EXECUTION COPY
================================================================================
XXXXXXX & XXXXX, INC.,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
IBJ XXXXXXXX BANK & TRUST COMPANY,
Trustee
------------------------
INDENTURE
Dated as of January 3, 1997
------------------------
$85,000,000
12 1/4% Series A Senior Notes Due 2003
================================================================================
Reconciliation and Tie between Trust Indenture Act of
1939, as amended, and Indenture, dated as of January 3, 1997
Trust Indenture Indenture
Act Section Section
ss.310 (a)(1)................................................... 6.7
(a)(2)................................................... 6.7
(b)...................................................... 6.7, 6.8, 6.9
ss.311 (a)...................................................... 6.12
(b)...................................................... 6.12
ss.312 ......................................................... 7.1
ss.313 ......................................................... 7.2
ss.314 (a)...................................................... 7.3
(a)(4)................................................... 10.8(a)
(c)(1)................................................... 15.1
(c)(2)................................................... 15.1
(e)...................................................... 15.1
ss.315 (a)...................................................... 6.1
(b)...................................................... 6.13
(c)...................................................... 6.1
(d)...................................................... 6.1
ss.316 (a) (last sentence)...................1.1 ("Outstanding")
(a)(1)(A)................................................ 5.2, 5.12
(a)(1)(B)................................................ 5.13
(b)...................................................... 5.8
ss.317 (a)(1)................................................... 5.3
(a)(2)................................................... 5.4
(b)...................................................... 10.3
ss.318 (a)...................................................... 15.10(b)
Note: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions...............................................
Section 1.2. Other Definitions.........................................
Section 1.3. Incorporation by Reference of Trust Indenture Act.........
Section 1.4. Rules of Construction.....................................
ARTICLE II
SECURITY FORMS
Section 2.1. Forms Generally...........................................
Section 2.2. Form of Securities........................................
ARTICLE III
THE SECURITIES
Section 3.1. Title and Terms...........................................
Section 3.2. Denominations.............................................
Section 3.3. Execution, Authentication, Delivery and Dating............
Section 3.4. Temporary Securities......................................
Section 3.5. Registration of Transfer and Exchange.....................
Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities..........
Section 3.7. Payment of Interest; Interest Rights Preserved............
Section 3.8. Persons Deemed Owners.....................................
Section 3.9. Cancellation..............................................
Section 3.10. Computation of Interest...................................
Section 3.11. CUSIP Numbers.............................................
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture...................
Section 4.2. Application of Trust Money................................
ARTICLE V
REMEDIES
Section 5.1. Events of Default.........................................
Section 5.2. Acceleration of Maturity; Rescission and Annulment........
Section 5.3. Collection of Indebtedness and Suits for Enforcement
by Trustee ...............................................
Section 5.4. Trustee May File Proof of Claim...........................
Section 5.5. Trustee May Enforce Claims Without Possession of
Securities ...............................................
Section 5.6. Application of Money Collected............................
Section 5.7. Limitations on Suits......................................
Section 5.8. Unconditional Right of Holders to Receive Principal,
Premium, Liquidated Damages and Interest..................
Section 5.9. Restoration of Rights and Remedies........................
Section 5.10. Rights and Remedies Cumulative............................
Section 5.11. Delay or Omission Not Waiver..............................
Section 5.12. Control by Holders........................................
Section 5.13. Waiver of Past Defaults...................................
Section 5.14. Waiver of Stay, Extension or Usury Laws...................
Section 5.15. Undertaking for Costs.....................................
ARTICLE VI
THE TRUSTEE
Section 6.1. Duties of Trustee.........................................
Section 6.2. Certain Rights of Trustee.................................
Section 6.3. Trustee Not Responsible for Recitals or Issuance of
Securities ...............................................
Section 6.4. May Hold Securities.......................................
Section 6.5. Money Held in Trust.......................................
Section 6.6. Compensation and Reimbursement............................
Section 6.7. Corporate Trustee Required; Eligibility...................
Section 6.8. Conflicting Interests.....................................
Section 6.9. Resignation and Removal; Appointment of Successor.........
Section 6.10. Acceptance of Appointment by Successor....................
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business .................................................
Section 6.12. Notice of Defaults........................................
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 7.1. Holders' Lists; Holder Communications; Disclosures
Respecting Holders........................................
Section 7.2. Reports by Trustee........................................
Section 7.3. Reports by Company........................................
ii
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 8.1. Company May Consolidate, Etc., Only on Certain Terms......
Section 8.2. Successor Substituted.....................................
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.1. Supplemental Indentures Without Consent of Holders......
Section 9.2. Supplemental Indentures with Consent of Holders.........
Section 9.3. Execution of Supplemental Indentures....................
Section 9.4. Effect of Supplemental Indentures.......................
