of which a Person becomes a Subsidiary of the Company. For the purposes of this
definition, an acquisition or other transaction shall be deemed "material" if it
has an aggregate value of $5 million or more.
"Xxxx" means Xxxx Baking Company, an Iowa corporation and a Wholly
Owned Subsidiary of the Company.
"Mother's" means Mother's Cake & Cookie Co., a California
corporation and a Wholly Owned Subsidiary of the Company.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, any gain
(but not loss), together with any related provision for taxes on such gain (but
not loss), realized in connection with any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions), and
excluding any extraordinary gain (but not loss), together with any related
provision for taxes on such extraordinary gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Subsidiaries in respect of any Asset Sale, net of the
direct costs relating to such Asset Sale (including, without limitation, legal,
accounting and investment banking fees, and sales commissions) and any
relocation expenses incurred as a result thereof, taxes paid or payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien on the asset or assets the
subject of such Asset Sale and any reserve for adjustment in respect of the sale
price of such asset or assets.
"Non-Recourse Indebtedness" of any Person means Indebtedness of such
Person that (i) is not guaranteed by any other Person (except a Wholly Owned
Subsidiary of the referent Person), (ii) is not recourse to and does not
obligate any other Person (except a Wholly Owned Subsidiary of the referent
Person) in any way, (iii) does not subject any property or assets of any other
Person (except a Wholly Owned Subsidiary of the referent Person), directly or
indirectly, contingently or otherwise, to the satisfaction thereof and (iv) is
not required by GAAP to be reflected on the financial statements of any other
Person (other than a Subsidiary of the referent Person) prepared in accordance
with GAAP.
"Non-Redemption Payment" means the payment of $50.00 per $1,000
principal amount of outstanding Notes payable under Section 3.7 in connection
with the Non-Redemption Event.
11
"Note Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Notes" means the Notes described above and issued under this
Indenture, including any PIK Notes.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness. With respect to the
Notes, "Obligations" shall include, without limitation, with respect to the
Notes, liabilities in respect of any indemnity, any reimbursement, compensation
or contribution obligations, any liquidated damage provision (including
Liquidated Damages), any breach of representation or warranty or any rights of
redemption or rescission under this Indenture, the Registration Rights Agreement
or by law or otherwise (other than amounts payable to the Trustee pursuant to
Section 7.7).
"Offering Circular" means the Offers to Exchange and Consent
Solicitations of the Company dated May 10, 1999 pursuant to which the Company
(i) offered to exchange (a) up to $225,000,000 aggregate principal amount of 11
1/4% Senior Notes and up to $5,659,368 aggregate principal amount of 11%
Debentures for all outstanding SFC 10 1/4% Senior Notes; (b) up to $150,000,000
aggregate principal amount of 12 1/8% Senior Notes and up to $3,772,912
aggregate principal amount of 11% Debentures for all outstanding SFC 11 1/8%
Senior Notes; and (c) up to $200,000,000 aggregate principal amount of Notes and
up to $18,864,558 aggregate principal amount of 11% Debentures for all
outstanding SFC Subordinated Notes; and (ii) solicited consents from the holders
of the SFC Notes to certain amendments to the indentures pursuant to which such
SFC Notes were issued.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate that meets the
requirements of Section 11.5 hereof and is signed on behalf of the Company by
the Chairman of the Board, the President or any Vice President and by the
Treasurer, or Assistant Treasurer, the Secretary or Assistant Secretary.
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
11.5 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Permitted Investments" means (a) any Investments in the Company or
in an 85% Owned Subsidiary of the Company that is engaged in the same or a
similar
12
or related line of business as the Company or any of its Subsidiaries were
engaged in on the date of this Indenture; (b) any Investments in Cash
Equivalents; (c) Investments by the Company or any Subsidiary of the Company in
a Person that is engaged in the same or a similar or related line of business as
the Company or any of its Subsidiaries were engaged in on the date of this
Indenture, if as a result of such Investment (i) such Person becomes an 85%
Owned Subsidiary of the Company or (ii) such Person is merged, consolidated or
amalgamated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or an 85% Owned Subsidiary of the
Company; (d) Investments in the Accounts Receivable Subsidiary permitted by
Section 4.13 hereof; (e) Investments in agricultural commodities futures,
options and other hedging obligations in the ordinary course of business; and
(f) Investments in any Person other than Holdings or a Subsidiary of Holdings
that is not also a Subsidiary of the Company (in addition to Investments
permitted by the foregoing clauses (a) through (e)) that, in the aggregate, do
not exceed $25 million at any one time outstanding.
"Permitted Liens" means (a) Liens on the Capital Stock of the First
Tier Subsidiaries and the Accounts Receivable Subsidiary and other assets of the
Company, if any, securing Senior Term Debt and any Indebtedness permitted under
clause (h) or (i) of the second paragraph of Section 4.9 hereof; (b) Liens
securing the Senior Revolving Debt; (c) Liens in favor of the Company and its
Wholly Owned Subsidiaries; (d) Liens on property of a Person existing at the
time such Person is merged into or consolidated with the Company or any
Subsidiary of the Company; provided that such Liens were in existence prior to
the contemplation of such merger or consolidation; (e) Liens on property
existing at the time of acquisition thereof by the Company or any Subsidiary of
the Company; provided that such Liens were in existence prior to the
contemplation of such acquisition; (f) Liens to secure Indebtedness permitted by
clause (e) of the second paragraph of Section 4.9 hereof covering solely the
assets acquired with such Indebtedness and the proceeds of such assets; (g)
Liens existing on the date of the SFC Subordinated Note Indenture (including
under the Accounts Receivable Agreements) and Liens created on the date hereof
in connection with the Transaction as set forth on Schedule 2 attached hereto
and renewals, extensions and replacements thereof; provided that such renewals,
extensions or renewals shall not apply to any property or assets not previously
subject to such Liens or increase the principal amount of Obligations secured
thereby; (h) Liens for taxes, assessments, or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently pursued; provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (i) carriers',
warehousemen's, mechanics', materialmen's, repairmen's, landlords' or other like
Liens arising in the ordinary course of business; (j) pledges or deposits in
connection with workers' compensation, unemployment insurance and other social
security legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements; (k) deposits to secure the performance
of bids, trade contracts (other than for borrowed money),
13
leases, statutory obligations, surety or appeal bonds, performance bonds or
other obligations of a like nature incurred in the ordinary course of business;
(l) easements, rights-of-way, encroachments and other survey defects,
restrictions and other similar encumbrances and title defects which, in the
aggregate, do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the Company and its Subsidiaries; (m) any Lien arising pursuant to
any order of attachment, distraint or other legal process arising in connection
with court or arbitration proceedings so long as the execution or other
enforcement thereof is effectively stayed, the claims secured thereby are being
contested in good faith by appropriate proceedings, adequate reserves have been
established with respect to such claims in accordance with GAAP and no Default
or Event of Default would result thereby; (n) licenses for the use of
intellectual property rights or like intangible assets; and (o) Liens incurred
in the ordinary course of business of the Company or any Subsidiary of the
Company with respect to obligations that do not exceed $5 million at any one
time outstanding and that are not incurred in connection with the borrowing of
money or the obtaining of advances or credit (other than trade credit).
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Principal Business Asset Sale" means any sale, issuance,
conveyance, transfer, lease or other disposition (including, without limitation,
by way of merger, consolidation or sale and leaseback transaction but not the
grant of a pledge or security interest), directly or indirectly, in one or a
series of related transactions, of all of the Capital Stock or all or
substantially all of the properties and assets of Mother's, Xxxx or Archway,
other than the SFC Sale Assets.
"Principals" means Xxxx Wheat & Partners Incorporated, Acadia
Partners, L.P. and Keystone, Inc.
"Receivables Trust" means a trust organized solely for the purpose
of securitizing the accounts receivable held by the Accounts Receivable
Subsidiary that (a) shall not engage in any business other than (i) the purchase
of accounts receivable or participation interests therein from the Accounts
Receivable Subsidiary and the servicing thereof, (ii) the issuance of and
distribution of payments with respect to the securities permitted to be issued
under clause (b) below and (iii) other activities incidental to the foregoing,
(b) shall not at any time incur Indebtedness or issue any securities, except (i)
certificates representing undivided interests in the Receivables Trust issued to
the Accounts Receivable Subsidiary and (ii) debt securities issued in an arm's
length transaction for consideration solely in the form of cash and Cash
Equivalents, all of which (net of any issuance fees and expenses) shall promptly
be paid to the Accounts Receivable Subsidiary, and (c) shall distribute to the
Accounts
14
Receivable Subsidiary as a distribution on the Accounts Receivable Subsidiary's
beneficial interest in the Receivables Trust no less frequently that once every
six months all available cash and Cash Equivalents held by it, to the extent not
required for reasonable operating expenses or reserves therefor or to service
any securities issued pursuant to clause (b) above that are not held by the
Accounts Receivable Subsidiary.
"Registration Rights Agreement" means that certain Registration
Rights Agreement, dated as of June 11, 1999, by and among the Company and the
holders of the Notes, the 12 1/8% Senior Notes and the 11 1/4% Senior Notes as
such agreement may be amended, modified or supplemented from time to time.
"Responsible Officer" means, when used with respect to the Trustee,
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Revolving Credit Agreement" means that certain Revolving Credit
Agreement, dated as of March 16, 1998 by and among certain Subsidiaries of SFC,
the lenders party thereto and DLJ Funding Corp., as administrative agent,
providing for up to $125 million in aggregate principal amount of revolving
loans and letters of credit, together with any replacement or additional loan
agreement or agreements, and including any related notes, guarantees, collateral
documents, instruments and agreements executed in connection therewith, and in
each case as amended, supplemented, extended, modified, renewed, refunded,
replaced or refinanced from time to time, whether or not with the same lenders.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Revolving Debt" means all Obligations from time to time
outstanding under the Revolving Credit Agreement.
"Senior Term Debt" means all Obligations from time to time
outstanding under the Term Loan Agreement.
"SFAC" means Specialty Foods Acquisition Corporation, a Delaware
corporation.
15
"SFC" means Specialty Foods Corporation, a Delaware corporation and
a Wholly Owned Subsidiary of SFAC.
"SFC Notes" means, collectively, the SFC 10 1/4% Senior Notes, the
SFC 11 1/8% Senior Notes and the SFC Subordinated Notes.
"SFC Sale Assets" means the real estate of Mother's, Xxxx and
Archway listed on Schedule 3 attached hereto which is being held for sale by SFC
as of the date of this Indenture.
"SFC Sub" means SFC Sub, Inc., a Delaware corporation, and a Wholly
Owned Subsidiary of SFC.
"SFC Subordinated Notes" means the 11 1/4% Senior Subordinated Notes
due 2003 issued by SFC pursuant to the SFC Subordinated Note Indenture.
"SFC Subordinated Note Indenture" means that certain Indenture,
dated as of August 16, 1993, by and between SFC and United States Trust Company
of New York, as trustee, as amended from time to time, relating to the SFC
Subordinated Notes.
"SFC 10 1/4% Senior Notes" means the 10 1/4% Senior Notes due 2001
issued by SFC pursuant to the SFC 10 1/4% Senior Indenture.
"SFC 10 1/4% Senior Indenture" means that certain Indenture, dated
as of August 16, 1993, by and between SFC and United States Trust Company of New
York, as trustee, as amended from time to time, relating to the SFC 10 1/4%
Senior Notes.
"SFC 11 1/8% Senior Notes" means the 11 1/8% Senior Notes due 2002
issued by SFC pursuant to the SFC 11 1/8% Senior Indenture.
"SFC 11 1/8% Senior Indenture" means that certain Indenture, dated
as of July 17, 1995, by and between SFC and United States Trust Company of New
York, as trustee, as amended from time to time, relating to the SFC 111/8%
Senior Notes.
"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 of this Indenture.
"Specified Party" with respect to any Principal means (A) any
controlling stockholder or partner, a direct or indirect 80% (or more) owned
Subsidiary, or spouse or immediate family member (in the case of an individual)
of
16
such Principal, (B) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of such Principal and/or such
other Persons referred to in the immediately preceding clause (A) or the
succeeding clauses (D) or (E), (C) any partner or stockholder of any Principal
as of the date of this Indenture who acquires any assets or voting stock of the
Company, Holdings, SFAC or SFC pursuant to a general distribution by such
Principal to each of its partners or stockholders, (D) any officer or director
of any Principal as of the date of this Indenture or (E) co-investment entities
established by any Principal within 90 days of the date of this Indenture and
controlled by such Principal, any affiliated party (including any officer or
director) of such Principal or of the general partner of such Principal (or of
the general partner of any general partner of such Principal) or any combination
of the foregoing; provided, however, that (x) each of Xxxxxxx X. Xxxxx and HWP
Specialty Partners, L.P. shall be deemed a Specified Party of Xxxx Wheat &
Partners Incorporated and (y) any officer or director of Oak Hill Partners, Inc.
as of the date of this Indenture shall be deemed a Specified Party of Acadia
Partners, L.P. and Keystone, Inc.
"Subsidiary" of any Person means any corporation, association or
other business entity of which more than 50% 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 owned or controlled, directly or indirectly, by such Person or one or more
of the other Subsidiaries of that Person or a combination thereof; provided,
however, that the Accounts Receivable Subsidiary and its Subsidiaries shall not
be deemed Subsidiaries of the Company or of any of its other Subsidiaries.
"Tax Sharing Agreement" that certain Tax Sharing Agreement, as
amended, dated as of August 16, 1993, between SFAC and SFC, as amended to
include the Company and Holdings as parties as of the date of this Indenture.
"Term Loan Agreement" means that certain Term Loan Agreement, dated
as of August 16, 1993, by and among SFC, and the lenders party thereto,
providing for up to $315 million in aggregate principal amount of term loans,
together with any replacement or additional credit agreement or agreements, and
including any related notes, guarantees, collateral documents, instruments and
agreements executed in connection therewith, and in each case as amended,
supplemented, extended, modified, renewed, refunded, replaced or refinanced from
time to time, whether or not with the same lenders.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx. 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"Transaction" means the corporate and financial restructuring of
SFAC, SFC and their Subsidiaries, including the Company, Holdings, and SFC Sub,
17
described in the Offering Circular of which the Initial Exchange Offers are one
component.
"Transfer Restricted Notes" means each Note, until the earliest to
occur of (a) the date on which such Note is exchanged in the Exchange Offer and
entitled to be resold to the public by the Holder thereof without complying with
the prospectus delivery requirements of the Securities Act, (b) the date on
which such Note has been effectively registered under the Securities Act and
disposed of in accordance with a shelf registration statement pursuant to the
Registration Rights Agreement and (c) the date on which such Note is distributed
to the public pursuant to Rule 144 under the Securities Act.
