EXHIBIT 4.1
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COUNTY SEAT STORES, INC.,
AS ISSUER,
AND
THE SUBSIDIARY GUARANTORS NAMED HEREIN
AND
FIRST TRUST NATIONAL ASSOCIATION
AS TRUSTEE,
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INDENTURE
DATED AS OF OCTOBER 29, 1997
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$85,000,000
12 3/4% SENIOR NOTES DUE 2004
WITH
SERIES A WARRANTS TO PURCHASE SHARES OF COMMON STOCK
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TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE................................. 1
SECTION 1.1 Definitions.............................................. 1
SECTION 1.2 Other Definitions........................................ 18
SECTION 1.3 Incorporation by Reference of TIA........................ 19
SECTION 1.4 Rules of Construction.................................... 20
ARTICLE TWO
THE NOTES.................................................................. 20
SECTION 2.1 Form and Dating.......................................... 20
SECTION 2.2 Execution and Authentication; Aggregate
Principal Amount........................................21
SECTION 2.3 Registrar and Paying Agent............................... 22
SECTION 2.4 Paying Agent To Hold Assets in Trust..................... 23
SECTION 2.5 Holder Lists............................................. 23
SECTION 2.6 Transfer and Exchange.................................... 23
SECTION 2.7 Replacement Notes........................................ 24
SECTION 2.8 Outstanding Notes........................................ 25
SECTION 2.9 Treasury Notes........................................... 25
SECTION 2.10 Temporary Notes.......................................... 25
SECTION 2.11 Cancellation............................................. 26
SECTION 2.12 CUSIP Number............................................. 26
SECTION 2.13 Deposit of Monies........................................ 26
SECTION 2.14 Book-Entry Provisions for Global Note.................... 27
SECTION 2.15 Special Transfer Provisions.............................. 28
SECTION 2.16 Defaulted Interest....................................... 30
ARTICLE THREE
REDEMPTION................................................................. 31
SECTION 3.1 Notices to Trustee....................................... 31
SECTION 3.2 Selection of Notes To Be Redeemed........................ 32
SECTION 3.3 Optional Redemption...................................... 32
SECTION 3.4 Notice of Redemption..................................... 33
SECTION 3.5 Effect of Notice of Redemption........................... 34
SECTION 3.6 Deposit of Redemption Price.............................. 34
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SECTION 3.7 Notes Redeemed in Part................................... 34
ARTICLE FOUR
COVENANTS.................................................................. 35
SECTION 4.1 Payment of Notes......................................... 35
SECTION 4.2 Maintenance of Office or Agency.......................... 35
SECTION 4.3 Corporate Existence...................................... 35
SECTION 4.4 Payment of Taxes and other Claims........................ 36
SECTION 4.5 Maintenance of Properties and Insurance.................. 36
SECTION 4.6 Compliance Certificate; Notice of Default................ 36
SECTION 4.7 Compliance with Laws..................................... 37
SECTION 4.8 Reports.................................................. 37
SECTION 4.9 Waiver of Stay, Extension or Usury Laws.................. 38
SECTION 4.10 Limitation on Restricted Payments........................ 38
SECTION 4.11 Limitation on Transactions with Affiliates............... 40
SECTION 4.12 Limitation on Incurrence of Additional
Indebtedness and Issuance of Preferred Stock........... 41
SECTION 4.13 Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries.................... 41
SECTION 4.14 Repurchase Upon Change of Control........................ 42
SECTION 4.15 Limitation on Asset Sales................................ 43
SECTION 4.16 Limitation on Issuances and Sales of
Capital Stock of Restricted Subsidiaries............... 46
SECTION 4.17 Impairment of Security Interest.......................... 47
SECTION 4.18 Limitation on Liens...................................... 47
SECTION 4.19 Conduct of Business...................................... 47
SECTION 4.20 Payments For Consent..................................... 47
SECTION 4.21 Registration Rights Agreement............................ 48
SECTION 4.22 Warrant Agreement........................................ 48
SECTION 4.23 Intercompany Indebtedness................................ 48
SECTION 4.24 Key Man Life Insurance................................... 48
SECTION 4.25 Use of Proceeds.......................................... 48
ARTICLE FIVE
SUCCESSOR CORPORATION...................................................... 49
SECTION 5.1 Merger, Consolidation and Sale of Assets................. 49
SECTION 5.1 Successor Corporation Substituted........................ 50
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ARTICLE SIX
DEFAULT AND REMEDIES....................................................... 51
SECTION 6.1 Events of Default........................................ 51
SECTION 6.2 Acceleration............................................. 52
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 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
SECTION 6.12 Restoration of Rights and Remedies....................... 57
SECTION 6.13 Rights and Remedies Cumulative........................... 57
SECTION 6.14 Delay or Omission Not Waiver............................. 57
ARTICLE SEVEN
TRUSTEE.................................................................... 57
SECTION 7.1 Duties of Trustee........................................ 57
SECTION 7.2 Rights of Trustee........................................ 59
SECTION 7.3 Individual Rights of Trustee............................. 60
SECTION 7.4 Trustee's Disclaimer..................................... 60
SECTION 7.5 Notice of Default........................................ 60
SECTION 7.6 Reports by Trustee to Holders............................ 60
SECTION 7.7 Compensation and Indemnity............................... 61
SECTION 7.8 Replacement of Trustee................................... 62
SECTION 7.9 Successor Trustee by Merger, Etc......................... 63
SECTION 7.10 Eligibility; Disqualification............................ 63
SECTION 7.11 Preferential Collection of Claims
Against Company........................................ 64
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE.................................... 64
SECTION 8.1 Legal Defeasance and Covenant Defeasance................. 64
SECTION 8.2 Satisfaction and Discharge............................... 65
SECTION 8.3 Survival of Certain Obligations.......................... 66
SECTION 8.4 Acknowledgment of Discharge by Trustee................... 66
SECTION 8.5 Application of Trust Monies.............................. 67
SECTION 8.6 Repayment to the Company; Unclaimed Money................ 67
SECTION 8.7 Reinstatement............................................ 68
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ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS........................................ 68
SECTION 9.1 Without Consent of Holders............................... 68
SECTION 9.2 With Consent of Holders.................................. 69
SECTION 9.3 Compliance with TIA...................................... 70
SECTION 9.4 Revocation and Effect of Consents........................ 70
SECTION 9.5 Notation on or Exchange of Notes......................... 71
SECTION 9.6 Trustee To Sign Amendments, Etc.......................... 71
ARTICLE TEN
GUARANTEE.................................................................. 72
SECTION 10.1 Unconditional Guarantee.................................. 72
SECTION 10.2 Subsidiary Guarantees.................................... 73
SECTION 10.3 Limitations on Subsidiary Guarantees..................... 73
SECTION 10.4 Evidence of Execution and Delivery of
Subsidiary Guarantee................................... 74
SECTION 10.5 Release of a Subsidiary Guarantor........................ 74
SECTION 10.6 Waiver of Subrogation.................................... 75
SECTION 10.7 Immediate Payment........................................ 76
SECTION 10.8 No Set-Off............................................... 76
SECTION 10.9 Obligations Absolute..................................... 76
SECTION 10.10 Obligations Continuing................................... 76
SECTION 10.11 Obligations Not Reduced.................................. 77
SECTION 10.12 Obligations Reinstated................................... 77
SECTION 10.13 Obligations Not Affected................................. 77
SECTION 10.14 Waiver................................................... 79
SECTION 10.15 No Obligation To Take Action Against
the Company............................................ 79
SECTION 10.16 Dealing with the Company and Others...................... 79
SECTION 10.17 Default and Enforcement.................................. 80
SECTION 10.18 Certain Bankruptcy Events................................ 80
SECTION 10.19 Acknowledgment........................................... 80
SECTION 10.20 Costs and Expenses....................................... 80
SECTION 10.21 No Merger or Waiver; Cumulative Remedies................. 80
SECTION 10.22 Survival of Obligations.................................. 81
SECTION 10.23 Subsidiary Guarantee in Addition to
Other Obligations...................................... 81
SECTION 10.24 Severability............................................. 81
SECTION 10.25 Successors and Assigns................................... 81
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ARTICLE ELEVEN
SECURITY ACCOUNT........................................................... 82
ARTICLE TWELVE
MISCELLANEOUS.............................................................. 84
SECTION 12.1 TIA Controls............................................. 84
SECTION 12.2 Notices.................................................. 84
SECTION 12.3 Communications by Holders with Other Holders............. 85
SECTION 12.4 Certificate and Opinion as to Conditions Precedent....... 85
SECTION 12.5 Statements Required in Certificate or Opinion............ 85
SECTION 12.6 Rules by Trustee, Paying Agent, Registrar................ 86
SECTION 12.7 Legal Holidays........................................... 86
SECTION 12.8 Governing Law; Jurisdiction; Submission to Venue......... 86
SECTION 12.9 No Adverse Interpretation of other Agreements............ 87
SECTION 12.10 No Recourse Against Others............................... 87
SECTION 12.11 Successors............................................... 88
SECTION 12.12 Duplicate Originals...................................... 88
SECTION 12.13 Severability............................................. 88
SECTION 12.14 Independence of Covenants................................ 88
SECTION 12.15 Table of Contents, Headings, Etc......................... 88
SIGNATURES................................................................. 89
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CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
310(a)(1)............................................................... 7.10
(a)(2)............................................................... 7.10
(a)(3)............................................................... N.A.
(a)(4)............................................................... N.A.
(a)(5)......................................................... 7.08; 7.10
(b)..................................................... 7.08; 7.10; 12.02
(c).................................................................. N.A.
311(a).................................................................. 7.11
(b).................................................................. 7.11
(c).................................................................. N.A.
312(a).................................................................. 2.05
(b)................................................................. 12.03
(c)................................................................. 12.03
313(a).................................................................. 7.06
(b)(1).................................................................N.A.
(b)(2)............................................................... 7.07
(c)........................................................... 7.06; 12.02
(d).................................................................. 7.06
314(a)..................................................... 4.07; 4.08; 12.02
(b).................................................................. N.A.
(c)(1).............................................................. 12.04
(c)(2).............................................................. 12.04
(c)(3)............................................................... N.A.
(d).................................................................. N.A.
(e)................................................................. 12.05
(f).................................................................. N.A.
315(a)............................................................... 7.01(b)
(b)........................................................... 7.05; 12.02
(c)............................................................... 7.01(a)
(d)............................................................... 7.01(c)
(e).................................................................. 6.11
316(a) (last sentence).................................................. 2.09
(a)(1)(A)............................................................ 6.05
(a)(1)(B)............................................................ 6.04
(a)(2)............................................................... N.A.
(b).................................................................. 6.07
(c).................................................................. 9.04
317(a)(1)............................................................... 6.08
(a)(2)............................................................... 6.09
(b).................................................................. 2.04
318(a).................................................................. 12.01
(c).................................................................. 12.01
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N.A. means not applicable
NOTE: This Cross-Reference Table shall not, for any purpose, be deemed to be
a part of the Indenture.
EXHIBITS
EXHIBIT A - FORM OF INITIAL NOTES....................................A-1
EXHIBIT B - FORM OF EXCHANGE NOTES...................................B-1
EXHIBIT C - FORM OF LEGEND FOR GLOBAL NOTES..........................C-1
EXHIBIT D - CERTIFICATE IN CONNECTION WITH TRANSFERS TO
INSTITUTIONAL ACCREDITED INVESTORS.......................D-1
EXHIBIT E - CERTIFICATE IN CONNECTION WITH
REGULATION S TRANSFERS...................................E-1
EXHIBIT F - FORM OF NOTATION ON NOTE RELATING
TO SUBSIDIARY GUARANTEE..................................F-1
INDENTURE, dated as of October 29, 1997, among County Seat Stores,
Inc., a Minnesota corporation (the "Company"), the Subsidiary Guarantors
referred to below and First Trust National Association, as trustee (the
"Trustee").
The Company has duly authorized the creation of an issue of 12 3/4%
Senior Notes (the "Initial Notes") and 12 3/4% Senior Notes due November 1,
2004, Series B to be issued in exchange for the Initial Notes pursuant to the
Registration Rights Agreement (as defined) (the "Exchange Notes" and, together
with the Private Exchange Notes (as defined) and the Initial Notes, the "Notes")
and, to provide therefor, the Company has duly authorized the execution and
delivery of this Indenture. The Notes will be jointly and severally guaranteed,
by the Subsidiary Guarantors (as defined). All things necessary to make the
Notes, when duly issued and executed by the Company and authenticated and
delivered hereunder, the valid obligations of the Company and the Subsidiary
Guarantors, and to make this Indenture a valid and binding agreement of the
Company and the Subsidiary Guarantors, have been done.
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders (as defined).
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.1 DEFINITIONS.
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"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, excluding
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 INTEREST" has the meaning set forth in the
Registration Rights Agreement.
"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 specified Person,
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management of policies of such Person, whether
through the ownership of voting securities, by agreement or otherwise; PROVIDED,
HOWEVER, that in the case of a corporation, beneficial ownership of 10% or more
of the aggregate voting power of the Voting Stock of a person shall be deemed to
be control. In
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the case of an individual, (A) members of such Person's immediate
family (as defined in Instruction 2 of Item 404(a) of Regulation S-K under the
Securities Act) and (B) trusts, any trustee or beneficiaries of which are such
Person or members of such Person's immediate family, shall be under common
control with such individual. Notwithstanding the foregoing, neither the Initial
Purchaser nor any of its Affiliates will be deemed to be Affiliates of the
Company.
"AGENT" means any Registrar, Paying Agent, Authenticating Agent
or co-Registrar.
"ASSET SALE" means, with respect to any transaction or series of
transactions, any direct or indirect sale, issuance, conveyance, transfer, lease
(other than operating leases entered into in the ordinary course of business),
assignment or other transfer for value by the Company or any of its Restricted
Subsidiaries to any Person other than the Company or a Wholly-Owned Restricted
Subsidiary of the Company of (a) any Capital Stock of any Restricted Subsidiary
of the Company; or (b) any other property or assets of the Company or any
Restricted Subsidiary of the Company other than in the ordinary course of
business; PROVIDED, HOWEVER, that Asset Sales shall not include (i) the sale,
lease, conveyance, disposition or other transfer of all or substantially all the
assets of the Company as permitted under Section 5.1 hereof, (ii) the sale,
conveyance, transfer or other disposition by the Company or any of its
Restricted Subsidiaries of (x) obsolete or unusable inventory or other assets or
(y) receivables generated by customer purchases in the ordinary course of
business, (iii) Sale and Leaseback Transactions or (iv) the incurrence by the
Company of any Permitted Liens.
"BANKRUPTCY LAW" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"BOARD OF DIRECTORS" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.
"BOARD RESOLUTION" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such Person
to have been duly adopted by the Board of Directors of such Person and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"BUSINESS DAY" means a day that is not a Legal Holiday.
"CAPITAL LEASE OBLIGATION" means, as to any Person, the obligations
of such Person under a lease that are required to be classified and accounted
for as capital lease obligations under GAAP and, for purposes of this
definition, the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations, rights or other
equivalents (however designated) of
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corporate stock, including, without limitation, partnership interests and other
indicia of ownership and (ii) with respect to any other Person, any and all
partnership or other equity interests of such Person.
"CASH EQUIVALENTS" means: (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof, or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America; (ii) commercial paper rated the highest
grade by Xxxxx'x Investors Service, Inc. and Standard & Poor's Corporation and
maturing not more than one year from the date of creation thereof; (iii) time
deposits with, and certificates of deposit and banker's acceptances issued by,
any bank having capital surplus and undivided profits aggregating at least $500
million and maturing not more than one year from the date of creation thereof;
(iv) repurchase agreements that are secured by a perfected security interest in
an obligation described in clause (i) and are with any bank described in clause
(iii); (v) money market accounts with any bank having capital surplus and
undivided profits aggregating at least $500 million; (vi) readily marketable
direct obligations issued by any state of the United States of America or any
political subdivision thereof having one of the two highest rating categories
obtainable from either Xxxxx'x Investors Service, Inc. or Standard & Poor's
Corporation; and (vii) money market funds investing only in U.S. Government
Obligations or repurchase agreements backed only by U.S. Government Obligations.
"CHANGE OF CONTROL" means the occurrence of any of the following (in
one transaction or a series of transactions): (i) the sale, lease, transfer,
conveyance or other disposition of all or substantially all of the Company's
assets to any "person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Exchange Act) other than to one or more Existing Holders; (ii) the
liquidation or dissolution of the Company or the adoption of a plan by the
stockholders of the Company relating to the dissolution or liquidation of the
Company; (iii) at any time following the first anniversary of the Effective
Date, any "person" or "group" (as such terms are used in Section 13(d) and 14(d)
of the Exchange Act), except for one or more Existing Holders, is or becomes the
"beneficial owner" (as such term is defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 50% of the aggregate ordinary voting power
of the total outstanding Voting Stock of the Company; or (iv) at any time
following the first anniversary of the Effective Date, with respect to the
Company's Board of Directors as such board is constituted on and after the
Effective Date, during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the Company
(together with any new directors who are approved by a vote of at least 662/3%
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Company then still in office.
"CHAPTER 11 FILING" means the filing by the Company of a petition
for reorganization relief under Chapter 11 of the United States Bankruptcy Code
on October 17, 1996 with the United States Bankruptcy Court for the District of
Delaware.
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"COMMON STOCK" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of such Person's common stock, whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.
"COMPANY" means the party named as such above, until a successor
replaces such Person in accordance with the terms of this Indenture, and
thereafter means such successor.
"CONSOLIDATED CASH FLOW" means, with respect to any Person for any
period, the Consolidated Net Income of such Person for such period plus (to the
extent such amounts are deducted in calculating such income (loss) from
operations of such Person for such period and without duplication) (a) provision
for taxes based on income or profits to the extent such provision for taxes was
included in computing Consolidated Net Income, (b) consolidated interest expense
of such person for such period, whether paid or accrued (including deferred
financing costs, non-cash interest payments and the interest component of
capital lease obligations), to the extent such expense was deducted in computing
Consolidated Net Income, and (c) depreciation and amortization (including
amortization of goodwill and other intangibles) for such period to the extent
such depreciation or amortization were deducted in computing Consolidated Net
Income, in each case, on a consolidated basis and determined in accordance with
GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP, plus extraordinary charges deducted in computing Net Income to the
extent related to and incurred in respect of the Chapter 11 Filing, the Offering
and the issuance of the New Notes; PROVIDED, that (i) the Net Income of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid to the referent Person or a Wholly-Owned
Subsidiary thereof, (ii) the Net Income of any Restricted Subsidiary will not be
included to the extent that declarations of dividends or similar distributions
by that Restricted Subsidiary are not at the time permitted, directly or
indirectly, by operation of the terms of its organization document or any
agreement, instrument, judgment or state or government regulation, (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 Restricted 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 (a) any cash received by such Person upon
issuance of
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such preferred stock and (b) the fair market value of any non-cash consideration
received by such Person upon issuance of such preferred stock; PROVIDED that
such value has been determined in good faith by a nationally recognized
investment bank, less (x) all write-ups, subsequent to the date of this
Indenture, in the book value of assets owned by such Person or a consolidated
Restricted Subsidiary of such Person, other than (a) write-ups resulting from
foreign currency translations and (b) write-ups upon the acquisition of assets
acquired in a transaction to be accounted for by purchase accounting under GAAP,
(y) all investments in persons that are not consolidated Restricted Subsidiaries
(except, in each case, a Permitted Investment), and (z) all unamortized debt
discount and expense and unamortized deferred financing charges (except such
amounts arising from the issuance of the Notes), all of the foregoing determined
in accordance with GAAP.
"CUSTODIAN" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"DEFAULT" means any event known to the Company or which should have
been known to the Company after due inquiry that is, or with the passage of time
or the giving of notice or both would be, an Event of Default.
"DEPOSITORY" means The Depository Trust Company, its nominees and
successors.
"DISBURSEMENT FUNDS" means the proceeds from the sale of the Units
to be deposited in the Security Account in an aggregate amount specified in the
Security and Disbursement Agreement to, among other things, pay interest on the
Notes that accrues and is unpaid from the Issue Date through and including the
Interest Payment Date on May 1, 1999.
"DISQUALIFIED STOCK" means any Capital Stock which, (i) either 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 Maturity Date or (ii) is convertible or exchangeable at the option of the
issuer thereof or any other Person for debt securities.
"DTC" means The Depository Trust Company, a New York corporation.
"EQUITY INTERESTS" means Capital Stock or warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, or any successor statute or statutes thereto.
"EXCHANGE NOTES" has the meaning provided in the Preamble to this
Indenture.
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"EXCHANGE OFFER" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange New Notes for the
Notes.
"EXISTING HOLDERS" shall mean, collectively, the record and
beneficial holders of Common Stock that receive such Common Stock in connection
with the Plan of Reorganization.
"FAIR MARKET VALUE" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the transaction. Unless
otherwise provided herein, fair market value shall be determined by the Board of
Directors of the Company acting reasonably and in good faith and shall be
evidenced by a Board Resolution of the Board of Directors of the Company
delivered to the Trustee.
"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 Restricted Subsidiaries incurs, assumes, guarantees,
repays, repurchases or redeems any Indebtedness (other than revolving credit
borrowings) or issues or redeems Preferred Stock subsequent to the commencement
of the period for which the Fixed Charge Coverage Ratio is being calculated but
prior to the event for which the calculation of the Fixed Charge Coverage Ratio
is made, then the Fixed Charge Coverage Ratio (both the numerator and the
denominator therein) shall be calculated giving pro forma effect to such
incurrence, assumption, guarantee, repayment, repurchase or redemption of
Indebtedness, or such issuance or redemption of Preferred Stock, as if the same
had occurred at the beginning of the applicable period; PROVIDED that pro forma
effect shall be given to repayments, repurchases or redemptions of Indebtedness
or Preferred Stock only to the extent such Indebtedness or Preferred Stock is
permanently retired (and, in the case of the Notes, surrendered to the Trustee
for cancellation). In addition, in the event of any Asset Sale, Consolidated
Cash Flow for such period shall be reduced by an amount equal to the
Consolidated Cash Flow (if positive) directly attributable to the assets sold
and Consolidated Interest Expense shall be reduced by an amount equal to the
Consolidated Interest Expense directly attributable to any Indebtedness assumed
by third parties or repaid with the proceeds of such Asset Sale, in each case as
if the same had occurred at the beginning of the applicable period. In the event
that acquisitions, divestitures, mergers or consolidations have been made by the
Company or any of its Restricted Subsidiaries subsequent to the commencement of
the four-quarter period over 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 being made, then the Fixed Charge Coverage Ratio shall be
calculated giving pro forma effect to such acquisitions, divestitures, mergers
and consolidations as if such transactions had occurred at the beginning of the
applicable 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
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amortization of non-cash interest payments and the interest component of capital
leases but excluding amortization of deferred financing fees) and (b) the
product of (i) all dividend payments, whether paid in cash, assets, securities
or otherwise, in the case of a Person that is a Subsidiary of the Company, on
any series of preferred stock of such Person, and all dividend payments in
respect of any series of preferred stock of the Company, whether paid in cash,
assets, securities or otherwise (other than dividends payable in additional
shares of the preferred stock on which such dividends are paid), times (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the then current combined federal, state and local statutory tax rate of
such Person, expressed as a decimal, in each case, on a consolidated basis and
in accordance with GAAP.
"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.
"HOLDER" OR "HOLDER" means the Person in whose name a Note is
registered on the Registrar's books.
"INDEBTEDNESS" means, with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or bankers'
acceptances or letters of credit (or reimbursement agreements in respect
thereof) or representing the balance deferred and unpaid of the purchase price
of any property (including pursuant to capital leases) or representing any
Interest Rate Swap 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 Interest Rate Swap 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 (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, by such Person in any manner
(including, without limitation, letters of credit and reimbursement agreements
in respect thereof), of all or any part of any of the items which would be
included within this definition.
"INDENTURE" means this Indenture, as amended or supplemented from
time to time in accordance with the terms hereof.
"INDEPENDENT FINANCIAL ADVISOR" means a nationally recognized
independent public accounting firm or investment banking firm (i) which does
not, and whose directors, officers and employees or Affiliates do not, have a
direct or indirect financial interest in the Company and (ii) which, in the
judgment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"INITIAL NOTES" has the meaning provided in the Preamble to this
Indenture.
"INITIAL PURCHASER" means Xxxxxxxxx & Company, Inc.
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"INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"INTEREST PAYMENT DATE" means the stated maturity of an
installment of interest on the Notes.
"INTEREST RATE SWAP OBLIGATIONS" means the obligations of any Person
pursuant to any arrangement with any other Person, whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"INVESTMENTS" means, with respect to any Person, all investments by
such Person in other Persons (including Affiliates) in the form of loans
(including direct or indirect guarantees), advances or capital contributions
(excluding commissions, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities and all
other items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP.
"ISSUE DATE" means the date of original issuance of the Initial
Notes under this Indenture.
"LIEN" means, with respect to any asset, 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,
excluding true lease and consignment filings).
"MATURITY DATE" means November 1, 2004.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, the
proceeds in the form of cash or Cash Equivalents including payments in respect
of deferred payment obligations when received in the form of cash or Cash
Equivalents (other than the portion of any such deferred payment constituting
interest) received by the Company or any of its Subsidiaries from such Asset
Sale net of (a) reasonable out-of-pocket expenses and fees relating to such
Asset Sale (including, without limitation, legal, accounting and investment
banking fees and sales commissions), (b) taxes paid or payable after taking into
account any reduction in consolidated tax liability due to available tax credits
or deductions and any tax sharing arrangements, (c) repayment of Indebtedness
that is required to be repaid in connection with such Asset Sale and (d)
appropriate amounts to be provided by the Company or any Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any
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liabilities associated with such Asset Sale and retained by the Company or any
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale.