Section 9.5. Conformity with Trust Indenture Act.....................
Section 9.6. Reference in Securities to Supplemental Indentures......
Section 9.7. Notice of Supplemental Indentures and Waivers...........
ARTICLE X
COVENANTS
Section 10.1. Payment of Principal, Premium or Liquidated
Damages, if any, and Interest...........................
Section 10.2. Maintenance of Office or Agency.........................
Section 10.3. Money for Security Payments to Be Held in Trust.........
Section 10.4. Corporate Existence.....................................
Section 10.5. Payment of Taxes; Maintenance of Properties; Insurance..
Section 10.6. Limitation on Sale-Leaseback Transactions...............
Section 10.7. Limitation on Conduct of Business.......................
Section 10.8. Statement by Officers as to Default.....................
Section 10.9. Provision of Financial Information......................
Section 10.10. Limitation on Restricted Payments.......................
Section 10.11. Limitation on Indebtedness and Disqualified Capital
Stock.................................................
Section 10.12. Limitation on Issuance and Sales of Capital Stock by
Restricted Subsidiaries.................................
Section 10.13. Limitation on Liens.....................................
Section 10.14. Purchase of Securities, Upon Change of Control..........
Section 10.15. Limitation on Asset Sales...............................
Section 10.16. Limitation on Transactions with Affiliates..............
Section 10.17. Limitation on Dividends and Other Payment
Restrictions Affecting Restricted Subsidiaries..........
Section 10.18. Limitation on Preferred Stock of Subsidiaries...........
Section 10.19. Waiver of Certain Covenants.............................
iii
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.1. Right of Redemption.......................................
Section 11.2. Applicability of Article..................................
Section 11.3. Election to Redeem; Notice to Trustee.....................
Section 11.4. Selection by Trustee of Securities to Be Redeemed.........
Section 11.5. Notice of Redemption......................................
Section 11.6. Deposit of Redemption Price...............................
Section 11.7. Securities Payable on Redemption Date.....................
Section 11.8. Securities Redeemed in Part...............................
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
Section 12.1. Company's Option to Effect Defeasance or Covenant
Defeasance ...............................................
Section 12.2. Defeasance and Discharge..................................
Section 12.3. Covenant Defeasance.......................................
Section 12.4. Conditions to Defeasance or Covenant Defeasance...........
Section 12.5. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions..........
Section 12.6. Reinstatement.............................................
ARTICLE XIII
SUBSIDIARY GUARANTEES
Section 13.1. Unconditional Guarantee...................................
Section 13.2. Execution and Delivery of Subsidiary Guarantees...........
Section 13.3. Limitation on Merger or Consolidation.....................
Section 13.4. Release of Subsidiary Guarantors..........................
Section 13.5. Additional Subsidiary Guarantors..........................
Section 13.6. Limitation of Subsidiary Guarantor's Liability............
Section 13.7. Contribution..............................................
ARTICLE XIV
PLEDGE AGREEMENT
Section 14.1. Unconditional Pledge......................................
Section 14.2. Recording and Opinions....................................
Section 14.3. Release of Collateral.....................................
Section 14.4. Authorization of Actions to be Taken by the Trustee
Under the Pledge Agreement................................
iv
Section 14.5. Authorization of Receipt of Funds by the Trustee
Under the Pledge Agreement..............................
Section 14.6. Termination of Security Interest........................
ARTICLE XV
MISCELLANEOUS
Section 15.1. Compliance Certificates and Opinions....................
Section 15.2. Form of Documents Delivered to Trustee..................
Section 15.3. Acts of Holders.........................................
Section 15.4. Notices, etc. to Trustee and the Company................
Section 15.5. Notice to Holders; Waiver...............................
Section 15.6. Effect of Headings and Table of Contents................
Section 15.7. Successors and Assigns..................................
Section 15.8. Severability............................................
Section 15.9. Benefits of Indenture...................................
Section 15.10. Governing Law; Trust Indenture Act Controls.............
Section 15.11. Legal Holidays..........................................
Section 15.12. No Recourse Against Others..............................
Section 15.13. Duplicate Originals.....................................
Section 15.14. No Adverse Interpretation of Other Agreements...........
Appendix A - Provisions Relating to Initial Securities, Private
Exchange Securities and Exchange Securities
Exhibit 1 to Appendix A - Form of Initial Security
Exhibit 2 to Appendix A - Form of Exchange/Private Exchange Security
Exhibit A - Form of Pledge and Security Agreement
v
THIS INDENTURE, dated as of January 3, 1997, is between XXXXXXX & XXXXX,
INC., a Delaware corporation (hereinafter called the "Company"), the Subsidiary
Guarantors parties hereto ("Subsidiary Guarantors") and IBJ XXXXXXXX BANK &
TRUST COMPANY (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 12 1/4% Series A
Senior Notes Due 2003 (the "Initial Securities") and, if and when issued
pursuant to a registered exchange for Initial Securities, the Company's 12 1/4%
Series B Senior Notes Due 2003 (the "Exchange Securities") and, if and when
issued pursuant to a private exchange for Initial Securities, the Company's 12
1/4% Series C Senior Notes Due 2003 (the "Private Exchange Securities," together
with the Exchange Securities and the Initial Securities, the "Securities").