"Trustee" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"12 1/8% Senior Indenture" means that certain indenture, dated as of
the date hereof, by and between the Company and United States Trust Company of
New York, as trustee, as amended or supplemented from time to time, relating to
the 12 1/8% Senior Notes.
"12 1/8% Senior Notes" means, collectively, the Company's 12 1/8%
Series A Senior Notes due 2002 and the Company's 12 1/8% Series B Senior Notes
due 2002, issued pursuant to the 12 1/8% Senior Indenture.
"Untendered SFC Notes" means the SFC Subordinated Notes that are not
acquired by the Company in exchange for Notes in accordance with the terms and
conditions of the Initial Exchange Offers.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding principal amount of such Indebtedness into (b) the sum of the
products obtained by multiplying (x) the amount of each then remaining
installment, sinking fund, serial maturity or other scheduled required payments
of principal, including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
18
Section 1.2 Other Definitions. Terms not otherwise defined herein
shall have the meanings assigned to them in the Notes. As used in this
Indenture, the following terms shall have the meanings assigned in the Sections
referred to opposite such terms below.
Defined in
Term Section
---- ----------
"Affiliate Transaction"................................ 4.11
"Asset Sale"........................................... 4.10
"Asset Sale Offer"..................................... 3.9
"Change of Control Offer".............................. 4.15
"Change of Control Payment"............................ 4.15
"Change of Control Payment Date"....................... 4.15
"Covenant Defeasance".................................. 8.3
"DLJSC"................................................ 4.11
"DTC".................................................. 2.3
"Event of Default"..................................... 6.1
"Excess Proceeds"...................................... 4.10
"Final Payment Default................................. 6.1
"incur"................................................ 4.9
"Legal Defeasance"..................................... 8.2
"Non-Redemption Event"................................. 3.7
"Offer Amount"......................................... 3.9
"Offer Period"......................................... 3.9
"Paying Agent"......................................... 2.3
"Permitted Refinancing"................................ 4.9
"PIK Interest"......................................... 2.2
"PIK Notes"............................................ 2.2
"Purchase Date"........................................ 3.9
"Refinancing Indebtedness"............................. 4.9
"Registrar"............................................ 2.3
"Restricted Payments".................................. 4.7
"Senior Debt".......................................... 10.2
Section 1.3 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
19
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.4 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) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.1 Form and Dating. The Notes and the Trustee's certificate
of authentication shall be substantially in the form of Exhibit A hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be in denominations of $1,000 and integral multiples thereof.
20
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.
Notes issued in global form shall be substantially in the form of
Exhibit A attached hereto (including footnotes 1 and 2 thereto), or in
definitive form, substantially in the form of Exhibit A hereto (not including
footnotes 1 and 2 thereto). Each Global Note shall represent such of the
outstanding Notes as shall be specified therein and each shall provide that it
shall represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the amount of outstanding Notes
represented thereby shall be made by the Trustee or the Note Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.6 hereof.
Section 2.2 Execution and Authentication; Payments-in-Kind. (a) Two
Officers shall sign the Notes for the Company by manual or facsimile signature.
The Company's seal shall be reproduced on the Notes and may be in facsimile
form.
(b) If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
(c) A Note shall not be valid until authenticated by the manual
signature of an authorized signatory of the Trustee. The signature shall be
conclusive evidence that the Note has been authenticated under this Indenture.
(d) The Trustee shall, upon receipt of a written order of the
Company signed by two Officers, authenticate Notes (i) for original issue up to
the aggregate principal amount stated in paragraph 4 of the Notes and (ii) for
issuance as provided in Section 2.7(e). The aggregate principal amount of Notes
outstanding at any time may not exceed the amount stated in paragraph 4 of the
Notes except as provided in Section 2.2(e) and 2.7 hereof.
(e) On each Interest Payment Date (as defined in Exhibit A to this
Indenture), the Company shall, in lieu of a cash payment of $5.00 per $1,000
principal amount of Notes (the "PIK Interest") due on the Notes on any Interest
Payment Date up to and including August 15, 2003, deliver to the Trustee or an
authenticating agent for authentication for original issue and delivery
additional Notes ("PIK Notes"), in an aggregate principal amount equal to the
PIK Interest due on the Notes on each such Interest Payment Date. For purposes
of determining the principal amount of PIK Notes to be issued to a Holder, the
Trustee shall aggregate the amount
21
of PIK Interest payable on all Notes registered in the name of the Holder. Each
issuance of PIK Notes shall be made pro rata with respect to the outstanding
Notes, provided that PIK Notes shall be issuable only in denominations of $1,000
or integral multiples thereof and the Company shall pay in cash to each Holder
the difference (if any) between the amount of interest payable to such Holder on
such Interest Payment Date and the face value of PIK Notes issued to such Holder
by the Company pursuant to this Section 2.2(e). PIK Notes shall bear interest
from the Interest Payment Date with respect to which they are issued.
(f) The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.
Section 2.3 Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar, and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall notify the Trustee in writing of the
name and address of any Agent not a party to this Indenture. If the Company
fails to appoint or maintain another entity as Registrar or Paying Agent, the
Trustee shall act as such. The Company or any of its Subsidiaries may act as
Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar,
Paying Agent and the Note Custodian with respect to the Global Notes.
Section 2.4 Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Holders or the Trustee all
money and PIK Notes held by the Paying Agent for the payment of principal or
interest on the Notes, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the Trustee may
require a Paying Agent to pay all money and PIK Notes held by it to the Trustee.
The Company at any time may require a Paying Agent to pay all money and PIK
Notes held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money and PIK Notes. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and
22
hold in a separate trust fund for the benefit of the Holders all money held by
it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating
to the Company, the Trustee shall serve as Paying Agent and conversion agent (if
any) for the Notes.
Section 2.5 Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA ss.
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes.
Section 2.6 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Registrar with a request:
(x) to register the transfer of the Definitive
Notes; or
(y) to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as requested if
its requirements for such transactions are met; provided, however, that the
Definitive Notes presented or surrendered for register of transfer or exchange:
(i) shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly
executed by such Holder or by his attorney, duly authorized in writing;
and
(ii) in the case of a Definitive Note that is a Transfer
Restricted Note, such request shall be accompanied by the following
additional information and documents, as applicable:
(A) if such Transfer Restricted Note is being
delivered to the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification to that effect
from such Holder (in substantially the form of Exhibit B hereto); or
(B) if such Transfer Restricted Note is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under
the
23
Securities Act or pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the Securities Act or
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B hereto); or
(C) if such Transfer Restricted Note is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect
from such Holder (in substantially the form of Exhibit B hereto) and
an Opinion of Counsel from such Holder or the transferee reasonably
acceptable to the Company and to the Registrar to the effect that
such transfer is in compliance with the Securities Act.
(b) Transfer of a Definitive Note for a Beneficial Interest in
a Global Note. A Definitive Note may not be exchanged for a beneficial interest
in a Global Note except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied
by appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) if such Definitive Note is a Transfer Restricted
Note, a certification from the Holder thereof (in substantially the form
of Exhibit B hereto) to the effect that such Definitive Note is being
transferred by such Holder to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act) in accordance with Rule
144A under the Securities Act; and
(ii) whether or not such Definitive Note is a Transfer
Restricted Note, written instructions from the Holder thereof directing
the Trustee to make, or to direct the Note Custodian to make, an
endorsement on the Global Note to reflect an increase in the aggregate
principal amount of the Notes represented by the Global Note,
in which case the Trustee shall cancel such Definitive Note and cause, or
direct the Note Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depository and the Note
Custodian, the aggregate principal amount of Notes represented by the
Global Note to be increased accordingly. If no Global Notes are then
outstanding, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.2, the Trustee shall
authenticate a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture, which shall include
restrictions on
24
transfer comparable to those set forth herein to the extent required by the
Securities Act and the procedures of the Depository therefor.
(d) Transfer of a Beneficial Interest in a Global Note for a
Definitive Note.
(i) Any Person having a beneficial interest in a Global
Note may upon request exchange such beneficial interest for a Definitive
Note. Upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depository, from the
Depository or its nominee on behalf of any Person having a beneficial
interest in a Global Note, and, in the case of a Transfer Restricted Note,
the following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the Depository as being the
beneficial owner, a certification to that effect from such Person
(in substantially the form of Exhibit B hereto); or
(B) if such beneficial interest is being
transferred to a "qualified institutional buyer" (as defined in Rule
144A under the Securities Act) in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from registration in
accordance with Rule 144 or Rule 904 under the Securities Act or
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from the transferor (in
substantially the form of Exhibit B hereto); or
(C) if such beneficial interest is being
transferred in reliance on another exemption from the registration
requirements of the Securities Act, a certification to that effect
from the transferor (in substantially the form of Exhibit B hereto)
and an Opinion of Counsel from the transferee or transferor
reasonably acceptable to the Company and to the Registrar to the
effect that such transfer is in compliance with the Securities Act,
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian, cause
the aggregate principal amount of Global Notes to be reduced accordingly
and, following such reduction, the Company shall execute and, upon receipt
of an authentication order in accordance with Section 2.2, the Trustee
shall authenticate and deliver to the transferee a Definitive Note in the
appropriate principal amount.
25
(ii) Definitive Notes issued in exchange for a
beneficial interest in a Global Note pursuant to this Section 2.6(d) shall
be registered in such names and in such authorized denominations as the
Depository, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. The Trustee shall
deliver such Definitive Notes to the Persons in whose names such Notes are
so registered.
(e) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in subsection (f) of this Section 2.6), a Global Note may
not be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(f) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes notifies the Company
that the Depository is unwilling or unable to continue as Depository for
the Global Notes and a successor Depository for the Global Notes is not
appointed by the Company within 90 days after delivery of such notice; or
(ii) the Company, at its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of Definitive
Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.2 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes, in exchange for such Global Notes.
(g) Legends.
(i) Except as permitted by the following paragraphs (ii)
and (iii), each Note certificate evidencing Global Notes and Definitive
Notes (and all Notes issued in exchange therefor or substitution thereof)
shall bear a legend in substantially the following form:
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE
26
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT
THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A
UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY
AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, OR IN ACCORDANCE
WITH RULE 144 UNDER THE SECURITIES ACT, OR PURSUANT TO ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL), (b) TO THE COMPANY, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (2) IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."
(ii) Upon any sale or transfer of a Transfer Restricted
Note (including any Transfer Restricted Note represented by Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Note
that is a Definitive Note, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Note for a Definitive
Note that does not bear the legend set forth in (i) above and
rescind any restriction on the transfer of such Transfer Restricted
Note; and
(B) in the case of any Transfer Restricted Note
represented by a Global Note, such Transfer Restricted Note shall
not be subject to the provisions set forth in (i) above and shall
only be subject to the provisions of Section 2.6(c) hereof;
provided, however, that with respect to any request for an exchange
of a Transfer
27
Restricted Note that is represented by a Global Note for a
Definitive Note that does not bear a legend, which request is made
in reliance upon Rule 144, the Holder thereof shall certify in
writing to the Registrar that such request is being made pursuant to
Rule 144 (such certification to be substantially in the form of
Exhibit B hereto).
(iii) Notwithstanding the foregoing, upon consummation
of the Exchange Offer and the Additional Exchange Offer, the Company shall
issue, and, upon receipt of an authentication order in accordance with
Section 2.2, the Trustee shall authenticate, Series B Notes in exchange
for (A) Series A Notes accepted for exchange in the Exchange Offer and (B)
Untendered SFC Notes accepted for exchange in the Additional Exchange
Offer, which Series B Notes shall not bear the legend set forth in (i)
above, and the Registrar shall rescind any restriction on the transfer of
such Notes, in each case unless the Holder of the Series A Notes tendered
into the Exchange Offer or, as applicable, the Holder of the Untendered
SFC Notes tendered into the Additional Exchange Offer is either (A) a
broker-dealer who purchased such Series A Notes directly from the Company
to resell pursuant to Rule 144A or any other available exemption under the
Securities Act, (B) a Person participating in the distribution of the
Series A Notes or the Untendered SFC Notes, as applicable, or (C) a Person
who is an affiliate (as defined in Rule 144A) of the Company.
(h) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have either been exchanged for
Definitive Notes, redeemed, repurchased or cancelled all Global Notes shall be
returned to or retained and cancelled by the Trustee. At any time prior to such
cancellation, if any beneficial interest in a Global Note is exchanged for
Definitive Notes, redeemed, repurchased or cancelled, the principal amount of
Notes represented by such Global Note shall be reduced accordingly and an
endorsement shall be made on such Global Note, by the Trustee or the Note
Custodian, at the direction of the Trustee, to reflect such reduction.
(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges,
the Company shall execute and the Trustee shall authenticate Definitive
Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.7, 4.10, 4.15 and 9.5 hereto).
28
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon
any registration of transfer or exchange of Definitive Notes or Global
Notes shall be valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Definitive
Notes or Global Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required:
(A) to issue, to register the transfer of or to
exchange Notes during a period beginning at the opening of business
15 days before the day of any selection of Notes for redemption
under Section 3.2 hereof and ending at the close of business on the
day of selection; or
(B) to register the transfer or to exchange any
Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part; or
(C) to register the transfer of or to exchange a
Note between a record date and the next succeeding interest payment
date.
(vi) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company may deem and
treat the Person in whose name any Note is registered as the absolute
owner of such Note for the purpose of receiving payment of principal of
and interest on such Note, and neither the Trustee, any Agent nor the
Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes
and Global Notes upon receipt of an authentication order in accordance
with the provisions of Section 2.2 hereof.
Section 2.7 Replacement Notes. If any mutilated Note is surrendered
to the Trustee or the Company and the Trustee receives evidence to its
satisfaction of the destruction, loss or theft of any Note, the Company shall
issue and the Trustee, upon the receipt of a written order of the Company signed
by two Officers of the Company, shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company, the Trustee, any Agent
and any authenticating agent from any
29
loss that any of them may suffer if a Note is replaced. The Company may charge
for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company
and shall be entitled to all the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.8 Outstanding Notes. The Notes outstanding at any time are
all the Notes authenticated by the Trustee except for those cancelled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. PIK Notes shall be
deemed outstanding as of the Interest Payment Date on which they are issued in
lieu of cash interest pursuant to Subsection 2.2(e) hereof. Except as set forth
in Section 2.9 hereof, a Note does not cease to be outstanding because the
Company or an Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.7 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.1 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.9 Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company or by any Affiliate of the Company shall
be considered as though not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent, only Notes that a Trustee knows are so owned shall
be so disregarded.