"NET INCOME" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP, 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
provisions for taxes on such extraordinary gain (but not loss).
"NEW NOTES" means the Company's 12 3/4% Senior Notes due 2004,
Series B, as described and authenticated and issued under the Indenture.
"NON-U.S. PERSON" means a Person who is not a U.S. Person, as
defined in Regulation S.
"NOTES" has the meaning provided in the Preamble to this Indenture
and means the Initial Notes, the Exchange Notes, and the Private Exchange Notes,
if any, treated as a single class of securities, as amended or supplemented from
time to time in accordance with the terms hereof, that are issued pursuant to
this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
this Indenture and the Notes.
"OFFERING CIRCULAR" means the Confidential Offering Circular, dated
October 23, 1997, as amended by any amendment or supplement thereto, in each
case relating to the offering of the Initial Notes.
"OFFICER" means, with respect to any Person, the chief executive
officer, the president, any vice president, the chief financial officer, the
treasurer, the controller, or the secretary or assistant secretary of such
Person, or any other officer designated by the Board of Directors to serve in a
similar capacity.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an assistant
treasurer or an assistant secretary of such Person and otherwise complying with
the requirements of Sections 12.4 and 12.5, as they relate to the making of an
Officers' Certificate.
"OPINION OF COUNSEL" means a written opinion from legal counsel, who
may be counsel for the Company and who is reasonably acceptable to the Trustee,
complying with the requirements of Sections 12.4 and 12.5, as they relate to the
giving of an Opinion of Counsel.
-9-
"PAYING AGENT" shall initially be the Trustee until a successor
paying agent for the Notes is selected in accordance with the Indenture.
"PERMITTED INDEBTEDNESS" means each of the following:
(a) Indebtedness incurred by the Company and its Subsidiaries under
the Senior Credit Facility in an aggregate principal amount not to exceed
$130 million;
(b) Indebtedness incurred by the Company or its Restricted
Subsidiaries in connection with or arising out of Sale and Leaseback
Transactions, Capital Lease Obligations or Purchase Money Obligations,
PROVIDED, that the aggregate principal amount at any one time outstanding
of all such Sale and Leaseback transactions, Capital Lease Obligations and
Purchase Money Obligations does not exceed $10 million;
(c) Indebtedness of the Company represented by the Notes or the New
Notes and Indebtedness of the Restricted Subsidiaries of the Company
represented by the Subsidiary Guarantees (whether incurred on the Issue
Date, or in connection with the Exchange Offer or any shelf registration
contemplated by the Registration Rights Agreement);
(d) Indebtedness owed by the Company to any of its Wholly-Owned
Subsidiaries for so long as such Indebtedness is held by a Wholly-Owned
Subsidiary of the Company, subject to no Lien except a Lien in favor of or
for the benefit of lenders party to the Senior Credit Facility; PROVIDED
that (i) any such Indebtedness of the Company is unsecured and
subordinated, pursuant to a written agreement, to the Company's
obligations under the Indenture and the Notes and (ii) if as of any date
any Person other than a Wholly-Owned Subsidiary of the Company owns or
holds any such Indebtedness or any Person holds a Lien in respect of such
Indebtedness, such date shall be deemed the date of incurrence of
Indebtedness not constituting Permitted Indebtedness of the Company;
(e) Indebtedness of a Wholly-Owned Subsidiary of the Company to the
Company or to a Wholly-Owned Subsidiary of the Company for so long as such
Indebtedness is held by the Company or a Wholly-Owned Subsidiary of the
Company, in each case subject to no Lien held by a Person other than (x)
the Company or a Wholly-Owned Subsidiary of the Company or (y) the lenders
party to the Senior Credit Facility or a Person acting as their agent;
PROVIDED that if as of any date any Person other than the Company or a
Wholly-Owned Subsidiary of the Company owns or holds such Indebtedness or
holds a Lien in respect of such Indebtedness, such date shall be deemed
the date of incurrence of Indebtedness not constituting Permitted
Indebtedness by the issuer of such Indebtedness;
(f) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness issued in exchange for, or the proceeds of which are
contemporaneously used to extend, refinance, renew, replace, or refund
(collectively, "Refinance")
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Xxxxxxxxx Xxxxxxxxxxxx referred to in clauses (a), (b) and (c) above and
outstanding Indebtedness incurred in accordance with Section 4.12 hereof
(other than pursuant to this definition of Permitted Indebtedness except
to the extent provided in clauses (a), (b) and (c) thereof) (the
"Refinancing Indebtedness"); PROVIDED, HOWEVER, that (i) the principal
amount of such Refinancing Indebtedness shall not exceed the principal
amount of Indebtedness so Refinanced (plus the amount of reasonable fees
required to be paid and reasonable expenses incurred in connection
therewith); (ii) the Refinancing Indebtedness shall rank in right of
payment no more senior (and at least as subordinated) to the Notes than
did the Indebtedness being Refinanced; (iii) if the Indebtedness being
Refinanced is Indebtedness of the Company or any Subsidiary, then such
Refinancing Indebtedness shall be Indebtedness solely of the Company or
such Subsidiary; (iv) such Refinancing Indebtedness shall have a Weighted
Average Life equal or longer than, and a stated maturity which is the same
or later than, that of the Indebtedness being Refinanced; and (v) the
Indebtedness so Refinanced is permanently retired (and, in case of the
Notes, surrendered to the Trustee for cancellation); and
(g) Interest Rate Swap Obligations of the Company covering
Indebtedness of the Company or any of its Restricted Subsidiaries and
Interest Rate Swap Obligations of any Restricted Subsidiary covering
Indebtedness of such Restricted Subsidiary; PROVIDED, HOWEVER, that such
Interest Rate Swap Obligations are entered into to protect the Company and
its Restricted Subsidiaries from fluctuations in interest rates on
Indebtedness incurred in accordance with this Indenture to the extent the
notional principal amount of such Interest Rate Swap Obligation does not
exceed the principal amount of the Indebtedness to which such Interest
Rate Swap Obligation relates.
"PERMITTED INVESTMENTS" means: (i) Investments by the Company or any
Wholly-Owned Subsidiary of the Company in any Person that is or will become
immediately after such Investment a Wholly-Owned Subsidiary of the Company or
that will merge or consolidate into the Company or a Wholly-Owned Subsidiary of
the Company, (ii) Investments in the Company by any Restricted Subsidiary of the
Company; PROVIDED that any Indebtedness evidencing such Investment is unsecured
and subordinated, pursuant to a written agreement, to the Company's obligations
under the Notes and this Indenture; (iii) investments in cash and Cash
Equivalents; (iv) Interest Rate Swap Obligations entered into in the ordinary
course of the Company's or its Subsidiaries' businesses and otherwise in
compliance with this Indenture; (v) Investments in securities of trade creditors
or customers received pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of such trade creditors or
customers; (vi) Investments in the Notes; (vii) Investments made by the Company
or its Subsidiaries as a result of an Asset Sale made in compliance with Section
4.15 hereof; (viii) Investments existing on the Issue Date; and (ix) Investments
in joint ventures or other similar arrangements in an aggregate amount not to
exceed $5 million.
"PERMITTED LIENS" means the following types of Liens:
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(i) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or its Restricted Subsidiaries
shall have set aside on its books such reserves as may be required
pursuant to GAAP;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
imposed by law incurred in the ordinary course of business for sums not
yet delinquent or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof;
(iii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business, or to secure the
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(iv) judgment Liens not giving rise to an Event of Default so long
as such Lien is adequately bonded and any appropriate legal proceedings
which may have been duly initiated for the review of such judgment shall
not have been finally terminated or the period within which such
proceedings may be initiated shall not have expired;
(v) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of the business of the Company
or any of its Restricted Subsidiaries;
(vi) any interest or title of a lessor under any Capital Lease
Obligation; PROVIDED that such Liens do not extend to any property or
assets which is not leased property subject to such Capital Lease
Obligation;
(vii) Purchase Money Liens of the Company or any Restricted
Subsidiary of the Company acquired in the ordinary course of business;
PROVIDED, HOWEVER, that (A) the related Purchase Money Obligation shall
not exceed the cost of such property or assets and shall not be secured by
any property or assets of the Company or any Restricted Subsidiary of the
Company other than the property and assets so acquired and (B) the Lien
securing such Indebtedness shall be created within 90 days of such
acquisition;
(viii) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumbered documents and other property
relating to such letters of credit and products and proceeds thereof;
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(ix) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual, or warranty requirements of the
Company or any of its Subsidiaries, including rights of offset and
set-off;
(x) Liens incurred in the ordinary course of business securing
Interest Rate Swap Obligations, which Interest Rate Swap Obligations
relate to Indebtedness that is otherwise permitted under this Indenture;
(xi) Liens securing Acquired Debt incurred in accordance with
Section 4.12 hereof; PROVIDED that (A) such Liens secured such Acquired
Debt at the time of and prior to the incurrence of such Acquired Debt by
the Company or a Restricted Subsidiary of the Company and were not granted
in connection with, or in anticipation of, the incurrence of such
Indebtedness by the Company or a Restricted Subsidiary of the Company and
(B) such Liens do not extend to or cover any property or assets of the
Company or of any of its Subsidiaries other than the property or assets
that secured the Acquired Debt prior to the time such Indebtedness became
Acquired Debt of the Company or a Restricted Subsidiary of the Company and
are no more favorable to the lienholders than those securing the Acquired
Debt prior to the incurrence of such Acquired Debt by the Company or a
Restricted Subsidiary of the Company;
(xii) Liens existing on the Issue Date to the extent and in the
manner such Liens are in effect on the Issue Date;
(xiii)Liens securing Indebtedness under the Senior Credit
Facility;
(xiv) Liens of the Company or a Wholly-Owned Subsidiary of the
Company on assets of any Subsidiary of the Company;
(xv) Liens securing Refinancing Indebtedness which is incurred to
Refinance any Indebtedness which has been secured by a Lien permitted
under this Indenture and which has been incurred in accordance with the
provisions of this Indenture; PROVIDED, HOWEVER, that such Liens (a) are
no less favorable to the Holders of Notes and are not more favorable to
the lienholders with respect to such Liens than the Liens in respect of
the Indebtedness being Refinanced and (b) other than Liens securing
Indebtedness under the Senior Credit Facility, do not extend to or cover
any property or assets of the Company or any of its Restricted
Subsidiaries not securing the Indebtedness so Refinanced; and
(xvi) Liens on the Security Account.
"PERSON" or "PERSON" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
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"PLAN OF REORGANIZATION" means the Company's plan of reorganization
confirmed by the United States Bankruptcy Court for the District of Delaware on
October 1, 1997.
"PLEDGED SECURITIES" means the U.S. Government Obligations to be
purchased by the Company and held in the Security Account in accordance with
the Security and Disbursement Agreement or any other U.S. Government
Obligations held in the Security Account.
"PREFERRED STOCK" means, with respect to any Person, any Capital
Stock of such Person or its Restricted Subsidiaries in respect of which a holder
thereof is entitled to receive payment upon dissolution or otherwise before any
payment may be made with respect to any other Capital Stock of such Person or
its Restricted Subsidiaries.
"PRIMARY OFFERING" means an underwritten public offering of
Qualified Capital Stock of the Company pursuant to a registration statement
filed with and declared effective by the SEC pursuant to the Securities Act
(other than a registration statement on Form S-8 or otherwise relating to equity
securities under any employee benefit plans) or pursuant to an exemption from
the registration requirements thereof.
"PRIORITY TAX CLAIMS" means tax liabilities of the Company which
have been restructured pursuant to the Plan of Reorganization.
"PRIVATE EXCHANGE NOTES" shall have the meaning assigned to such
term in the Registration Rights Agreement.
"PRIVATE PLACEMENT LEGEND" means the legend initially set forth on
the Notes in the form set forth in Exhibit A attached hereto.
"PRO FORMA" means, with respect to any calculation made or required
to be made pursuant to the terms of this Indenture, a calculation in accordance
with Article Ten of Regulation S-X under the Securities Act, as determined by
the Board of Directors of the Company in consultation with its independent
public accountants.
"PURCHASE MONEY LIENS" means (i) Liens to secure or securing
Purchase Money Obligations permitted to be incurred under this Indenture and
(ii) Liens to secure Refinancing Indebtedness incurred solely to Refinance
Purchase Money Obligations permitted to be incurred under this Indenture,
PROVIDED that such Refinancing Indebtedness is incurred no later than six (6)
months after the satisfaction of such Purchase Money Obligations and such Lien
extends to or covers only the asset or property securing the Purchase Money
Obligations being Refinanced.
"PURCHASE MONEY OBLIGATIONS" means Indebtedness representing, or
incurred to finance, the cost of acquiring any assets (including Purchase Money
Obligations of any other Person at the time such other Person is merged with or
into or is otherwise acquired by the Company or its Wholly-Owned Subsidiaries);
PROVIDED that (i) the principal amount of such Indebtedness does not exceed 100%
of such cost (including the amount of reasonable
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expenses incurred and reasonable fees and interest required to be paid), (ii)
any Lien securing such Indebtedness does not extend to or cover any other asset
or property other than the asset or property being so acquired and (iii) such
Indebtedness is incurred, and any Liens with respect thereto are granted, within
90 days of the acquisition of such property or asset.
"QUALIFIED CAPITAL STOCK" means any Capital Stock that is not
Disqualified Capital Stock.
"QUALIFIED INSTITUTIONAL BUYER" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"RECORD DATE" means any of the Record Dates specified in the Notes,
whether or not a Legal Holiday.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated of even date herewith, between the Company and the Initial
Purchaser, as the same may be amended or modified from time to time in
accordance with the terms thereof.
"REGULATION S" means Regulation S under the Securities Act, as such
regulation may be amended from time to time.
"RESTRICTED INVESTMENT" means an Investment other than a
Permitted Investment.
"RESTRICTED SECURITY" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act; PROVIDED that the Trustee shall be entitled
to request and conclusively rely on an Opinion of Counsel with respect to
whether any Note constitutes a Restricted Security.
"RESTRICTED SUBSIDIARY" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"RULE 144A" means Rule 144A under the Securities Act.
"SALE AND LEASEBACK TRANSACTION" means any direct or indirect
arrangement with any Person or to which any such Person is a party providing for
the leasing to the Company or a Restricted Subsidiary of any property whether
owned by the Company or any Restricted Subsidiary at the Issue Date or later
acquired, which has been or is to be sold or transferred by the Company or such
Restricted Subsidiary to such Person or to any other Person from whom funds have
been or are to be advanced by such Person on the security of such Property.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations of the SEC promulgated thereunder.
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"SECURITY ACCOUNT" means one or more accounts established with the
Trustee pursuant to the terms of the Security and Disbursement Agreement for the
deposit of the Disbursement Funds and the Pledged Securities.
"SECURITY AGENT" shall mean the Trustee, as security agent under the
Security Agreement.
"SECURITY AND DISBURSEMENT AGREEMENT" means an agreement, dated as
of the Issue Date, between the Trustee, in its capacity as Trustee and as
securities intermediary, and the Company relating to the Security Account.
"SENIOR CREDIT FACILITY" means (i) the credit facility evidenced by
the Loan and Security Agreement, dated as of the Issue Date, among the Company,
BankBoston Retail Finance Inc., and the lenders party thereto, and (ii) any
additional or replacement credit facility entered into by the Company subsequent
to the Issue Date which is permitted to be incurred under clause (a) of the
definition of "Permitted Indebtedness" pursuant to which the Company and its
Subsidiaries may incur Indebtedness thereunder at any time outstanding in an
aggregate principal amount not to exceed $130 million, together with all other
agreements, instruments and documents executed or delivered pursuant thereto or
in connection therewith, in each case, as such agreements, instruments or
documents may be amended, supplemented, extended, renewed, replaced or otherwise
modified from time to time.
"SERIES A WARRANTS" means Series A warrants to purchase shares of
Common Stock (a) comprising the Units and issued by the Company
contemporaneously with the Initial Notes and (b) issued to the Initial
Purchaser, in each case, pursuant to the terms and conditions of the Warrant
Agreement.
"SERIES B WARRANTS" means Series B warrants to purchase shares of
Common Stock issued by the Company to holders of preferred stock interests in
the Company prior to the Chapter 11 Filing.
"SERIES C WARRANTS" means Series C warrants to purchase shares of
Common Stock issued to Xxx Xxxxxx, the President and Chief Executive Officer of
the Company on the Issue Date, under the Plan of Reorganization.
"SUBSIDIARY" means, with respect to any Person, 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.
"SUBSIDIARY GUARANTEES" means, individually, the guarantee and,
collectively, the guarantees given by the Subsidiary Guarantors pursuant to
supplemental indentures
-16-
executed by the Subsidiary Guarantors after the Issue Date pursuant to which
such Subsidiary Guarantors agree to be bound by the terms of this Indenture.
"SUBSIDIARY GUARANTOR" means CSS Trade Names, Inc. (after its
Chapter 11 case is dismissed by the United States Bankruptcy Court for the
District of Delaware) and all Restricted Subsidiaries of the Company formed
after the Issue Date.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. xx.xx.
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date of such qualification, except as otherwise provided in
Section 9.3.
"TRUST OFFICER" means any officer of the Trustee assigned by the
Trustee to administer this Indenture, or in the case of a successor trustee, an
officer assigned to the department, division or group performing the corporation
trust work of such successor and assigned to administer this Indenture.
"TRUSTEE" means the party named as such in the Preamble to this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture and thereafter means such successor.
"UNITS" means units consisting of Initial Notes and Series A
Warrants sold to the Initial Purchaser on the Issue Date pursuant to a private
offering conducted by the Company and as described in the Offering Circular.
"UNRESTRICTED SUBSIDIARY" of any Person means (i) any Subsidiary of
such Person that at the time of determination shall be or continue to be
designated an Unrestricted Subsidiary by the Board of Directors of such Person
in the manner provided below and (ii) any Subsidiary of an Unrestricted
Subsidiary. The Board of Directors may designate any Subsidiary (including any
newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; PROVIDED that (v)
immediately after giving effect to such designation, the Company is able to
incur at least $1.00 of additional Indebtedness in compliance with Section 4.12
hereof, (w) immediately before and immediately after giving effect to such
designation, no Default or Event of Default shall have occurred and be
continuing, (x) the Company certifies to the Trustee that such designation
complies with Section 4.10 hereof, and (y) each Subsidiary to be so designated
and each of its Subsidiaries has not at the time of designation, and does not
thereafter, create, incur, issue, assume, guarantee or otherwise become directly
or indirectly liable with respect to any Indebtedness pursuant to which the
lender has recourse to any of the assets of the Company or any of its Restricted
Subsidiaries. The Board of Directors may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary only if (x) immediately after giving effect to
such designation, the Company is able to incur at least $1.00 of additional
Indebtedness in compliance with Section 4.12 hereof, and (y) immediately before
and immediately after giving effect to such designation, no Default or Event of
Default shall have occurred and be
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continuing. Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the Board Resolution
giving effect to such designation and an Officers' Certificate certifying that
such designation complied with the foregoing provisions.
"U.S. GOVERNMENT OBLIGATIONS" means non-callable direct
obligations of, and non-callable obligations guaranteed by, the United States
of America for the payment of which the full faith and credit of the United
States of America is pledged.
"U.S. LEGAL TENDER" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.
"VOTING STOCK" means, with respect to any Person, (i) one or more
classes of the Capital Stock of such Person having general voting power under
ordinary circumstances to elect at least a majority of the Board of Directors,
managers or trustees of such Person (irrespective of whether or not at the time
Capital Stock of any other class or classes shall have or might have voting
power by reason of the happening of any contingency) and (ii) any Capital Stock
of such Person convertible or exchangeable without restriction at the option of
the holder thereof into Capital Stock of such Person described in clause (i)
above.
"WARRANT AGREEMENT" means the Warrant Agreement, dated as of even
date herewith, between the Company and the Trustee, as Warrant Agent, pursuant
to which the Series A Warrants are issued, as amended and supplemented from time
to time in accordance with its terms.
"WEIGHTED AVERAGE LIFE" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum of
the products of the numbers of years from the date of determination to the date
of each successive scheduled principal payment of such Indebtedness multiplied
by the amount of such principal payment by (ii) the sum of all such principal
payments.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, with respect to any
Person, a Restricted Subsidiary all the Capital Stock of which (other than
directors' qualifying shares) is owned by such Person or another Wholly-Owned
Restricted Subsidiary of such Person.
SECTION 1.2 OTHER DEFINITIONS.
TERM DEFINED IN SECTION
"Acceleration Notice".......................... 6.2(a)
"Affiliate Transaction"........................4.11
"Agent Members"................................2.14
"Authenticating Agent"..........................2.2
"Change of Control Offer"......................4.14
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"Change of Control Payment"....................4.14
"Change of Control Payment Date"...............4.14
"Clearing Agency"..............................2.14
"Covenant Defeasance"...........................8.1
"Default Interest Payment Date"................2.16
"Event of Default"..............................6.1
"Excess Proceeds"..............................4.15
"Global Note"...................................2.1
"Legal Defeasance"..............................8.1
"Legal Holiday"................................11.7
"Net Proceeds Offer"...........................4.15
"Net Proceeds Offer Amount"....................4.15
"Net Proceeds Offer Payment Date"..............4.15
"Net Proceeds Offer Trigger Date"..............4.15
"New York Presenting Agent".....................2.3
"Paying Agent"..................................2.3
"Physical Notes"................................2.1
"Proceeds Purchase Date".......................4.15
"Registrar".....................................2.3
"Replacement Assets"...........................4.15
"Restricted Payments"..........................4.10
"Separability Date"............................2.15
SECTION 1.3 INCORPORATION BY REFERENCE OF TIA.
Whenever this Indenture or any Exhibit hereto refers to a provision
of the TIA, such provision is incorporated by reference in, and made a part of,
this Indenture. The following TIA terms used in this Indenture have the
following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Holder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company, the
Subsidiary Guarantors or any other obligor on the Notes.
All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
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SECTION 1.4 RULES OF CONSTRUCTION.
Unless otherwise expressly provided herein or 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) words in the singular include the plural, and words in the
plural include the singular;
(4) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or other
subdivision;
(5) any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor statute, law or regulation; PROVIDED, HOWEVER, that any
reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to
the relevant case;
(6) provisions apply to successive events and transactions; and
(7) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
ARTICLE TWO
THE NOTES
SECTION 2.1 FORM AND DATING.
The Initial Notes, the Exchange Notes and the Trustee's respective
certificates of authentication relating thereto shall be substantially in the
forms of Exhibits A and B attached hereto. The Private Exchange Notes, if
required, and the Trustee's certificate of authentication relating thereto shall
be substantially in the form of Exhibit B attached hereto, but shall bear the
Private Placement Legend. The Notes may have notations, legends or endorsements
required by law, stock exchange rule or depository rule or usage. The Company
and the Trustee shall approve the forms of the Notes and any notation, legend or
endorsement on them. Each Note shall be dated the date of its issuance and shall
show the date of its authentication.
The terms and provisions contained in the Notes annexed hereto as
Exhibits A and B shall constitute, and are hereby expressly made, a part of this
Indenture and, to the
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extent applicable, 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.
Initial Notes offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global notes in registered
form, substantially in the form set forth in Exhibit A attached hereto (each
such Note, a "Global Note"), deposited with the Trustee, as custodian for the
Depository, and shall bear the legend set forth in Exhibit C attached hereto,
and be duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Exchange Notes shall be issued initially in the form of
one or more permanent Global Notes, substantially in the form set forth in
Exhibit B attached hereto, deposited with the Trustee, as custodian for the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Exhibit C attached
hereto. The aggregate principal amount of a Global Note may from time to time be
increased or decreased by adjustments made on the records of the Trustee, as
custodian for the Depository, as hereinafter provided.
Notes issued in exchange for an interest in a Global Note pursuant
to Section 2.14 may be issued in the form of permanent certificated Notes in
registered form in substantially the form set forth in Exhibit A attached hereto
(each such Note, a "Physical Note"). Initial Notes offered and sold to
Institutional Accredited Investors and Private Exchange Notes shall be issued in
the form of Physical Notes in substantially the form set forth in Exhibits A and
B, respectively, attached hereto and shall bear the Private Placement Legend.
SECTION 2.2 EXECUTION AND AUTHENTICATION; AGGREGATE.
PRINCIPAL AMOUNT.
Two Officers, or an Officer and an assistant secretary of the
Company, shall sign, or one Officer shall sign and one Officer or an assistant
secretary of the Company (each of whom shall, in each case, have been duly
authorized by all requisite corporate actions) shall attest to, the Notes for
the Company by manual or facsimile signature. The corporate seal of the Company
shall be affixed to each Note or reproduced thereon.
If an Officer or assistant secretary of the Company, whose signature
is on a Note was an Officer or assistant secretary of the Company at the time of
such execution but no longer holds that office or position at the time the
Trustee authenticates the Note, the Note shall nevertheless be valid.
A Note shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Note. The
signature shall be conclusive evidence that the Note has been authenticated
under this Indenture.