All things necessary have been done on the part of the Company and the
Subsidiary Guarantors to make the Securities, when issued and executed by the
Company and the Subsidiary Guarantors and authenticated and delivered by the
Trustee as herein provided, the valid obligations of the Company and the
Subsidiary Guarantors, as the case may be, and to make this Indenture a valid
agreement of the Company and the Subsidiary Guarantors and the Trustee, in
accordance with their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
"Acquired Indebtedness" means, with respect to any specified Person, (a)
Indebtedness of any other Person existing at the time such other Person merged
with or into or became a Restricted Subsidiary of such specified Person,
including Indebtedness incurred in connection with, or in contemplation of, such
other Person merging with or into or becoming a Restricted Subsidiary of such
specified Person or (b) assumed in connection with acquisitions of properties or
assets from such Person. Acquired Indebtedness shall be deemed to be incurred on
the date the acquired Person becomes a Restricted Subsidiary or the date of the
related acquisition of properties or assets from such Person.
"Act" when used with respect to any Holder, has the meaning specified in
Section 15.3.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control," when used with respect to any Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of this definition, beneficial ownership of 10% or more of the voting
common equity (on a fully diluted basis) or options or warrants to purchase such
equity (but only if exercisable at the date of determination or within 60 days
thereof) of a Person shall be deemed to constitute control of such Person.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any of
its Restricted Subsidiaries (including, without limitation, by means of a
Sale/Leaseback Transaction or a merger or consolidation) (collectively, for
purposes of this definition, a "transfer"), directly or indirectly, in one or a
series of related transactions, of (a) any Capital Stock of any Restricted
Subsidiary held by the Company or any other Restricted Subsidiary or (b) any
other Property of the Company or any of its Restricted Subsidiaries other than
transfers of cash, Cash Equivalents, accounts receivable or other Properties in
the ordinary course of business. For the purposes of this definition, the term
"Asset Sale" also shall not include any of the following: (i) any transfer of
Properties (including Capital Stock) that is governed by, and made in accordance
with, the provisions of Article VIII; (ii) any transfer of Properties to an
Unrestricted Subsidiary, if permitted under Section 10.10 hereof; (iii) sales of
damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are either (x) no longer used or (y) no longer useful in
the business of the Company or its Restricted Subsidiaries; and (iv) any
transfers that, but for this clause (iv), would be Asset Sales, if after giving
effect to such transfers, the aggregate Fair Market Value of the Properties
transferred in such transaction or any such series of related transactions so
designated by the Company does not exceed $500,000.
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable, whether or not accounted for as a
Capitalized Lease Obligation, and at any date as of which the amount thereof is
to be determined, the present value of the total net amount of rent required to
be paid by such Person under the lease during the primary term thereof, without
giving effect to any renewals at the option of the lessee, discounted from the
respective due dates thereof to such date of determination at a rate per annum
equal to the discount rate which would be applicable to a Capitalized Lease
Obligation with a like term in accordance with GAAP. As used in the preceding
sentence, the "net amount of rent" under any such lease for any such period
shall mean the sum of rental and other payments required to be paid with respect
to such period by the lessee thereunder, excluding any amounts required to be
paid by such lessee on account of maintenance and repairs, insurance, taxes,
assessments, water rates or similar charges. In the case of any lease which is
terminable by the lessee upon payment of a penalty, such net amount of rent
shall also include the amount of such penalty, but no rent shall
2
be considered as required to be paid under such lease subsequent to the first
date upon which it may be so terminated.
"Authorized Newspaper" shall have the meaning set forth in Section 10.3.
"Average Life" means, with respect to any Indebtedness, as at any date of
determination, the quotient obtained by dividing (a) the sum of the products of
(i) the number of years (and any portion thereof) from the date of determination
to the date or dates of each successive scheduled principal payment (including,
without limitation, any sinking fund or mandatory redemption payment
requirements) of such Indebtedness multiplied by (ii) the amount of each such
principal payment by (b) the sum of all such principal payments.
"Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of such board of
directors, and, with respect to any Subsidiary, either the board of directors of
such Subsidiary or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Subsidiary, a
copy of a resolution certified by the Secretary or an Assistant Secretary of
such Subsidiary to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) any property (whether real, personal or mixed) that
is required to be classified and accounted for as a capital lease obligation
under GAAP and, for the purpose of the Indenture, the amount of such obligation
at any date shall be the capitalized amount thereof at such date, determined in
accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participation, rights or other equivalents in the equity interests
(however designated) in such Person, and any rights (other than debt securities
convertible into an equity interest), warrants or options exercisable for,
exchangeable for or convertible into such an equity interest in such Person.
"Cash Equivalents" means (i) marketable obligations with a maturity of 180
days or less issued or directly or indirectly guaranteed or insured by the
United States of America or any
3
agency or instrumentality thereof (provided that the full faith and credit of
the United States of America is pledged in support thereof); (ii) demand and
time deposits and certificates of deposit or acceptances with a maturity of 180
days or less of any financial institution that is a member of the Federal
Reserve System having combined capital and surplus and undivided profits of not
less than $500,000,000; (iii) commercial paper maturing no more than 180 days
from the date of creation thereof issued by a corporation that is not an
Affiliate of the Company and is organized under the laws of any state of the
United States or the District of Columbia and rated at least A-1 by S&P or at
least P-1 by Moody's; (iv) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in clause (i) above
entered into with any commercial bank meeting the specifications of clause (ii)
above; and (v) investments in money market or other mutual funds substantially
all of whose assets comprise securities of the types described in clauses (i)
through (iv) above.
"Change of Control" means the occurrence of any event or series of events
(whether or not otherwise in compliance with the provisions of the Indenture) by
which: (a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act) other than the Principals, is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 35% of the total Voting Stock of the Company, (b) the
Company consolidates with or merges into another Person or any Person
consolidates with, or merges into, the Company, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company is changed into
or exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Stock of the Company is changed
into or exchanged for Voting Stock of the surviving or resulting Person that is
Qualified Capital Stock and (ii) the holders of the Voting Stock of the Company
immediately prior to such transaction own, directly or indirectly, not less than
a majority of the Voting Stock of the surviving or resulting Person immediately
after such transaction; (c) the Company, either individually or in conjunction
with one or more Restricted Subsidiaries, sells, assigns, conveys, transfers,
leases or otherwise disposes of, or the Restricted Subsidiaries sell, assign,
convey, transfer, lease or otherwise dispose of, all or substantially all of the
Properties of the Company and its Restricted Subsidiaries, taken as a whole
(either in one transaction or a series of related transactions), including
Capital Stock of the Restricted Subsidiaries, to any Person (other than the
Company or a Wholly Owned Restricted Subsidiary); (d) during any consecutive
two-year period, individuals who at the beginning of such period constituted the
Board of Directors of the Company (together with any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of two-thirds 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 in office; or (e) the approval by the holders of
Capital Stock of the Company of any plan or proposal for liquidation or
dissolution of the Company.
"Code" means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations thereunder issued by the
Internal Revenue Service.
4
"Collateral" means any assets pledged under the Pledge Agreement by the
Pledgor as Collateral thereunder.
"Collateral Agent" shall have the meaning set forth in the Pledge
Agreement.
"Commission" or "SEC" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Company" means Xxxxxxx & Xxxxx, Inc., a Delaware corporation, until a
successor corporation replaces it pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman, its President, or any Vice
President, and its Treasurer or an Assistant Treasurer, Controller, any
Assistant Controller, Secretary or any Assistant Secretary, and delivered to the
Trustee.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to the
Company for any period, the ratio of (a) the sum of Consolidated Net Income,
Consolidated Fixed Charges, Consolidated Income Tax Expense and Consolidated
Non-cash Charges of the Company and its Restricted Subsidiaries, on a
consolidated basis for such period, all determined in accordance with GAAP to
(b) Consolidated Fixed Charges for such period. In making such computations, (i)
the Consolidated Fixed Charge Coverage Ratio shall be calculated on a pro forma
basis assuming that (A) the Indebtedness to be incurred or the Disqualified
Capital Stock to be issued (and all other Indebtedness incurred or Disqualified
Capital Stock issued after the first day of such period of four full fiscal
quarters referred to in Section 10.11(a) through and including the date of
determination), and (if applicable) the application of the net proceeds
therefrom (and from any other such Indebtedness or Disqualified Capital Stock),
including to refinance other Indebtedness, had been incurred on the first day of
such four quarter period and, in the case of Acquired Indebtedness, on the
assumption that the related transaction (whether by means of purchase, merger or
otherwise) also had occurred on such date with the appropriate adjustments with
respect to such acquisition being included in such pro forma calculation and (B)