Section 2.10 Temporary Notes. Until Definitive Notes are ready for
delivery, the Company may prepare and the Trustee shall authenticate temporary
Notes upon the receipt of a written order of the Company signed by two Officers
of the Company. Temporary Notes shall be substantially in the form of Definitive
Notes but may have variations that the Company considers appropriate for
temporary Notes. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate Definitive Notes in exchange for temporary Notes.
30
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11 Cancellation. The Company at any time may deliver Notes
to the Trustee for cancellation. The Registrar and Paying Agent shall forward to
the Trustee any Notes surrendered to them for registration of transfer, exchange
or payment. The Trustee and no one else shall cancel all Notes surrendered for
registration of transfer, exchange, payment, replacement or cancellation and
shall destroy cancelled Notes (subject to the record retention requirement of
the Exchange Act). Certification of the destruction of all cancelled Notes shall
be delivered to the Company. The Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12 Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.1 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or the Trustee in the name of and at the
expense of the Company) shall mail or cause to be mailed to Holders a notice
that states the special record date, the related payment and the amount of such
interest to be paid.
ARTICLE 3
REDEMPTION
Section 3.1 Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.7 hereof, it
shall furnish to the Trustee, at least 40 days but not more than 60 days before
a redemption date, an Officers' Certificate setting forth (i) the Section of
this Indenture pursuant to which the redemption shall occur, (ii) the redemption
date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption
price.
Section 3.2 Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed, the Trustee shall select the Notes to be redeemed
among the Holders of the Notes on a pro rata basis, by lot or in accordance with
any other method the Trustee considers fair and appropriate (and in such manner
as complies with applicable legal and stock exchange requirements, if any). In
the event of partial redemption by lot, the particular Notes to be redeemed
shall be selected,
31
unless otherwise provided herein, not less than 30 nor more than 60 days prior
to the redemption date by the Trustee from the outstanding Notes not previously
called for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.3 Notice of Redemption. Subject to the provisions of
Section 3.9 hereof, at least 30 days but not more than 60 days before a
redemption date, the Company shall mail or cause to be mailed, by first class
mail, a notice of redemption to each Holder whose Notes are to be redeemed at
its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption date
upon surrender of such Note, a new Note or Notes in principal amount equal to
the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to accrue on
and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being redeemed;
and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, ISIN or Common Code, if any, listed in such notice
or printed on the Notes.
32
At the Company's written request, the Trustee shall give the notice
of redemption in the Company's name and at its expense; provided, however, that
the Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph.
Section 3.4 Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.3 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.5 Deposit of Redemption Price. One Business Day prior to
the redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.1 hereof.
Section 3.6 Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall issue and the Trustee shall authenticate for
the Holder at the expense of the Company a new Note equal in principal amount to
the unredeemed portion of the Note surrendered.
Section 3.7 Optional Redemption.
(a) The Company shall have the option to redeem the Notes, in
whole or in part, upon not less than 30 nor more than 60 days' notice to the
Holders, at the redemption prices (expressed as percentages of principal amount)
set forth below plus accrued and unpaid interest thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
15 of the years indicated below:
33
Year Percentage
---- ----------
1998................................................................. 103.786%
1999................................................................. 101.893%
2000 and thereafter.................................................. 100.000%
========
(b) If the Company fails to redeem the Notes, in whole, on or
before November 15, 2002 (the "Non-Redemption Event"), the Company shall direct
the Trustee to pay the Non-Redemption Payment to the Person in whose name such
Note was registered at the close of business on November 15, 2002. If the
Company is required to pay the Non-Redemption Payment, on November 15, 2002 the
Company shall deposit with the Trustee or with the Paying Agent money sufficient
to pay the Non-Redemption Payment. On November 16, 2002, the Company (or the
Trustee in the name of and at the expense of the Company) shall mail or cause to
be mailed to Holders the Non-Redemption Payment.
(c) Any redemption pursuant to this Section 3.7 shall be made
pursuant to the provisions of Sections 3.1 through 3.6 hereof.
Section 3.8 Mandatory Redemption. Except as set forth in Section 3.9
hereof or pursuant to Section 4.15 hereof, the Company is not required to make
mandatory redemption or sinking fund payments with respect to the Notes.
Section 3.9 Offer to Purchase by Application of Excess Proceeds. In
the event that, pursuant to Section 4.10 hereof, the Company shall be required
to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"),
it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer. Payment for any Notes so purchased shall be made in the same manner
as interest payments are made.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Asset Sale Offer.
34
Upon the commencement of an Asset Sale Offer, the Company shall
send, by first class mail, a notice to the Trustee and each of the Holders. The
notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.9 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Company, a Depository, if appointed by the Company, or a
Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day preceding the Purchase Date;
(g) that Holders shall be entitled to withdraw their election
if the Company, the Depository or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
35
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered.
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes tendered pursuant to the Asset Sale Offer, or if less than
the Offer Amount has been tendered, all Notes tendered, and shall deliver to the
Trustee an Officers' Certificate stating that such Notes or portions thereof
were accepted for payment by the Company in accordance with the terms of this
Section 3.9. The Company, the Depository or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not so
accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale Offer
on the Purchase Date.
Other than as specifically provided in this Section 3.9, any
purchase pursuant to this Section 3.9 shall be made pursuant to the provisions
of Sections 3.1 through 3.6 hereof.
ARTICLE 4
COVENANTS
Section 4.1 Payment of Notes. The Company shall pay or cause to be
paid the principal of, premium, if any, the Non-Redemption Payment, if any, and
interest on the Notes on the dates and in the manner provided in the Notes.
Principal, premium, if any, the Non-Redemption Payment, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than the
Company or a Subsidiary thereof holds as of 11:00 a.m. Eastern Time on the due
date money deposited by the Company in immediately available funds and PIK Notes
designated for and sufficient to pay all principal, premium, if any, the
Non-Redemption Payment, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement and shall inform the Trustee of
any such payments of Liquidated Damages pursuant thereto.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent
36
lawful; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and on
overdue Liquidated Damages (without regard to any applicable grace period) and
Non-Redemption Payments at the same rate to the extent lawful.
Section 4.2 Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee or
Registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.3.
Section 4.3 Reports.
(a) Whether or not required by the rules and regulations of
the SEC, so long as any Notes are outstanding, the Company shall furnish to all
Holders all quarterly and annual financial information that would be required to
be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified independent
accountants. In addition, the Company will provide in each such quarterly and
annual report such income statement information as its Board of Directors
determines in good faith to be appropriate with respect to each of its major
product groupings. Whether or not required by the rules and regulations of the
SEC, the Company shall file a copy of all such information with the SEC for
public availability (so long as the SEC will accept such filings) and shall
promptly make such information available to all investors who request it in
writing.
37
(b) For so long as any Transfer Restricted Notes remain
outstanding, the Company shall furnish to all Holders and prospective purchasers
of the Notes designated by the Holders of Transfer Restricted Notes, promptly
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.4 Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officers' Certificate stating that a
review of the activities of the Company, its Subsidiaries and the Accounts
Receivable Subsidiary during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.3(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officers' Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
38
Section 4.5 Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.6 Stay, Extension and Usury Laws. The Company covenants
(to the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law has been enacted.
Section 4.7 Restricted Payments. The Company shall not, and shall
not permit any of its 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 Subsidiaries' Equity Interests (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company or
dividends or distributions payable by a Subsidiary of the Company to the Company
or any Wholly Owned Subsidiary of the Company); (ii) purchase, redeem or
otherwise acquire or retire for value any Equity Interests of the Company or any
Subsidiary or other Affiliate of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Subsidiary of the Company);
(iii) purchase, redeem, defease or otherwise acquire or retire for value any
Indebtedness of Holdings or any Indebtedness that is subordinated in right of
payment to the Notes; 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:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment had been
made at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in Section 4.9 hereof; and
(c) such Restricted Payment, together with the aggregate of
all other Restricted Payments made by the Company and its Subsidiaries after the
date of this Indenture (including Restricted Payments permitted by the next
succeeding
39
paragraph (except clause (iv) thereof and, to the extent deducted in determining
the Consolidated Net Income of the Company in clause (x) below, clause (vi)
thereof)), is less than the sum of (x) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period) from the date of this
Indenture to the end of the Company's most recently ended fiscal quarter for
which internal financial statements are available at the time of such Restricted
Payment (or, if such Consolidated Net Income for such period is a deficit, 100%
of such deficit), plus (y) 100% of the aggregate Net Proceeds received by the
Company since the date of this Indenture (excluding any proceeds received on
such date in connection with the Transaction) from the issue or sale of Equity
Interests of the Company (other than Equity Interests sold to a Subsidiary of
the Company and other than Disqualified Stock) or any debt security of the
Company that is convertible into or exchangeable for any Equity Interest of the
Company (other than Disqualified Stock) that has been so converted or exchanged,
plus (z) 100% of any common equity capital contribution received by the Company
subsequent to the date of this Indenture.
The foregoing provisions shall not prohibit (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement or other acquisition of
any of the Company's Equity Interests or any Indebtedness that is subordinated
in right of payment to the Notes in exchange for, or out of the proceeds of, the
substantially concurrent sale (other than to a Subsidiary of the Company) of
other Equity Interests of the Company (other than any Disqualified Stock); (iii)
the repurchase, redemption or other acquisition or retirement for value (or the
payment of a dividend to Holdings for such repurchase, redemption or other
acquisition or retirement for value) of any Equity Interests of the Company,
Holdings or any Subsidiary of the Company held by any member of the Company's
(or any of its Subsidiaries') management; provided, however, that the aggregate
price paid since the date of this Indenture for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed an amount equal to $5
million plus the aggregate cash proceeds received by the Company or any
Subsidiary of the Company from any reissuance of Equity Interests by the Company
or such Subsidiary to members of management of the Company and its Subsidiaries;
(iv) Permitted Refinancings of Indebtedness that is subordinated in right of
payment to the Notes; (v) payments to Holdings to reimburse it for its
out-of-pocket administrative expenses in an aggregate amount not to exceed $1
million in any fiscal year; (vi) payments to Holdings pursuant to the Tax
Sharing Agreement as in effect on the date of this Indenture to the extent that
Holdings is actually required to make cash outlays to pay taxes; and (vii)
payments or distributions to Holdings in an aggregate amount equal to the
interest required to be paid by SFC from time to time on any SFC Notes that
remain outstanding after the Initial Exchange Offers.
Not later than the date of making any Restricted Payment (other than
Restricted Payments pursuant to clauses (iv), (v), (vi) and (vii) of the
foregoing paragraph), the Company shall deliver to the Trustee an Officers'
Certificate stating
40
that such Restricted Payment is permitted and setting forth the basis upon which
the calculations required by this Section 4.7 were computed, which calculations
may be based upon the Company's latest available financial statements.
Section 4.8 Dividend and Other Payment Restrictions Affecting
Subsidiaries. The Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction (other than
encumbrances or restrictions imposed by law or judicial or regulatory action) if
such encumbrance or restriction would by its terms prohibit or limit any
Subsidiary from (a)(i) paying dividends or making any other distributions to the
Company or any of its Subsidiaries (A) on its Capital Stock or (B) with respect
to any other interest or participation in, or measured by, its profits or (ii)
paying any indebtedness owed to the Company or any of its Subsidiaries, (b)
making loans or advances to the Company or any of its Subsidiaries or (c)
transferring any of its properties or assets to the Company or any of its
Subsidiaries, except for such encumbrances or restrictions existing under or by
reason of (i) Existing Indebtedness as in effect on the date of this Indenture,
(ii) the Term Loan Agreement and the Revolving Credit Agreement as in effect as
of the date of this Indenture, (iii) this Indenture, the Notes, the 12 1/8%
Senior Indenture, the 12 1/8% Senior Notes, the 11 1/4% Senior Indenture and the
11 1/4% Senior Notes, (iv) applicable law, (v) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Subsidiaries as in effect at the time of such acquisition (except to the extent
such Indebtedness was incurred in connection with or in anticipation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, (vi) customary non-assignment
provisions in leases entered into in the ordinary course of business, (vii) with
respect to clause (c) above, purchase money obligations for property acquired in
the ordinary course of business; provided that such restrictions are only
applicable to the property acquired through such purchase money obligations,
(viii) permitted Refinancing Indebtedness, provided that the restrictions
contained in the agreements governing such Refinancing Indebtedness are no more
restrictive than those contained in the agreements governing the Indebtedness
being refinanced or (ix) any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of the
Indebtedness or the Capital Stock referred to in the foregoing clauses (i), (ii)
or (v); provided that such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are not more
restrictive with respect to such dividend and other payment restrictions than
those contained in the applicable instrument governing such Indebtedness or
Capital Stock (as the case may be) as in effect on the date of this Indenture.
Section 4.9 Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guaranty or otherwise
become
41
directly or indirectly liable with respect to (collectively, "incur") any
Indebtedness (including Acquired Debt), and the Company shall not issue any
Disqualified Stock and shall not permit any of its Subsidiaries to issue any
shares of preferred stock; provided, however, that the Company may incur
Indebtedness or issue shares of Disqualified Stock, and Subsidiaries of the
Company may incur up to $10 million in aggregate principal amount of
Indebtedness at any time outstanding, if the Fixed Charge Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
additional Indebtedness is incurred or such Disqualified Stock is issued would
have been at least 2.75 to 1 determined on a pro forma basis (including a pro
forma application of the net proceeds therefrom), as if the additional
Indebtedness had been incurred, or the Disqualified Stock had been issued, as
the case may be, at the beginning of such four-quarter period.