The Trustee shall authenticate (i) Initial Notes for original issue
in the aggregate principal amount not to exceed $85,000,000, (ii) Private
Exchange Notes from time to time, and (iii) Exchange Notes from time to time for
issue only in exchange for a
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like principal amount of Initial Notes, in each case upon written orders of the
Company in the form of an Officers' Certificate. The Officers' Certificate shall
specify the amount of Notes to be authenticated and the date on which the Notes
are to be authenticated, whether the Notes are to be Initial Notes, Private
Exchange Notes or Exchange Notes, and shall further specify the amount of such
Notes to be issued as the Global Notes or Physical Notes. The aggregate
principal amount of Notes outstanding at any time may not exceed $85,000,000,
except as provided in Section 2.7. In addition, with respect to authentication
pursuant to clauses (ii) and (iii) of the first sentence of this paragraph, the
written orders from the Company shall be accompanied by an Opinion of Counsel of
the Company in a form reasonably satisfactory to the Trustee and the Initial
Purchaser stating, among other things, that the issuance of the Exchange Notes
or Private Exchange Notes, as the case may be, does not give rise to an Event of
Default, complies with this Indenture and has been duly authorized by the
Company.
The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company and Affiliates of the Company.
The Notes shall be issuable in fully registered form only, without
coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 2.3 REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New York),
which shall initially be First Trust National Association, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "New York Presenting Agent"), having a principal
office at 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000 (the "Corporate Trust
Office"), where (a) Notes may be presented or surrendered for registration of
transfer or for exchange, (b) Notes may be presented or surrendered for payment
and (c) notices and demands to or upon the Company in respect of the Notes and
this Indenture may be served in addition to the Corporate Trust Office. In
addition, the Company shall maintain an office or agency to maintain the Note
register, for purposes of registration of record ownership of the Notes
("Registrar") and one or more paying agents ("Paying Agent") for payment of the
Notes. The Company hereby initially appoints the Trustee as Registrar and Paying
Agent. The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company, upon prior written notice to the Trustee, may have
one or more co-Registrars and one or more additional Paying Agents reasonably
acceptable to the Trustee. Neither the Company nor any Affiliate of the Company
may act as Paying Agent.
The Company shall enter into an appropriate agency agreement with
any Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA
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and implement the provisions of this Indenture that relate to such Agent. The
Company shall notify the Trustee, in advance, of the name and address of any
such Agent. If the Company fails to maintain a Registrar or Paying Agent, or
fails to give the foregoing notice, the Trustee shall act as such (PROVIDED,
HOWEVER, that such requirement shall not be construed to obligate the Trustee to
maintain an office in New York).
The Company initially appoints the Trustee as Registrar, Paying
Agent and agent for service of demands and notices in connection with the Notes,
until such time as the Trustee has resigned or a successor has been appointed.
The Paying Agent or Registrar may resign upon 30 days notice to the Company.
SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.
The Company shall require each Paying Agent other than the Trustee
to agree in writing to hold in trust for the benefit of the Holders or the
Trustee all assets held by the Paying Agent for the payment of principal of,
premium, if any, or interest on, the Notes (whether such assets have been
distributed to it by the Company, a Subsidiary Guarantor or any other obligor on
the Notes), and the Company and the Paying Agent shall notify the Trustee of any
Default by the Company (or any other obligor on the Notes) in making any such
payment. The Company at any time may require a Paying Agent to distribute all
assets held by it to the Trustee and account for any assets disbursed, and the
Trustee may at any time during the continuance of any payment Default, upon
written request to a Paying Agent, require such Paying Agent to distribute all
assets held by it to the Trustee and to account for any assets distributed. Upon
distribution to the Trustee of all assets that shall have been delivered by the
Company, a Subsidiary Guarantor or any other obligor on the Notes, to the Paying
Agent, the Paying Agent shall have no further liability for such assets.
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
the Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company shall furnish or cause the Registrar to furnish
to the Trustee at least seven Business Days before each Record 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, including the aggregate principal amount thereof, which list may be
conclusively relied upon by the Trustee.
SECTION 2.6 TRANSFER AND EXCHANGE.
Subject to the provisions of Sections 2.14 and 2.15, when Notes are
presented to the Registrar or a co-Registrar with a request to register the
transfer of such Notes or to exchange such Notes for an equal principal amount
of Notes of other authorized
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denominations, the Registrar or co-Registrar shall register the transfer or make
the exchange as requested if its requirements for such transaction are met,
including an Opinion of Counsel with respect to whether (i) such Note
constitutes a Restricted Security and (ii) the requirements for transfer of such
Note have been satisfied, including the requirements provided for in Section
2.15; PROVIDED, HOWEVER, that the Notes presented or surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form satisfactory to the Company, the Trustee
and the Registrar or co-Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing. To permit registrations of transfer and
exchanges, the Company shall execute and the Trustee shall authenticate Notes at
the Registrar's or co-Registrar's request. No service charge shall be made for
any registration of transfer or exchange, but the Company may require payment of
a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith (other than any such transfer taxes or similar
governmental charge payable upon exchanges or transfers pursuant to Sections
2.10, 3.7, 4.14, 4.15 or 9.5, in which event the Company shall be responsible
for the payment of such taxes).
The Registrar or co-Registrar shall not be required to register the
transfer or exchange of any Note during the 15-day period immediately preceding
the redemption date in connection with any redemption of Notes under Section
3.3.
Any Holder of the Global Note shall, by acceptance of such Global
Note, agree that transfers of beneficial interests in such Global Note may be
effected only through a book entry system maintained by the Depository, and that
ownership of a beneficial interest in the Note shall be required to be reflected
in a book entry.
SECTION 2.7 REPLACEMENT NOTES.
If a mutilated Note is surrendered to the Trustee or if the Holder
of a Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an affidavit of lost certificate and an indemnity bond or
other indemnity, sufficient in the judgment of both the Company and the Trustee,
to protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. The Company may charge such Holder for its
reasonable, out-of-pocket expenses in replacing a Note, including any tax or
governmental charge that may be imposed in relation thereto and reasonable fees
and expenses of its counsel and of the Trustee and its counsel. Every
replacement Note shall constitute 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.
In case any such mutilated, lost, destroyed or wrongfully taken Note
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Note, pay such Note.
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SECTION 2.8 OUTSTANDING NOTES.
Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in this Section as not outstanding. Subject
to the provisions of Section 2.9, a Note does not cease to be outstanding
because the Company or any of its Affiliates holds the Note.
If a Note is replaced pursuant to Section 2.7 (other than a
mutilated Note surrendered for replacement), it ceases to be outstanding unless
the Trustee receives proof satisfactory to it that the replaced Note is held by
a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender
of such Note and replacement thereof pursuant to Section 2.7.
If on a redemption date or the Maturity Date the Paying Agent holds
U.S. Legal Tender or U.S. Government Obligations sufficient to pay all of the
principal and interest due on the Notes payable on that date and is not
prohibited from paying such money to the Holders thereof pursuant to the terms
of this Indenture, then on and after that date such Notes (to the extent of the
principal amount redeemed, in the case of a partial redemption) cease to be
outstanding and interest on them ceases to accrue.
SECTION 2.9 TREASURY NOTES.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice, Notes owned
by the Company or any of its Affiliates shall be considered as though they are
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 which a Trust Officer of the Trustee actually knows are so owned shall be
so considered. The Company shall notify the Trustee, in writing (which notice
shall constitute actual notice for purposes of the foregoing sentence), when it
or any of its Affiliates repurchases or otherwise acquires Notes, of the
aggregate principal amount of such Notes so repurchased or otherwise acquired
and such other information as the Trustee may reasonably request and the Trustee
shall be entitled to rely thereon.
SECTION 2.10 TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon receipt of a
written order of the Company in the form of an Officers' Certificate. The
Officers' Certificate shall specify the amount of temporary Notes to be
authenticated and the date on which the temporary Notes are to be authenticated.
Temporary Notes shall be substantially in the form of definitive Notes but may
have variations that the Company considers appropriate for temporary Notes and
so indicates in the Officers' Certificate. Without unreasonable delay, the
Company shall prepare and the Trustee shall authenticate upon receipt of a
written order of the Company pursuant to Section 2.2 definitive Notes of
authorized denominations and in like principal
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amount as the temporary Notes for which they are being exchanged in exchange for
the temporary Notes, upon surrender of the temporary Notes at the office or
agency of the Company designated for such purpose pursuant to Section 4.2,
without charge to the Holder. Until so exchanged, the temporary Notes shall be
entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for transfer, exchange or payment. The Trustee, or
at the direction of the Trustee, the Registrar or the Paying Agent, and no one
else, shall cancel and, at the written direction of the Company, shall dispose,
in its customary manner, of all Notes surrendered for transfer, exchange,
payment or cancellation, and deliver a certificate of destruction to the
Company. Subject to Section 2.7, the Company may not issue new Notes to replace
Notes that it has paid or delivered to the Trustee for cancellation. If the
Company shall acquire any of the Notes, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Notes unless
and until the same are surrendered to the Trustee for cancellation pursuant to
this Section 2.11.
SECTION 2.12 CUSIP NUMBER.
The Company in issuing the Notes of each series may use "CUSIP",
"CINS" or "ISIN" numbers (if then generally in use), and the Trustee shall use
CUSIP, CINS or ISIN numbers, as the case may be, in notices of redemption or
exchange as a convenience to Holders; PROVIDED that any such notice shall state
that no representation is made as to the correctness of such numbers either as
printed on the Notes or as contained in any notice of redemption or exchange and
that reliance may be placed only on the other identification numbers printed on
the Notes. The Company will promptly notify the Trustee of any change in CUSIP,
CINS or ISIN numbers for the Notes.
SECTION 2.13 DEPOSIT OF MONIES.
Prior to 11:00 a.m. New York City time on each Interest Payment
Date, Maturity Date, redemption date, Change of Control Payment Date and Net
Proceeds Offer Payment Date, the Company shall have deposited with the Paying
Agent in immediately available funds U.S. Legal Tender sufficient to make cash
payments, if any, due on such Interest Payment Date, Maturity Date, redemption
date, Change of Control Payment Date and Net Proceeds Offer Payment Date, as the
case may be, in a timely manner which permits the Paying Agent to remit payment
to the Holders on such Interest Payment Date, Maturity Date, redemption date,
Change of Control Payment Date and Net Proceeds Offer Payment Date, as the case
may be. At the option and direction of the Company, payment of interest on
Physical Notes may be made by the Paying Agent by check mailed to the Holders
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on or before the relevant Interest Payment Date. Payments to Holders to be made
by wire transfer of immediately available funds shall require prior receipt by
the Paying Agent of appropriate wire transfer instructions.
SECTION 2.14 BOOK-ENTRY PROVISIONS FOR GLOBAL NOTE.
(a) The Global Note initially shall (i) be registered in the name of
the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth in
Exhibit C attached hereto.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note held
on their behalf by the Depository, or the Trustee as its custodian, or under the
Global Note, and the Depository may be treated by the Company, the Trustee, any
agent of the Company, or the Trustee as the absolute owner of the Global Note
for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall
prevent the Company, the Trustee or any agent of the Company or the Trustee from
giving effect to any written certification, proxy or other authorization
furnished by the Depository or impair, as between the Depository and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any Note.
(b) Transfers of the Global Note shall be limited to transfers of
such Global Note in whole, but not in part, to the Depository, its successors or
their respective nominees. Interests of beneficial owners in the Global Note may
be transferred or exchanged for Physical Notes in accordance with the rules and
procedures of the Depository and the provisions of Section 2.15. In addition,
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the Global Note (in each case directed by the
Depository) if (i) the Depository notifies the Company that it is unwilling or
unable to continue as Depository for the Global Note or the Depository ceases to
be a "Clearing Agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days of such notice or (ii)
an Event of Default has occurred and is continuing and the Registrar has
received a request from the Depository to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion of the
beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more Physical Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
Physical Notes of like tenor and amount.
(d) In connection with the transfer of the entire Global Note to
beneficial owners pursuant to paragraph (b), the Global Note shall be deemed to
be surrendered to the Trustee for cancellation, and the Company shall execute,
and the Trustee shall authenticate
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and deliver, to each beneficial owner identified by the Depository in exchange
for its beneficial interest in the Global Note, an equal aggregate principal
amount of Physical Notes of authorized denominations.
(e) Any Physical Note constituting a Restricted Security delivered
in exchange for an interest in the Global Note pursuant to paragraph (b) or (c)
shall, except as otherwise provided by paragraphs (a)(i)(x) and (c) of Section
2.15, bear the legend regarding transfer restrictions applicable to the Physical
Notes set forth in Exhibit A attached hereto.
(f) The Holder of the Global Note may grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under this Indenture or the Notes.
(g) Neither the Trustee nor the Paying Agent shall have any
responsibility or liability for the accuracy of the records of the Depository or
its Agent Members, or for any actions or omissions of the Depository or its
Agent Members.
SECTION 2.15 SPECIAL TRANSFER PROVISIONS.
(a) TRANSFERS TO NON-QIB INSTITUTIONAL ACCREDITED INVESTORS AND
NON-U.S. PERSONS. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to
any Non-U.S. Person:
(i) the Registrar shall register the transfer of any Note
constituting a Restricted Security, whether or not such Note bears the
Private Placement Legend, if (x) the requested transfer is after November
1, 1999; PROVIDED, HOWEVER, that neither the Company nor any Affiliate of
the Company has held any beneficial interest in such Note or portion
thereof, at any time on or prior to November 1, 1999 (as certified to the
Trustee by an Officers' Certificate of the Company), or (y) (1) in the
case of a transfer to an Institutional Accredited Investor which is not a
QIB (excluding Non-U.S. Persons), the proposed transferee has delivered to
the Registrar a certificate substantially in the form of Exhibit D
attached hereto or (2) in the case of a transfer to a Non-U.S. Person, the
proposed transferor has delivered to the Registrar a certificate
substantially in the form of Exhibit E attached hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the Registrar of
(x) the certificate, if any, required by paragraph (i) above and (y)
instructions given in accordance with the Depository's and the Registrar's
customary procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of the outstanding Physical Notes)
a decrease in the principal amount of the Global Note in an amount equal to the
principal amount of the beneficial
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interest in the Global Note to be transferred, and (b) the Company shall execute
and the Trustee shall authenticate and deliver one or more Physical Notes of
like tenor and amount to that amount of the beneficial interest in the Global
Note to be transferred.
(b) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a Note constituting a
Restricted Security to a QIB (excluding transfers to Non-U.S.
Persons):
(i) the Registrar shall register the transfer if such transfer
is being made by a proposed transferor who has checked the box provided
for on the form of Note stating, or has otherwise advised the Company and
the Registrar in writing, that the sale has been made in compliance with
the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has otherwise
advised the Company and the Registrar in writing, that it is purchasing
the Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account is a
QIB within the meaning of Rule 144A, and is aware that the sale to it is
being made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by Rule 144A; and
(ii) if the proposed transferee is an Agent Member, and the
Notes to be transferred consist of Physical Notes which after transfer are
to be evidenced by an interest in the Global Note, upon receipt by the
Registrar of written instructions given in accordance with the
Depository's and the Registrar's customary procedures, the Registrar shall
reflect on its books and records the date and an increase in the principal
amount of the Global Note in an amount equal to the principal amount of
the Physical Notes to be transferred, and the Trustee shall cancel the
Physical Notes so transferred.
(c) PRIVATE PLACEMENT LEGEND. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless (i) the circumstance contemplated by paragraph (a)(i)(x) of this Section
2.15 exist or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) GENERAL. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Registrar shall not register a transfer of
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any Note unless such transfer complies with the restrictions on transfer of such
Note set forth in this Indenture. In connection with any transfer of Notes, each
Holder agrees by its acceptance of the Notes to furnish the Registrar of the
Company such certifications, legal opinions or other information as either of
them may reasonably require to confirm that such transfer is being made pursuant
to an exemption from, or a transaction not subject to, the registration
requirements of the Securities Act; PROVIDED that the Registrar shall not be
required to determine (but may rely on a determination made by the Company with
respect to) the sufficiency of any such certifications, legal opinions or other
information.
(e) TRANSFERS OF NOTES HELD BY AFFILIATES. Any certificate (i)
evidencing a Note that has been transferred to an Affiliate of the Company
within two years after the Issue Date, as evidenced by a notation on the
assignment form for such transfer or in the representation letter delivered in
respect thereof or (ii) evidencing a Note that has been acquired from an
Affiliate (other than by an Affiliate) in a transaction or a chain of
transactions not involving any public offering, shall, until two years after the
last date on which the Company or any Affiliate of the Company was as owner of
such Note, in each case, bear a Private Placement Legend in substantially the
form set forth in this Section 2.15 hereof, unless otherwise agreed by the
Company (with written notice thereof to the Trustee).
(f) NO SEPARATE TRANSFERS PRIOR TO SEPARABILITY DATE.
Notwithstanding any other provision of this Article Two, no Note may be
transferred separately from the Series A Warrants until such date as the Initial
Purchaser may, in its sole discretion, determine, as such date is specified to
the Company and the Trustee in writing (the "Separability Date"). The Company
shall promptly notify the Registrar of the occurrence of the Separability Date.
The Registrar shall retain copies of all letters, notices and other
written communications received by it pursuant to Section 2.14 or this Section
2.15 for so long as this Indenture remains in effect. The Company shall have the
right to inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.16 DEFAULTED INTEREST.
The Company shall pay interest on overdue principal from time to
time on demand at the rate of interest then borne by the Notes. The Company
shall, to the extent lawful, pay interest on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate of interest then borne by the Notes. Interest will be computed on the
basis of a 360-day year comprised of twelve 30-day months, and, in the case of a
partial month, the actual number of days elapsed.
If the Company defaults in a payment of interest on the Notes, it
shall pay the defaulted interest, plus (to the extent lawful) any interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, which special record date shall be the fifteenth
day next preceding the date fixed by the Company for the payment of defaulted
interest or the next succeeding Business Day if such date is not a Business Day.
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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
(a "Default Interest Payment Date"), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such defaulted interest or shall make
arrangements satisfactory to the Trustee for such deposit on or prior to the
date of the proposed payment, such money when deposited to be held in trust for
the benefit of the Persons entitled to such defaulted interest as provided in
this Section; PROVIDED, HOWEVER, that in no event shall the Company deposit
monies proposed to be paid in respect of defaulted interest later than 11:00
a.m. New York City time on the proposed Default Interest Payment Date. The
Company shall, with the Trustee's consent, fix or cause to be fixed each such
special record date and payment date. At least 15 days before the special record
date, the Company shall mail (or cause to be mailed) to each Holder, as of a
recent date selected by the Company, with a copy to the Trustee, a notice that
states the special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 10-day period set forth in Section 6.1(a) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.
ARTICLE THREE
REDEMPTION
SECTION 3.1 NOTICES TO TRUSTEE.
If the Company elects to redeem Notes pursuant to [Paragraph 5] of
the Notes, it shall deliver to the Trustee and the Paying Agent, at least 30
days but not more than 60 days before a redemption date, a notice complying with
the provisions of Section 3.4 setting forth (i) the redemption date, (ii) the
principal amount of the Notes to be redeemed and that, after the redemption
date, upon cancellation of the original Note, a new Note or Notes in principal
amount equal to the unredeemed portion shall be issued, (iii) the redemption
price, and (iv) the paragraph of the Notes and/or the section of this Indenture
pursuant to which the Notes called for redemption are being redeemed.
The Company shall give each notice provided for in this Section 3.1,
at its expense, at least 30 days before the applicable redemption date (unless a
shorter notice period shall be satisfactory to the Trustee, as evidenced in a
writing signed on behalf of the Trustee), together with an Officers' Certificate
stating that such redemption shall comply with the conditions contained herein
and in the Notes.
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SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.
If fewer than all of the Notes are to be redeemed at any time,
selection of Notes for redemption will be made by the Trustee in compliance with
the requirements of the national securities exchange, if any, on which the Notes
are listed or, if the Notes are not so listed, on a pro rata basis, by lot or by
such method as the Trustee deems to be fair and appropriate. The Trustee shall
make the selection from the Notes outstanding and not previously called for
redemption and 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 in denominations
of $1,000 or less may not be redeemed in part. The Trustee may select for
redemption portions (equal to $1,000 or any integral multiple thereof) of the
principal of Notes that have denominations larger than $1,000. Provisions of
this Indenture that apply to Notes called for redemption also apply to portions
of Notes called for redemption.
SECTION 3.3 OPTIONAL REDEMPTION.
The Notes are not subject to any mandatory redemption provisions or
sinking fund payments. Except as described below, the Notes are not redeemable
at the Company's option prior to November 1, 2001. Thereafter, the Notes will be
subject to redemption at the option of the Company, in whole or in part, upon
not less than 30 nor more than 60 days' notice, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued and
unpaid interest thereon to the applicable redemption date, if redeemed during
the twelve month period beginning on November 1 of the years indicated below:
YEAR PERCENTAGE
2001 106.3750%
2002 103.1875%
2003 and thereafter 100%
Notwithstanding the foregoing, prior to November 1, 2001, the
Company may redeem, at its option, up to one-third of the aggregate principal
amount of the Notes at a redemption price equal to 112.750% of the principal
amount thereof, plus accrued and unpaid interest, if any, thereon, with all or a
portion of the net proceeds of an offering of Capital Stock (other than
Disqualified Stock) of the Company; PROVIDED, that (i) at least 662/3% of
aggregate principal amount of the Notes are outstanding immediately following
such redemption and (ii) such redemption shall occur within 60 days of the date
of the closing of such offering of Capital Stock of the Company. The
restrictions on optional redemptions set forth in the Indenture do not limit the
Company's right to make open market or privately negotiated purchases of the
Notes from time to time.
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SECTION 3.4 NOTICE OF REDEMPTION.
At least 15 days but not more than 60 days before a redemption date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail, postage prepaid, to each Holder at each Holder's registered address
whose Notes are to be redeemed, with a copy to the Trustee and any Paying Agent.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. The Company shall
provide such notices of redemption to the Trustee at least fifteen days before
the intended mailing date.
Each notice for redemption shall state:
(1) the principal amount of Notes to be redeemed;
(2) the redemption date;
(3) the redemption price and the amount of accrued interest, if
any, to be paid;
(4) the name and address of the Paying Agent;
(5) the subparagraph of the Notes pursuant to which such
redemption is being made;
(6) that any Physical Notes called for redemption must be
surrendered to the Paying Agent to collect the redemption price plus
accrued interest, if any;
(7) that, unless the Company defaults in making the redemption
payment, interest on Notes (or applicable portions thereof) called for
redemption ceases to accrue on and after the redemption date, and the only
remaining right of the Holders of such Notes is to receive payment of the
redemption price plus accrued interest, if any, as of the redemption date
upon surrender to the Paying Agent of the Notes redeemed;
(8) that if any Physical Note is being redeemed in part, the portion
of the principal amount of such Note to be redeemed and that, after the
redemption date, and upon surrender, and subsequent cancellation of such
Note, a new Note or Notes in the aggregate principal amount equal to the
unredeemed portion thereof will be issued in the name of the Holder; and
(9) that, if fewer than all the Notes are to be redeemed, the
identification of the particular Physical Notes (or portion thereof) to be
redeemed, as well as the principal amount of Notes to be redeemed and the
principal amount of Notes to be outstanding after such partial redemption.
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The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the purchase
of Notes.
SECTION 3.5 EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.4,
Notes called for redemption become due and payable on the applicable redemption
date and at the applicable redemption price plus accrued interest, if any. Upon
surrender to the Trustee or Paying Agent, such Notes called for redemption shall
be paid at the redemption price (which shall include accrued and unpaid interest
thereon to the redemption date), but installments of interest, the maturity of
which is on or prior to the redemption date, shall be payable to Holders of
record at the close of business on the applicable Record Dates referred to in
the Notes.
SECTION 3.6 DEPOSIT OF REDEMPTION PRICE.
On or before the redemption date, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the redemption price plus
accrued interest to but excluding the redemption date, if any, of all Notes to
be redeemed on that date. The Paying Agent shall promptly return to the Company
any U.S. Legal Tender so deposited which is not required for that purpose,
except with respect to monies owed as obligations to the Trustee pursuant to
Article Seven.
If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such redemption price plus accrued interest,
if any, to but excluding the redemption date, interest on the Notes to be
redeemed will cease to accrue, on and after the applicable redemption date,
whether or not such Notes are presented for payment.
SECTION 3.7 NOTES REDEEMED IN PART.
Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.
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ARTICLE FOUR
COVENANTS
SECTION 4.1 PAYMENT OF NOTES.
The Company shall pay the principal of and interest on the Notes on
the dates and in the manner provided in the Notes and in this Indenture.
Principal of or interest on the Notes shall be considered paid on the date it is
due if the Trustee or Paying Agent (other than the Company or an Affiliate of
the Company) holds on that date U.S. Legal Tender designated for and sufficient
to pay the installment in full and is not prohibited from paying such money to
the Holders pursuant to the terms of this Indenture.
Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes from principal or interest payments
hereunder.
SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain the office or agency required under
Section 2.3. 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 address of the
Trustee set forth in Section 12.2.
The Company may also from time to time designate one or more other
offices or agencies (in or outside of The City of New York) where the Notes may
be presented or surrendered for any or all such purposes and may from time to
time rescind any such designation; 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 City of New York for such purposes. The
Company shall give prompt written notice to the Trustee of any such designation
or rescission and any change in the location of any such other office or agency.
SECTION 4.3 CORPORATE EXISTENCE.
Except as otherwise permitted by Article Five, the Company shall do
or cause to be done, at its own cost and expense, all things necessary to
preserve and keep in full force and effect its corporate existence and the
corporate existence of each of its Restricted Subsidiaries in accordance with
the respective organizational documents of each such Restricted Subsidiary and
the material rights (charter and statutory) and franchises of the Company and
each such Restricted Subsidiary.