any acquisition or disposition by the Company or any Restricted Subsidiary of
any properties or assets outside the ordinary course of business, or any
repayment of any principal amount of any Indebtedness of the Company or any
Restricted Subsidiary prior to the Stated Maturity thereof, in either case since
the first day of such period of four full fiscal quarters through and including
the date of
5
determination, had been consummated on such first day of such four-quarter
period; (ii) the Consolidated Fixed Charges attributable to interest on any
Indebtedness required to be computed on a pro forma basis in accordance with
Section 10.11(a) and (A) bearing a floating interest rate shall be computed as
if the rate in effect on the date of computation had been the applicable rate
for the entire period and (B) which was not outstanding during the period for
which the computation is being made but which bears, at the option of the
Company, a fixed or floating rate of interest, shall be computed by applying, at
the option of the Company, either the fixed or floating rate; (iii) the
Consolidated Fixed Charges attributable to interest on any Indebtedness under a
revolving credit facility required to be computed on a pro forma basis in
accordance with Section 10.11(a) shall be computed based upon the average daily
balance of such Indebtedness during the applicable period, provided that such
average daily balance shall be reduced by the amount of any repayment of
Indebtedness under a revolving credit facility during the applicable period,
which repayment permanently reduced the commitments or amounts available to be
reborrowed under such facility; (iv) notwithstanding clauses (ii) and (iii) of
this proviso, interest on Indebtedness determined on a fluctuating basis, to the
extent such interest is covered by agreements relating to Interest Rate
Protection Obligations, shall be deemed to have accrued at the rate per annum
resulting after giving effect to the operation of such agreements; and (v) if
after the first day of the period referred to in clause (a) of this definition
the Company has permanently retired any Indebtedness out of the Net Cash
Proceeds of the issuance and sale of shares of Qualified Capital Stock of the
Company within 30 days of such issuance and sale, Consolidated Fixed Charges
shall be calculated on a pro forma basis as if such Indebtedness had been
retired on the first day of such period.
"Consolidated Fixed Charges" means, for any period, without duplication,
(i) the sum of (a) the interest expense of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, any amortization of debt discount, the
net cost under Interest Rate Protection Obligations (including any amortization
of discounts), the interest portion of any deferred payment obligation
constituting Indebtedness, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and all
accrued interest, in each case to the extent attributable to such period, (b) to
the extent any Indebtedness of any Person (other than the Company or a
Restricted Subsidiary) is guaranteed by the Company or any Restricted
Subsidiary, the aggregate amount of interest paid (to the extent not accrued in
a prior period) or accrued by such other Person during such period attributable
to any such Indebtedness, in each case to the extent attributable to that
period, (c) the aggregate amount of the interest component of Capitalized Lease
Obligations paid (to the extent not accrued in a prior period), accrued or
scheduled to be paid or accrued by the Company and its Restricted Subsidiaries
during such period, and (d) the aggregate amount of dividends paid (to the
extent not accrued in a prior period) or accrued on Preferred Stock or
Disqualified Capital Stock of the Company and its Restricted Subsidiaries, to
the extent such Preferred Stock or Disqualified Capital Stock is owned by
Persons other than the Company or any Restricted Subsidiary, less (ii), to the
extent included in clause (i) above, amortization of capitalized debt issuance
costs of the Company and its Restricted Subsidiaries during such period.
6
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes (including state franchise taxes
accounted for as income taxes in accordance with GAAP) of the Company and its
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net after-tax gains or losses (less all fees and expenses relating thereto)
attributable to Asset Sales, (c) net income (or net loss) of any Person (other
than the Company or any of its Restricted Subsidiaries), in which the Company or
any of its Restricted Subsidiaries has an ownership interest, except to the
extent of the amount of dividends or other distributions actually paid to the
Company or any of its Restricted Subsidiaries in cash by such other Person
during such period (regardless of whether such cash dividends or distributions
are attributable to net income (or net loss) of such Person during such period
or during any prior period), (d) net income (or net loss) of any Person combined
with the Company or any of its Restricted Subsidiaries on a "pooling of
interests" basis attributable to any period prior to the date of combination,
(e) net income of any Restricted Subsidiary to the extent that the declaration
or payment of dividends or similar distributions by that Restricted Subsidiary
of its net income is not at the date of determination permitted, directly or
indirectly, by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders, and (f) income
resulting from transfers of assets received by the Company or any Restricted
Subsidiary from an Unrestricted Subsidiary.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of the Company less (without duplication) the amount of
such stockholders' equity attributable to Disqualified Capital Stock or treasury
stock of the Company and its Restricted Subsidiaries, as determined in
accordance with GAAP.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization and other non-cash expenses of the Company
and its Restricted Subsidiaries deducted in computing Consolidated Net Income
for such period, all determined on a consolidated basis in accordance with GAAP
(excluding any such non-cash charge for which an accrual of or reserve for cash
charges for any future period is required).