The foregoing limitations shall not apply to:
(a) the incurrence by the Company of Senior Term Debt in an
aggregate principal amount at any time outstanding not to exceed an amount equal
to $315 million less the aggregate amount of all repayments, optional or
mandatory, of the principal of any Senior Term Debt (other than repayments that
are immediately reborrowed) that have been made since the date of the SFC
Subordinated Note Indenture (provided, however, that Subsidiaries of the Company
shall not be permitted to guarantee the Senior Term Debt);
(b) the incurrence by the Company or its Subsidiaries of
Senior Revolving Debt (and guarantees thereof by the Company and its
Subsidiaries) in an aggregate principal amount at any time outstanding not to
exceed an amount equal to $125 million, less the aggregate amount of all
proceeds of sales or other dispositions of assets applied to permanently reduce
the commitments with respect to such Indebtedness pursuant to Section 4.10
hereof;
(c) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
(d) the incurrence by the Company of Indebtedness represented
by the Notes (including any PIK Notes), the 12 1/8% Senior Notes and the 11 1/4%
Senior Notes;
(e) the incurrence by the Company or any of its Subsidiaries
of Indebtedness represented by Capital Lease Obligations, mortgage financings or
purchase money obligations, in each case, incurred for the purpose of financing
all or any part of the purchase price or cost of construction or improvement of
property used in the business of the Company or such Subsidiary, in an aggregate
principal amount not to exceed $5 million at any time outstanding;
42
(f) the incurrence by the Company or any of its Subsidiaries
of Indebtedness issued in exchange for, or the proceeds of which are used to
extend, refinance, renew, replace, defease or refund, Indebtedness referred to
in clauses (c), (d) or (e) above or previously incurred under this clause (f)
(the "Refinancing Indebtedness"); provided, however, that:
(i) the principal amount of such Refinancing
Indebtedness shall not exceed the aggregate principal amount, tender or
prepayment premium and unpaid interest on the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith);
(ii) any Refinancing Indebtedness incurred by any
Subsidiary shall only extend, refinance, renew, replace, defease or refund
Indebtedness of such Subsidiary or any Wholly Owned Subsidiary of the
Company;
(iii) the Refinancing Indebtedness shall have a Weighted
Average Life to Maturity equal to or greater than either (x) the remaining
Weighted Average Life to Maturity of the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded or (y) the remaining
Weighted Average Life to Maturity of the Notes; and
(iv) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, the Refinancing Indebtedness shall be subordinated
in right of payment to the Notes on terms at least as favorable to the
holders of the Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded (any such extension, refinancing, renewal, replacement,
defeasance or refunding, a "Permitted Refinancing");
(g) intercompany Indebtedness between or among the Company and
any of its Wholly Owned Subsidiaries;
(h) the incurrence by the Company or its Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
interest rate risk with respect to any floating rate Indebtedness that is
permitted by the terms of this Indenture to be outstanding; and
(i) the incurrence by the Company of Indebtedness (in addition
to Indebtedness permitted by any other clause of this paragraph) in an aggregate
principal amount at any time outstanding not to exceed the sum of (A) $35
million plus (B) up to $40 million of permanent reductions in commitments for
Senior
43
Revolving Debt (other than pursuant to the mandatory repayment provisions
thereof) made since the date of this Indenture.
Section 4.10 Asset Sales. (a) The Company shall not, and shall not
permit any of its Subsidiaries to (i) sell, lease, convey or otherwise dispose
of any assets (including by way of a sale-and-leaseback) other than in the
ordinary course of business and other than sales of accounts receivable to the
Accounts Receivable Subsidiary in accordance with the provisions of Section 4.13
hereof (provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Company shall be governed by Section 5.1
hereof) or (ii) issue or sell equity securities of any of its Subsidiaries, in
each case, whether in a single transaction or a series of related transactions,
(a) that have a fair market value in excess of $3 million or (b) for net
proceeds in excess of $3 million (each of the foregoing, an "Asset Sale"),
unless (x) the Company (or the Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee) of the assets sold or otherwise
disposed of and (y) at least 80% of the consideration therefor received by the
Company or such Subsidiary is in the form of cash or Cash Equivalents; provided,
however, that the amount of (A) any liabilities (as shown on the Company's or
such Subsidiary's most recent balance sheet or in the notes thereto) of the
Company or any Subsidiary (other than liabilities that are by their terms
subordinated in right of payment to the Notes) that are assumed by the
transferee of any such assets and (B) any notes or other obligations of such
transferee or Marketable Securities received by the Company or any such
Subsidiary from such transferee that, within 30 days (or 90 days, in the case of
Marketable Securities received in connection with a pooling of interest
transaction) of the consummation of the Asset Sale, are converted by the Company
or such Subsidiary into cash (to the extent of the cash received), shall be
deemed to be cash for purposes of this provision.
(b) Within 30 days after the receipt of cash proceeds from any
Principal Business Asset Sale, the Company (or such Subsidiary) shall apply 75%
of the Net Proceeds thereof to permanently reduce Senior Term Debt and, to the
extent that cash proceeds are not used in connection therewith, to permanently
reduce Senior Revolving Debt. To the extent that such Net Proceeds exceed the
amounts required to permanently reduce Senior Term Debt and Senior Revolving
Debt, such excess Net Proceeds shall be deemed to constitute "Excess Proceeds"
(as defined in Subsection 4.10(c) hereof) and shall be applied in accordance
with the procedures set forth in Subsection 4.10(c) below.
(c) Within 365 days after the receipt of cash proceeds from any
Asset Sale (other than 75% of the cash proceeds from a Principal Business Asset
Sale), the Company (or such Subsidiary) may, at its option, apply the Net
Proceeds from such Asset Sale either (a) to permanently reduce Senior Term Debt,
(b) to permanently reduce Senior Revolving Debt with a corresponding permanent
reduction
44
in commitments with respect thereto, (c) to offer to redeem 11 1/4% Senior Notes
pursuant to the provisions of the 11 1/4% Senior Indenture or (d) to an
investment in another business, capital expenditures or other long-term assets,
in each case, in the same, similar or related line of business as the Company or
any of its Subsidiaries were engaged in on the date of this Indenture. Pending
the final application of any such Net Proceeds, the Company (or such Subsidiary)
may temporarily reduce Senior Revolving Debt or invest such Net Proceeds in cash
or Cash Equivalents. Any Net Proceeds from an Asset Sale that are not finally
applied or invested as provided in the first sentence of this paragraph will be
deemed to constitute "Excess Proceeds." When the aggregate amount of Excess
Proceeds exceeds $15 million, within five days of such date, the Company shall
be required to make an Asset Sale Offer pursuant to Section 3.9 hereof to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid interest, if any,
to the date fixed for the closing of such offer, in accordance with the
procedures of Section 3.9 hereof. To the extent that the aggregate amount of
Notes tendered pursuant to an Asset Sale Offer is less than the amount of Excess
Proceeds, the Company may use such deficiency for general corporate purposes. If
the aggregate principal amount of Notes surrendered by Holders thereof exceeds
the amount of Excess Proceeds, the Trustee shall select the Notes to be
purchased on a pro rata basis. Upon completion of such offer to purchase, the
amount of Excess Proceeds shall be deemed to be reset at zero.
Neither Section 3.9 nor this Section 4.10 shall apply to Asset Sales
to the Company or any of its Wholly Owned Subsidiaries.
Section 4.11 Transactions with Affiliates. The Company shall not,
and shall not permit any of its Subsidiaries to, in one or a series of related
transactions, sell, lease, transfer or otherwise dispose of any of its
properties or assets to, or purchase any property or assets from, or enter into
any contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (including the Accounts Receivable Subsidiary and
its Subsidiaries) (each of the foregoing, an "Affiliate Transaction"), unless
(a) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Subsidiary with an unrelated
Person and (b) the Company delivers to the Trustee (i) with respect to (x) any
Affiliate Transaction constituting the purchase or sale of goods and services in
the ordinary course of business in excess of $10 million or (y) any other
Affiliate Transaction involving aggregate payments in excess of $500,000, a
resolution of the Board of Directors set forth in an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (a) above and
such Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors and (ii) with respect to any Affiliate
Transaction (other than the purchase or sale of goods and services in the
ordinary course of business) involving aggregate payments in excess of $20
million, an opinion as to the fairness
45
to the Company or such Subsidiary from a financial point of view issued by an
investment banking firm of national standing; provided, however, that (A) any
employment agreement entered into by the Company or any of its Subsidiaries in
the ordinary course of business and consistent with business practices of
companies similarly situated, (B) transactions between or among the Company
and/or its Wholly Owned Subsidiaries, (C) transactions permitted by Section 4.7
above (including payments under the Tax Sharing Agreement as in effect on the
date of this Indenture), (D) fees payable pursuant to financial advisory
agreements as in effect on the date of this Indenture, (E) transactions
permitted by Section 4.13 hereof and (F) transactions between the Company or any
of its Subsidiaries on the one hand, and Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation or any of its Affiliates ("DLJSC") on the other hand, involving the
provision of financial, consulting or underwriting services by DLJSC; provided
that the fees payable to DLJSC do not exceed the usual and customary fees of
DLJSC for similar services, in each case, shall not be deemed Affiliate
Transactions.
Section 4.12 Liens. The Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or suffer
to exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens.
Section 4.13 Accounts Receivable Subsidiary. The Company:
(a) may, and may permit any of its Subsidiaries to,
notwithstanding the provisions of Section 4.7 hereof, make Investments in the
Accounts Receivable Subsidiary (i) the proceeds of which are applied within five
Business Days of the making thereof solely to finance (A) the purchase of
accounts receivable of the Company and its Subsidiaries (provided that the
aggregate amount of Investments pursuant to this clause (i)(A) made since the
date of this Indenture (including any such Investments made concurrently with
the consummation of the Transaction) shall not exceed $56 million, plus the
amount of any return of capital (excluding payment of dividends) or any
repayment of the principal amount of any Indebtedness constituting such
Investments by the Accounts Receivable Subsidiary since the date of this
Indenture) or (B) payments required in connection with the termination of all
then existing arrangements relating to the sale of accounts receivable or
participation interests therein by the Accounts Receivable Subsidiary (provided
that the Accounts Receivable Subsidiary shall receive cash, Cash Equivalents and
accounts receivable having an aggregate fair market value not less than the
amount of such payments in exchange therefor) and (ii) in the form of Accounts
Receivable Subsidiary Notes to the extent permitted by clause (b) below;
(b) shall not, and shall not permit any of its Subsidiaries
to, sell accounts receivable to the Accounts Receivable Subsidiary except for
consideration in an amount not less than that which would be obtained in an
arm's
46
length transaction and solely in the form of cash or Cash Equivalents; provided
that the Accounts Receivable Subsidiary may pay the purchase price for any such
accounts receivable in the form of Accounts Receivable Subsidiary Notes so long
as, after giving effect to the issuance of any such Accounts Receivable
Subsidiary Notes, the aggregate principal amount of all Accounts Receivable
Subsidiary Notes outstanding shall not exceed 10% of the aggregate purchase
price paid for all outstanding accounts receivable purchased by the Accounts
Receivable Subsidiary since the date of this Indenture (and not written off or
required to be written off in accordance with the normal business practice of
the Accounts Receivable Subsidiary);
(c) shall not permit the Accounts Receivable Subsidiary to
sell any accounts receivable purchased from the Company and its Subsidiaries or
participation interests therein to any other Person except on an arm's length
basis and solely for consideration in the form of cash or Cash Equivalents or
certificates representing undivided interests of a Receivables Trust; provided
that the Accounts Receivable Subsidiary may not sell such certificates to any
other Person except on an arm's length basis and solely for consideration in the
form of cash or Cash Equivalents;
(d) shall not, and shall not permit any of its Subsidiaries
to, enter into any guarantee, subject any of their respective properties or
assets (other than the accounts receivable sold by them to the Accounts
Receivable Subsidiary) to the satisfaction of any liability or obligation or
otherwise incur any liability or obligation (contingent or otherwise), in each
case, on behalf of the Accounts Receivable Subsidiary or in connection with any
sale of accounts receivable or participation interests therein by or to the
Accounts Receivable Subsidiary, other than customary obligations relating to
breaches of representations, warranties, covenants and other agreements of the
Company or any of its Subsidiaries with respect to the accounts receivable sold
by the Company or any of its Subsidiaries to the Accounts Receivable Subsidiary
or with respect to the servicing thereof as set forth in the Accounts Receivable
Agreements as in effect on the date of this Indenture or in any replacement or
substitute agreement, so long as the obligations set forth in such replacement
or substitute agreement are no more burdensome in any material respect than
those contained in the Accounts Receivable Agreements as in effect on the date
of this Indenture provided that neither the Company nor any of its Subsidiaries
shall at any time guarantee or be otherwise liable for the collectibility of
accounts receivable sold by them;
(e) shall not permit the Accounts Receivable Subsidiary to
engage in any business or transaction other than the purchase and sale of
accounts receivable or participation interests therein of the Company and its
Subsidiaries and activities incidental thereto;
(f) shall not permit the Accounts Receivable Subsidiary to
incur any Indebtedness other than the Accounts Receivable Subsidiary Notes,
47
Indebtedness owed to the Company and Non-Recourse Indebtedness; provided that
the aggregate principal amount of all such Indebtedness of the Accounts
Receivable Subsidiary shall not exceed the book value of its total assets as
determined in accordance with GAAP;
(g) shall cause the Accounts Receivable Subsidiary to remit to
the Company on a monthly basis as a distribution, all available cash and Cash
Equivalents not held in a collection account pledged to acquirors of accounts
receivable or participation interests therein, to the extent not applied (x) to
pay interest or principal on the Accounts Receivable Subsidiary Notes or any
Indebtedness of the Accounts Receivable Subsidiary owed to the Company, (y) to
pay or maintain reserves for reasonable operating expenses of the Accounts
Receivable Subsidiary or to satisfy reasonable minimum operating capital
requirements or (z) to finance the purchase of additional accounts receivable of
the Company and its Subsidiaries; and
(h) shall not, and shall not permit any of its Subsidiaries
to, sell accounts receivable to, or enter into any other transaction with or for
the benefit of, the Accounts Receivable Subsidiary (i) if the Accounts
Receivable Subsidiary pursuant to or within the meaning of any Bankruptcy Law
(A) commences a voluntary case, (B) consents to the entry of an order for relief
against it in an involuntary case, (C) consents to the appointment of a
Custodian of it or for all or substantially all of its property, (D) makes a
general assignment for the benefit of its creditors, or (E) generally is not
paying its debts as they become due; or (ii) if a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for
relief against the Accounts Receivable Subsidiary in an involuntary case, (B)
appoints a Custodian of the Accounts Receivable Subsidiary or for all or
substantially all of the property of the Accounts Receivable Subsidiary, or (C)
orders the liquidation of the Accounts Receivable Subsidiary, and, with respect
to clause (ii) hereof, the order or decree remains unstayed and in effect 60
consecutive days.