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SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or
discharged, on or prior to the date the same shall become delinquent, all
material taxes, assessments and governmental charges (including withholding
taxes and any penalties, interest and additions to taxes) levied or imposed upon
it or any of its Restricted Subsidiaries or its properties or any of its
Restricted Subsidiaries' properties (other than Priority Tax Claims, which shall
be paid or discharged as required under the Plan of Reorganization); PROVIDED,
HOWEVER, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being or shall be contested in good faith by
appropriate proceedings properly instituted and diligently conducted for which
adequate reserves, to the extent required under GAAP, have been taken.
SECTION 4.5 MAINTENANCE OF PROPERTIES AND INSURANCE.
(a) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain its properties used or held in the conduct of its
business or the business of any of its Restricted Subsidiaries in good working
order and condition in all material respects (subject to ordinary wear and tear)
and make all necessary repairs, renewals, replacements, additions, betterments
and improvements thereto necessary or desirable to actively conduct and carry on
its business except to the extent failure to maintain such properties and to
take such actions could not reasonably be expected to have a material adverse
effect on the business of the Company.
(b) The Company shall, and shall cause each of its Restricted
Subsidiaries to, maintain insurance (including appropriate self-insurance)
against loss or damage of the kinds that, in the good faith judgment of the
Company, are adequate and appropriate for the conduct of the business of the
Company and its Restricted Subsidiaries in a prudent manner, with reputable
insurers or with the government of the United States of America or an agency or
instrumentality thereof, in such amounts, with such deductibles, and by such
methods as are adequate for the conduct of its business and the value of its
material properties and shall be customary, in the good faith judgment of the
Company, for companies similarly situated within the industry of the Company.
SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 days after
the end of the Company's fiscal year, commencing with the fifty-two weeks ending
February 1, 1998, an Officers' Certificate stating that a review of its
activities during the preceding fiscal year has been made under the supervision
of the signing officers with a view to determining whether it 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 such Officer's knowledge, after due inquiry, the Company during such
preceding fiscal year has
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kept, observed, performed and fulfilled each and every such covenant under this
Indenture, and that no Default or Event of Default occurred during such year,
and at the date of such certificate there is no Default or Event of Default that
has occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe the Default or Event of Default
and its status with particularity. The Officers' Certificate shall also notify
the Trustee should the Company elect to change the manner in which it fixes its
fiscal year end.
(b) The annual financial statements delivered pursuant to Section
4.8 shall be accompanied by a written report of the Company's independent
accountants (who shall be a firm of established national reputation) that in
conducting their audit of such financial statements nothing has come to their
attention that would lead them to believe that the Company has violated any
provisions of Article Four, Five or Six of this Indenture insofar as they relate
to accounting matters 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 hereunder directly or indirectly to any Person
for any failure to obtain knowledge of any such violation.
(c) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, within five
Business Days of its becoming aware of such occurrence, the Company shall
deliver to the Trustee, at its address set forth in Section 12.2 hereof, by
registered or certified mail or by telegram, telex or facsimile transmission
followed by hard copy by registered or certified mail an Officers' Certificate
specifying such event, notice or other action and what action the Company is
taking or proposes to take with respect thereto.
SECTION 4.7 COMPLIANCE WITH LAWS.
The Company shall, and shall cause each of its Restricted
Subsidiaries to, comply with all applicable statutes, rules, regulations, orders
and restrictions of the United States of America, all states and municipalities
thereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of its businesses and the ownership of its properties, except for
such noncompliances as are not in the aggregate reasonably likely to have a
material adverse effect on the financial condition or results of operations of
the Company and its Restricted Subsidiaries, taken as a whole.
SECTION 4.8 REPORTS.
So long as any Notes are outstanding, the Company will furnish to
the Holders of Notes all quarterly and annual financial information and other
reports filed with the SEC pursuant to the Exchange Act and, whether or not the
Company is required to file any financial information with the SEC, will furnish
to the Holders of the Notes and to
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prospective purchasers of the Notes, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act
for so long as is required for an offer or sale of the Notes under Rule 144A.
From and after the date of effectiveness of any registration statement filed
with the SEC with respect to the Notes, the Company will furnish to the holders
of Notes such quarterly, annual or other reports or information that is required
to be filed with the SEC. The Company will provide a copy of the Registration
Rights Agreement and the Warrant Agreement to holders of Notes or to prospective
purchasers upon request.
SECTION 4.9 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it will not, nor permit its Subsidiaries
to, at any time insist upon, plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive the Company or the Subsidiary Guarantors from
paying all or any portion of the principal of or interest on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture; and (to the
extent that it may lawfully do so) each of the Company and the Subsidiary
Guarantors hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 4.10 LIMITATION ON RESTRICTED PAYMENTS.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (other than dividends or distributions payable in
Equity Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Wholly-Owned Restricted Subsidiary
of the Company); (ii) purchase, redeem or otherwise acquire or retire for value
any Equity Interests of the Company or any Restricted Subsidiary or other
Affiliate of the Company (other than any such Equity Interests owned by the
Company or any Wholly-Owned Restricted Subsidiary of the Company); (iii)
voluntarily purchase, redeem, defease or otherwise acquire or retire for value
any Indebtedness (other than Indebtedness under the Senior Credit Facility or
Indebtedness evidenced by the Notes or the New Notes) that is PARI PASSU with or
subordinated 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; and
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(b) immediately after giving effect to such transaction, on a pro
forma basis as if such transaction had occurred at the beginning of the
applicable four-quarter period, the Company would be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Fixed Charge
Coverage Ratio test set forth in the first paragraph of Section 4.12
hereof; and
(c) the amount of such Restricted Payment, together with the
aggregate amount of all other Restricted Payments made by the Company and
its Restricted Subsidiaries after the Issue Date, 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 beginning of the first quarter
commencing immediately after the Issue Date to the end of the Company's
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, 100% of such
deficit), plus (y) 100% of the net cash proceeds received by the Company
from the issuance or sale of Equity Interests of the Company (other than
Equity Interests sold to a Restricted Subsidiary or Affiliate of the
Company and other than Disqualified Stock) after the Issue Date and on or
prior to the time of such Restricted Payment, plus (z) 100% of the Net
Cash Proceeds received by the Company from the issuance or sale, other
than to a Restricted Subsidiary or Affiliate of the Company, of any debt
security of the Company that has been converted into Equity Interests of
the Company (other than Disqualified Stock) pursuant to the terms thereof
after the Issue Date and on or prior to the time of such Restricted
Payment. For purposes of this clause (c) the amount of any Restricted
Payment paid in property other than cash shall be the fair market value of
such property as determined reasonably and in good faith by the Board of
Directors of the Company (and evidenced by a resolution set forth in an
Officers' Certificate delivered to the Trustee); and
(d) at least two fiscal quarters shall have elapsed since the
Issue Date.
The foregoing provisions will not prohibit, so long as no Default or
Event of Default shall have occurred and be continuing or would occur as a
consequence of any of the following: (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 Indebtedness or
Equity Interests of the Company in exchange for, or solely out of the proceeds
of, the substantially concurrent sale (other than to a Restricted Subsidiary or
other Affiliate of the Company) of other Equity Interests of the Company (other
than any Disqualified Stock); (iii) the redemption, repurchase or payoff of
Purchase Money Obligations required to be repaid with the proceeds of the sale
of the asset financed by such indebtedness; (iv) the redemption, repurchase,
defeasance or payoff of any Indebtedness with proceeds of any Refinancing
Indebtedness permitted to be incurred under Section 4.12 hereof; (v) the
repurchase, redemption or other acquisition or retirement for value of any
Equity Interests of the Company or any Subsidiary of the Company held by any
officer or employee of the Company or its Subsidiaries; PROVIDED, HOWEVER, that
the aggregate amount of all such repurchases, redemptions and other acquisitions
and retirements under this clause
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(v) on or after the date of this Indenture shall not exceed $2.5 million, except
for any such repurchases, redemptions and other acquisitions and retirements
funded with insurance proceeds or proceeds received in connection with the
issuance of Equity Interests of the Company and its Restricted Subsidiaries,
which shall not be subject to such limitation; (vi) the purchase, redemption,
defeasance or other acquisition or retirement of Series A Warrants, Series B
Warrants or Series C Warrants, in each case to the extent required by the terms
of the agreement or agreements relating thereto or governing the terms thereof
as in effect on the Issue Date; (vii) distributions required under the Plan of
Reorganization; or (viii) payments or distributions to dissenting stockholders
required by applicable law pursuant to and in connection with transactions
permitted under the terms of this Indenture.
Not later than the date of making any Restricted Payment, the
Company shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by the "Restricted Payments" covenant were computed, which
calculations may be based upon the Company's latest available financial
statements.
SECTION 4.11 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of any
services or the entering into any contract, agreement, understanding, loan or
guarantee) with, or for the benefit of, any of its Affiliates (each an
"Affiliate Transaction"), other than (x) Affiliate Transactions permitted under
paragraph (b) below and (y) Affiliate Transactions and each series of related
Affiliate Transactions that are similar or part of a common plan, having an
aggregate value of less than $2 million; PROVIDED that such transactions are on
terms that are no less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's length basis from
a Person that is not an Affiliate of the Company or such Restricted Subsidiary.
All Affiliate Transactions (and each series of related Affiliate Transactions
which are similar or part of a common plan) involving aggregate payments or
other property with a fair market value in excess of $2,000,000 shall be
approved by a majority of the disinterested members of the Board of Directors of
the Company, such approval to be evidenced by a Board Resolution stating that
such Board of Directors has determined that such transaction complies with the
foregoing provisions. If the Company or any such Restricted Subsidiary of the
Company enters into an Affiliate Transaction (or a series of related Affiliate
Transactions which are similar or part of a common plan) that involves an
aggregate fair market value of more than $5,000,000, the Company shall, prior to
the consummation thereof, obtain a favorable opinion as to the fairness of such
transaction or series of related transactions to the Company from a financial
point of view from an Independent Financial Advisor and deliver such opinion to
the Trustee.
(b) The restrictions set forth in clause (a) above shall not apply
to: (i) reasonable fees and compensation paid to, and indemnity provided on
behalf of, officers,
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directors, employees or consultants of the Company or any Subsidiary as
determined in good faith by the Company's Board of Directors or senior
management; (ii) transactions exclusively between or among the Company and any
of its Wholly-Owned Restricted Subsidiaries or exclusively between or among such
Wholly-Owned Restricted Subsidiaries, PROVIDED such transactions are not
otherwise prohibited by this Indenture; and (iii) Restricted Payments not
prohibited by this Indenture.
SECTION 4.12 LIMITATION ON INCURRENCE OF ADDITIONAL
ISSUANCE OF PREFERRED STOCK
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to (collectively,
"incur") any Indebtedness (other than Permitted Indebtedness), and the Company
will not issue any Disqualified Stock and will not permit any of its Restricted
Subsidiaries to issue any shares of Preferred Stock; PROVIDED, HOWEVER, that the
Company may incur Indebtedness which is not Permitted Indebtedness or issue
shares of Disqualified Stock, if (i) no Default or Event of Default shall have
occurred and be continuing or would occur after giving effect on a pro forma
basis to such incurrence or issuance and (ii) 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 equal to 2.5:1, determined on a pro forma basis
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.
SECTION 4.13 LIMITATION ON DIVIDENDS AND OTHER PAYMENT
SUBSIDIARIES
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrances or restrictions on the ability of any
such Restricted Subsidiary to (i) pay dividends or make any other distributions
to the Company or any of its Restricted Subsidiaries (A) on such Restricted
Subsidiary's Capital Stock or (B) with respect to any other interest or
participation in, or measured by, its profits, or pay any Indebtedness owed to
the Company or any of its Restricted Subsidiaries; (ii) make loans or advances
to the Company or any of its Restricted Subsidiaries; or (iii) transfer any of
its properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
applicable law, (b) this Indenture, Notes or the Senior Credit Facility, (c)
customary non-assignment provisions of any contract or any lease entered into in
the ordinary course of business, (d) agreements existing on the Issue Date to
the extent and in the manner such agreements are in effect on the Issue Date, or
(e) an agreement governing Indebtedness incurred to Refinance the Indebtedness
issued, assumed or incurred pursuant to an agreement referred to in the
immediately preceding clauses (b) or (d) above; PROVIDED, HOWEVER, that the
provisions relating to such encumbrance or restriction
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contained in any such Indebtedness are no less favorable to the Company in any
material respect as determined by the Board of Directors of the Company in their
reasonable and good faith judgment than the provisions relating to such
encumbrance or restriction contained in agreements referred to in such clauses
(b) or (d).
SECTION 4.14 REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company will be
required to notify the Trustee in writing thereof and to offer to repurchase all
or any part (equal to $1,000 of principal or an integral multiple thereof) of
each Holder's Notes pursuant to the offer described below (the "Change of
Control Offer") at a purchase price equal to 101% of the principal amount
thereof on the date of purchase, plus accrued and unpaid interest thereon, if
any, through the date of purchase (the "Change of Control Payment").
(b) 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 this Section 4.14 and that all Notes tendered will be
accepted for payment; (2) the purchase price and the purchase date, which shall
be no earlier than 30 days nor later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"); (3) that any Note not tendered
will continue to accrue interest; (4) that, unless the Company defaults in the
payment of the Change of Control Payment, on and after the Change of Control
Payment Date, all Notes accepted for payment pursuant to the Change of Control
Offer shall cease to accrue interest; (5) that Holders electing to have any
Notes purchased pursuant to a Change of Control Offer will 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 will 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 (7) that Holders whose Notes are being purchased only in part
will be issued new Notes; PROVIDED, that each Note purchased and each new Note
issued shall be in a principal amount equal to $1,000 or an integral multiple
thereof. On the Business Day immediately preceding the Change of Control Payment
Date, the Trustee shall notify the Company in writing of the Holders who have so
elected to have their Notes purchased pursuant to the Change of Control Offer
(and who have not withdrawn such election pursuant to clause (5) above).
On the Change of Control Payment Date, the Company shall, to the
extent lawful, (i) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S.
Legal Tender in an amount equal to the Change of Control Payment in respect of
all Notes or portions thereof so tendered and (iii) deliver or cause to be
delivered to the Trustee the Notes so accepted together with an Officers'
Certificate stating the amount of the Notes or portions thereof being tendered
to the
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Company. The Paying Agent shall promptly mail to the Holders of the 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, if any;
PROVIDED, HOWEVER, that each such new Note shall be in a principal amount of
$1,000 or an integral multiple thereof. Any Notes not so accepted shall be
promptly mailed by the Company to the Holder thereof. For purposes of this
Section 4.14, the Trustee shall act as the Paying Agent.
Any amounts deposited with the Paying Agent and remaining after the
purchase of Notes pursuant to a Change of Control Offer shall be returned by the
Paying Agent to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder, in
each case, to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Change of Control Offer. To the
extent provisions of any securities laws or regulations conflict with this
Section 4.14, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.14 by virtue thereof.
The Company will announce publicly the results of the Change of
Control Offer on as soon as practicable after the Change of Control Date.
Neither the Board of Directors of the Company nor the Trustee may
waive the provisions of this Section 4.14 relating to the Company's obligation
to make a Change of Control Offer under this Section 4.14.
SECTION 4.15 LIMITATION ON ASSET SALES.
(a) The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company or the
applicable Restricted Subsidiary, as the case may be, receives consideration at
the time of such Asset Sale in an amount at least equal to the amount of the
fair market value of the assets sold or otherwise disposed of (A) as determined
in good faith by the Company's Board of Directors (as set forth in a resolution
of such Board of Directors and set forth in an Officers' Certificate delivered
to the Trustee) with respect to any Asset Sale pursuant to which at least 85% of
the consideration received by the Company or the Restricted Subsidiary, as the
case may be, from such Asset Sale shall be in the form of cash or Cash
Equivalents and is received at the time of such disposition or (B) with respect
to any other Asset Sale, as determined by an Independent Financial Advisor (as
evidenced by a favorable opinion delivered by such Independent Financial Advisor
to the Trustee as to (x) the adequacy of the consideration received by the
Company or the Restricted Subsidiary, as the case may be, from such Asset Sale
and (y) the fairness, from a financial point of view, of such Asset Sale); and
(ii) upon the consummation of an Asset Sale, the Company shall (I) apply, or
cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale
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within 180 days of such Asset Sale either (A) to repay any Indebtedness secured
by the assets involved in such Asset Sale or outstanding Indebtedness under the
Senior Credit Facility, in each case, together with a concomitant permanent
reduction in the amount of such Indebtedness (including a permanent reduction in
the committed amounts therefor in the case of any revolving credit facility so
repaid), (B) to make an investment in properties and assets that replace the
properties and assets that were the subject of such Asset Sale or in properties
and assets that will be used in the business of the Company and its Restricted
Subsidiaries ("Replacement Assets"), or (C) to effect a combination of repayment
and investment permitted by the foregoing clauses (ii)(I)(A) and (B) or (II) (A)
enter into a definitive written agreement, within 150 days of such Asset Sale,
committing it, subject to conditions customary in such agreements, to apply, or
cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to
such Asset Sale within 270 days of such Asset Sale to an investment in
Replacement Assets or (B) effect a combination of repayment and investment
permitted by the foregoing clauses (ii)(I)(A) and (B) and (ii)(II)(A). On (i)
the 181st day after an Asset Sale, (ii) if a definitive written agreement
relating to an investment in Replacement Assets was entered into within 150 days
of such Asset Sale, on the 271st day after such Asset Sale or such earlier date
on which such definitive agreement is for any reason terminated or (iii) such
earlier date as the Board of Directors of the Company or of such Restricted
Subsidiary determines to apply the Net Cash Proceeds relating to such Asset Sale
as set forth in clauses (ii)(I) and (ii)(II) of the immediately preceding
sentence, in each case as applicable (each, a "Net Proceeds Offer Trigger
Date"), such aggregate amount of Net Cash Proceeds which has not been applied on
or before such Net Proceeds Offer Trigger Date ("Excess Proceeds") as permitted
in clauses (ii)(I) or (ii)(II) of the immediately preceding sentence (each a
"Net Proceeds Offer Amount") shall be applied by the Company or such Restricted
Subsidiary to make an offer to purchase (the "Net Proceeds Offer"), on a date
(the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60 days
following the applicable Net Proceeds Offer Trigger Date, from all holders of
Notes on a pro rata basis, according to principal amount of Notes equal to the
Net Proceeds Offer Amount at a price equal to 100% of the principal amount of
the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to
the date of purchase; PROVIDED, HOWEVER, that if at any time any non-cash
consideration received by the Company or any Restricted Subsidiary of the
Company, as the case may be, in connection with any Asset Sale is converted into
or sold or otherwise disposed of for cash (other than interest received with
respect to any such non-cash consideration), then such conversion or disposition
shall be deemed to constitute an Asset Sale hereunder, and the Net Cash Proceeds
thereof shall be applied in accordance with this covenant. The Company may defer
the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer
Amount equal to or in excess of $10 million resulting from one or more Asset
Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not
just the amount in excess of $10 million, shall be applied as required pursuant
to this paragraph).
In the event of the transfer of substantially all (but not all) of
the property and assets of the Company and its Restricted Subsidiaries as an
entirety to a Person in a transaction permitted under Section 5.1, the successor
corporation shall be deemed to have sold the properties and assets of the
Company and its Restricted Subsidiaries not so transferred for purposes of this
covenant, and shall comply with the provisions of this
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covenant with respect to such deemed sale as if it were an Asset Sale. In
addition, the fair market value of such properties and assets of the Company or
its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash
Proceeds for purposes of this covenant.
(b) Subject to the deferral of the Net Proceeds Offer Trigger Date
contained in subsection (a) above, each notice of a Net Proceeds Offer pursuant
to this Section 4.15 shall be mailed or caused to be mailed, by first class
mail, by the Company within 25 days after the Net Proceeds Offer Trigger Date to
all Holders at their last registered addresses as of a date within 15 days of
the mailing of such notice, with a copy to the Trustee. The notice shall contain
all instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Net Proceeds Offer and shall state the following terms:
(1) that the Net Proceeds Offer is being made pursuant to this
Section 4.15 and that all Notes tendered and not withdrawn, in whole or in
part, in integral multiples of $1,000 will be accepted for payment;
PROVIDED, HOWEVER, that if the aggregate principal amount of Notes
tendered in a Net Proceeds Offer plus accrued interest at the expiration
of such offer exceeds the aggregate amount of the Net Proceeds Offer, 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 principal amount or multiples thereof
shall be purchased);
(2) the purchase price (including the amount of any accrued
interest) and the purchase date (which shall be 20 Business Days from the
date of mailing of notice of such Net Proceeds Offer, or such longer
period as required by law) (the "Proceeds Purchase Date");
(3) that any Note not tendered will continue to accrue interest
on and after the Proceeds Purchase Date;
(4) that, unless the Company defaults in making payment therefor,
any Note accepted for payment pursuant to the Net Proceeds offer shall
cease to accrue interest on and after the Proceeds Purchase Date;
(5) that Holders electing to have a Physical Note purchased pursuant
to a Net Proceeds Offer will 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 Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day prior to the
Proceeds Purchase Date;
(6) that Holders will be entitled to withdraw their election if the
Paying Agent receives, not later than five Business Days prior to the
Proceeds Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the principal amount of the
Notes the Holder delivered for purchase and a
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statement that such Holder is withdrawing his election to have such Note
purchased; and
(7) that Holders whose Physical Notes are purchased only in part
will be issued new Physical Notes in a principal amount equal to the
unpurchased portion of the Physical Notes surrendered; PROVIDED that each
Physical Note purchased and each new Physical Note issued shall be in
principal amount of $1,000 or integral multiples thereof.
On the second Business Day immediately preceding the Proceeds
Purchase Date, the Trustee shall notify the Company in writing of the Holders
who have so elected to have their Physical Note purchased pursuant to such Net
Proceeds Offer (and who have not withdrawn such election, as provided above). On
or before the Proceeds Purchase Date, the Company shall (i) accept for payment
Notes or portions thereof tendered pursuant to the Net Proceeds Offer which are
to be purchased in accordance with item (b)(1) above, (ii) deposit with the
Paying Agent U.S. Legal Tender sufficient to pay the purchase price plus accrued
interest, if any, of all Notes to be purchased and (iii) deliver to the Trustee
Notes so accepted together with an Officers' Certificate stating the Notes or
portions thereof being purchased by the Company. The Paying Agent shall promptly
mail to the Holders so accepted payment in an amount equal to the purchase price
for such Notes plus accrued interest, if any, to the Proceeds Purchase Date. For
purposes of this Section 4.15, the Trustee shall act as the Paying Agent.
Any amounts deposited with the Paying Agent and remaining after the
purchase of Notes pursuant to a Net Proceeds Offer shall be returned by the
Paying Agent to the Company.
The Company shall comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder, in
each case, to the extent such laws and regulations are applicable in connection
with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent
that the provisions of any securities laws or regulations conflict with this
Section 4.15, the Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 4.15 by virtue thereof.
SECTION 4.16 LIMITATION ON ISSUANCES AND SALES OF CAPITAL
SUBSIDIARIES
The Company will not cause or permit any of its Restricted
Subsidiaries to issue or sell any Capital Stock (other than to the Company or to
a Wholly-Owned Restricted Subsidiary of the Company) or permit any Person (other
than the Company or a Wholly-Owned Restricted Subsidiary of the Company) to own
or hold any Capital Stock of any Restricted Subsidiary of the Company or any
Lien or security interest therein (other than Permitted Liens); PROVIDED,
HOWEVER, such covenant shall not prohibit the disposition (by sale, merger or
otherwise) of all of the Capital Stock of a Restricted Subsidiary of the
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Company; PROVIDED any Net Cash Proceeds therefrom are applied in accordance with
Section 4.15 of this Indenture.
SECTION 4.17 IMPAIRMENT OF SECURITY INTEREST.
Neither the Company nor any of its Subsidiaries will take or omit to
take any action which would adversely affect or impair the Security Interests in
favor of the Trustee, on behalf of itself and the Holders, with respect to the
Disbursement Funds, and neither the Company nor its Subsidiaries shall grant to
any Person, or permit any Person (other than the Company) to have (other than to
the Trustee on behalf of the Trustee and the Holders or the securities
intermediary under the Security and Disbursement Agreement) any interest
whatsoever in the Disbursement Funds.
SECTION 4.18 LIMITATION ON LIENS.
Other than Permitted Liens, the Company shall not, and shall not
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
incur any Liens of any kind against or upon any property or assets of the
Company or any of its Restricted Subsidiaries whether owned on the Issue Date or
acquired after the Issue Date, or any income or profits therefrom, or assign or
otherwise convey any right to receive income or profits therefrom.
SECTION 4.19 CONDUCT OF BUSINESS.
Neither the Company nor any of its Restricted Subsidiaries will
engage in any business other than (a) the business conducted or proposed to be
conducted by the Company and its Restricted Subsidiaries on the Issue Date or
(b) any business reasonably related and complimentary to any business described
in clause (a) above.
SECTION 4.20 PAYMENTS FOR CONSENT.
Neither the Company nor any of the Company's Subsidiaries shall,
directly or indirectly, pay or cause to be paid any consideration, whether by
way of interest, fee or otherwise, to any Holder of any Notes for, or as
inducement to, any consent, waiver or amendment of any of the terms or
provisions of this Indenture or the Notes unless such consideration is offered
to be paid or agreed to be paid to all Holders of Notes then outstanding that
consent, waive or agree to amend any of such terms or provisions in the time
frame set forth in the solicitation documents relating to such consent, waiver
or agreement.
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SECTION 4.21 REGISTRATION RIGHTS AGREEMENT.
The Company will comply with all of the terms and provisions of the
Registration Rights Agreement, including, without limitation, its obligation to
pay Additional Interest to the Holders, as set forth in Section 4 therein (which
provision is hereby incorporated in its entirety by reference herein) and to
notify the Trustee immediately of the occurrence of any Registration Default (as
defined in the Registration Rights Agreement) thereunder.