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of such Person at such time which were incurred in the ordinary
course of business pursuant to any foreign currency exchange agreement, option
or futures contract or other similar agreement or
7
arrangement designed to protect against or manage such Person's or any of its
Subsidiaries' exposure to fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition that is, or after notice or
passage of time or both would become, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7 hereof.
"Depository" mean The Depository Trust Company, its nominees and their
respective successors.
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors of the Company is
required to deliver a Board Resolution under the Indenture, a member of the
Board of Directors of the Company who does not have any material direct or
indirect financial interest (other than an interest arising solely from the
beneficial ownership of Capital Stock of the Company) in or with respect to such
transaction or series of transactions.
"Disqualified Capital Stock" means any Capital Stock that, either by its
terms, by the terms of any security into which it is convertible or exchangeable
or by contract or otherwise, is, or upon the happening of an event or passage of
time or both would be, required to be redeemed or repurchased, in whole or in
part, prior to the final Stated Maturity of the Securities or is redeemable at
the option of the holder thereof at any time prior to such final Stated
Maturity, or is convertible into or exchangeable for debt securities at any time
prior to such final Stated Maturity.
"Event of Default" has the meaning specified in Section 5.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor act thereto.
"Fair Market Value" means the fair market value of a Property as
determined in good faith by the Board of Directors of the Company and evidenced
by a Board Resolution, which determination shall be conclusive for purposes of
this Indenture; provided, however, that unless otherwise specified herein, the
Board of Directors shall be under no obligation to obtain any valuation or
assessment from any investment banker, appraiser or other third party.
"Federal Bankruptcy Code" means the United States Bankruptcy Code of Title
11 of the United States Code, as amended from time to time.
"GAAP" means generally accepted accounting principles, consistently
applied, that are 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
8
Accounting Standards Board or in such other statements by such other entity as
may be approved by a significant segment of the accounting profession of the
United States of America, which are applicable as of the date of this Indenture.
"Global Security" shall have the meaning set forth in Appendix A.
"Guarantee" or "guarantee" means, as applied to any obligation, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (ii) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down under letters of credit. When used as a verb,
"guarantee" has a corresponding meaning.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person, contingent or otherwise, for borrowed money or
for the deferred purchase price of property or services (excluding any trade
accounts payable and other accrued current liabilities incurred in the ordinary
course of business) and all liabilities of such Person incurred in connection
with any letters of credit, bankers' acceptances or other similar credit
transactions or any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any Capital Stock of such Person, or any warrants,
rights or options to acquire such Capital Stock, outstanding on the date of this
Indenture or thereafter, if, and to the extent, any of the foregoing would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, if, and to the extent, any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, (c) all Indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of a default are limited
to repossession or sale of such property), (d) the Attributable Indebtedness of
any Capitalized Lease Obligation of such Persons, (e) all Indebtedness described
in the preceding clauses and all dividends, the payment of which is secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien upon property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness
(the amount of such obligation being deemed to be the lesser of the value of
such property or the amount of the obligation so secured), (f) all guarantees by
such Person of Indebtedness referred to in this definition, and (g) all
obligations of such Person under or in respect of Currency Hedge Obligations and
Interest Rate Protection Obligations.
9
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or similar case or proceeding in connection
therewith, relative to such Person or its creditors, as such, or its assets or
(b) any liquidation, dissolution or other winding-up proceeding of such Person,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of such Person.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection 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 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 other similar agreements or arrangements designed to
protect against or manage such Person's or any of its Subsidiaries' exposure to
fluctuations in interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other property or assets to
others or any payment for property, assets or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives) or
evidences of Indebtedness issued by, any other Person. In addition, the Fair
Market Value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary is designated an Unrestricted Subsidiary shall be
deemed to be an "Investment" made by the Company in such Unrestricted Subsidiary
at such time. "Investments" shall exclude (a) extensions of trade credit or
other advances to customers on commercially reasonable terms in accordance with
normal trade practices or otherwise in the ordinary course of business, (b)
Interest Rate Protection Obligations and Currency Hedge Obligations, but only to
the extent that the same constitute Permitted Indebtedness and (c) endorsements
of negotiable instruments and documents in the ordinary course of business.
"Issue Date" means the date of first issuance of the Securities under this
Indenture.
"Leasing Company" means Embroidery Leasing Corporation, a Georgia
corporation.
10
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or similar type
of encumbrance (including, without limitation, any agreement to give or grant
any lease, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing) upon or with
respect to any Property. A Person shall be deemed to own subject to a Lien any
Property which such Person has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement.
"Liquidated Damages" means all liquidated damages due and owing pursuant
to Section 6 of the Registration Rights Agreement.