Section 4.14 Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
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Section 4.15 Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, each Holder of
Notes shall have the right to require the Company to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of such Holder's Notes
pursuant to the offer described below (the "Change of Control Offer") at a
purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Payment"). Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder stating:
(i) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered shall be
accepted for payment;
(ii) the purchase price and the purchase date, which
shall be no later than 30 Business Days from the date such notice is
mailed (the "Change of Control Payment Date");
(iii) that any Note not tendered shall continue to
accrue interest;
(iv) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date;
(v) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer shall be required to surrender the
Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent 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;
(vi) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of
business on the second Business Day preceding the Change of Control
Payment Date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his election to
have such Notes purchased; and
(vii) that Holders whose Notes are being purchased only
in part shall be issued new Notes equal in principal amount to the
49
unpurchased portion of the Notes surrendered, which unpurchased portion
must be equal to $1,000 in principal amount or an integral multiple
thereof.
The Company shall comply with the requirements of Rule 14e-1 under the Exchange
Act and any other securities laws and regulations thereunder to the extent such
laws and regulations are applicable in connection with the repurchase of Notes
in connection with a Change of Control.
(b) On the Change of Control Payment Date, the Company shall,
to the extent lawful, (1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Company. The Paying Agent shall
promptly mail to each Holder of Notes so accepted payment in an amount equal to
the purchase price for such Notes, and the Trustee shall promptly authenticate
and mail to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered by such Holder, if any; provided, that each
such new Note will be in a principal amount of $1,000 or an integral multiple
thereof. Prior to making the Change of Control Payment in respect of the Notes,
but in any event within 60 days following a Change of Control, the Company shall
either repay all outstanding Senior Debt or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Debt to permit the
repurchase of the Notes required by this Section 4.15. 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.
Section 4.16 No Senior Subordinated Indebtedness. The Company shall
not incur, create, issue, assume, guarantee or otherwise become directly or
indirectly liable for any Indebtedness that is subordinate or junior in any
respect in right of payment to any Senior Debt and senior in any respect in
right of payment to the Notes.
ARTICLE 5
SUCCESSORS
Section 5.1 Merger, Consolidation, or Sale of Assets. The Company
shall not consolidate or merge with or into (whether or not the Company is the
surviving corporation) or sell, assign, transfer, lease, convey or otherwise
dispose of all or substantially all of its properties or assets in one or more
related transactions to, another corporation, Person or entity unless:
50
(i) the Company is the surviving corporation or the entity or
the Person formed by or surviving any such consolidation or merger (if other
than the Company) or to which such sale, assignment, transfer, lease, conveyance
or other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;
(ii) the entity or Person formed by or surviving any such
consolidation or merger (if other than the Company) or the entity or Person to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, under
the Notes and this Indenture;
(iii) immediately after such transaction, no Default or Event
of Default exists; and
(iv) the Company or any entity or Person formed by or
surviving any such consolidation or merger, or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) shall
have Consolidated Net Worth (immediately after the transaction) equal to or
greater than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) shall, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.9 hereof.
Section 5.2 Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, lease, conveyance or other disposition of
all or substantially all of the assets of the Company in accordance with Section
5.1 hereof, the successor corporation formed by such consolidation or into or
with which the Company is merged or to which such sale, lease, conveyance or
other disposition is made shall succeed to, and be substituted for (so that from
and after the date of such consolidation, merger, sale, lease, conveyance or
other disposition, the provisions of this Indenture referring to the "Company"
shall refer instead to the successor corporation and not to the Company), and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such successor Person has been named as the Company herein;
provided, however, that the predecessor Company shall not be released from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that complies with the provisions of
this Article 5.
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ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.1 Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of interest (including
the payment of interest in PIK Notes), Liquidated Damages or the Non-Redemption
Payment on any Note when the same becomes due and payable and the Default
continues for a period of 30 days, whether or not such payment is prohibited by
the provisions of Article 10 hereof;
(2) the Company defaults in the payment of the principal of or
premium, if any, on any Note when the same becomes due and payable at maturity,
upon redemption (including in connection with an offer to purchase) or
otherwise, whether or not such payment is prohibited by the provisions of
Article 10 hereof;
(3) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to Sections 4.10 or 5.1 hereof or the Company fails for a period of 15
days to observe or perform any covenant, condition or agreement on the part of
the Company to be observed or performed pursuant to Sections 4.7 or 4.9 hereof;
(4) the Company fails to comply with any of its other
agreements or covenants in, or provisions of, the Notes or this Indenture and
the Default continues for the period and after the notice specified below;
(5) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Subsidiaries (or the payment of which is guaranteed by the Company or any of its
Subsidiaries) whether such Indebtedness or guarantee now exists, or is created
after the date of this Indenture, which default (a) is caused by a failure to
pay at final maturity principal of such Indebtedness within the grace period
provided in such Indebtedness (a "Final Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express final maturity and, in
each case, either (1) the principal amount of such Indebtedness, together with
the principal amount of any other Indebtedness under which there has been a
Final Payment Default or the maturity of which has been so accelerated,
aggregates $10 million or more, and such Final Payment Default or acceleration
shall not have been cured or remedied within 10 days after the occurrence
thereof, or (2) the principal amount of such Indebtedness, together with the
principal amount of any other Indebtedness under which there has been a Final
Payment Default or the maturity of which has been so accelerated, aggregates $50
million or more, or (3) a Final Payment Default or
52
acceleration shall have occurred with respect to the Senior Term Debt, the
Senior Revolving Debt, the 12 1/8% Senior Notes or the 11 1/4% Senior Notes;
(6) the Company, or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, fails to pay any final judgment or judgments (other than any
judgment to the extent a reputable insurance company has accepted liability)
aggregating in excess of $10 million, which judgments remain undischarged or
unstayed for a period of 60 days;
(7) the Company, or any of its Significant Subsidiaries or any
group of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against
it in an involuntary case,
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors, or
(E) generally is not paying its debts as they become
due; or
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company, any of its Significant
Subsidiaries or any group of Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, or
(C) orders the liquidation of the Company, any of its
Significant Subsidiaries or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary,
53
and the order or decree remains unstayed and in effect for 60 consecutive days.
An Event of Default shall not be deemed to have occurred under
clause (3), (5) or (6) until the Trustee shall have received written notice from
the Company or any of the Holders or unless a Responsible Officer shall have
actual knowledge of such Event of Default. A Default under clause (4) is not an
Event of Default until the Trustee notifies the Company, or the Holders of at
least 25% in principal amount of the then outstanding Notes notify the Company
and the Trustee in writing, of the Default and the Company does not cure the
Default within 60 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default."
If an Event of Default occurs by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding payment of the premium, if any, that the Company would have had to
pay if the Company then had elected to redeem the Notes pursuant to Section
3.7(a) hereof, an equivalent premium shall also become and be immediately due
and payable to the extent permitted by law, anything in this Indenture or in the
Notes to the contrary notwithstanding.
Section 6.2 Acceleration. If an Event of Default (other than an
Event of Default specified in clauses (7) or (8) of Section 6.1) occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the then outstanding Notes by written notice to the
Company and the Trustee, may declare the unpaid principal of and any accrued
interest on all the Notes to be due and payable. Upon such declaration the
principal and interest shall be due and payable immediately. If an Event of
Default specified in clause (7) or (8) of Section 6.1 relating to the Company,
any Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary occurs, such an amount shall ipso
facto become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Holder. The Holders of a majority in
principal amount of the then outstanding Notes by written notice to the Trustee
may rescind an acceleration and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal or interest that has become due solely because
of the acceleration) have been cured or waived.
Section 6.3 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, premium, if any, the Non-Redemption Payment, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission
54
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.4 Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences, except a continuing
Default or Event of Default in the payment of the principal of, premium, if any,
the Non-Redemption Payment, if any, or interest on, the Notes (including in
connection with an offer to purchase); provided, however, that the Holders of a
majority in aggregate principal amount of the outstanding Notes may rescind an
acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
Section 6.5 Control by Majority. Holders of a majority in principal
amount of the then outstanding Notes may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with the law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of other Holders of
Notes or that may involve the Trustee in personal liability.
Section 6.6 Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the provision
of indemnity; and
55
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee a
direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.7 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, but subject to Article 10
hereof, the right of any Holder of a Note to receive payment of principal of,
premium, if any, the Non-Redemption Payment, if any, and interest on the Note,
on or after the respective due dates expressed in the Note (including in
connection with an offer to purchase), or to bring suit for the enforcement of
any such payment on or after such respective dates, shall not be impaired or
affected without the consent of such Holder.
Section 6.8 Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium, if any,
the Non-Redemption Payment, if any, and interest remaining unpaid on the Notes
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.9 Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.7 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.7 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders of the Notes may
56
be entitled to receive in such proceeding whether in liquidation or under any
plan of reorganization or arrangement or otherwise. Nothing herein contained
shall be deemed to authorize the Trustee to authorize or consent to or accept or
adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 6.10 Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.7 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to the holders of Senior Debt to the extent required by
Article 10 hereof;
Third: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, if any, the Non-Redemption Payment, if any, and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal, premium, if any, the
Non-Redemption Payment, if any, and interest, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes.
Section 6.11 Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.7 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.
57
ARTICLE 7
TRUSTEE
Section 7.1 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely
by the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.5 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b), and (c) of this Section.
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(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders of Notes, unless such Holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.2 Rights of Trustee.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
Section 7.3 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may
59
otherwise deal with the Company or any Affiliate of the Company with the same
rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
Section 7.4 Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.5 Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is actually known by the Trustee, the Trustee
shall mail to Holders of Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, the Non-Redemption Payment,
if any, or interest on any Note, the Trustee may withhold the notice if and so
long as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of the Holders of the Notes.
Section 7.6 Reports by Trustee to Holders of the Notes. Within 60
days after each May 15 beginning with the May 15 following the date of this
Indenture, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes are listed. The Company shall promptly notify the
Trustee when the Notes are listed on any stock exchange.
Section 7.7 Compensation and Indemnity. The Company shall pay to the
Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its
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services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, and hold it harmless
against, any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company (including this Section 7.7) and defending itself against
any claim (whether asserted by the Company or any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such loss, liability or expense may
be attributable to its negligence or bad faith. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. Failure by the
Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense. The Trustee may have separate counsel and the Company
shall pay the reasonable fees and expenses of such counsel. The Company need not
pay for any settlement made without its consent, which consent shall not be
unreasonably withheld.
All payments and reimbursements under this Section shall be made
with interest at the rate per annum borne by the Notes. As security for the
performance of the obligations of the Company under this Section, the Trustee
shall have a first lien on any property or funds held by the Trustee under this
Indenture, except that held in trust to pay principal and interest on particular
Notes. The Company's payment obligations pursuant to this Section and any lien
arising hereunder shall survive the resignation or removal of the Trustee, the
discharge of the Company's obligations pursuant to Article 8 or otherwise and
the termination of this Indenture; provided, however, that such lien shall
survive only for so long as the Trustee shall hold any property or funds
hereunder. The Trustee's right to receive payment of any amounts due under this
Section shall not be subordinate to any other liability or indebtedness of the
Company (even though the Notes may be subordinate to such other liability or
indebtedness).
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(7) or (8) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
Section 7.8 Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of Notes of a
61
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any Bankruptcy
Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.7 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.9 Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its
62
corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
Section 7.10 Eligibility; Disqualification. There shall at all times
be a Trustee hereunder that is a corporation organized and doing business under
the laws of the United States of America or of any state thereof, that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company. The
Trustee is subject to TIA ss. 311(a), excluding any creditor relationship listed
in TIA ss. 311(b). A Trustee who has resigned or been removed shall be subject
to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.1 Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.2 or 8.3 hereof be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.
Section 8.2 Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.1 hereof of the option applicable to this Section 8.2,
the Company shall, subject to the satisfaction of the conditions set forth in
Section 8.4 hereof, be deemed to have been discharged from its obligations with
respect to all outstanding Notes on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by the outstanding Notes, which shall thereafter be
deemed to be "outstanding" only for the purposes of Section 8.5 and the other
Sections of this Indenture referred to in (i) and (ii) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (i) the rights
of holders of such outstanding Notes to receive, solely from the trust fund
described in Section 8.5, payments in respect of the principal of, premium, if
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any, the Non-Redemption Payment, if any, and interest on such Notes when such
payments are due, (ii) the Company's obligations with respect to the Notes under
Article 2 and Section 4.2 hereof, (iii) the rights, powers, trust, duties and
immunities of the Trustee, and the Company's obligations in connection therewith
and (iv) this Article 8. Subject to compliance with this Article 8, the Company
may exercise its option under this Section 8.2 notwithstanding the prior
exercise of its option under Section 8.3 hereof.
Section 8.3 Covenant Defeasance. Upon the Company's exercise under
Section 8.1 hereof of the option applicable to this Section 8.3, the Company
shall, subject to the satisfaction of the conditions set forth in Section 8.4
hereof, be released from its obligations under the covenants contained in
Sections 4.7, 4.8, 4.9, 4.10, 4.11, 4.12, 4.13, 4.15 and 4.16 and Article 5
hereof with respect to the outstanding Notes on and after the date the
conditions set forth below are satisfied (hereinafter, "Covenant Defeasance"),
and the Notes shall thereafter be deemed not "outstanding" for the purposes of
any direction, waiver, consent or declaration or act of Holders (and the
consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "outstanding" for all other purposes hereunder (it being
understood that such Notes shall not be deemed outstanding for accounting
purposes). For this purpose, such Covenant Defeasance means that, with respect
to the outstanding Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section 6.1
hereof, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby. In addition, upon the Company's exercise
under Section 8.1 hereof of the option applicable to this Section 8.3, subject
to the satisfaction of the conditions set forth in Section 8.4 hereof, Sections
6.1(5) and 6.1(6) hereof shall not constitute Events of Default.