SECTION 4.22 WARRANT AGREEMENT.
The Company will comply with all of the terms and provisions of the
Warrant Agreement and on or prior to the Separability Date shall notify the
Trustee immediately of the occurrence of any default or event of default
thereunder.
SECTION 4.23 INTERCOMPANY INDEBTEDNESS.
The Company agrees that any Indebtedness of a Subsidiary of the
Company to the Company or any Subsidiary of the Company, if such Indebtedness of
such Subsidiary exceeds $500,000 in aggregate principal amount shall be
subordinate to the Obligations of the Company and the Subsidiary Guarantors, and
the promissory note or other instrument evidencing such Indebtedness shall
contain language giving effect to such subordination.
SECTION 4.24 KEY MAN LIFE INSURANCE.
The Company shall use commercially reasonable efforts to obtain, not
later than 30 days after the Issue Date, and to maintain, for so long as the
Notes are outstanding, key man life insurance upon the life of Xxx Xxxxxx, the
Company's Chief Executive Officer, and any successor chief executive officer of
the Company, or other senior executive officer of the Company performing similar
functions, with the death benefit thereunder payable to the Company in an amount
not less than $10,000,000. For purposes of this covenant, the payment by the
Company of annual premiums not in excess of $250,000 in connection with such key
man life insurance shall be considered commerically reasonable. The Company
shall at all times retain all the incidents of ownership of such insurance and
shall not borrow upon or otherwise impair its right to receive the proceeds of
such insurance, except that the Company may incur Permitted Liens on such
insurance and proceeds.
SECTION 4.25 USE OF PROCEEDS.
The Company shall use the proceeds of the Notes substantially in the
manner described in the Offering Circular. The Company will not use any part of
such proceeds to purchase or carry any margin stock or to extend credit to
others for the purpose of
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purchasing or carrying any margin stock. Neither the issuance of any Note nor
the use of the proceeds thereof shall violate or be inconsistent with the
provisions of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
ARTICLE FIVE
SUCCESSOR CORPORATION
SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS.
(a) The Company will not, in a single transaction or series of
related transactions, consolidate or merge with or into (whether or not the
Company is the surviving entity), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets to,
another corporation, Person or entity unless: (i) the Company is the surviving
entity, 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
to which such sale, assignment, transfer, lease, conveyance or other disposition
will have been made assumes all the obligations of the Company under the Notes
and this Indenture and the Registration Rights Agreement, pursuant to a
supplemental indenture and any other documents or instruments requested by the
Trustee, in each case, in a form reasonably satisfactory to the Trustee under
the Notes and this Indenture; (iii) immediately after such transaction
(including giving effect to any Indebtedness and Acquired Debt incurred or
expected to be incurred in connection with or in respect of such transaction and
to any assumption required by clause (ii) above) no Default or Event of Default
exists; (iv) the Company or any entity formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease
conveyance or other disposition will have been made (A) will have Consolidated
Net Worth (immediately after the transaction but prior to any purchase
accounting adjustments resulting from the transaction) equal to or greater than
the Consolidated Net Worth of the Company immediately preceding the transaction
and (B) will, 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 Section 4.12 of this Indenture and will have a Fixed
Charge Coverage Ratio, determined on a PRO FORMA basis, greater than or equal to
the Fixed Charge Coverage Ratio of the Company immediately prior to the
transaction; and (v) the Company or the entity or Person formed by or surviving
any such consolidation or merger, or to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel (with respect
to which opinion such counsel may rely solely as to matters of fact on an
Officers' Certificate), each stating that such consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition and any
supplemental indenture required in connection with such transaction
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comply with the applicable provisions of this Indenture and that all conditions
precedent in this Indenture relating to such transaction have been satisfied.
(b) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries of the Company, the Capital Stock of which constitutes all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
(c) Each Restricted Subsidiary (other than any Restricted Subsidiary
whose Subsidiary Guarantee is to be released in accordance with the terms of
such Subsidiary Guarantee and this Indenture in connection with any transaction
made in compliance with the provisions of Section 4.15) will not, and the
Company will not cause or permit any Restricted Subsidiary to, consolidate with
or merge with or into any Person (other than the Company or any Restricted
Subsidiary of the Company), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets (other than to the
Company or any Restricted Subsidiary of the Company), unless: (i) the entity
formed by or surviving any such consolidation or merger (if other than the
Restricted Subsidiary), or to which such disposition shall have been made, is a
corporation organized and existing under the laws of the United States, any
state thereof or the District of Columbia; (ii) such entity assumes by
supplemental indenture all of the obligations of the Restricted Subsidiary on
the Subsidiary Guarantee; (iii) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; (iv) immediately after giving effect to such transaction and the use
of any net proceeds therefrom on a pro forma basis, the Company could satisfy
the provisions of clause (iv) of paragraph (a) of this Section 5.1; and (v) the
Subsidiary Guarantor or the entity or Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition will have been made, shall have delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel (with respect to
which opinion such counsel may rely solely as to matters of fact on an Officers'
Certificate), each stating that such consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition and any supplemental indenture
required in connection with such transaction comply with the applicable
provisions of this Indenture and that all conditions precedent in this Indenture
relating to such transactions have been satisfied. Any merger or consolidation
of a Restricted Subsidiary with and into the Company (with the Company being the
surviving entity) or another Restricted Subsidiary need only comply with clause
(iv) of paragraph (a) of this Section 5.1.
SECTION 5.1 SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation, combination or merger or any transfer of all
or substantially all of the assets of the Company in accordance with the
foregoing, in which the Company is not the continuing entity, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, lease or transfer is made
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shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture and the Notes and the Registration Rights
Agreement, with the same effect as if such surviving entity had been named as
such, and thereafter (except in the case of a lease) the predecessor corporation
will be relieved of all further obligations and covenants hereunder and
thereunder.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.1 EVENTS OF DEFAULT.
An "Event of Default" occurs if:
(a) for any Interest Payment Date, the Company fails to pay interest
on any Notes when the same becomes due and payable and the Default
continues for a period of 10 days;
(b) the Company fails to pay the principal (or premium, if any) on
any Notes, when such principal becomes due and payable, at maturity, by
acceleration, upon redemption or otherwise (including any default in the
performance or breach of the provisions in Section 4.14 or Section 5.1 of
this Indenture, the failure to make a payment to purchase Notes tendered
pursuant to a Change of Control Offer or a Net Proceeds Offer);
(c) the Company or any of its Subsidiaries defaults in the
observance or performance of any other covenant, provision or agreement
contained in this Indenture or the Notes, which default continues for a
period of 30 days after the Company receives written notice specifying the
nature of such default (and demanding that such default be remedied) from
the Trustee or the Holders of at least 25% of the outstanding principal
amount of the Notes (except in the case of a default under Section 5.1 of
this Indenture, which default will constitute an Event of Default with
such notice requirement but without such passage of time requirement);
(d) a default (after giving effect to any applicable grace periods
or any extension of any maturity date) under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness of the Company or of any Restricted
Subsidiary of the Company, whether such Indebtedness now exists or is
created after the Issue Date, if (a) either (A) such default results from
the failure to pay principal of or interest on such Indebtedness and the
default continues for a period of 30 days or (B) as a result of such
default the maturity of such Indebtedness has been accelerated, and (b)
the principal amount of such Indebtedness, together with the principal
amount of any other such Indebtedness with respect to which a payment
default as described in
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clause (a)(A) (after the expiration of any applicable grace period or any
extension of the maturity date) has occurred, or the maturity of which may
be so accelerated, exceeds $2,000,000 in the aggregate, and the default
continues for a period of 10 days after the Company has received written
notice specifying the default from the Trustee or the Holders of at least
25% of the aggregate principal amount of the then outstanding Notes;
(e) one or more judgments in an aggregate amount in excess of
$2,000,000 (other than any judgment as to which a reputable insurance
company has accepted full liability in writing) shall have been rendered
against the Company or any of its Restricted Subsidiaries and such
judgments remain undischarged, unpaid or unstayed for a period of 60 days
after such judgment or judgments become final and non-appealable;
(f) the Company or any Restricted Subsidiary (A) commences a
voluntary case or proceeding under any Bankruptcy Law with respect to
itself, (B) consents to the entry of a judgment, decree or order for
relief against it in an involuntary case or proceeding under any
Bankruptcy Law, (C) consents to the appointment of a Custodian of it or
for substantially all of its property or assets, (D) consents to or
acquiesces in the institution of a bankruptcy or an insolvency proceeding
against it, (E) makes a general assignment for the benefit of its
creditors, (F) shall generally not pay its debts when such debts become
due or shall admit in writing its inability to pay its debts generally or
(G) takes any action to authorize or effect any of the foregoing;
(g) a court of competent jurisdiction enters a judgment, decree or
order for relief in respect of the Company, any Restricted Subsidiary in
an involuntary case or proceeding under any Bankruptcy Law, which shall
(A) approve as properly filed a petition seeking reorganization,
arrangement, adjustment or composition in respect of the Company, or any
Restricted Subsidiary, (B) appoint a Custodian of the Company, or any
Restricted Subsidiary or for substantially all of its property or (C)
order the winding-up or liquidation of its affairs; and such judgment,
decree or order shall remain unstayed and in effect or a period of 60
consecutive days; or
(h) any Subsidiary Guarantee for any reason ceases to be in full
force and effect or becomes or is declared to be null and void,
unenforceable or invalid or any Subsidiary Guarantor denies or disaffirms
its obligations under its Subsidiary Guarantee (other than by reason of
release of a Subsidiary Guarantor in accordance with the terms of this
Indenture).
SECTION 6.2 ACCELERATION.
(a) If an Event of Default (other than an Event of Default specified
in Section 6.1(f) or (g) with respect to the Company or any of its Restricted
Subsidiaries) occurs and is continuing and has not been waived pursuant to
Section 6.4, then the Trustee or the Holders of at least 25% in principal amount
of the outstanding Notes may declare the
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principal of, premium, if any, and accrued interest on all the Notes to be due
and payable immediately by notice in writing to the Company and the Trustee
specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), and the same shall become immediately
due and payable.
(b) If an Event of Default specified in Section 6.1(f) or (g) with
respect to the Company or any of its Restricted Subsidiaries occurs and is
continuing, then all unpaid principal of, and premium, if any, and accrued and
unpaid interest on all of the outstanding Notes 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.
(c) At any time after a declaration of acceleration with respect to
the Notes in accordance with Section 6.2(a), the Holders of a majority in
principal amount of the Notes may on behalf of all of the Holders, by written
notice to the Trustee, (i) waive any existing Default or Event of Default and
its consequences, except a continuing Default or Event of Default under Section
6.1(a) or (b) hereof or a Default or Event of Default with respect to any
covenant or provision which cannot be modified or amended without the consent of
the Holder of each outstanding Note affected, and (ii) rescind and cancel such
declaration of acceleration and its consequences if (A) the rescission would not
conflict with any judgment or decree of a court of competent jurisdiction, and
(B) all existing Events of Default have been cured or waived (except any such
Event of Default arising from the nonpayment of principal or interest on the
Notes that has become due solely because of the acceleration).
(d) In the case of any Event of Default occurring by reason of any
willful action (or inaction) taken (or not taken) by or on behalf of the Company
or any Subsidiary Guarantor with the intention and for the purpose of avoiding
payment of the premium that the Company would have had to pay if the Company
then had elected to redeem the Notes pursuant to Section 3.1 hereof and
Paragraph 5 of the Notes, an equivalent premium shall also become and be
immediately due and payable on Notes of such series to the extent permitted by
law.
SECTION 6.3 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of, premium, if any, or 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 by the Trustee or any Holder in exercising any right or remedy arising
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.
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SECTION 6.4 WAIVER OF PAST DEFAULTS.
Subject to Sections 2.9, 6.8 and 9.2, the Holders of a majority in
principal amount of the outstanding Notes by written notice to the Trustee may
waive an existing Default or Event of Default and its consequences, except a
continuing Default or Event of Default in the payment of principal of or
interest on any Note as specified in clauses (a) and (b) of Section 6.1. When a
Default or Event of Default is waived, it is cured and ceases.
SECTION 6.5 CONTROL BY MAJORITY.
Subject to Section 2.9, the Holders of a majority in principal
amount of the outstanding Notes may direct in writing the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, including, without
limitation, any remedies provided for in Section 6.3. Subject to Section 7.1,
however, the Trustee may refuse to follow any direction (i) that the Trustee
reasonably believes conflicts with any law or this Indenture or the Notes, (ii)
that the Trustee determines may be unduly prejudicial to the rights of another
Holder or (iii) that may involve the Trustee in personal liability; PROVIDED,
further, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction or this Indenture.
SECTION 6.6 LIMITATION ON SUITS.
No Holder will have any right to institute any proceeding, judicial
or otherwise, or pursue any remedy under this Indenture or the Notes unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
outstanding Notes have made a written request to the Trustee to institute
proceedings in respect of such Event of Default in its own name as Trustee
under this Indenture;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against any costs, losses,
liabilities or expenses to be incurred in compliance with such request;
(4) the Trustee, for 30 days after its receipt of such notice,
request and offer of indemnity, has failed to institute such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 30-day period by the Holders of a
majority in principal amount of the outstanding Notes.
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The foregoing limitations shall not apply to a suit instituted by a
Holder for the enforcement of the payment of principal and premium, if any, or
interest on such Note on or after the respective due dates set forth in such
Note (including upon acceleration thereof) or the institution of any proceeding
with respect to this Indenture or any remedy hereunder, including without
limitation, acceleration, by the Holders of a majority in principal amount of
the outstanding Notes; PROVIDED that upon institution of any proceeding or
exercise of any remedy, such Holder provides the Trustee with prompt notice
thereof.
A Holder may not use this Indenture to prejudice the rights of
another Holder or to obtain a preference or priority over such other Holder.
SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder to receive payment of principal of, premium, if any, and interest on
a Note, on or after the respective due dates expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
is absolute and unconditional and shall not be impaired or affected without the
written consent of such Holder.
SECTION 6.8 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in payment of principal or interest specified
in clause (a) or (b) of Section 6.1 occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Notes for the whole amount of principal of,
premium, if any, and accrued interest remaining unpaid, together with interest
on overdue principal and, to the extent that payment of such interest is lawful,
interest on overdue installments of interest at the rate set forth in Section
2.16 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 may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents, counsel, accountants and
experts) and the Holders allowed in any judicial proceedings relating to the
Company or Subsidiaries or any other obligor upon the Notes, any of their
respective creditors or any of their respective property and shall be entitled
and empowered to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same, and any Custodian in
any such judicial proceedings 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
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to the Trustee any amount due to it for the reasonable compensation, expenses,
taxes, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.7. 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
thereof, 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 or property pursuant to this
Article Six, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.7;
Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;
Third: to Holders for amounts due and unpaid on the Notes for
principal and interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Notes for
principal and interest, respectively; and
Fourth: to the Company or any other obligor on the Notes, as
their interests may appear, or as a court of competent jurisdiction may
direct.
The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.
SECTION 6.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder
pursuant to Section 6.7, a suit by a Holder or Holders of more than 25% in
principal amount of the outstanding Notes, or a suit by a Holder or Holders for
the enforcement of the payment of the principal of, premium, if any, or interest
on the Notes, on or after the due dates expressed in the Notes.
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SECTION 6.12 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture or any Note and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case, the
Company, the Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 6.13 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or wrongfully taken Notes in Section 2.7,
no right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 6.14 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder to exercise any
right or remedy arising upon any Default or Event of Default shall impair any
such right or remedy or constitute a waiver of any such Default or Event of
Default or an acquiescence therein. Every right and remedy given by this Article
Six or by law to the Trustee or to the Holders may be exercised from time to
time, and as may be deemed expedient, by the Trustee or by the Holders, as the
case may be.
ARTICLE SEVEN
TRUSTEE
SECTION 7.1 DUTIES OF TRUSTEE.
The duties and responsibilities of the Trustee shall be as provided
by the TIA and as set forth herein.
(a) If a Default or 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
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same degree of care and skill in its exercise thereof as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of a Default or an Event of
Default:
(1) the Trustee need perform only those duties as are specifically
set forth in this Indenture, and no covenants or obligations shall be
implied in this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
PROVIDED, HOWEVER, that the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) Notwithstanding anything to the contrary herein contained, the
Trustee may not be relieved from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this paragraph does not limit the effect of paragraph (b)
of this Section 7.1;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Trust officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.2, 6.4 or 6.5 of this Indenture.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section 7.1 and
Section 7.2 of this Indenture.
(f) The Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
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SECTION 7.2 RIGHTS OF TRUSTEE.
Subject to Section 7.1:
(a) The Trustee may rely and shall be fully protected in acting or
refraining from acting upon any document reasonably 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 consult
with counsel and may require an Officers' Certificate or an Opinion of Counsel,
or both, which shall conform to Sections 12.4 and 12.5 of this Indenture. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts.
(d) The Trustee shall not be liable for any action that it takes or
omits to take in good faith which it reasonably believes to be authorized or
within its rights or powers under this Indenture.
(e) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, financial statement, opinion, notice, request, direction, consent,
order, bond, debenture, or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled, upon reasonable notice
to the Company, to examine the books, records, and premises of the Company,
personally or by agent or attorney and to consult with the officers and
representatives of the Company, including the Company's accountants and
attorneys.
(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, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee security or indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities which may be incurred by it in compliance with such request, order
or direction.
(g) The Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder.
(h) Any permissive right or power available to the Trustee under
this Indenture shall not be construed to be a mandatory duty or obligation.
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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 otherwise deal with the Company, any
Subsidiary of the Company, or their respective Affiliates,with the same rights
it would have if it were not Trustee. Any Agent may do the same with like
rights. However, the Trustee must comply with Sections 7.10 and 7.11 of this
Indenture, and the Trustee is subject to TIA Sections 310(b) and 311.
SECTION 7.4 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy
of this Indenture or the Notes, and it shall not be accountable for the
Company's use of the proceeds from the Notes, and it shall not be responsible
for any statement of the Company in this Indenture or the Notes other than the
Trustee's certificate of authentication.
SECTION 7.5 NOTICE OF DEFAULT.
If a Default or an Event of Default occurs and is continuing and if
it is known to the Trustee, the Trustee shall mail to the Company and each
Holder in the manner and to the extent provided in TIA Section 313(c) notice of
the Default or Event of Default within 45 days after such Default or Event of
Default occurs, unless such Default or Event of Default has been cured. Except
in the case of a Default or an Event of Default in payment of principal of, or
interest on, any Note, including an accelerated payment and the failure to make
payment on the Change of Control Payment Date pursuant to a Change of Control
Offer or on the Net Proceeds Offer Payment Date pursuant to a Net Proceeds
Offer, the Trustee may withhold the notice of a Default or an Event of Default
if and so long as its Board of Directors, the executive committee of its Board
of Directors or a committee of its directors and/or officers charged with such
responsibility in good faith determines that withholding the notice is in the
interest of the Holders.
SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 15, beginning with May 15, 1998, the
Trustee shall, to the extent that any of the events described in Section 313(a)
of the TIA occurred within the previous twelve months, but not otherwise, mail
to each Holder a brief report dated as of such date that complies with Section
313(a) of the TIA. The Trustee also shall comply with Sections 313(b) and (c) of
the TIA.
A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the SEC and each stock exchange or market,
if any, on which the Notes are listed or quoted.
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The Company shall promptly notify the Trustee if the Notes become
listed or quoted on any stock exchange or market and the Trustee shall comply
with Section 313(d) of the TIA.
SECTION 7.7 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time reasonable
compensation for its services as shall from time to time be agreed to in writing
by the Company and the Trustee. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it in connection with the performance of its duties under
this Indenture, except any such expense as may arise from its negligence, bad
faith or willful misconduct. Such expenses shall include but not be limited to
the reasonable fees and expenses of the Trustee's agents and counsel.
The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders and directors and officers for,
and hold them harmless against, any loss, liability, damage, claim or expense
(including reasonable fees and expenses of counsel), including taxes (other than
taxes based on the income of the Trustee) incurred by them except for such
actions to the extent caused by any negligence, bad faith or willful misconduct
on their part, arising out of or in connection with the administration of this
trust including the reasonable costs and expenses of enforcing this Indenture
against the Company (including this Section 7.7) and defending themselves
against any claim or liability in connection with the exercise or performance of
any of their rights, powers or duties hereunder. The Trustee shall notify the
Company promptly of any claim asserted against the Trustee for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company of its obligations hereunder. At the Trustee's sole discretion, the
Company shall defend the claim and the Trustee shall cooperate and may
participate in the defense; PROVIDED that any settlement of a claim shall be
approved in writing by the Trustee. Alternatively, the Trustee may at its option
have separate counsel of its own choosing and the Company shall pay the
reasonable fees and expenses of such counsel; PROVIDED that the Company will not
be required to pay such fees and expenses if it assumes the Trustee's defense
and there is no conflict of interest between the Company and the Trustee in
connection with such defense as reasonably determined by the Trustee. The
Company need not pay for any settlement made without its written consent, which
consent shall not be unreasonably withheld. The Company need not reimburse any
expense or indemnify against any loss or liability to the extent incurred by the
Trustee through its negligence, bad faith or willful misconduct.
To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a claim prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.
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When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.1(f) or (g) of this Indenture occurs, such
expenses and the compensation for such services are intended to constitute
expenses of administration under any Bankruptcy Law.
The obligations of the Company under this Section 7.7 shall survive
the satisfaction and discharge of this Indenture.
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 7.8.
The Trustee may resign by so notifying the Company in writing at
least 30 days prior to the date of the proposed resignation. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the
Trustee or its property; or
(4) the Trustee 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 notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in aggregate principal
amount of the outstanding Notes may appoint a successor Trustee to replace the
successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, 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 Company and the successor Trustee shall mail notice of the
successor Trustee's succession to each Holder.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least
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10% in principal amount the outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
If the Trustee is no longer eligible under or otherwise fails to
comply with Section 7.10, any Holder who satisfies the requirements of TIA
Section 310(b) may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
The Company shall give notice of any resignation and any removal of
the Trustee and each appointment of a successor Trustee to all Holders. Each
notice shall include the name of the successor Trustee and the address of its
corporate trust office.
Notwithstanding any resignation or replacement of the Trustee
pursuant to this Section 7.8, the Company's obligations under Section 7.7 of
this Indenture shall continue for the benefit of the retiring Trustee.
SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
Person the resulting, surviving or transferee Person without any further act
shall, if such resulting, surviving or transferee Person is otherwise eligible
hereunder, be the successor Trustee; PROVIDED, HOWEVER, that such Person shall
be otherwise qualified and eligible under this Article Seven.
SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the
case of a corporation included in a bank holding company system, the related
bank holding company) shall have combined capital and surplus of at least
$200,000,000 as set forth in its most recent published annual report of
condition. In addition, if the Trustee is a corporation included in a bank
holding company system, the Trustee, independently of such bank holding company,
shall meet the capital requirements of TIA Section 310(a)(2). The Trustee shall
comply with TIA Section 310(b); PROVIDED, HOWEVER, that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding, if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. The provisions of TIA
Section 310 shall apply to the Company and the Subsidiary Guarantors, each as an
obligor of the Notes.
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SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST
COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311(a) shall apply to the Company and the
Subsidiary Guarantors, each as an obligor on the Notes.
ARTICLE EIGHT
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 8.1 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
(a) If the Company irrevocably deposits, or causes to be deposited,
in trust with the Trustee or the Paying Agent, at any time prior to the stated
maturity of the Notes or the date of redemption of all the outstanding Notes, as
trust funds in trust, money or direct non-callable obligations of or guaranteed
by the United States of America in an amount sufficient (as to principal,
premium (if any) and interest, but without reinvestment thereof), in the opinion
of a nationally recognized firm of independent public accountants to pay timely
and discharge the principal of and premium, if any, and interest on the
outstanding Notes to maturity or redemption, as the case may be, the Indenture
shall cease to be of further effect as to all outstanding Notes (except, among
other things, as to (i) remaining rights of registration of transfer and
substitution and exchange of the Notes, (ii) rights of holders to receive
payment of principal of and interest on the Notes and (iii) the rights,
obligations and immunities of the Trustee) and the Guarantees will be
discharged.
(b) The following shall be the conditions to application of
paragraph (a) above to the outstanding Notes:
(i) (x) 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 which will be used to defease the Notes concurrently with such
incurrence) or (y) at any time in the period ending on the 91st day after
the date of deposit no Default or Event of Default set forth in Section
6.1(f) or (g) shall have occurred and be continuing;
(ii) Such deposit and the defeasance contemplated hereby will
not result in a Default under, or a breach or violation of, this Indenture
or any other material instrument or agreement to which the Company or any
of its Subsidiaries is a party or by which it or their property or assets
is bound;
(iii) The Company shall deliver to the Trustee an Opinion of
Counsel in the United States, in form and substance reasonably
satisfactory to the Trustee, to
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the effect that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, (y) since the Issue
Date, there has been a change in the applicable Federal income tax law or
(z) based on existing precedents, if the matter were properly briefed, in
any case to the effect that, and based thereon such Opinion of Counsel
shall state that, a court should hold that Holders will not recognize
income, gain or loss for Federal income tax purposes as a result of such
deposit and the defeasance contemplated hereby and will be subject to
Federal income tax in the same amounts and in the same manner and at the
same times as would have been the case if such deposit and defeasance had
not occurred;
(iv) The Company shall have delivered to the Trustee an
Opinion of Counsel, reasonably satisfactory to the Trustee, to the effect
that, or based on existing precedents, if the matter were properly
briefed, a court should state that: (A) the trust funds will not be
subject to the rights of holders of Indebtedness of the Company other than
the Notes and as otherwise permitted herein and (B) assuming no
intervening bankruptcy of the Company between the date of deposit and the
91st day following the deposit and that no Holder is an insider of the
Company, after the 91st day following the deposit, the trust funds will
not be subject to any applicable bankruptcy, insolvency, reorganization or
similar law affecting creditors' rights generally; and
(v) The Company shall have delivered to the Trustee an
Officers' Certificate, stating that the deposit under clause (i) was not
made by the Company with the intent of preferring the Holders over any
other creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding any other creditors of the Company or others;
(vi) The Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent specified herein relating to the defeasance
contemplated by this Section 8.1 have been complied with; PROVIDED,
HOWEVER, that such counsel may rely, as to matters of fact, on Officers'
Certificates of the Company.