"Maturity" means, with respect to any Security, the date on which any
principal of such Security becomes due and payable as therein or in the
Indenture provided, whether at the Stated Maturity with respect to such
principal or by declaration of acceleration, call for redemption or purchase or
otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Available Proceeds" means, with respect to any Asset Sale, the
proceeds thereof 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 (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants and investment banks) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the
properties or assets subject to the Asset Sale or having a Lien therein, and
(iv) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve required in accordance with GAAP
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pensions and other postemployment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate; provided, however, that any amounts
remaining after adjustments, revaluations or liquidations of such reserves shall
constitute Net Available Proceeds.
"Net Cash Proceeds," with respect to any issuance or sale of Qualified
Capital Stock or other securities, means the cash proceeds of such issuance or
sale net of attorneys' fees, accountants' fees, underwriters' or placement
agents' fees, discounts or commissions and brokerage, consultant and other fees
and expenses actually incurred in connection with such issuance or sale, and net
of taxes paid or payable as a result thereof.
11
"New Credit Facility" means the Company's Working Capital Facility with
NationsBank, N.A. in an aggregate amount not to exceed $18,500,000.00.
"Officers" means, with respect to any Person, the Chief Executive Officer,
the President, any Vice President, the Chief Financial Officer and the Treasurer
of such Person.
"Officers' Certificate" means a certificate signed by any Officer and an
Assistant Treasurer, Controller, Assistant Controller, the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company including an employee of the Company, and who shall be
reasonably acceptable to the Trustee, which opinion may contain customary
qualifications and assumptions.
"Outstanding" when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities, provided
that, if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 12.2 and
12.3 hereof, with respect to which the Company has effected legal
defeasance or covenant defeasance as provided in Article XII hereof; and
(iv) Securities which have been paid pursuant to Section 3.6 hereof
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except
12
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, consent, notice or waiver, only Securities which the Trustee knows to
be so owned shall be so disregarded. Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of (and premium or
Liquidated Damages, if any, on) or interest on any Securities on behalf of the
Company.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness under Working Capital Agreements in an aggregate
principal amount at any time outstanding not to exceed the greater of (A)
$20,000,000 or (B) 60% of the book value of the accounts receivable of the
Company and its Restricted Subsidiaries, calculated on a consolidated
basis and in accordance with GAAP,
(ii) Indebtedness under the Securities;
(iii) Indebtedness outstanding or in effect on the date of this
Indenture after giving effect to the issuance and sale of Initial
Securities and the application of the net proceeds therefrom;
(iv) Indebtedness under Interest Rate Protection Obligations,
provided that (A) such Interest Rate Protection Obligations are related to
payment obligations on Permitted Indebtedness or Indebtedness otherwise
permitted by paragraph (a) of Section 10.11, and (B) the notional
principal amount of such Interest Rate Protection Obligations does not
exceed the principal amount of such Indebtedness to which such Interest
Rate Protection Obligations relate;
(v) Indebtedness under Currency Hedge Obligations, provided that (A)
such Currency Hedge Obligations are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by paragraph
(a) of Section 10.11 or to the foreign currency cash flows reasonably
expected to be generated or required by the Company and its Restricted
Subsidiaries, (B) the notional principal amount of such Currency Hedge
Obligations does not exceed the principal amount of such Indebtedness and
the amount of such foreign currency cash flows to which such Currency
Hedge Obligations relate, and (C) such Currency Hedge Obligations are
entered into for the purpose of limiting currency exchange rate risks in
connection with transactions entered into in the ordinary course of
business;
13
(vi) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary to the Company or
a Wholly Owned Restricted Subsidiary; provided, however, that upon either
(A) the subsequent issuance (other than directors' qualifying shares),
sale, transfer or other disposition of any Capital Stock or any other
event which results in any such Wholly Owned Restricted Subsidiary ceasing
to be a Wholly Owned Restricted Subsidiary or (B) the transfer or other
disposition of any such Indebtedness (except to the Company or a Wholly
Owned Restricted Subsidiary), the provisions of this clause (vi) shall no
longer be applicable to such Indebtedness and such Indebtedness shall be
deemed, in each case, to be incurred and shall be treated as an incurrence
for purposes of paragraph (a) of Section 10.11 at the time the Wholly
Owned Restricted Subsidiary in question ceased to be a Wholly Owned
Restricted Subsidiary or the time such transfer or other disposition
occurred;
(vii) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company in the ordinary course of business,
including guaranties or obligations of the Company with respect to letters
of credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed);
(viii) Indebtedness in respect of Capitalized Lease Obligations
directly incurred by the Company, provided that such Indebtedness incurred
under this clause (viii) does not exceed $2,500,000 at any one time
outstanding; and
(ix) any renewals, amendments, extensions, supplements,
modifications, deferrals, substitutions, refinancing or replacements
(each, for purpose of this clause (ix), a "refinancing") by the Company or
a Restricted Subsidiary of any Indebtedness incurred pursuant to paragraph
(a) of Section 10.11 (without giving effect to the parenthetical excluding
Permitted Indebtedness) or referred to above in clauses (ii) through (vi)
or this clause (ix), so long as (A) any such new Indebtedness shall be in
a principal amount that does not exceed the principal amount (or, if such
Indebtedness being refinanced provides for an amount less than the
principal amount thereof to be due and payable upon a declaration of
acceleration thereof, such lesser amount as of the date of determination)
so refinanced plus the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by the
Company or such Restricted Subsidiary as necessary to accomplish such
refinancing, plus the amount of expenses of the Company or such Restricted
Subsidiary incurred in connection with such refinancing, (B) in the case
of any refinancing of Indebtedness (including the Securities) that is pari
passu with or subordinated in right of payment to the Securities, then
such new Indebtedness is pari passu with or subordinated in right of
payment to the Securities at least to the same extent as the Indebtedness
being refinanced and (C) such new Indebtedness has an Average Life equal
to or longer than the Average Life of the Indebtedness being refinanced
and a final
14
Stated Maturity that is at least 91 days later than the final Stated
Maturity of the Indebtedness being refinanced.