Section 8.4 Conditions to Legal or Covenant Defeasance. The
following shall be the conditions to the application of either Section 8.2 or
8.3 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee or
Paying Agent, in trust, for the benefit of the Holders, cash in United States
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, the
Non-Redemption Payment, if any, and interest on such Notes on the stated date
for payment thereof or on the applicable redemption date, as the case may be, of
such
64
principal or installment of principal of, premium, if any, the Non-Redemption
Payment, if any, or interest on the Notes;
(b) in the case of an election under Section 8.2 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue Service a
ruling or (B) since the date of this Indenture, there has been a change in the
applicable federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Holders of the Notes
will not recognize income, gain or loss for federal income tax purposes as a
result of such Legal Defeasance and will be subject to federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such Legal Defeasance had not occurred;
(c) in the case of an election under Section 8.3 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of the
Notes will not recognize income, gain or loss for federal income tax purposes as
a result of such Covenant Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the incurrence of Indebtedness all or a portion of the proceeds
of which will be used to defease the Notes pursuant to this Article Eight
concurrently with such incurrence) or insofar as Sections 6.1(7) and 6.1(8)
hereof are concerned, at any time in the period ending on the 91st day after the
date of deposit;
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a Default under, this
Indenture or a default under the 12 1/8% Senior Indenture, the 11 1/4% Senior
Indenture, the Term Loan Agreement, the Revolving Credit Agreement or any other
material agreement or instrument to which the Company or any of its Subsidiaries
is a party or by which the Company or any of its Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel to the effect that after the 91st day 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;
(g) the Company shall have delivered to the Trustee an
Officers' Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders over any other creditors of the Company or
with the
65
intent of defeating, hindering, delaying or defrauding any other creditors of
the Company; and
(h) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.5 Deposited Money and Government Securities to Be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.6 hereof, all money
and non-callable Government Securities (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.5, the "Trustee") pursuant to Section 8.4 hereof in
respect of the outstanding Notes shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Notes and this Indenture, to
the payment, either directly or through any Paying Agent (including the Company
acting as Paying Agent) as the Trustee may determine, to the Holders of such
Notes of all sums due and to become due thereon in respect of principal,
premium, if any, the Non-Redemption Payment, if any, and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.4 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the Company's
request any money or non-callable Government Securities held by it as provided
in Section 8.4 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.4(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.6 Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, the Non-Redemption Payment, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium, if any, the Non-Redemption Payment, if any, or interest
has become due and payable shall be paid to the Company on its request or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust
66
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in The New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 8.7 Reinstatement. If the Trustee or Paying Agent is unable
to apply any United States dollars or non-callable Government Securities in
accordance with Section 8.2 or 8.3 hereof, as the case may be, by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, then the Company's obligations under
this Indenture and the Notes shall be revived and reinstated as though no
deposit had occurred pursuant to Section 8.2 or 8.3 hereof until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 8.2 or 8.3 hereof, as the case may be; provided, however, that, if
the Company makes any payment of principal of, premium, if any, the
Non-Redemption Payment, if any, or interest on any Note following the
reinstatement of its obligations, the Company shall be subrogated to the rights
of the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.1 Without Consent of Holders of Notes. Notwithstanding
Section 9.2 of this Indenture, the Company and the Trustee may amend or
supplement this Indenture or the Notes without the consent of any Holder of a
Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for the assumption of the Company's obligations
to the Holders of the Notes in the case of a merger or consolidation pursuant to
Article 5 hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not adversely affect
the legal rights hereunder of any Holder of the Note; or
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(e) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.2 hereof, the Trustee shall join with the Company in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
Section 9.2 With Consent of Holders of Notes. The Company and the
Trustee may amend or supplement this Indenture (including Section 4.10 hereof)
and the Notes may be amended or supplemented with the consent of the Holders of
at least a majority in principal amount of the Notes then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Notes), and, subject to Sections 6.4 and 6.7 hereof, any existing Default or
Event of Default (other than a Default or Event of Default in the payment of the
principal of, premium, if any, the Non-Redemption Payment, if any, or interest
on the Notes, except a payment default resulting from an acceleration that has
been rescinded) or compliance with any provision of this Indenture or the Notes
may be waived with the consent of the Holders of a majority in principal amount
of the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes). Without the consent of at least
75% in principal amount of the Notes then outstanding (including consents
obtained in connection with a tender offer or exchange offer for such Notes), no
waiver or amendment to this Indenture may make any change in the provisions of
Section 4.15 hereof that adversely affects the rights of any Holder of such
Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.2 hereof, the Trustee shall
join with the Company in the execution of such amended or supplemental Indenture
unless such amended or supplemental Indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.2 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
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After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.4 and 6.7 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture or the Notes. However, without the consent of each Holder affected, an
amendment or waiver may not (with respect to any Notes held by a non-consenting
Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter or waive any of the provisions with respect to the redemption
of the Notes except as provided above with respect to Sections 4.15 and 4.10
hereof;
(c) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(d) waive a Default or Event of Default in the payment of
principal of, premium, if any, the Non-Redemption Payment, if any, or interest
on the Notes (except a rescission of acceleration of the Notes by the Holders of
at least a majority in aggregate principal amount of the then outstanding Notes
and a waiver of the payment default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes to
receive payments of principal of or interest on the Notes;
(g) waive a redemption payment with respect to any Note; or
(h) make any change in Section 6.4 or 6.7 hereof or in the
foregoing amendment and waiver provisions; or
(i) make any change in Article 10 hereof that adversely
affects any Holder.
Section 9.3 Compliance with Trust Indenture Act. Every amendment or
supplement to this Indenture or the Notes shall be set forth in an amended or
supplemental Indenture that complies with the TIA as then in effect.
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Section 9.4 Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by the Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
Section 9.5 Notation on or Exchange of Notes. The Trustee may place
an appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall authenticate new Notes that reflect the amendment, supplement
or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.6 Trustee to Sign Amendments, Etc. The Trustee shall sign
any amended or supplemental indenture authorized pursuant to this Article 9 if
the amendment or supplement does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. The Company may not sign an amendment
or supplemental Indenture until the Board of Directors approves it. In executing
any amended or supplemental indenture, the Trustee shall be entitled to receive
and (subject to Section 7.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such amended or supplemental indenture is authorized or permitted by this
Indenture.
ARTICLE 10
SUBORDINATION
Section 10.1 Agreement to Subordinate. The Company agrees, and each
Holder by accepting a Note agrees, that the Obligations with respect to such
Note are subordinated in right of payment, to the extent and in the manner
provided in this Article, to the prior payment in full in cash or Cash
Equivalents of all Senior Debt, including the 12 1/8% Senior Notes and the 11
1/4% Senior Notes (whether outstanding on the date hereof or hereafter created,
incurred, assumed or guaranteed), and that the subordination is for the benefit
of the holders of Senior Debt. Holders of Senior Debt need not prove reliance on
the subordination provisions hereof.
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Section 10.2 Certain Definitions.
"Designated Senior Debt" means (i) the Senior Term Debt, (ii) the
Senior Revolving Debt, (iii) the 12 1/8% Senior Notes and the 11 1/4% Senior
Notes and (iv) any other Senior Debt permitted hereunder the principal amount of
which is $25 million or more.
"Representative" means the indenture trustee or other trustee, agent
or representative for any Senior Debt.
"Senior Debt"means (i) all Senior Term Debt outstanding from time to
time, (ii) all Senior Revolving Debt outstanding from time to time, (iii) the
12 1/8% Senior Notes and the 11 1/4% Senior Notes, (iv) Hedging Obligations and
(v) any other Indebtedness that is permitted to be incurred by the Company
pursuant to this Indenture unless the instrument under which such Indebtedness
is incurred expressly provides that it is on a parity with or subordinated in
right of payment to the Notes. "Senior Debt" shall include, without limitation,
interest on any of the Obligations described in the preceding clauses (i)
through (v) accruing after the filing of a petition by or against the Company
under any Bankruptcy Law, in accordance with and at the rate (including any rate
applicable upon any default or event of default) specified in the applicable
agreement under which such Obligations are created, whether or not the claim for
such interest is allowed as a claim after such filing in any proceeding under
such Bankruptcy Law. Notwithstanding anything to the contrary in the foregoing,
Senior Debt shall not include (x) any Indebtedness of the Company to any of its
Subsidiaries or other Affiliates, (y) any Indebtedness incurred for the purchase
of goods or materials or for services obtained in the ordinary course of
business (other than the Senior Revolving Debt) and (z) any Indebtedness that is
incurred in violation of this Indenture.
A distribution may consist of cash, securities or other property, by
set-off or otherwise. As used in this Indenture and the Notes, the term
"payment" of or with respect to Obligations relating to the Notes and similar
phrases include any payment (including by issuance of additional securities of
any kind), redemption, acquisition, deposit, segregation, retirement, sinking
fund payment and defeasance of or with respect to any Obligations relating to
the Notes.
Section 10.3 Liquidation; Dissolution; Bankruptcy. Upon any payment
or distribution to creditors of the Company in a liquidation or dissolution of
the Company or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to the Company or its property, in an assignment for
the benefit of creditors or any marshalling of the Company's assets and
liabilities:
(1) holders of Senior Debt shall be entitled to receive
payment in full in cash or Cash Equivalents of all outstanding Obligations
in respect of such Senior Debt before Holders shall be entitled to receive
any
71
payment or distribution with respect to the Notes (except that Holders may
receive securities that are subordinated to at least the same extent as
the Notes to (a) Senior Debt and (b) any securities issued in exchange for
Senior Debt; provided that such securities paid or distributed to the
holders of the Notes are authorized by an order or decree giving effect,
and stating in such order or decree that effect is given, to the
subordination of the Notes to the Senior Debt and the provisions of this
clause, and made by a court of competent juris diction in a reorganization
proceeding under any applicable bankruptcy law); and
(2) until all Obligations with respect to Senior Debt
(as provided in subsection (1) above) are paid in full in cash or Cash
Equivalents, any payment or distribution to which Holders would be
entitled but for this Article shall be made to holders of Senior Debt
(except that Holders may receive securities that are subordinated to at
least the same extent as the Notes to (a) Senior Debt and (b) any
securities issued in exchange for Senior Debt; provided that such
securities paid or distributed to the holders of the Notes are authorized
by an order or decree giving effect, and stating in such order or decree
that effect is given to the subordination of the Notes to the Senior Debt
and the provisions of this clause, and made by a court of competent
jurisdiction in a reorganization proceeding under any applicable
bankruptcy law), as their interests may appear.
Section 10.4 Default on Designated Senior Debt. The Company may not
make any payment or distribution to the Trustee or any Holder in respect of
Obligations with respect to the Notes and may not acquire from the Trustee or
any Holder any Notes for cash, securities or other property (other than
securities that are subordinated to at least the same extent as the Notes to (a)
Senior Debt and (b) any Securities issued in exchange for Senior Debt; provided
that such securities paid or distributed to the holders of the Notes are
authorized by an order or decree giving effect, and stating in such order or
decree that effect is given, to the subordination of the Notes to the Senior
Debt and the provisions of this clause, and made by a court of competent
jurisdiction in a reorganization proceeding under any applicable Bankruptcy Law)
until all principal and other Obligations with respect to the Senior Debt have
been paid in full in cash or Cash Equivalents if:
(i) a default in the payment of any principal or other
Obligations with respect to Designated Senior Debt occurs and is
continuing; or
(ii) a default, other than a payment default, on
Designated Senior Debt occurs and is continuing that then permits holders
of the Designated Senior Debt to accelerate its maturity, and the Trustee
receives a written notice of the default from a Person who may give it
pursuant to Section 10.12 hereof. If the Trustee receives any such notice,
a subsequent
72
notice received within 360 days thereafter shall not be effective for
purposes of this Section. Notwithstanding the foregoing, a notice of
default under this paragraph (ii) may only be given by the Representative
for the holders of Senior Debt under the Term Loan Agreement or the
Revolving Credit Agreement if Senior Debt is outstanding under the Term
Loan Agreement or the Revolving Credit Agreement (including obligations in
respect of letters of credit) at the time such notice is to be given. No
nonpayment default that existed or was continuing on the date of delivery
of any such notice to the Trustee shall be, or be made, the basis for a
subsequent notice unless such default shall have been cured or waived for
a period of not less than 180 days,
The Company may and shall resume payments on and distributions in
respect of the Notes and may acquire them upon the earlier of:
(1) the date upon which the default is cured or waived, or
(2) in the case of a default referred to in Section 10.4(ii)
hereof, 179 days pass after notice is received if the maturity of any
Designated Senior Debt has not been accelerated, if this Article otherwise
permits the payment, distribution or acquisition at the time of such
payment, distribution or acquisition.
Section 10.5 Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Debt of the acceleration.
Section 10.6 When Distribution Must Be Paid Over. In the event that
the Trustee or any Holder receives any payment of or distribution with respect
to any Obligations with respect to the Notes at a time when such payment or
distribution is prohibited by this Article, such payment or distribution shall
be held by the Trustee or such Holder, for the benefit of, and shall be paid
forthwith over and delivered, upon written request, to, the holders of Senior
Debt as their interests may appear or their Representative under the indenture
or other agreement (if any) pursuant to which Senior Debt may have been issued,
as their respective interests may appear, for application to the payment of all
Obligations with respect to Senior Debt remaining unpaid to the extent necessary
to pay such Obligations in full in accordance with their terms in cash or Cash
Equivalents, after giving effect to any concurrent payment or distribution to or
for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10 and Section 6.2 hereof, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of
73
Senior Debt, and shall not be liable to any such holders if the Trustee shall
pay over or distribute to or on behalf of Holders or the Company or any other
Person money or assets to which any holders of Senior Debt shall be entitled by
virtue of this Article 10, except if such payment is made as a result of the
willful misconduct or gross negligence of the Trustee or in violation of Section
10.12.
Section 10.7 Notice by Company. The Company shall promptly notify
the Trustee and the Paying Agent of any facts known to the Company that would
cause a payment of any Obligations with respect to the Notes to violate this
Article, but failure to give such notice shall not affect the subordination of
the Notes to the Senior Debt as provided in this Article.
Section 10.8 Subrogation. After all Senior Debt is paid in full in
cash or Cash Equivalents and until the Notes are paid in full, Holders shall be
subrogated (equally and ratably with all other Indebtedness pari passu with the
Notes) to the rights of holders of Senior Debt to receive distributions
applicable to Senior Debt to the extent that distributions otherwise payable to
the Holders have been applied to the payment of Senior Debt. A distribution made
under this Article to holders of Senior Debt that otherwise would have been made
to Holders is not, as between the Company and Holders, a payment by the Company
on the Notes.
Section 10.9 Relative Rights. This Article defines the relative
rights of Holders and holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Notes in accordance with their terms;
(2) affect the relative rights of Holders and creditors
of the Company other than their rights in relation to holders of Senior
Debt; or
(3) prevent the Trustee or any Holder from exercising
its available remedies upon a Default or Event of Default, subject to the
rights of holders and owners of Senior Debt to receive distributions and
payments otherwise payable to Holders.
If the Company fails because of this Article to pay principal of or
interest on a Note on the due date, the failure is still a Default or Event of
Default.
Section 10.10 Subordination May Not be Impaired by Company. No right
of any holder of Senior Debt to enforce the subordination of the Obligations
with respect to the Notes shall be impaired by any act or failure to act by the
Company or any Holder or by the failure of the Company or any Holder to comply
with this Indenture.
74
Section 10.11 Payment, Distribution or Notice to Representative.
Whenever a payment or distribution is to be made or a notice given to holders of
Senior Debt, the payment or distribution may be made and the notice given to
their Representative.