In the event all or a portion of the Notes are to be redeemed
through such irrevocable trust, the Company must make arrangements reasonably
satisfactory to the Trustee, at the time of such deposit, for the giving of the
notice of such redemption or redemptions by the Trustee in the name and at the
expense of the Company.
SECTION 8.2 SATISFACTION AND DISCHARGE.
In addition to the Company's rights under Section 8.1, the Company
may terminate all of its obligations under this Indenture (subject to Section
8.3), when:
(1) all Notes theretofore authenticated and delivered (other than
Notes which have been destroyed, lost or stolen and which have been
replaced or paid as
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provided in Section 2.7 and Notes for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust) have been
delivered to the Trustee for cancellation or all such Notes not
theretofore delivered to the Trustee for cancellation have become due and
payable, and the Company has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust solely for that purpose
an amount of money sufficient to pay and discharge the entire Indebtedness
on the Notes not theretofore delivered to the Trustee for cancellation,
for principal of, premium, if any, and interest;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company;
(3) the Company has delivered irrevocable instructions to the
Trustee to apply the deposited money toward the payment of the Notes at
maturity or redemption, as the case may be; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, stating that all conditions
precedent specified herein relating to the satisfaction and discharge of
this Indenture have been complied with; PROVIDED, HOWEVER, that such
counsel may rely, as to matters of fact, on Officers' Certificates of the
Company.
SECTION 8.3 SURVIVAL OF CERTAIN OBLIGATIONS.
Notwithstanding the satisfaction and discharge of this Indenture and
of the Notes referred to in Section 8.1 or 8.2, the respective obligations of
the Company and the Trustee under Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.7, 2.10,
2.13, 2.14, 2.16, 4.1, 4.2, 4.9, 4.20, 4.21, 6.7, Article Seven, 8.5, 8.6, 8.7,
10.2 and 10.4 of this Indenture shall survive until the Notes are no longer
outstanding, and thereafter the obligations of the Company and the Trustee under
Sections 7.7, 7.8, 8.5, 8.6 and 8.7 of this Indenture shall survive. Nothing
contained in this Article Eight shall abrogate any of the obligations or duties
of the Trustee under this Indenture.
SECTION 8.4 ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.
Subject to Section 8.7, after (i) the conditions of Section 8.1 or
8.2 of this Indenture have been satisfied, (ii) the Company has paid or caused
to be paid all other sums payable hereunder by the Company and (iii) the Company
has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel,
each stating that all conditions precedent referred to in clause (i) above
relating to the satisfaction and discharge of this Indenture have been complied
with, the Trustee upon written request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified in Section 8.3.
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SECTION 8.5 APPLICATION OF TRUST MONIES.
The Trustee or Paying Agent shall hold any U.S. Legal Tender or U.S.
Government Obligations deposited with it in the irrevocable trust established
pursuant to Section 8.1 of this Indenture. The Trustee shall apply the deposited
U.S. Legal Tender or the U.S. Government Obligations, together with earnings
thereon, through the Paying Agent, in accordance with this Indenture and the
terms of the irrevocable trust agreement established pursuant to Section 8.1, to
the payment of principal of and interest on the Notes. Anything in this Article
Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon the Company's request any U.S. Legal Tender or
U.S. Government Obligations held by it as provided in Section 8.1(d) hereof
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent defeasance and discharge contemplated by
Section 8.1.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed or assessed against the U.S. Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.1 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 outstanding Notes.
SECTION 8.6 REPAYMENT TO THE COMPANY; UNCLAIMED MONEY.
Subject to Sections 7.7, 8.1 and 8.2 of this Indenture, the Trustee
and the Paying Agent shall promptly pay to the Company upon request any excess
U.S. Legal Tender or U.S. Government Obligations held by them at any time. The
Trustee and the Paying Agent will pay to the Company upon receipt by the Trustee
or the Paying Agent, as the case may be, of an Officers' Certificate, any money
held by it for the payment of principal or interest that remains unclaimed for
two years after payment to the Holders is required; PROVIDED, HOWEVER, that the
Trustee and the Paying Agent before being required to make any payment may, but
need not, at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein, which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to
money must look solely to the Company for payment as general creditors unless an
applicable abandoned property law designated another Person, and all liability
of the Trustee or Paying Agent with respect to such money shall thereupon cease.
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SECTION 8.7 REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any U.S. Legal
Tender or U.S. Government obligations in accordance with Section 8.1 or 8.2 of
this Indenture by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.1 or 8.2 of this Indenture until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.1 or 8.2 of this Indenture;
PROVIDED, HOWEVER, that if the Company has made any payment of interest on or
principal of any Notes because of 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 or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE NINE
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 9.1 WITHOUT CONSENT OF HOLDERS.
The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture or the Notes without notice to
or consent of any Holder:
(1) to cure any ambiguity, defect or inconsistency; PROVIDED that
such amendment or supplement does not adversely affect the rights of any
Holder;
(2) to provide for the assumption of the Company's obligations to
Holders or any Subsidiary Guarantor's obligation under its Subsidiary
Guarantee if required under the terms hereof in the case of a merger,
consolidation or similar transaction and otherwise as required to comply
with Article Five;
(3) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(4) to comply with any requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA;
(5) to make any change that would provide any additional benefits or
rights to the Holders or that does not adversely affect the legal rights
hereunder of any Holder; or
(6) to provide for issuance of the Exchange Notes, which will have
terms substantially identical in all material respects to the Initial
Notes (except that the
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transfer restrictions contained in the Initial Notes will be modified or
eliminated, as appropriate), and which will be treated together with any
outstanding Initial Notes, as a single issue of securities;
PROVIDED that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section 9.1.
SECTION 9.2 WITH CONSENT OF HOLDERS.
Subject to Section 6.7 of this Indenture, the Company, when
authorized by a Board Resolution, and the Trustee, together, with the written
consent of the Holder or Holders of at least a majority in aggregate principal
amount of the outstanding Notes (including consents obtained in connection with
a tender offer or exchange offer for Notes), may amend or supplement this
Indenture or the Notes and may waive compliance by the Company with any
provision of this Indenture or the Notes. Notwithstanding the foregoing, no
amendment, supplement or waiver, including a waiver pursuant to Section 6.4 of
this Indenture, shall, without the consent of each Holder of each Note affected
thereby:
(1) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver of any provision of this Indenture
or the Notes;
(2) reduce the rate of or change or have the effect of changing the
time for payment of interest, including default interest, on any Notes;
(3) reduce the principal of, or the premium on, or change or have
the effect of changing the fixed maturity of any Notes, or alter the
provisions with respect to the redemption of the Notes, or alter the
provisions with respect to repurchases or redemptions of the Notes with
Net Cash Proceeds from Asset Sales or upon a Change of Control;
(4) make any Notes payable in money other than that stated in
the Notes;
(5) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest on any Note (other than a Default in
the payment of an amount due as a result of an acceleration, where such
acceleration is rescinded pursuant to this Indenture);
(6) make any change in the provisions of this Indenture relating to
waivers of past Defaults with respect to, or the rights of Holders to
receive, payments of principal of or interest on the Notes;
(7) waive a redemption payment with respect to any Note;
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(8) modify or change any provision of this Indenture affecting the
ranking of the Notes or any Subsidiary Guarantee in a manner which
adversely affects the Holders; or
(9) release any Subsidiary Guarantor from any of its obligations
under its Subsidiary Guarantee or the Indenture, except to the extent such
release is authorized under the terms hereof.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
cancelled and of no further effect.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, supplement or
waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.2
becomes effective, the Company shall mail to the Holders 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 supplemental indenture.
SECTION 9.3 COMPLIANCE WITH TIA.
Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect.
SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, waiver or supplement becomes effective, a
consent to it by a Holder is a continuing consent by the Holder and every
subsequent Holder of a Note or portion of a Note that evidences the same
Indebtedness as the consenting Holder's Note, even if notation of the consent is
not made on any Note. Subject to the following paragraph, any such Holder or
subsequent Holder may revoke the consent as to such Holder's Note or portion of
such Note by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Notes have consented (and not theretofore
revoked such consent) to the
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amendment, supplement or waiver. An amendment, supplement or waiver becomes
effective upon receipt by the Trustee of such Officers' Certificate and evidence
of consent by the Holders of the requisite percentage in principal amount of
outstanding Notes.
The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the last sentence of the immediately preceding paragraph, those
Persons who were Holders at such record date (or their duly designated proxies),
and only those Persons, shall be entitled to revoke any consent previously
given, whether or not such Persons continue to be Holders after such record
date. No such consent shall be valid or effective for more than 90 days after
such record date, unless consents from Holders of the requisite percentage in
principal amount of the outstanding Notes required hereunder for the
effectiveness of such consents shall have also been given and not revoked within
such 90-day period.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder.
SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.
If an amendment, supplement or waiver changes the terms of a Note,
the Trustee may require the Holder of the Note to deliver the Note to the
Trustee. The Trustee at the written direction of the Company may place an
appropriate notation on the Note about the changed terms and return it to the
Holder, and the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms. Failure to make the appropriate
notation, or issue a new Note, shall not affect the validity and effect of such
amendment, supplement or waiver. Any such notation or exchange shall be made at
the sole cost and expense of the Company.
SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; PROVIDED, HOWEVER, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel and an Officers' Certificate
each stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Nine is authorized or permitted by this
Indenture; PROVIDED, that the legal counsel delivering such Opinion of Counsel
may rely as to matters of fact on one or more Officers' Certificates of the
Company. Such Opinion of Counsel shall not be an expense of the Trustee or the
Holders.
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ARTICLE TEN
GUARANTEE
SECTION 10.1 UNCONDITIONAL GUARANTEE.
(a) In consideration of the promises contained herein and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, each of the Subsidiary Guarantors hereby, jointly and severally,
irrevocably and unconditionally guarantees and agrees to be liable on a senior
basis to each Holder of a Note authenticated and delivered by the Trustee and to
the Trustee and its successors and assigns, irrespective of the validity and
enforceability of this Indenture, the Notes or the Obligations of the Company or
any other Subsidiary Guarantor under this Indenture or the Notes, that: (a) the
principal of, premium, if any, and interest on the Notes (and any Additional
Interest payable thereon) shall be duly and punctually paid in full when due,
whether at maturity, upon redemption (whether upon a Change of Control or
pursuant to a Net Proceeds Offer or otherwise), by acceleration or otherwise,
and interest on the overdue principal and (to the extent permitted by law)
interest, if any, on the Notes and all other Obligations of the Company or the
Subsidiary Guarantors to the Holders or the Trustee hereunder or thereunder
(including amounts due the Trustee under Section 7.7 hereof), shall be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and (b) in case of any extension of time of payment or renewal of any Notes or
any of such other Obligations of the Company, the same shall be promptly paid in
full when due or performed in accordance with the terms of extension or renewal,
whether at maturity, upon redemption, by acceleration or otherwise. Failing
payment when due of any amount so guaranteed, or failing performance of any
other Obligation of the Company to the Holders or the Trustee under this
Indenture or under the Notes, for whatever reason, each Subsidiary Guarantor
shall be obligated to pay, or to perform or cause the performance of, the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under each such Subsidiary Guarantee, and shall
entitle the Holders or Trustee to accelerate the Obligations of the Subsidiary
Guarantors under the Subsidiary Guarantees in the same manner and to the same
extent as the Obligations of the Company hereunder or under the Notes.
(b) Each of the Subsidiary Guarantors hereby agrees that its
Obligations under its Subsidiary Guarantee shall be unconditional, irrespective
of the validity, regularity or enforceability of the Notes or this Indenture,
the absence of any action to enforce the same, any waiver or consent by any
Holder of the Notes with respect to any provisions thereof, any release of any
other Subsidiary Guarantor, the recovery of any judgment against the Company,
any action to enforce the same, whether or not a Subsidiary Guarantee is affixed
to any particular Note, or any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor. Each of the
Subsidiary Guarantors hereby waives the benefit of diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and
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covenants that its Subsidiary Guarantee shall not be discharged except by
complete performance of the Obligations contained in the Notes, this Indenture
and its Subsidiary Guarantee. Each Subsidiary Guarantee shall be a guarantee of
payment and not of collection. If any Holder or the Trustee is required by any
court or otherwise to return to the Company or to any Subsidiary Guarantor, or
any custodian, trustee, liquidator or other similar official acting in relation
to the Company or such Subsidiary Guarantor, any amount paid by the Company or
such Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor shall further agree that, as between
it, on the one hand, and the Holders and the Trustee, on the other hand, (a)
subject to this Article Ten, the maturity of the Obligations guaranteed may be
accelerated as provided in Article Six hereof for the purposes of its Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition preventing
such acceleration in respect of the Obligations guaranteed thereby, and (b) in
the event of any acceleration of such Obligations as provided in Article Six
hereof, such Obligations (whether or not due and payable) shall forthwith become
due and payable jointly and severally by each Subsidiary Guarantor for the
purpose of its Subsidiary Guarantee.
SECTION 10.2 SUBSIDIARY GUARANTEES.
(a) As long as any Notes remain outstanding, any Restricted
Subsidiary shall (i) execute and deliver to the Trustee a supplemental indenture
in form reasonably satisfactory to the Trustee pursuant to which such Restricted
Subsidiary shall unconditionally guarantee all the Company's obligations under
the Notes and hereunder on the terms set forth hereunder and (ii) deliver to the
Trustee an opinion of counsel, subject to customary exceptions, that such
supplemental indenture has been duly authorized, executed and delivered by such
Restricted Subsidiary and constitutes a legal, valid, binding and enforceable
obligation of such Restricted Subsidiary. Thereafter, such Restricted Subsidiary
shall be a Subsidiary Guarantor for all purposes hereunder.
(b) Immediately following the dismissal of the Chapter 11 proceeding
of CSS Trade Names, Inc. ("CSS") currently pending in the United States
Bankruptcy Court for the District of Delaware (the "Chapter 11 Proceeding"),
CSS, whose only assets consist of certain service marks of the Company, shall be
a Subsidiary Guarantor of the Company and shall comply with the provisions of
this Section 10.2. The Company shall use its best efforts to have the Chapter 11
Proceeding dismissed within 30 days following the Issue Date.
(c) Notwithstanding any provisions to the contrary herein, the
Company may not transfer assets to CSS until the dismissal of the Chapter 11
Proceeding.
SECTION 10.3 LIMITATIONS ON SUBSIDIARY GUARANTEES.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee will be limited to the maximum amount which, after giving effect to
all other contingent and
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fixed liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the Obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee or pursuant to its contribution Obligations under this
Indenture, will result in the Obligations of such Subsidiary Guarantor under the
applicable Subsidiary Guarantee not constituting a fraudulent conveyance or
fraudulent transfer under Federal or state law. The net worth of any Subsidiary
Guarantor for such purpose shall include any claim of such Subsidiary Guarantor
against the Company for reimbursement and any claim against any other Subsidiary
Guarantor for contribution.
SECTION 10.4 EVIDENCE OF EXECUTION AND DELIVERY OF
SUBSIDIARY GUARANTEE.
(a) To further evidence each Subsidiary Guarantee referred to in
Section 10.1 hereby, each Subsidiary Guarantor shall agree that a notation of
such Subsidiary Guarantee, substantially in the form of Exhibit F hereto
endorsed by such Subsidiary Guarantor, shall be attached to each Note
authenticated and delivered by the Trustee after the date the Trustee receives
such Subsidiary Guarantee. Each such endorsement shall be executed on behalf of
each Subsidiary Guarantor by either manual or facsimile signature of two
Officers of each Subsidiary Guarantor, each of whom, in each case, shall have
been duly authorized to so execute by all requisite corporate action. The
validity and enforceability of any Subsidiary Guarantee shall not be affected by
the fact that it is not affixed to any particular Note.
(b) Each of the Subsidiary Guarantors hereby agrees that its
Subsidiary Guarantee set forth in Section 10.1 hereof shall remain in full force
and effect notwithstanding any failure to so endorse on each Note a notation of
such Subsidiary Guarantee.
(c) If an Officer of a Subsidiary Guarantor whose signature is on a
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which such Subsidiary Guarantee is endorsed or at any
time thereafter, such Subsidiary Guarantor's Subsidiary Guarantee of such Note
shall be valid nevertheless.
(d) The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of any
Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.
SECTION 10.5 RELEASE OF A SUBSIDIARY GUARANTOR.
(a) If no Default or Event of Default exists or would exist under
this Indenture upon the sale or disposition of all of the Capital Stock of a
Subsidiary Guarantor by the Company or a Subsidiary of the Company in a
transaction constituting an Asset Sale, the Net Cash Proceeds of which are
applied in accordance with Section 4.15, or upon the
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consolidation or merger of a Subsidiary Guarantor with or into any Person in
compliance with Article Five, such Subsidiary Guarantor and each Subsidiary of
such Subsidiary Guarantor that is also a Subsidiary Guarantor shall be deemed
released from all obligations under this Article Ten and its Subsidiary
Guarantee without any further action required on the part of the Trustee or any
Holder. Any Subsidiary Guarantor not so released or the entity surviving such
Subsidiary Guarantor, as applicable, shall remain or be liable under its
Subsidiary Guarantee as provided in this Indenture.
(b) The Trustee shall deliver an appropriate instrument evidencing
the release of a Subsidiary Guarantor upon receipt of a request by the Company
or such Subsidiary Guarantor accompanied by an Officers' Certificate and an
Opinion of Counsel certifying as to the compliance with this Section 10.5,
PROVIDED the legal counsel delivering such Opinion of Counsel may rely as to
matters of fact on one or more Officers' Certificates of the Company.
(c) The Trustee shall execute any documents reasonably requested by
the Company or a Subsidiary Guarantor in order to evidence the release of such
Subsidiary Guarantor from its obligations under its Subsidiary Guarantee,
whether or not endorsed on the Notes and under this Article Ten.
Nothing contained in this Indenture or in any of the Notes shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into the
Company or another Subsidiary Guarantor or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as an
entirety to the Company or another Subsidiary Guarantor. Any Subsidiary
Guarantor may cease to be a Subsidiary Guarantor, and the Subsidiary Guarantee
of such Subsidiary Guarantor will terminate at any time that the Board of
Directors designates such Subsidiary Guarantor as an "Unrestricted Subsidiary,"
as provided below.
SECTION 10.6 WAIVER OF SUBROGATION.
Until this Indenture is discharged or defeased as provided in
Article 8 and all of the Notes are discharged and paid in full, each Subsidiary
Guarantor shall irrevocably waive and agree not to exercise any claim or other
rights which it may hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of the Obligations of the Company
under the Notes or this Indenture and such Subsidiary Guarantor's Obligations
under its Subsidiary Guarantee and this Indenture, in any such instance,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, indemnification, and any right to participate in any
claim, remedy or right arises in equity, or under contract, statute or common
law, including, without limitation, the right to take or receive from the
Company directly or indirectly, in cash or other property or by set-off or in
any other manner, payment or security on account of such claim or other rights.
If any amount shall be paid to any Subsidiary Guarantor in violation of the
preceding sentence and any amounts owing to the Trustee or the Holders under the
Notes, this Indenture, or any other document or instrument delivered under or in
connection with such
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agreements or instruments, shall not have been paid in full, such amount shall
have been deemed to have been paid to such Subsidiary Guarantor for the benefit
of, and held in trust for the benefit of, the Trustee or the Holders and shall
forthwith be paid to the Trustee for the benefit of itself or such Holders to be
credited against and applied to the Obligations of the Company, whether matured
or unmatured, in accordance with the terms of this Indenture. Each Subsidiary
Guarantor hereby acknowledges that it will receive direct and indirect benefits
from the financing arrangements contemplated by this Indenture and that the
waiver set forth in this Section 10.6 is knowingly made in contemplation of such
benefits.
SECTION 10.7 IMMEDIATE PAYMENT.
Each Subsidiary Guarantor shall agree to make immediate payment to
the Trustee on behalf of the Holders of all Obligations of the Company and such
Subsidiary Guarantor owing or payable to the respective Holders upon receipt of
a demand for payment therefor by the Trustee to such Subsidiary Guarantor in
writing. Each of the Subsidiary Guarantors agrees that neither the Trustee nor
the Holders need attempt to collect any amounts guaranteed hereunder from the
Company, any other Subsidiary Guarantor or any other Person, but may require any
one of the Subsidiary Guarantors to make immediate payment of all of such
guaranteed amounts to the Holders when due, whether by maturity, acceleration,
redemption or otherwise, or at any time thereafter.
SECTION 10.8 NO SET-OFF.
Each payment to be made by a Subsidiary Guarantor hereunder in
respect of the Obligations under its Subsidiary Guarantee shall be payable in
the currency or currencies in which such Obligations are denominated, and shall
be made without set-off, counterclaim, reduction or diminution of any kind or
nature.
SECTION 10.9 OBLIGATIONS ABSOLUTE.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall be absolute and unconditional and any monies or amounts
expressed to be owing or payable by each Subsidiary Guarantor which may not be
recoverable from such Subsidiary Guarantor on the basis of a Subsidiary
Guarantee shall be recoverable from such Subsidiary Guarantor as a primary
obligor and principal debtor in respect thereof.
SECTION 10.10 OBLIGATIONS CONTINUING.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall be continuing and shall remain in full force and effect until
all the Obligations hereunder have been paid and satisfied in full. Each
Subsidiary Guarantor hereby agrees with the Trustee that it will from time to
time deliver to the Trustee suitable
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acknowledgments of this continued liability hereunder and under any other
instrument or instruments in such form as counsel to the Trustee may advise and
as will prevent any action brought against it in respect of any default
hereunder being barred by any statute of limitations now or hereafter in force
and, in the event of the failure of a Subsidiary Guarantor so to do, it shall
irrevocably appoint the Trustee, the attorney and agent of such Subsidiary
Guarantor to make, execute and deliver such written acknowledgment or
acknowledgments or other instruments as may from time to time become necessary
or advisable, in the judgment of the Trustee on the advice of counsel, to fully
maintain and keep in force the liability of such Subsidiary Guarantor under its
Subsidiary Guarantee.
SECTION 10.11 OBLIGATIONS NOT REDUCED.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall not be discharged except by the payment in full of such
Obligations owing or payable under or by virtue of or otherwise in connection
with the Notes of this Indenture.
SECTION 10.12 OBLIGATIONS REINSTATED.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall continue to be effective or shall be reinstated, as the case may
be, if at any time any payment which would otherwise have reduced such
Obligations of any Subsidiary Guarantor (whether such payment shall have been
made by or on behalf of the Company or by or on behalf of a Subsidiary
Guarantor) is rescinded or reclaimed from any of the Holders upon the
insolvency, bankruptcy, liquidation or reorganization of the Company or any
Subsidiary Guarantor or otherwise, all as though such payment had not been made.
If demand for, or acceleration of the time for, payment by the Company is stayed
upon the insolvency, bankruptcy, liquidation or reorganization of the Company,
all such Indebtedness otherwise subject to demand for payment or acceleration
shall nonetheless be payable by each Subsidiary Guarantor as provided herein
subject to Section 10.3.
SECTION 10.13 OBLIGATIONS NOT AFFECTED.
The Obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee shall not be affected, impaired or diminished in any way by any act,
omission, matter or thing whatsoever, occurring before, upon or after any demand
for payment (and whether or not known or consented to by any Subsidiary
Guarantor or any of the Holders) which, but for this provision, might constitute
a whole or partial defense to a claim against any Subsidiary Guarantor under its
Subsidiary Guarantee or might operate to release or otherwise exonerate any
Subsidiary Guarantor from any of its Obligations or otherwise affect such
Obligations, whether occasioned by default of any of the Holders or otherwise,
including, without limitation:
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(a) any limitation of status or power, disability, incapacity or
other circumstance relating to the Company or any other Person, including any
insolvency, bankruptcy, liquidation, reorganization, readjustment, composition,
dissolution, winding-up or other proceeding involving or affecting either the
Company or any other Person;
(b) any irregularity, defect, unenforceability or invalidity in
respect of any Indebtedness or other Obligation of the Company or any other
Person under this Indenture, the Notes or any other document or instrument;
(c) any failure of the Company, whether or not without fault on its
part, to perform or comply with any of the provisions of this Indenture or the
Notes, or to give notice thereof to a Subsidiary Guarantor;
(d) the taking or enforcing or exercising or the refusal or neglect
to take or enforce or exercise any right or remedy from or against the Company
or any other Person or their respective assets or the release or discharge of
any such right or remedy;
(e) the granting of time, renewals, extensions, compromises,
concessions, waivers, releases, discharges and other indulgences to the Company
or any other Person;
(f) any change in the time, manner or place of payment of, or in any
other term of, any of the Notes, or any other amendment, variation, supplement,
replacement or waiver of, or any consent to departure from, any of the Notes or
this Indenture, including, without limitation, any increase or decrease in the
principal amount of or premium, if any, or interest on any of the Notes;
(g) any change in the ownership, control, name, objects,
businesses, assets, capital structure or constitution of the Company or a
Subsidiary Guarantor;
(h) any merger or amalgamation of the Company or a Subsidiary
Guarantor with any Person or Persons other than the Company;
(i) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise affect,
any of the Obligations of the Company under this Indenture or the Notes or the
Obligations of a Subsidiary Guarantor under its Subsidiary Guarantee; and
(j) any other circumstance, including release of the Subsidiary
Guarantor pursuant to Section 10.5 hereof (other than by complete, irrevocable
payment) that might otherwise constitute a legal or equitable discharge or
defense of the Company under this Indenture or the Notes or of a Subsidiary
Guarantor in respect of its Subsidiary Guarantee.
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SECTION 10.14 WAIVER.
Without in any way limiting the provisions of Section 10.1 hereof,
each Subsidiary Guarantor hereby waives notice of acceptance hereof, notice of
any liability of any Subsidiary Guarantor under its Subsidiary Guarantee, notice
or proof of reliance by the Holders upon the Obligations of any Subsidiary
Guarantor under its Subsidiary Guarantee, and diligence, presentment, demand for
payment on the Company, protest, notice of dishonor or non-payment of any of the
Company's Obligations under this Indenture or the Notes, or other notice or
formalities to the Company or any Subsidiary Guarantor of any kind whatsoever.
SECTION 10.15 NO OBLIGATION TO TAKE ACTION AGAINST THE
COMPANY.
Neither the Trustee nor any other Person shall have any obligation
to enforce or exhaust any rights or remedies under this Indenture or the Notes,
or against the Company or any other Person or any assets or properties of the
Company or any other Person before the Trustee is entitled to demand payment and
performance by any or all Subsidiary Guarantors of their liabilities and
obligations under any Subsidiary Guarantees or under this Indenture.
SECTION 10.16 DEALING WITH THE COMPANY AND OTHERS.
The Holders or the Trustee, without releasing, discharging, limiting
or otherwise affecting in whole or in part the Obligations of any Subsidiary
Guarantor and without the consent of or notice to any Subsidiary Guarantor, may:
(a) grant time, renewals, extensions, compromises, concessions,
waivers, releases and discharges to the Company or any other Person;
(b) take or abstain from taking security or collateral from the
Company or from perfecting security interests in any collateral;
(c) release, discharge, compromise, realize, enforce or otherwise
deal with or do any act or thing in respect of (with or without consideration)
any and all collateral, mortgages or other security, including, without
limitation, any collateral, given by the Company or any third party with respect
to the Obligations of the Company under, or matters contemplated by, this
Indenture or the Notes;
(d) accept compromises or arrangements from the Company;
(e) apply all monies at any time received from the Company as the
Holders may see fit or change any such application in whole or in part from time
to time as the Holders may see fit; and
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(f) otherwise deal with, or waive or modify their right to deal
with, the Company and all other Persons and any collateral as the Holders or the
Trustee may see fit.
SECTION 10.17 DEFAULT AND ENFORCEMENT.
If any Subsidiary Guarantor fails to comply with Section 10.17
hereof, the Trustee may proceed in its name as trustee hereunder in the
enforcement of the Subsidiary Guarantee of any such Subsidiary Guarantor and
such Subsidiary Guarantor's Obligations hereunder by any remedy provided by law,
whether by legal proceedings or otherwise, and to recover from such Subsidiary
Guarantor the Company's Obligations under this Indenture and the Notes.
SECTION 10.18 CERTAIN BANKRUPTCY EVENTS.
Each Subsidiary Guarantor hereby covenants and agrees, to the
fullest extent that it may do so (i) under applicable law and (ii) consistent
with its fiduciary obligations, that in the event of the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company, such Subsidiary
Guarantor shall not file (or join in any filing of), or otherwise seek to
participate in the filing of, any motion or request seeking to stay or to
prohibit (even temporarily) execution on the Subsidiary Guarantee and hereby
waives and agrees not to take the benefit of any such stay of execution, whether
under Section 362 or 105 of the United States Bankruptcy Code or otherwise.
SECTION 10.19 ACKNOWLEDGMENT.
Each Subsidiary Guarantor hereby acknowledges communication of the
terms of this Indenture and the Notes and consents to and approves of the same.
SECTION 10.20 COSTS AND EXPENSES.
Each Subsidiary Guarantor shall pay on demand by the Trustee any and
all costs, fees and expenses (including, without limitation, legal fees)
incurred by the Trustee, its agents, advisors and counsel or any of the Holders
in enforcing any of their rights under any Subsidiary Guarantee.
SECTION 10.21 NO MERGER OR WAIVER; CUMULATIVE REMEDIES.
No Subsidiary Guarantee shall operate by way of merger of any of the
obligations of a Subsidiary Guarantor under any other agreement, including,
without limitation, this Indenture. No failure to exercise and no delay in
exercising, on the part of the Trustee or the Holders, any right, remedy, power
or privilege under this Indenture or the
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Notes, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege under this Indenture or the
Notes preclude any other or further exercise thereof or the exercise of any
other right, remedy power or privilege. The rights, remedies, powers and
privileges in each Subsidiary Guarantee and under this Indenture, the Notes and
any other document or instrument between a Subsidiary Guarantor and/or the
Company and the Trustee are cumulative and not exclusive of any rights,
remedies, powers and privilege provided by law.
SECTION 10.22 SURVIVAL OF OBLIGATIONS.
To the extent the Trustee receives any payment by or on behalf of
the Company, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
the Company, or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied, by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of the Company to the Trustee as of the date such initial payment, reduction or
satisfaction occurred.
SECTION 10.23 SUBSIDIARY GUARANTEE IN ADDITION TO OTHER
OBLIGATIONS.
The obligations of each Subsidiary Guarantor under its Subsidiary
Guarantee and this Indenture are in addition to and not in substitution for any
other obligations to the Trustee or to any of the Holders in relation to this
Indenture or the Notes and any guarantees or security at any time held by or for
the benefit of any of them.
SECTION 10.24 SEVERABILITY.
Any provision of this Article Ten which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining provisions
and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any jurisdiction.
SECTION 10.25 SUCCESSORS AND ASSIGNS.
Each Subsidiary Guarantee shall be binding upon and inure to the
benefit of each Subsidiary Guarantor and the Trustee and the other Holders and
their respective successors and permitted assigns, except that no Subsidiary
Guarantor may assign any of its obligations hereunder or thereunder.
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ARTICLE ELEVEN
SECURITY ACCOUNT
(a) On the Issue Date, the Company shall execute and deliver the
Security and Disbursement Agreement and comply with the terms and provisions
thereof, including, without limitation, depositing or causing to be deposited
the Disbursement Funds in the Security Account or any related account pursuant
to the terms of the Security and Disbursement Agreement. The Trustee shall
establish and maintain the Security Account in accordance with the terms and
provisions of the Security and Disbursement Agreement, and the Trustee shall
hold the Disbursement Funds and Pledged Securities for the equal and ratable
benefit of the Holders without preference, priority or distinction of any
thereof over any other by reason of difference in time of issuance, sale or
otherwise, as security for the Company's obligations to (i) provide for payment
in full of the scheduled interest payments due on the Notes through and
including May 1, 1999 and (ii) secure repayment of the principal, premium, if
any, and interest on the Notes in the event that the Notes become due and
payable prior to the payment in full of all and any scheduled interest payments
due and payable under this Indenture and the Notes through and including May 1,
1999.
(b) Subject to certain limitations set forth in the Security and
Disbursement Agreement, the Company may direct the Trustee to release from the
Security Account certain Disbursement Funds or Pledged Securities upon an
optional redemption of the Notes with the net proceeds of a Primary Offering.
Additionally, after disbursing all the interest payments on the Notes due
through and including May 1, 1999 and compliance with the provisions of Section
11(e), any remaining Disbursement Funds and Pledged Securities will be released
and disbursed from the Security Account and paid to the Company to such accounts
as may be designated by the Company in written instructions delivered to the
Trustee, all as provided for in the Security and Disbursement Agreement.
(c) As provided in the Security and Disbursement Agreement, the
Disbursement Funds shall be invested by the Trustee in Pledged Securities,
pursuant to specific, written directions of the Company, as soon as practicable
after the Issue Date. Interest and other earnings on the Pledged Securities will
be added to the Security Account and will secure the repayment of the principal,
premium, if any, and interest on the Notes.
(d) Each Holder, by its acceptance of a Note, consents and agrees to
the terms of the Security and Disbursement Agreement (including, without
limitation, the provisions providing for foreclosure and release of the Pledged
Securities and other assets held in connection therewith) as the same may be in
effect or may be amended from time to time in accordance with its terms, and
authorizes and directs the Trustee to enter into the Security and Disbursement
Agreement and to perform its respective obligations and exercise its respective
rights thereunder in accordance therewith. The Company shall take, or shall
cause to be taken, any and all actions as may be necessary or proper, or as may
be required hereunder or under the Security and Disbursement Agreement (and any
action requested by the Trustee) to cause the Security and Disbursement
Agreement, subject to the provisions
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therein and of this Indenture, (A) to create and maintain, as security for
certain of the Obligations of the Company under this Indenture and the Notes,
valid and enforceable first priority Liens in and on the Security Account, the
Disbursement Funds and the Pledged Securities, in favor of the Trustee, superior
to and prior to the rights of third Persons and subject to no other Liens, and
(B) to assure and confirm to the Trustee such Liens in the Security Account, the
Disbursement Funds and the Pledged Securities so as to render the same available
for the security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein expressed.
(e) The Trustee shall release from the Security Account any
Disbursement Funds or Pledged Securities held in the Security Account upon the
delivery by the Company to the Trustee of the following:
(i) a notice from the Company requesting the release of such
Disbursement Funds or Pledged Securities and certifying that release
of such Disbursement Funds or Pledged Securities complies with the
terms and conditions of the Security and Disbursement Agreement with
respect thereto; and
(ii) an Officers' Certificate of the Company stating that (A)
there is Event of Default in effect or continuing on the date
thereof, (B) the release of such Disbursement Funds or Pledged
Securities will not result in a Default or Event of Default under
this Indenture, (C) all payments contemplated by and under the
Security and Disbursement Agreement, including, without limitation,
each of the scheduled interest payments and all payments due and
payable hereunder and in accordance with the Notes through and
including May 1, 1999 have been paid in full without any claim,
setoff, or defense, and (D) all conditions precedent in the Security
and Disbursement Agreement relating to the release of the
Disbursement Funds or Pledged Securities in question have been
complied with.
(f) The Trustee, in its sole discretion and without the consent of
the Holders, may, and at the request of the Holders of at least 25% in aggregate
principal amount of Notes then outstanding shall, on behalf of the Holders, take
all actions it deems necessary or appropriate in order to (i) enforce any of the
terms of the Security and Disbursement Agreement and (ii) collect and receive
any and all amounts payable in respect of the obligations of the Company
thereunder (subject, in each case, to Article Seven hereof). The Trustee shall
have power to institute and to maintain such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Security Account, the Disbursement Funds and the
Pledged Securities (including power to institute and maintain suits or
proceedings to restrain the enforcement of or compliance with any legislative or
other governmental enactment, rule or order that may be unconstitutional or
otherwise invalid if the enforcement of, or compliance with, such enactment,
rule or order would impair the security interests thereunder or be prejudicial
to the interests of the Holders or of the Trustee).
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ARTICLE TWELVE
MISCELLANEOUS
SECTION 12.1 TIA CONTROLS.
If any provision of this Indenture limits, qualifies, or conflicts
with another provision which is required to be included in this Indenture by the
TIA, the provision required to be included by the TIA shall control; PROVIDED,
HOWEVER, that this Section 12.1 shall not of itself require that this Indenture
or the Trustee be qualified under the TIA or constitute any admission or
acknowledgement by any party hereto that any such qualification is required
prior to the time this Indenture and the Trustee are required by the TIA to be
so qualified.
SECTION 12.2 NOTICES.
Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telex, by telecopier or registered or certified mail, postage prepaid, return
receipt requested, addressed as follows:
if to the Company:
County Seat Stores, Inc.
0000 Xxxx Xxxx Xxxxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attn: General Counsel
Telephone Number: (000) 000-0000
Telecopy Number: (000) 000-0000
if to the Trustee:
First Trust National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Attn: Corporate Finance Department
Telephone Number:(000) 000-0000
Telecopy Number: (000) 000-0000
Each of the Company and the Trustee by written notice to each other
such Person may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by
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registered or certified mail, postage prepaid (except that a notice of change of
address shall not be deemed to have been given until actually received by the
addressee).
Any notice or communication mailed to a Holder shall be mailed to
such Holder by first class mail or other equivalent means at such Holder's
address as it appears on the registration books of the Registrar and shall be
sufficiently given to such Holder if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect
in it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 12.3 COMMUNICATIONS BY HOLDERS WITH OTHER
HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).
SECTION 12.4 CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT.
Upon any request or application by the Company or any Subsidiary
Guarantor to the Trustee to take any action under this Indenture, the Company
shall furnish to the Trustee upon request:
(1) an Officers' Certificate, in form and substance reasonably
satisfactory to the Trustee, stating that, in the opinion of the signers,
all conditions precedent to be performed by the Company and any Subsidiary
Guarantor, if any, provided for in this Indenture relating to the proposed
action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent to be performed by the Company and
any Subsidiary Guarantor, if any, PROVIDED for in this Indenture relating
to the proposed action have been complied with (which counsel, as to
factual matters, may rely on an Officers' Certificate).
SECTION 12.5 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 the Officers'
Certificate required by Section 4.6, shall include:
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(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such Person, he has made
such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
Person, such condition or covenant has been complied with; provided,
HOWEVER, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 12.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.
The Trustee may make reasonable rules in accordance with the
Trustee's customary practices for action by or at a meeting of Holders. The
Paying Agent or Registrar may make reasonable rules for its functions.
SECTION 12.7 LEGAL HOLIDAYS.
A "Legal Holiday" used with respect to a particular place of payment
is a Saturday, a Sunday or a day on which banking institutions in New York, New
York, Eden Prairie, Minnesota or at such place of payment are not required to be
open. If a payment date is a Legal Holiday at such place, payment may be made at
such place on the next succeeding day that is not a Legal Holiday, and no
interest shall accrue for the intervening period.
SECTION 12.8 GOVERNING LAW; JURISDICTION; SUBMISSION TO
VENUE.
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH OF THE PARTIES HERETO
AGREES TO SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COMPETENT COURTS OF
THE STATE OF NEW YORK SITTING IN THE CITY OF NEW YORK OR THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES. EACH OF THE COMPANY
AND THE SUBSIDIARY GUARANTORS HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
ANY NEW YORK STATE COURT SITTING IN
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XXX XXXXXXX XX XXXXXXXXX IN THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN
THE BOROUGH OF MANHATTAN IN THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, JURISDICTION OF THE AFORESAID COURTS. EACH OF THE TRUSTEE, ON
BEHALF OF THE HOLDERS, THE COMPANY AND THE SUBSIDIARY GUARANTORS IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW,
TRIAL BY JURY AND ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE COMPANY AND THE
SUBSIDIARY GUARANTORS IRREVOCABLY CONSENTS TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY AND THE
GUARANTORS AT THE ADDRESS SET FORTH HEREIN, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT ANY RIGHT OF ANY HOLDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY OR THE SUBSIDIARY
GUARANTORS IN ANY OTHER JURISDICTION.
SECTION 12.9 NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of the Company or those of any of its Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.10 NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or any Subsidiary Guarantor, as such, shall have
any liability for any Obligations of the Company or any Subsidiary Guarantor
under the Units or this Indenture, any Subsidiary Guarantee, the Warrant
Agreement, the Registration Rights Agreement or for any claim based on, in
respect of, or by reason of such obligations or their creations. Each Holder by
accepting a Unit waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of the Units.
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SECTION 12.11 SUCCESSORS.
All agreements of the Company and any Subsidiary Guarantor in this
Indenture and the Notes and under any Subsidiary Guarantee, as the case may be,
shall bind its successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION 12.12 DUPLICATE ORIGINALS.
All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.
SECTION 12.13 SEVERABILITY.
In case any one or more of the provisions in this Indenture or in
the Notes shall be held invalid, illegal or unenforceable, in any respect for
any reason, the validity, legality and enforceability of any such provision in
every other respect and the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby, it
being intended that all of the provisions hereof shall be enforceable to the
full extent permitted by law.
SECTION 12.14 INDEPENDENCE OF COVENANTS.
All covenants and agreements in this Indenture and the Notes shall
be given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
SECTION 12.15 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 hereof, and shall in no way
modify or restrict any of the terms and provisions hereof.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the date first written above.
COUNTY SEAT STORES, INC.
By: /s/ Xxx Xxxxxx
--------------------------
Name: Xxx Xxxxxx
Title: President
Attest: /s/ Xxxx X. Xxxxxxx
---------------------------
Name: Xxxx X. Xxxxxxx
Title: SVP & CFO
FIRST TRUST NATIONAL
ASSOCIATION, as Trustee
By: /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
Title: V.P.
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EXHIBIT A
FORM OF NOTE
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE, AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE ARE
AVAILABLE UPON REQUEST BY CONTACTING XXXXXXX XXXXX, GENERAL COUNSEL TO THE
COMPANY, AT 0000 XXXX XXXX XXXXXXX, XXXX XXXXXXX, XXXXXXXXX 00000, TELEPHONE
(000) 000-0000, TELECOPY (000) 000-0000, WHO, BEGINNING TEN DAYS AFTER THE
ISSUANCE OF THIS NOTE, WILL BE AVAILABLE TO PROVIDE SUCH INFORMATION TO THE
HOLDER OF THIS NOTE.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS NOTE
NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUE DATE OF THIS NOTE AND THE LAST DATE ON WHICH COUNTY
SEAT STORES, INC. ("THE COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER
OF THIS NOTE (OR ANY PREDECESSOR OF SUCH NOTE)(THE "RESALE RESTRICTION
TERMINATION DATE"), ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO
LONG AS THE NOTES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) or (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THE NOTE FOR ITS OWN ACCOUNT, OR FOR
THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO
A-1
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S, OR TRANSFER AGENT'S, AS
APPLICABLE, RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND IN EACH OF THE
FOREGOING CASES, AN ASSIGNMENT IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE OR TRANSFER
AGENT. THIS LEGEND SHALL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE
RESALE RESTRICTION TERMINATION DATE.
THIS NOTE IS SUBJECT TO A REGISTRATION RIGHTS AGREEMENT, DATED AS OF EVEN
DATE HEREWITH, BETWEEN THE COMPANY AND XXXXXXXXX & COMPANY, INC., A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.
THIS NOTE IS INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE
"UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF 12 3/4% SENIOR
NOTES DUE 2004 (THE "NOTES") OF THE COMPANY AND A SERIES A WARRANT
(COLLECTIVELY, THE "WARRANTS") ENTITLING THE HOLDER THEREOF TO PURCHASE SHARES
OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF THE COMPANY. PRIOR TO THE CLOSE OF
BUSINESS ON SUCH DATE AS THE INITIAL PURCHASER MAY, IN ITS DISCRETION DEEM
APPROPRIATE, THIS NOTE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT
MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE SERIES A WARRANTS.
A-2
CUSIP No.:
COUNTY SEAT STORES, INC.
12 3/4% SENIOR NOTE DUE 2004
No. $
County Seat Stores, Inc., a Minnesota corporation (the "Company,"
which term includes any successor entity), for value received promises to pay to
____________________ or registered assigns, the principal sum of ________
Dollars, on _____, __, 2004.
Interest Payment Dates: November 1 and May 1
Record Dates: October 15 and April 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers its corporate seal to
be affixed hereto or imprinted hereon.
COUNTY SEAT STORES, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
Dated: _____________, 199__
Certificate of Authentication
This is one of the 12 3/4% Senior Notes due 2004 referred to in thE
within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
Dated: ______________, 199__ By:
------------------------------------
Name:
Title:
A-3
{REVERSE OF NOTE}
COUNTY SEAT STORES, INC.
12 3/4% Senior Note due 2004
1. INTEREST. County Seat Stores, Inc., a Minnesota corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate and in the manner specified below. Interest on the Securities will accrue
at 12 3/4% per annum and will be payable semiannually iN cash on November 1 and
May 1 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 the
Securities will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from the date of issuance; PROVIDED that the
first Interest Payment Date shall be May 1, 1998. The Company shall pay interest
on overdue principal and premium, if any, from time to time on demand at the
rate of interest then borne by the Notes and shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
will pay Additional Interest (as defined in the Registration Rights Agreement)
pursuant to Section 4 of the Registration Rights Agreement.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes to
the Persons who are the registered Holders as of the close of business on the
Record Date immediately preceding the applicable Interest Payment Date even if
the Notes are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Notes to a Paying Agent to
collect principal payments. The Company shall pay principal, premium, if any,
and interest and Additional Interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts ("U.S.
Legal Tender"). The Notes will be payable both as to principal and to interest
at the office or agency of the Company, or, at the option of the Company,
payment of interest may be made by its check payable in such U.S. Legal Tender
and mailed to the Holders at their respective registered addresses as set forth
in the register of Holders. If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest plus any interest payable on the
defaulted interest in accordance with Section 2.16 of the Indenture.
3. PAYING AGENT AND REGISTRAR. Until otherwise designated by the
Company, the Registrar and Paying Agent for the Notes shall be First Trust
National Association, the trustee (the "Trustee") under the Indenture (as
defined below), having an address as 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx
00000, Attention: Corporate Finance Department. In addition, until otherwise
designated by the Company, the Company's office or agency maintained in the
Borough of Manhattan, in the City of New York at which the Notes may be
presented for payment or for transfer or exchange will be the office of the
Trustee, at 000 Xxxx Xxxxxx, Xxx Xxxx, XX. The Company may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders.
A-4
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of October 29, 1997 (the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code xx.xx. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture unTIl such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Notes are senior unsecured
general obligations of the Company limited in aggregate principal amount to
$85,000,000. Payment on the Notes will be guaranteed on a senior basis, jointly
and severally, by the Subsidiary Guarantors pursuant to Article Ten of the
Indenture and upon the execution of a supplemental indenture by each Subsidiary
Guarantor. Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION. Except as described in paragraph (b) of
this Section 5, the Notes are not redeemable at the Company's option, at any
time prior to November 1, 2001. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the following redemption prices (expressed
as percentages of principal amount), if redeemed during the twelve-month period
commencing on November 1, of the years set forth below, through but not
including the Maturity Date, plus, in each case, accrued and unpaid interest
thereon to the applicable date of redemption:
YEAR PERCENTAGE
2001 106.3750%
2002 103.1875%
2003 and thereafter 100 %
(b) OPTIONAL REDEMPTION UPON PRIMARY OFFERING. Notwithstanding
paragraph (a) of this Section 5, at any time, prior to November 1, 2001, the
Company may, at its option, use the net cash proceeds of a Primary Offering to
redeem up to one-third of the original principal amount of the Notes at a
redemption price equal to 112.75% of the principal amount thereof outstanding on
the redemption date, plus accrued and unpaid interest thereon, if any, to the
date of redemption; PROVIDED that (i) at least 66 2/3% of original principal
amount of the Notes are outstanding immediately following such redemption and
(ii) such redemption shall occur within 60 days of the date of the closing of
such Primary Offering.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 15 days but not more than 60 days before the
redemption date to each Holder, at each of such Holder's registered address,
whose Notes are to be redeemed. If
A-5
fewer than all of the Notes are to be redeemed at any time, selection of Notes
for redemption will be made by the Trustee in compliance with the requirements
of the national securities exchange, if any, on which the Notes are listed, or,
if the Notes are not so listed, on a pro rata basis, by lot or by such method as
the Trustee deems to be fair and appropriate; PROVIDED that Notes of $1,000 or
less may not be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such redemption date, then, unless the Company defaults
in the payment of such redemption price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such redemption
date, and the only remaining right of the Holders of such Notes will be to
receive payment of the redemption price plus accrued interest, if any, as of the
redemption date upon surrender to the Paying Agent of the Notes redeemed.
7. OFFERS TO PURCHASE. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales and upon the occurrence of a Change of
Control, and subject to further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
8. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement dated the date of the Indenture among the Company and the Holders of
the Initial Notes, the Company will use its best efforts to prepare and file
with the SEC on or prior to 120 days after the Issue Date a registration
statement (the "Exchange Registration Statement") with respect to an offer to
the Holders to exchange this Note for the Company's 12 3/4% Senior Notes due
2004, Series B (the "Exchange Notes"), which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects as the Initial Notes. The Company will also use its best
efforts to cause the Exchange Registration Statement to become effective as
promptly as practicable after the filing thereof but in no event later than 180
days after the Issue Date and to consummate the exchange offer within 30 days
after the date on which the Exchange Registration Statement is declared
effective. The Holders of the Initial Notes shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture. The Registrar or co-Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. Subject to
certain provisions in the Indenture, the Registrar or co-Registrar need not
register the transfer of or exchange of any Notes or portions thereof selected
for redemption. Also the Registrar or co-Registrar need not register the
transfer or exchange of any Note during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of notes and
ending at the close of business on the day of such mailing.
A-6
10. PERSONS DEEMED OWNERS. The registered Holder of a Note
shall be treated as the owner of such Note for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years (or such sooner period as may be
required by applicable abandoned property laws), the Trustee and the Paying
Agent will pay the money back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
12. MATURITY DATE. All outstanding principal, all premiums if
any, and all accrued and unpaid interest shall be due and payable on the
Maturity Date.
13. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented by the Company, the
Trustee and with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and, subject to
Section 6.7 of the Indenture, noncompliance with any provision of the Indenture
or this Note may be waived with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding. Without
the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency; to
provide for uncertificated Notes in addition to or in place of certificated
Notes; to provide for the assumption of the Company's obligations to Holders or
any Subsidiary Guarantor's obligation under its Subsidiary Guarantee in the case
of a merger or consolidation where such assumption is required under the
Indenture; to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal right under
the Indenture of any such Holder; to provide for issuance of the Exchange Notes;
or to comply with the requirements of the U.S. Securities and Exchange
Commission (the "SEC") in order to effect or maintain the qualification of the
Indenture under the TIA. As provided in the Indenture, there shall be no
amendment, supplement or waiver without the consent of each Holder of each Note
affected thereby with respect to the circumstances enumerated in Section 9.2
therein.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, issue or sell its Capital Stock,
enter into transactions with Affiliates, cause to be effective restrictions
affecting Restricted Subsidiaries' abilities to pay certain dividends or make
certain loans, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important
A-7
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
16. SUCCESSORS. When a successor assumes, in accordance with
the Indenture, all the Obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those Obligations.
17. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to exercise any of the rights or powers
vested in it by the Indenture or the Notes and at the order or direction of any
Holders, unless it has received indemnity reasonably satisfactory to it. Subject
to certain limitations set forth in the Indenture, Holders of a majority in
aggregate principal amount of the Notes then outstanding may direct the Trustee
in its exercise of any trust or power; PROVIDED that, as provided in the
Indenture, Events of Default set forth in Section 6.1 (f) and (g) of the
Indenture shall result in such acceleration occurring without such declaration.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except in the case of a Default or Event of Default in payment of
principal or interest or a failure to comply with Article Five of the Indenture)
if it determines that withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates, as such, with the same rights it would have as if it were
not the Trustee.
19. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any Obligations of the Company
or any Subsidiary Guarantor under the Notes or the Indenture, any Subsidiary
Guarantee, the Warrant Agreement or the Registration Rights Agreement or for any
claim based on, in respect of, or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Units.
20. AUTHENTICATION. This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.
21. GOVERNING LAW. The laws of the State of New York shall
govern this Note and the Indenture.
22. ABBREVIATIONS AND DEFINED TERMS. 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
A-8
and not as tenants-in-common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. 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 as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture.
Requests may be made to: County Seat Stores, Inc., 0000 Xxxx Xxxx
Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000, Attn: General Counsel.
A-9
FORM OF ASSIGNMENT
If you, the Holder, want to assign this Note, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Note to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code and social
security or tax ID number of assignee)
and irrevocably appoint________________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date:________________ Signed:__________________________________________
(Sign exactly as your name appears on the
other side of this Note. This signature must be
guaranteed by the signatory's bank or broker.)
Signature Guarantee: _____________________________
Medallion Signature Guarantee
A-10
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) ________________, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
(Check One)
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) ___ to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter can be obtained
from the Trustee); or
(4) ___ outside the United states to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration provided
by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement under
the Securities Act; or
(7) ___ pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; PROVIDED that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
A-11
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.15 of the Indenture shall have been satisfied.
Dated: _______________________ Signed: _____________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:___________________________________________________________
Medallion Signature Guarantee
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration requirements of the Securities Act provided by Rule 144A
thereunder.
Dated: ________________________ ______________________________
Executive Officer
Name: _______________________
Title: _______________________
A-12
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$_____________________
Dated:___________________________ Signature: _____________________
Tax Identification No. ___________
Signature Guarantee: ______________________________________________
Medallion Signature Guarantee
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT
APPEARS UPON THE FACE OF THE WITHIN NOTE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND BE ACKNOWLEDGED AS GENUINE BY THE
ENDORSER'S BANK OR BROKER.
A-13
EXHIBIT B
FORM OF NOTE
THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT. THE ISSUE PRICE, AMOUNT
OF ORIGINAL ISSUE DISCOUNT, ISSUE DATE AND YIELD TO MATURITY OF THIS NOTE ARE
AVAILABLE UPON REQUEST BY CONTACTING XXXXXXX XXXXX, GENERAL COUNSEL TO THE
COMPANY, AT 0000 XXXX XXXX XXXXXXX, XXXX XXXXXXX, XXXXXXXXX 00000, TELEPHONE
(000) 000-0000, TELECOPY (000) 000-0000, WHO, BEGINNING TEN DAYS AFTER THE
ISSUANCE OF THIS NOTE, WILL BE AVAILABLE TO PROVIDE SUCH INFORMATION TO THE
HOLDER OF THIS NOTE.
THIS NOTE IS INITIALLY ISSUED AS PART OF AN ISSUANCE OF UNITS (THE
"UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL AMOUNT OF 12 3/4% SENIOR
NOTES DUE 2004 (THE "NOTES") OF THE COMPANY AND A SERIES A WARRANT
(COLLECTIVELY, THE "WARRANTS") ENTITLING THE HOLDER THEREOF TO PURCHASE SHARES
OF COMMON STOCK, $.01 PAR VALUE PER SHARE, OF THE COMPANY. PRIOR TO THE CLOSE OF
BUSINESS ON SUCH DATE AS THE INITIAL PURCHASER MAY, IN ITS DISCRETION DEEM
APPROPRIATE, THIS NOTE MAY NOT BE TRANSFERRED OR EXCHANGED SEPARATELY FROM, BUT
MAY BE TRANSFERRED OR EXCHANGED ONLY TOGETHER WITH, THE SERIES A WARRANTS.*
________________________
* To be deleted if the Separation Date has occurred.
B-1
CUSIP No.:
COUNTY SEAT STORES, INC.
12 3/4% SENIOR NOTE DUE 2004, SERIES B
No. $
County Seat Stores, Inc., a Minnesota corporation (the "Company,"
which term includes any successor entity), for value received promises to pay to
____________________ or registered assigns, the principal sum of
_________________ Dollars, on ________, 2004.
Interest Payment Dates: November 1 and May 1
Record Dates: October 15 and April 15
Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.
IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officers its corporate seal to
be affixed hereto or imprinted hereon.
COUNTY SEAT STORES, INC.
By: _________________________________
Name:
Title:
By: _________________________________
Name:
Dated: _______________, 199__ Title:
Certificate of Authentication
This is one of the 12 3/4% Senior Notes due 2004, Series B referred
to in the within-mentioned Indenture.
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
Dated: _______________, 199__ By: _________________________________
Name:
Title:
B-2
{REVERSE OF NOTE}
COUNTY SEAT STORES, INC.
12 3/4% Senior Note due 2004, Series B
1. INTEREST. County Seat Stores, Inc., a Minnesota corporation (the
"Company"), promises to pay interest on the principal amount of this Note at the
rate and in the manner specified below. Interest on the Securities will accrue
at 12 3/4% per annum and will be payable semiannually in cash on November 1 and
May 1 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 the
Securities will accrue from the most recent date on which interest has been paid
or, if no interest has been paid, from the date of issuance; PROVIDED that the
first Interest Payment Date shall be May 1, 1998. The Company shall pay interest
on overdue principal and premium, if any, from time to time on demand at the
rate of interest then borne by the Notes and shall pay interest on overdue
installments of interest (without regard to any applicable grace periods) from
time to time on demand at the same rate to the extent lawful. Interest will be
computed on the basis of a 360-day year of twelve 30-day months. The Company
will pay Additional Interest (as defined in the Registration Rights Agreement)
pursuant to Section 4 of the Registration Rights Agreement.
2. METHOD OF PAYMENT. The Company shall pay interest on the Notes to
the Persons who are the registered Holders as of the close of business on the
Record Date immediately preceding the applicable Interest Payment Date even if
the Notes are cancelled on registration of transfer or registration of exchange
after such Record Date. Holders must surrender Notes to a Paying Agent to
collect principal payments. The Company shall pay principal, premium, if any,
and interest and Additional Interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts ("U.S.
Legal Tender"). The Notes will be payable both as to principal and to interest
at the office or agency of the Company, or, at the option of the Company,
payment of interest may be made by its check payable in such U.S. Legal Tender
and mailed to the Holders at their respective registered addresses as set forth
in the register of Holders. If the Company defaults in a payment of interest on
the Notes, it shall pay the defaulted interest plus any interest payable on the
defaulted interest in accordance with Section 2.16 of the Indenture.
3. PAYING AGENT AND REGISTRAR. Until otherwise designated by the
Company, the Registrar and Paying Agent for the Notes shall be First Trust
National Association, the trustee (the "Trustee") under the Indenture (as
defined below), having an address as 000 Xxxx Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx
00000, Attention: Corporate Finance Department. In addition, until otherwise
designated by the Company, the Company's office or agency maintained in the
Borough of Manhattan, in the City of New York at which the Notes may be
presented for payment or for transfer or exchange will be the office of the
Trustee, at 000 Xxxx Xxxxxx, Xxx Xxxx, XX. The Company may change any Paying
Agent, Registrar or co-Registrar without notice to the Holders.
B-3
4. INDENTURE. The Company issued the Notes under an Indenture, dated
as of October 29, 1997 (the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. Capitalized terms herein are used as defined in the
Indenture unless otherwise defined herein. 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 (15 U.S. Code xx.xx. 77aaa-77bbbb) (the "TIA"), as
in effect on the date of the Indenture until such time as the Indenture is
qualified under the TIA, and thereafter as in effect on the date on which the
Indenture is qualified under the TIA. Notwithstanding anything to the contrary
herein, the Notes are subject to all such terms, and Holders are referred to the
Indenture and the TIA for a statement of them. The Notes are senior unsecured
general obligations of the Company limited in aggregate principal amount to
$85,000,000. Payment on the Notes will be guaranteed on a senior basis, jointly
and severally, by the Subsidiary Guarantors pursuant to Article Ten of the
Indenture and upon the execution of a supplemental indenture by each Subsidiary
Guarantor. Each Holder, by accepting a Note, agrees to be bound by all of the
terms and provisions of the Indenture, as the same may be amended from time to
time.
5. REDEMPTION.
(a) OPTIONAL REDEMPTION. Except as described in paragraph (b) of
this Section 5, the Notes are not redeemable at the Company's option, at any
time prior to November 1, 2001. Thereafter, the Notes will be subject to
redemption at the option of the Company, in whole or in part, upon not less than
30 nor more than 60 days' notice, at the following redemption prices (expressed
as percentages of principal amount), if redeemed during the twelve-month period
commencing on November 1, of the years set forth below, through but not
including the Maturity Date, plus, in each case, accrued and unpaid interest
thereon to the applicable date of redemption:
YEAR PERCENTAGE
2001 106.3750%
2002 103.1875%
2003 and thereafter 100 %
(b) OPTIONAL REDEMPTION UPON PRIMARY OFFERING. Notwithstanding
paragraph (a) of this Section 5, at any time, prior to November 1, 2001, the
Company may, at its option, use the net cash proceeds of a Primary Offering to
redeem up to one-third of the original principal amount of the Notes at a
redemption price equal to 112.75% of the principal amount thereof outstanding on
the redemption date, plus accrued and unpaid interest thereon, if any, to the
date of redemption; PROVIDED that (i) at least 66 2/3% of original principal
amount of the Notes are outstanding immediately following such redemption and
(ii) such redemption shall occur within 60 days of the date of the closing of
such Primary Offering.
6. NOTICE OF REDEMPTION. Notice of redemption will be mailed by
first class mail at least 15 days but not more than 60 days before the
redemption date to each Holder, at each of such Holder's registered address,
whose Notes are to be redeemed. If fewer than all of the Notes are to be
redeemed at any time, selection of Notes for redemption
B-4
will be made by the Trustee in compliance with the requirements of the national
securities exchange, if any, on which the Notes are listed, or, if the Notes are
not so listed, on a pro rata basis, by lot or by such method as the Trustee
deems to be fair and appropriate; PROVIDED that Notes of $1,000 or less may not
be redeemed in part.
Except as set forth in the Indenture, if monies for the redemption
of the Notes called for redemption shall have been deposited with the Paying
Agent for redemption on such redemption date, then, unless the Company defaults
in the payment of such redemption price plus accrued interest, if any, the Notes
called for redemption will cease to bear interest from and after such redemption
date, and the only remaining right of the Holders of such Notes will be to
receive payment of the redemption price plus accrued interest, if any, as of the
redemption date upon surrender to the Paying Agent of the Notes redeemed.
7. OFFERS TO PURCHASE. Sections 4.14 and 4.15 of the Indenture
provide that, after certain Asset Sales and upon the occurrence of a Change of
Control, and subject to further limitations contained therein, the Company will
make an offer to purchase certain amounts of the Notes in accordance with the
procedures set forth in the Indenture.
8. REGISTRATION RIGHTS. Pursuant to the Registration Rights
Agreement dated the date of the Indenture among the Company and the Holders of
the Initial Notes, the Company will use its best efforts to prepare and file
with the SEC on or prior to 120 days after the Issue Date a registration
statement (the "Exchange Registration Statement") with respect to an offer to
the Holders to exchange this Note for the Company's 12 3/4% Senior Notes due
2004, Series B (the "Exchange Notes"), which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects as the Initial Notes. The Company will also use its best
efforts to cause the Exchange Registration Statement to become effective as
promptly as practicable after the filing thereof but in no event later than 180
days after the Issue Date and to consummater the exchange offer within 30 days
after the date on which the Exchange Registration Statement is declared
effective. The Holders of the Initial Notes shall be entitled to receive certain
additional interest payments in the event such exchange offer is not consummated
and upon certain other conditions, all pursuant to and in accordance with the
terms of the Registration Rights Agreement.
9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 and integral multiples of
$1,000. A Holder shall register the transfer of or exchange of Notes in
accordance with the Indenture. The Registrar or co-Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay certain transfer taxes or similar governmental charges
payable in connection therewith as permitted by the Indenture. Subject to
certain provisions in the Indenture, the Registrar or co-Registrar need not
register the transfer of or exchange of any Notes or portions thereof selected
for redemption. Also the Registrar or co-Registrar need not register the
transfer or exchange of any Note during a period beginning at the opening of
business 15 days before the mailing of a notice of redemption of notes and
ending at the close of business on the day of such mailing.
B-5
10. PERSONS DEEMED OWNERS. The registered Holder of a Note
shall be treated as the owner of such Note for all purposes.
11. UNCLAIMED MONEY. If money for the payment of principal or
interest remains unclaimed for two years (or such sooner period as may be
required by applicable abandoned property laws), the Trustee and the Paying
Agent will pay the money back to the Company. After that, all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
12. MATURITY DATE. All outstanding principal, all premiums if
any, and all accrued and unpaid interest shall be due and payable on the
Maturity Date.
13. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).
14. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented by the Company, the
Trustee and with the written consent of the Holders of at least a majority in
aggregate principal amount of the Notes then outstanding, and, subject to
Section 6.7 of the Indenture, noncompliance with any provision of the Indenture
or this Note may be waived with the written consent of the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding. Without
the consent of any Holder, the parties thereto may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency; to
provide for uncertificated Notes in addition to or in place of certificated
Notes; to provide for the assumption of the Company's obligations to Holders or
any Subsidiary Guarantor's obligation under its Subsidiary Guarantee in the case
of a merger or consolidation where such assumption is required under the
Indenture; to make any change that would provide any additional rights or
benefits to the Holders or that does not adversely affect the legal right under
the Indenture of any such Holder; to provide for issuance of the Exchange Notes;
or to comply with the requirements of the U.S. Securities and Exchange
Commission (the "SEC") in order to effect or maintain the qualification of the
Indenture under the TIA. As provided in the Indenture, there shall be no
amendment, supplement or waiver without the consent of each Holder of each Note
affected thereby with respect to the circumstances enumerated in Section 9.2
therein.
15. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations
on the ability of the Company and its Restricted Subsidiaries to, among other
things, incur additional Indebtedness or Liens, issue or sell its Capital Stock,
enter into transactions with Affiliates, cause to be effective restrictions
affecting Restricted Subsidiaries' abilities to pay certain dividends or make
certain loans, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
assets or adopt a plan of liquidation. Such limitations are subject to a number
of important
B-6
qualifications and exceptions. The Company must annually report to the Trustee
on compliance with such limitations.
16. SUCCESSORS. When a successor assumes, in accordance with
the Indenture, all the Obligations of its predecessor under the Notes and the
Indenture, the predecessor will be released from those Obligations.
17. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of Notes then outstanding may declare all the Notes to be due and payable
in the manner, at the time and with the effect provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee is not obligated to exercise any of the rights or powers
vested in it by the Indenture or the Notes and at the order or direction of any
Holders, unless it has received indemnity reasonably satisfactory to it. Subject
to certain limitations set forth in the Indenture, Holders of a majority in
aggregate principal amount of the Notes then outstanding may direct the Trustee
in its exercise of any trust or power; PROVIDED that, as provided in the
Indenture, Events of Default set forth in Section 6.1 (f) and (g) of the
Indenture shall result in such acceleration occurring without such declaration.
The Trustee may withhold from Holders notice of any continuing Default or Event
of Default (except in the case of a Default or Event of Default in payment of
principal or interest or a failure to comply with Article Five of the Indenture)
if it determines that withholding notice is in their interest.
18. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture,
in its individual or any other capacity, may become the owner or pledgee of
Notes and may otherwise deal with the Company, its Subsidiaries or their
respective Affiliates, as such, with the same rights it would have as if it were
not the Trustee.
19. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator or stockholder of the Company or any Subsidiary
Guarantor, as such, shall have any liability for any Obligations of the Company
or any Subsidiary Guarantor under the Notes or the Indenture, any Subsidiary
Guarantee, the Warrant Agreement or the Registration Rights Agreement or for any
claim based on, in respect of, or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Units.
20. AUTHENTICATION. This Note shall not be valid until the
Trustee or Authenticating Agent manually signs the certificate of
authentication on this Note.
21. GOVERNING LAW. The laws of the State of New York shall
govern this Note and the Indenture.
22. ABBREVIATIONS AND DEFINED TERMS. 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
B-7
and not as tenants-in-common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
23. 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 as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture.
Requests may be made to: County Seat Stores, Inc., 0000 Xxxx Xxxx
Xxxxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000, Attn: General Counsel.
B-8
FORM OF ASSIGNMENT
If you, the Holder, want to assign this; Note, fill in the form
below and have your signature guaranteed:
I or we assign and transfer this Note to:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type name, address and zip code and social
security or tax ID number of assignee)
and irrevocably appoint______________________________________________________,
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Dated:________________ Signed:__________________________________________
(Sign exactly as your name appears on the
other side of this Note. This signature
must be guaranteed by the signatory's
bank or broker.)
Signature Guarantee:__________________________
Medallion Signature Guarantee
B-9
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Note (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) _______________, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that this Note is being transferred:
(Check One)
(1) ___ to the Company or a subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) ___ to an institutional "accredited investor" (as defined
in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter can be obtained
from the Trustee); or
(4) ___ outside the United states to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration provided
by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement under
the Securities Act; or
(7) ___ pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Notes evidenced by this certificate in the name of any person other than the
registered Holder thereof; PROVIDED that if box (3), (4), (5) or (7) is checked,
the Company or the Trustee may require, prior to registering any such transfer
of the Notes, in its sole discretion, such legal opinions, certifications
(including an investment letter in the case of box (3) or (4)) and other
information as the Trustee or the Company has reasonably requested to confirm
that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
B-10
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Note in the name of any person other than the Holder
hereof unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.15 of the Indenture shall have been satisfied.
Dated:_______________________ Signed:_____________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:__________________________________________________________
Medallion Signature Guarantee
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon the
undersigned's foregoing representations in order to claim the exemption from
registration requirements of the Securities Act provided by Rule 144A
thereunder.
Dated:________________________ __________________________________
Executive Officer
Name: ________________________
Title: ________________________
B-11
FORM OF OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.14 or Section 4.15 of the Indenture, check the appropriate
box:
Section 4.14 [ ]
Section 4.15 [ ]
If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.14 or Section 4.15 of the Indenture, state the
amount you elect to have purchased:
$___________________
Dated:_____________________ Signature: ______________________
Tax Identification No. ___________
Signature Guarantee:____________________________________________
Medallion Signature Guarantee
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS IT
APPEARS UPON THE FACE OF THE WITHIN NOTE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATSOEVER AND BE ACKNOWLEDGED AS GENUINE BY THE
ENDORSER'S BANK OR BROKER.
B-12
EXHIBIT C
FORM OF LEGEND FOR GLOBAL NOTES
Any Global Note authenticated and delivered hereunder shall bear a
legend (which would be in addition to any other legends required in the case of
a Restricted Security) in substantially the following form:
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS NOTE IS NOT
EXCHANGEABLE FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN
THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS
NOTE 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) MAY BE REGISTERED
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH
OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO 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.
C-1
EXHIBIT D
FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS TO NON-QIB ACCREDITED INVESTORS
----------, ----
First Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Office
Re: County Seat Stores, Inc. (the "Company")
12 3/4% Senior Notes due
2004 (THE "NOTES")
Ladies and Gentlemen:
In connection with our proposed purchase of $85,000,000 aggregate
principal amount of the Notes, we confirm that:
1. We have received a copy of the Offering Circular (the "Offering
Circular"), dated October 23, 1997, as amended or supplemented, relating to the
Notes and such other information as we have deemed necessary in order to make
our investment decision. We acknowledge that we have read and agreed to the
matters stated in the section entitled "Notice to Investors" of the Offering
Circular.
2. We understand that any subsequent transfer of the Notes is
subject to certain restrictions and conditions set forth in the Indenture dated
as of October 29, 1997 relating to the Notes (the "Indenture"), and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with such restrictions and conditions
and the U.S. Securities Act of 1933, as amended (the "Securities Act").
3. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
Persons except as permitted in the following sentence. We agree, on our own
behalf and on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell or otherwise transfer any Notes prior to the date
which is two years after the later of the date of (x) original issue of the Note
and (y) the last date on which the Note is owned by the Company or an affiliate
of the Company, we will do so only (i) to the Company, (ii) pursuant to a
registration statement which has been declared effective under the Securities
Act, (iii) for so long as the Notes are eligible for resale pursuant to Rule
144A, to a person it reasonably believes is a Qualified Institutional Buyer
("QIB") (within the meaning of Rule 144A) that purchases for its own account or
for the account of a QIB to whom notice is given that the transfer is being made
in reliance on Rule 144A, (iv) inside the United States to an institutional
"accredited investor" (as defined below) that, prior to such transfer, furnishes
(or has furnished on its behalf by a U.S. broker-dealer) to you and to the
Company, a signed letter containing certain representations and agreements
relating to the restrictions on transfer of the Notes, substantially in the form
of this letter, (v) pursuant to offers and sales to non-U.S. persons that occur
outside of the United States in compliance with Rule 904 of Regulation S under
the Securities Act or (vi) pursuant to any other available exemption from the
registration requirements of the Securities Act, and we further agree to provide
to any person purchasing any of the Notes from us a notice advising such
purchaser that resales of the Notes are restricted as stated herein.
4. We are not acquiring the Notes for or on behalf of, and will not
transfer the Notes to, any pension or welfare plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974) except as permitted in the
section entitled "Notice to Investors" of the Offering Circular.
5. We understand that, on any proposed resale of any Notes, we will
be required to furnish to you and the Company such certifications, legal
opinions and other information as you and the Company reasonably may require to
confirm that the proposed sale complies with the foregoing restrictions. We
further understand that the Notes purchased by us will bear a legend to the
foregoing effect.
6. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
each of the accounts for which we are acting are and is able to bear the
economic risk of our or its entire investment, as the case may be, for an
indefinite period.
7. We are acquiring the Notes purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited
investor") as to each of which we exercise sole investment discretion, for
investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act.
You, the Company and your and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby, and
we agree to notify you promptly if any of our representations or warranties
herein cease to be accurate and complete.
D-1
This letter shall be governed by, and construed in accordance with,
the laws of the State of New York.
Very truly yours,
[Name of Transferee]
By:
---------------------------------
Authorized Signature
D-2
EXHIBIT E
FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO REGULATION S
----------, ----
First Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Re: County Seat Stores, Inc. (the "Company")
12 3/4% Senior Notes due
2004 (THE "NOTES")
Ladies and Gentlemen:
In connection with our proposed sale of $85,000,000 aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S promulgated under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we
represent that:
(1) the offer of the Notes was not made to a person in the
United States;
(2) either: (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United States; or
(b) the transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any person acting on
our behalf had knowledge that the transaction had been pre-arranged with a buyer
in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation
S, as applicable;
(4) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby. Defined terms used herein without definition have
the respective meanings provided in Regulation S.
Very truly yours,
[Name of Transferor]
By:
-------------------------------
Authorized Signature
E-1
EXHIBIT F
FORM OF NOTATION ON NOTE RELATING TO SUBSIDIARY GUARANTEE
For value received, _________________, a _______________ corporation,
hereby unconditionally guarantees to the Holder of the Note upon which this
Subsidiary Guarantee is endorsed, subject in all respects to the provisions of
Article 10 of the Indenture which shall govern and control the terms of this
Subsidiary Guarantee: (a) the due and punctual payment of the principal of,
premium, if any, and interest on the Note, whether at maturity acceleration,
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal of, premium, if any, and interest on the Note, if any, to the
extent lawful, and (c) in case of any extension of time of payment or renewal of
any Note or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. Capitalized
terms used herein have the meanings assigned to them in the Indenture unless
otherwise indicated.
This Subsidiary Guarantee shall be binding upon each Subsidiary Guarantor
and its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Holder and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof and
in the Indenture.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized signatories.
[ ]
By: ________________________
Name:
Title:
Attest: _____________________
F-1