Upon any payment or distribution of assets, securities or other
property of the Company referred to in this Article 10, the Trustee and the
Holders shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction or upon any certificate of such Representative or of the
liquidating trustee or agent or other Person making any distribution to the
Trustee or to the Holders for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior Debt
and other Indebtedness of the Company, the amount thereof payable thereon, the
amount or amounts paid or distributed thereon and the other facts pertinent
thereto or to this Article 10.
Section 10.12 Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent (other than the Company and its Affiliates) may
continue to make payments on the Notes, unless the Trustee shall have received
at its Corporate Trust Office at least two Business Days prior to the date of
such payment written notice of facts that would cause the payment of any
Obligations with respect to the Notes to violate this Article. Only the Company
or a Representative may give the notice. Nothing in this Article 10 shall impair
the claims of, or payments to, the Trustee under or pursuant to Section 7.7
hereof. Nothing contained in this Section 10.12 shall limit the right of the
holders of Senior Debt to recover payments as contemplated by this Article. Any
deposit of cash, property or securities by or on behalf of the Trustee or any
Paying Agent (whether or not in trust) for payment of Obligations with respect
to the Notes shall be subject to the provisions of this Article. The provisions
of this Article shall apply to each Paying Agent to the extent applicable to the
Trustee, mutatis mutandis.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any
Representative may do the same with like rights.
Section 10.13 Authorization to Effect Subordination. Each Holder of
a Note by the Holder's acceptance thereof authorizes and directs the Trustee on
the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 10, and appoints the
Trustee the Holder's attorney-in-fact for any and all such purposes. If the
Trustee does not file a proper proof of claim or proof of debt in the form
required in any proceeding referred to in Section 6.9 hereof at least 30 days
before the expiration of the time to file such claim,
75
the Representatives are hereby authorized to file an appropriate claim for and
on behalf of the Holders of the Notes.
Section 10.14 Amendments. The provisions of this Article 10,
Sections 6.1 and 6.2 hereof and all defined terms used herein and therein shall
not be amended or modified without the written consent of the holders of all
Senior Debt.
Section 10.15 Limited Waiver. Each Holder of the Notes by his
acceptance thereof agrees that the Representative of any Senior Debt, in its
discretion, without notice or demand and without affecting any rights of any
holder of Senior Debt under this Article 10, may foreclose any mortgage or deed
of trust covering interests in real property secured thereby, by judicial or
nonjudicial sale; and such Holder hereby waives any defense to the enforcement
by the Representative of any Senior Debt or by any holder of any Senior Debt
against such holder of this Article 10, after a judicial or nonjudicial sale or
other disposition of its interest in real property secured by such mortgage or
deed of trust; and such Holder expressly waives any defense or benefits that may
be derived from California Civil Code xx.xx. 2808, 2809, 2810, 2819, 2845, 2849
or 2850, or California Code of Civil Procedure xx.xx. 580a, 580d or 726, or
comparable provisions of the laws of any other jurisdiction or any similar
statute in effect in any other jurisdiction.
ARTICLE 11
MISCELLANEOUS
Section 11.1 Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by TIA ss.
318(c), the imposed duties shall control.
Section 11.2 Notices. Any notice or communication by the Company or
the Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company:
SFC New Holdings Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Attention: Secretary
76
With a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
If to the Trustee:
U.S. Trust Company of Texas, N.A.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: Corporate Trust Administration
The Company, or the Trustee, by notice to the others may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 11.3 Communication by Holders of Notes with Other Holders of
Notes. Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
77
Section 11.4 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of the signers, all conditions
precedent and covenants, if any, provided for in this Indenture relating to the
proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 11.5 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied.
Section 11.5 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA ss. 314(a)(4)) shall comply with the provisions of TIA ss. 314(e) and shall
include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 11.6 Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders of Notes. The
Registrar or Paying Agent may make reasonable rules and set reasonable
requirements for its functions.
Section 11.7 No Personal Liability of Directors, Officers, Employees
and Stockholders. No past, present or future director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes or this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder of Notes by
78
accepting a Note waives and releases all such liability. The waiver and release
are part of the consideration for issuance of the Notes.
Section 11.8 Governing Law. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE AND THE NOTES.
Section 11.9 No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
Section 11.10 Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors.
Section 11.11 Severability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 11.12 Counterpart Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement.
Section 11.13 Table of Contents, Headings, Etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
79
[Senior Subordinated Indenture - Signature Page]
Dated as of June 11, 1999 SFC New Holdings, Inc.
By: /s/ Xxxx X. Xxxxx
------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President, Treasurer and
Assistant Secretary
Dated as of June 11, 1999 U.S. Trust Company of Texas, N.A.
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Assistant Vice-President
80
SCHEDULE 1
FIRST TIER SUBSIDIARIES
Xxxx Baking Company
Mother's Cake & Cookie Co.
Archway Cookies, LLC
Andre-Boudin Bakeries, Inc.
Pane Corporation (dba San Diego Bread Company)
Clear Lake Bakery, Inc.
81
SCHEDULE 2
TRANSACTION LIENS
1. A lien in respect of the pledge by Specialty Foods Corporation of 100
shares of common stock of SFC Sub, Inc. securing Specialty Food
Corporation's obligations under the Term Loan Agreement (as defined in the
Indenture).
2. A lien in respect of the pledge by SFC New Holdings, Inc. of 100% of the
sole membership interest of MA Holdings, LLC securing SFC New Holdings,
Inc.'s obligations under the Term Loan Agreement (as defined in the
Indenture).
3. A lien in respect of the pledge by SFAC New Holdings, Inc. of 100 shares
of common stock, 225 shares of Series A Preferred Stock, 150 shares of
Series B Preferred Stock and 200 shares of Series C Preferred Stock of SFC
New Holdings, Inc. securing SFAC New Holdings, Inc.'s obligations under
the 13% Senior Secured Discount Debentures due 2009.
82
SCHEDULE 3
SFC SALE ASSETS
1. Property owned by Archway Cookies, LLC (formerly Archway Cookies, Inc.),
consisting of:
(a) Property situated at 0000 Xxxx Xxxxxxx Xxxx - Fort Xxxxxx Urban
Renewal Plat of Battle Creek Lot 63, except the easterly 10 feet
hereof.
(b) Property situated at 0000 Xxxx Xxxxxxx Xxxx - Fort Xxxxxx Urban
Renewal Plat of Battle Creek Lots 84 and 85.
2. Property owned by Mother's Cake & Cookie Co., consisting of:
(a) Xxx 0, Xxxxx 0, Xxxxxxxx Xxxx Company Addition to the City of Fort
Worth, Tarrant County, Texas, according to the Plat recorded in
Volume 388-58, Page 846, Plat Records, Tarrant County, Texas, SAVE
AND EXCEPT that portion of the above-described tract conveyed to the
City of Fort Worth by deed recorded in Volume 9016, Page 696, Real
Property Records, Tarrant County, Texas.
(b) Xxx 0, Xxxxx 0, Xxxxxxxx Xxxx Company Addition to the City of Fort
Worth, Tarrant County, Texas, according to the Plat recorded in
Volume 388-114, Page 881, Plat Records, Tarrant County, Texas.
(c) Lot 1 and a portion of Xxx 0, Xxxxx 0, Xxxx Xxxxxx Subdivision to
the City of Forth Worth, Tarrant County, Texas, according to the
Plat recorded in Volume 388-66, Page 25, Plat Records, Tarrant
County, Texas, SAVE AND EXCEPT that portion of Lot 1 conveyed to the
City of Forth Worth by deed recorded in Volume 9016, Page 700, Real
Property Records, Tarrant County, Texas.
(d) 0.517 acres of land, more or less, situated in the X. XxXxxxxx
Survey, Abstract No. 1056, Tarrant County, Texas, and being the same
tract of land as described in deed to Standard Meat Company recorded
in Volume 6009, Page 423, Deed Records, Tarrant County, Texas, SAVE
AND EXCEPT that portion of the above described tract conveyed to the
City of Fort Worth by deed recorded in Volume 9016, Page 692, Real
Property Records, Tarrant County, Texas.
(e) 0.48 acres of land, more or less, situated in the X. XxXxxxxx
Survey, Abstract No. 1056, Tarrant County, Texas, and being the same
tract of land as described in deed to Standard Meat Company recorded
in Volume 6927, Page 2119, Deed Records, Tarrant County, Texas,
83
SAVE AND EXCEPT that portion of the above described tract conveyed
to the City of Fort Worth, by deed recorded in Volume 9016, Page
692, Real Property Records, Tarrant County, Texas
(f) Xxx 0, Xxxxx 00, Xxxxxxxxx Addition, Third Filing, to the City of
Fort Worth, Tarrant County, Texas, according to the Plat recorded in
Volume 204-A, Page 114, Plat Records, Tarrant County, Texas, SAVE
AND EXCEPT that portion of the above described tract conveyed to the
City of Fort Worth by deed recorded in Volume 9016, Page 682, Real
Property Records, Tarrant County, Texas.
(g) Xxx 00, Xxxxx 00, Xxxxxxxxx Addition, Third Filing, to the City of
Fort Worth, Tarrant County, Texas, according to the Plat recorded in
Volume 204-A, Page 114, Plat Records, Tarrant County, Texas.
(h) A portion of Lots 1 and 2, Block 1, of Page Land Company's East Side
Addition to the City of Fort Worth, Tarrant County, Texas, according
to Plat recorded in Volume 204, Page 74, Plat Records, Tarrant
County, Texas, SAVE AND EXCEPT that portion of the above described
tract conveyed to the City of Fort Worth by deed recorded in Volume
9016, Page 682, Real Property Records, Tarrant County, Texas.
EXHIBIT A
(Face of Note)
13 1/4% [Series A] [Series B] Senior Subordinated Notes Due 2003
No. $__________________
SFC NEW HOLDINGS, INC.
promises to pay to
or registered assigns,
the principal sum of
Dollars on August 15, 2003.
Interest Payment Dates: February 15 and August 15
Record Dates: February 1 and August 1
Dated:__________ SFC New Holdings, Inc.
By: ______________________________________
Name:
Title:
(SEAL)
By: ______________________________________
Name:
Title:
This is one of the Notes
referred to in the within-
mentioned Indenture:
U.S. Trust Company of Texas. N.A.,
as Trustee
By ______________________
Authorized Signatory
(Back of Note)
13 1/4% [Series A] [Series B] Senior Subordinated Notes Due 2003
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx) ("XXX"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.](1)
["THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE
144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES
FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
UNDER THE SECURITIES ACT IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
OR IN ACCORDANCE WITH RULE 144 UNDER THE SECURITIES ACT, OR PURSUANT TO ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL), (b) TO THE COMPANY, (c) OUTSIDE THE UNITED STATES
TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER
THE SECURITIES ACT OR (d) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT AND (2) IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED
----------
(1) This paragraph should be included only if the Note is issued in global
form.
A-2
STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED
HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE."]*
* This legend should be included only if the Note is a Transfer Restricted
Note.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. Interest. SFC New Holdings, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate of 13 1/4% per annum from and including the date hereof until maturity and
promises to pay Liquidated Damages (as defined below) in accordance with the
following paragraphs. On each Interest Payment Date (as defined below), the
Company shall, in lieu of a cash payment of $5.00 per $1,000 principal amount of
Notes (the "PIK Interest") due on the Notes on any Interest Payment Date up to
and including August 15, 2003, deliver to the Trustee or an authenticating agent
for authentication for original issue and delivery additional Notes ("PIK
Notes"), in an aggregate principal amount equal to the PIK Interest payable on
each such Interest Payment Date. For purposes of determining the principal
amount of PIK Notes to be issued to a Holder, the Trustee shall aggregate the
amount of PIK Interest payable on all Notes registered in the name of the
Holder. Each issuance of PIK Notes shall be made pro rata with respect to the
outstanding Notes, provided that PIK Notes shall be issuable only in
denominations of $1,000 or integral multiples thereof and the Company shall pay
in cash to each Holder the difference (if any) between the amount of interest
payable to such Holder on such Interest Payment Date and the face value of PIK
Notes issued to such Holder by the Company pursuant to this Section 2.2(e). PIK
Notes shall bear interest from the Interest Payment Date with respect to which
they are issued. Each PIK Note shall be dated the date of such Interest Payment
Date and shall be in a principal amount equal the PIK Interest due but not paid
on such Interest Payment Date, and with a maturity date, interest rate, and
other terms of, and generally in the form of, this Note. The issuance of such
PIK Note shall constitute full payment of such interest. Each issuance of PIK
Notes shall be made pro rata with respect to the outstanding Notes, provided,
that PIK Notes shall be issuable only in denominations of $1,000 or integral
multiples thereof and the Company shall pay in cash to each Holder the
difference (if any) between the amount of interest payable to such Holder on
such Interest Payment Date and the face value of PIK Notes issued to such Holder
by the Company pursuant to Section 2.2(e) of the Indenture. PIK Notes shall bear
interest from the interest payment date with respect to which they are issued.
The term "Notes" shall include the PIK Notes that may be issued under the
Indenture.
The Company shall pay interest and Liquidated Damages semi-annually
on February 15 and August 15 of each year, or if any such day is not a Business
Day, on the next succeeding Business Day (each an "Interest Payment Date").
Interest on
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the Notes will accrue from the most recent date to which interest has been paid
or, if no interest has been paid, from and including June 11, 1999; provided
that if there is no existing Default in the payment of interest, and if this
Note is authenticated between a record date referred to on the face hereof and
the next succeeding Interest Payment Date, interest shall accrue from such next
succeeding Interest Payment Date; provided, further, that the first Interest
Payment Date shall be August 15, 1999.
The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated June 11, 1999, among the Company and the
Holders of the Notes named therein (the "Registration Rights Agreement")
pursuant to which the Company has agreed (a) to file with the SEC promptly (but
in any event on or prior to 120 days) after the Original Issue Date, the
Exchange Offer Registration Statement on the appropriate form relating to the
Registered Exchange Offer for the Notes under the Securities Act, and (b) to
cause such Exchange Offer Registration Statement to become effective within 180
days after the Original Issue Date. Upon the occurrence of certain Registration
Defaults (as defined in the Registration Rights Agreement), the Company will pay
or cause to be paid, in addition to amounts otherwise due under the Indenture
and the Exchange Securities, as liquidated damages, and not as a penalty
("Liquidated Damages"), to each holder of Registrable Securities (as defined in
the Registration Rights Agreement), during the first 90-day period immediately
following the occurrence of such Registration Default an amount equal to $.05
per week per $1,000 principal amount of Registrable Securities held by such
holder. The amount of the liquidated damages thereafter will increase each week
by an additional $.05 per $1,000 principal amount of Registrable Securities, up
to a maximum amount of liquidated damages of $0.30 per week per $1,000 principal
amount of Registrable Securities, until all Registration Defaults are cured. All
accrued Liquidated Damages will be paid in the same manner as interest payments
on the Notes on semiannual damages payment dates that correspond to interest
payment dates for the Debentures and upon redemption dates, Change of Control
Payment Dates and Asset Sale payment dates. Following the cure of a Registration
Default, the accrual of Liquidated Damages will cease.
The Company shall pay interest (including post-petition interest in
any proceeding under Bankruptcy Law) on overdue principal and premium, if any,
from time to time on demand at a rate that is 1% per annum in excess of the rate
then in effect; it shall pay interest (including post-petition interest in any
proceeding under Bankruptcy Law) on overdue installments of interest, Liquidated
Damages and the Non-Redemption Payment in cash (without regard to any applicable
grace periods) from time to time on demand at the same rate to the extent
lawful. Interest and Liquidated Damages will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest and Liquidated
Damages on the Notes (except defaulted interest) to the Persons who are
registered Holders of Notes at the close of business on the February 1 or August
1
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next preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable both as to principal and interest at the office or agency of the
Company maintained for such purpose within or without the City and State of New
York, or, at the option of the Company, payment of interest may be made by check
mailed to the Holders at their addresses set forth in the register of Holders.
3. Paying Agent and Registrar. Initially, U.S. Trust Company of
Texas, N.A., the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture, dated
as of June 11, 1999 (the "Indenture"), between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code xx.xx. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. [The Notes are unsecured obligations of the Company limited to
$197,646,000 in aggregate principal amount.]** [The Notes are unsecured
obligations of the Company limited to $200 million in aggregate principal
amount.]***
** This language should be included only for the Series A Notes.
*** This language should be included only for the Series B Notes. The
aggregate amount of Series B Notes will be either $200 million or, if less
than all of the holders of the Untendered SFC Notes exchange such notes in
the Additional Exchange Offer, the excess of (a) $200 million over (b) the
aggregate principal amount of Untendered SFC Notes.
5. Optional Redemption. The Company shall have the option to redeem
the Notes, 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 to the applicable
redemption date, if redeemed during the twelve-month period beginning on August
15 of the years indicated below:
Year Percentage
---- ----------
1998.............................. 103.786%
1999.............................. 101.893%
2000 and thereafter............... 100.000%
=======
If the Company fails to redeem the Notes, in whole, on or before
November 15, 2002 (the "Non-Redemption Event"), the Company shall direct the
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Trustee to pay the Non-Redemption Payment to the Person in whose name such Note
was registered at the close of business on November 15, 2002. If the Company is
required to pay the Non-Redemption Payment, on November 15, 2002 the Company
shall deposit with the Trustee or with the Paying Agent money sufficient to pay
the Non-Redemption Payment. On November 16, 2002, the Company (or the Trustee in
the name of and at the expense of the Company) shall mail or cause to be mailed
to Holders the Non-Redemption Payment.
6. Mandatory Redemption. Except as set forth in paragraph 7 below,
or pursuant to Section 4.15 of the Indenture, the Company is not required to
make mandatory redemption or sinking fund payments with respect to the Notes.
7. Redemption or Repurchase at Option of Holder.
(a) If there is a Change of Control, each Holder of Notes
shall have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at a purchase price
equal to 101% of the aggregate principal amount thereof plus the accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Payment"). Within 30 days following any Change of Control, the Company shall
mail a notice to each Holder stating: (1) that the Change of Control Offer is
being made pursuant to Section 4.15 of the Indenture and that all Notes tendered
shall be accepted for payment; (2) the purchase price and the purchase date,
which shall be no later than 30 Business Days from the date such notice is
mailed (the "Change of Control Payment Date"); (3) that any Note not tendered
shall continue to accrue interest; (4) that, unless the Company defaults in the
payment of the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest after the
Change of Control Payment Date; (5) that Holders electing to have any Notes
purchased pursuant to a Change of Control Offer shall be required to surrender
the Notes, with the form entitled "Option of Holder to Elect Purchase" on the
reverse of the Notes completed, to the Paying Agent 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) that Holders shall be entitled to
withdraw their election if the Paying Agent receives, not later than the close
of business on the second Business Day preceding the Change of Control Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of Holder, the principal amount of Notes delivered for purchase, and a statement
that such Holder is withdrawing his election to have such Notes purchased; and
(7) that Holders whose Notes are being purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof.
(b) If the Company or a Subsidiary consummates any Asset Sale
(other than a Principal Business Asset Sale), within five days of each date on
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which the aggregate amount of Excess Proceeds exceeds $15 million, the Company
shall commence an offer to all Holders of Notes (an "Asset Sale Offer") pursuant
to Section 3.9 of the Indenture to purchase the maximum principal amount of
Notes that may be purchased out of the Excess Proceeds at an offer price in cash
in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest, if any, to the date fixed for the closing of such offer in
accordance with the procedures set forth in Section 3.9 of the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use
such deficiency for general corporate purposes. Holders of Notes that are the
subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. Subordination. The Notes are subordinated to Senior Debt, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed or guaranteed. "Senior Debt" means (i) all Senior Term Debt outstanding
from time to time, (ii) all Senior Revolving Debt outstanding from time to time,
(iii) the Company's 12 1/8% Series A Senior Notes due 2002 and the Company's
12 1/8% Series B Senior Notes due 2002, (iv) the Company's 11 1/4% Series A
Senior Notes due 2001 and the Company's 11 1/4% Series B Senior Notes due 2001,
(v) Hedging Obligations and (vi) any other indebtedness that is Permitted to be
incurred by the Company pursuant to the Indenture unless the instrument under
which such indebtedness is incurred expressly provides that it is on a parity
with or subordinated in right of payment to the Notes. "Senior Debt" shall
include, without limitation, interest on any of the obligations described in the
preceding clauses (i) through (vi) accruing after the filing of a petition by or
against the Company under any Bankruptcy Law, in accordance with and at the rate
(including any rate applicable upon any default or event of default) specified
in the applicable agreement under which such obligations are created, whether or
not the claim for such interest is allowed as a claim after such filing in any
proceeding under such Bankruptcy Law. Notwithstanding anything to the contrary
in the foregoing, Senior Debt shall not include (x) any indebtedness of the
Company to any of its Subsidiaries or other Affiliates, (y) any indebtedness
incurred for the purchase of goods or materials or for services obtained in the
ordinary course of business (other than the Senior Revolving Debt) and (z) any
indebtedness that is incurred in violation of the Indenture. To the extent
provided in the Indenture, Senior Debt must be paid before the Notes may be
A-7
paid. The Company agrees, and each Holder by accepting a Note agrees, to the
Subordination and authorizes the Trustee to give it effect.
10. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
12. Amendments Supplement and Waivers. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act. Without the
consent of the Holders of at least 75% in principal amount of the Notes then
outstanding (including consents obtained in connection with a tender offer or
exchange offer for such Notes), no waiver or amendment to the Indenture may make
any change in the provisions of Section 4.15 of the Indenture that adversely
affects the rights of any Holder of such Notes.
13. Defaults and Remedies. Events of Default include: (i) default
for 30 days in the payment when due of interest or Liquidated Damages on the
Notes, whether or not prohibited by the subordination provisions of the
Indenture; (ii) default in payment when due of principal of, or premium, if any,
or the Non-Redemption Payment, if any, on the Notes when the same becomes due
and payable at maturity, upon redemption (including in connection with an offer
to purchase) or otherwise,
A-8
whether or not prohibited by the subordination provisions of the Indenture;
(iii) failure by the Company to comply with the provisions described under
Sections 4.10 or 5.1 of the Indenture or failure by the Company for 15 days to
comply with the provisions described under Sections 4.7 or 4.9 of the Indenture;
(iv) failure by the Company for 60 days after notice to the Company by the
Trustee or the Holders of at least 25% in principal amount of the Notes then
outstanding to comply with any other agreements in the Indenture or the Notes;
(v) default under any mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any Indebtedness for money
borrowed by the Company or any of its Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Subsidiaries) whether such Indebtedness
or guarantee now exists, or is created after the date of the Indenture, which
default (a) is caused by a failure to pay at final maturity principal of such
Indebtedness within the grace period provided in such Indebtedness (a "Final
Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its express final maturity and, in each case, the principal amount of such
Indebtedness, together with the principal amount of any other Indebtedness under
which there has been a Final Payment Default or the maturity of which has been
so accelerated, aggregates $10 million or more, and such Final Payment Default
or acceleration shall not have been cured or rescinded within 10 days after the
occurrence thereof, or (2) the principal amount of such Indebtedness, together
with the principal amount of any other Indebtedness under which there has been a
Final Payment Default or the maturity of which has been so accelerated,
aggregates $50 million or more or (3) a Final Payment Default or acceleration
shall have occurred with respect to the Senior Term Debt, the Senior Revolving
Debt, the 12 1/8% Senior Notes or the 11 1/4% Senior Notes; (vi) failure by the
Company, any of its Significant Subsidiaries or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, to pay any final
judgment or judgments (other than any judgment to the extent a reputable
insurance company has accepted liability) aggregating in excess of $10 million,
which judgments remain unstayed or undischarged for a period of 60 days; and
(vii) certain events of bankruptcy or insolvency with respect to the Company,
any of its Significant Subsidiaries or any group of Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
principal amount of the then outstanding Notes may declare all the Notes to be
due and payable immediately. So long as any Designated Senior Debt is
outstanding, such declaration shall not become effective until the earlier of
(x) the day which is five Business Days after the receipt by representatives of
Designated Senior Debt of such written notice of acceleration (which notice may
only be given during the continuation of an Event of Default) or (y) the date of
acceleration of any Designated Senior Debt. Notwithstanding the foregoing, in
the case of an Event of Default arising from certain events of bankruptcy or
insolvency with respect to the Company, any Significant Subsidiary or any group
of Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in
A-9
principal amount of the then outstanding Notes may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default or Event of Default (except a Default or
Event of Default relating to the payment of principal or interest) if it
determines that withholding notice is in their interest. If an Event of Default
occurs by reason of any willful action (or inaction) taken (or not taken) by or
on behalf of the Company with the intention of avoiding payment of the premium
that the Company would have had to pay if the Company then had elected to redeem
any Notes pursuant to the optional redemption provisions of the Indenture, an
equivalent premium shall also become and be immediately due and payable to the
extent permitted by law. The Holders of a majority in aggregate principal amount
of the Notes then outstanding by notice to the Trustee may on behalf of the
Holders of all of the Notes waive any existing Default or Event of Default and
its consequences under the Indenture (including annulling a declaration of
acceleration of maturity) except a continuing Default or Event of Default in the
payment of interest on, or the principal of, such Notes. The Company is required
to deliver to the Trustee annually a statement regarding compliance with the
Indenture, and the Company is required upon becoming aware of any Default or
Event of Default, to deliver to the Trustee a statement specifying such Default
or Event of Default.
14. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not Trustee.
15. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. Authentication. This Note shall not be valid until authenticated
by the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
A-10
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
19. Additional Rights of Holders of Transfer Restricted Notes. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Notes shall have all the rights set forth in the
Registration Rights Agreement referred to above.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or Registration Rights Agreement.
Requests may be made to:
SFC New Holdings Inc.
000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
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Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to __________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
Date: _______________
Your Signature: _____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee.
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Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
|_| Section 4.10 |_| Section 4.15
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the
amount you elect to have purchased: $______________
Date:_________________ Your Signature: ____________________________________
(Sign exactly as your name appears on the Note)
Tax Identification No.:_____________________
Signature Guarantee.
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SCHEDULE OF EXCHANGES OF DEFINITIVE NOTE(2)
The following exchanges of a part of this Global Note for Definitive
Notes have been made:
Amount of Principal Amount
decrease in Amount of increase of this Global Signature of
Principal in Principal Note following authorized officer
Amount of this Amount of this such decrease (or of Trustee or
Date of Exchange Global Note Global Note increase) Note Custodian
-----------------------------------------------------------------------------------------------
----------
(2) This should be included only if the Note is issued in global form.
A-14
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF NOTES
Re: 13 1/4% [Series A] [Series B] Senior Subordinated Notes due 2003 of SFC
New Holdings, Inc.
This Certificate relates to $____________ principal amount of Notes
held in * ____________ book-entry or * ___________ definitive form by
_________________________________________________________ (the "Transferor").
The Transferor*:
|_| has requested the Trustee by written order to deliver in exchange for
its beneficial interest in the Global Note held by the Depository a Note or
Notes in definitive, registered form of authorized denominations in an aggregate
principal amount equal to its beneficial interest in such Global Note (or the
portion thereof indicated above); or
|_| has requested the Trustee by written order to exchange or register the
transfer of a Note or Notes.
In connection with such request and in respect of each such Note,
the Transferor does hereby certify that the Transferor is familiar with the
Indenture relating to the above captioned Notes and as provided in Section 2.6
of such Indenture, the transfer of this Note does not require registration under
the Securities Act (as defined below) because:*
|_| Such Note is being acquired for the Transferor's own account, without
transfer (in satisfaction of Section 2.6(a)(ii)(A) or Section 2.6(d)(i)(A) of
the Indenture).
|_| Such Note is being transferred to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act")) in reliance on Rule 144A (in satisfaction of Section
2.6(a)(ii)(B), Section 2.6(b)(A) or Section 2.6(d)(i)(B) of the Indenture) or
pursuant to an exemption from registration in accordance with Rule 904 under the
Securities Act (in satisfaction of Section 2.6(a)(ii)(B) or Section 2.6(d)(i)(B)
of the Indenture).
----------
* Check applicable box.
|_| Such Note is being transferred in accordance with Rule 144 under the
Securities Act, or pursuant to an effective registration statement under the
Securities Act (in satisfaction of Section 2.6(a)(ii)(B) or Section 2.6(d)(i)(B)
of the Indenture).
|_| Such Note is being transferred in reliance on and in compliance with
an exemption from the registration requirements of the Securities Act, other
than Rule 144A, 144 or Rule 904 under the Securities Act. An Opinion of Counsel
to the effect that such transfer does not require registration under the
Securities Act accompanies this Certificate (in satisfaction of Section
2.6(a)(ii)(C) or Section 2.6(d)(i)(C) of the Indenture).
-----------------------------------------
[INSERT NAME OF TRANSFEROR]
By:______________________________________
Date:_____________________________
----------
* Check applicable box.
================================================================================
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