"Permitted Investments" means any of the following: (i) Investments in
Cash Equivalents; (ii) Investments in the Company or any of its Wholly Owned
Restricted Subsidiaries; (iii) Investments by the Company or any of its
Restricted Subsidiaries in another Person, if as a result of such Investment (A)
such other Person becomes a Wholly Owned Restricted Subsidiary or (B) such other
Person is merged or consolidated with or into, or transfers or conveys all or
substantially all of its Properties to, the Company or a Wholly Owned Restricted
Subsidiary; (iv) Investments permitted under Section 10.15; (v) Investments made
in the ordinary course of business in prepaid expenses, lease, utility, workers'
compensation, performance and other similar deposits; (vi) Investments in an
aggregate amount not to exceed $2,500,000 in any Person engaged primarily in a
Related Business on the date of any such Investment; and (vii) Investments in
the Leasing Company in an aggregate amount not to exceed $5,000,000.
"Permitted Liens" means the following types of Liens:
(i) Liens existing as of the date of this Indenture;
(ii) Liens securing the Securities;
(iii) Liens in favor of the Company or, with respect to a Restricted
Subsidiary, Liens in favor of another Restricted Subsidiary;
(iv) Liens on accounts receivable, notes receivable or chattel paper
securing Indebtedness under one or more Working Capital Agreements that do
not, in the aggregate, exceed the amounts permitted pursuant to clause (i)
of the definition of Permitted Indebtedness;
(v) Liens securing Indebtedness that constitute Permitted
Indebtedness pursuant to clause (ix) of the definition of "Permitted
Indebtedness" incurred as a refinancing of any Indebtedness secured by
Liens described in clause (i) or (iv) of this definition; provided,
however, that such Liens (x) are not less favorable to the Holders and are
not more favorable to the lienholders with respect to such Liens than the
Liens in respect of the Indebtedness being refinanced and (y) do not
extend to or cover any property or assets of the Company or any of its
Restricted Subsidiaries not securing the Indebtedness so refinanced;
(vi) Liens for taxes, assessments or governmental charges or claims
either (A) not delinquent or (B) contested in good faith by appropriate
proceedings and as to which the Company or a Restricted Subsidiary of the
Company, as the case may be, shall have set aside on its books such
reserves as may be required pursuant to GAAP;
15
(vii) 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
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;
(viii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the payment or
performance of tenders, statutory or regulatory obligations, surety and
appeal bonds, bids, government contracts and leases, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(ix) judgment Liens not giving rise to a Default or Event of Default
and so long as 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 proceeding may be initiated
shall not have expired;
(x) easements, rights-of-way, zoning restrictions and other similar
charges or encumbrances in respect of real property not interfering in any
material respect with the ordinary conduct of business of the Company or
any of its Restricted Subsidiaries;
(xi) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease; provided that (A) the Attributable
Indebtedness related thereto constitutes Indebtedness permitted to be
incurred under the terms of the Indenture and (B) with respect to any
Capitalized Lease Obligation, such Liens do not extend to any property or
assets which is not leased property subject to such Capitalized Lease
Obligation;
(xii) Liens securing Purchase Money Indebtedness; provided, however,
that (A) the Purchase Money Indebtedness shall not be secured by any
property or assets of the Company or any Restricted Subsidiary other than
the property or assets so acquired and any proceeds therefrom and (B) the
Lien securing such Purchase Money Indebtedness shall be created within 90
days of such acquisition;
(xiii) Liens upon specific items of inventory or other goods of any
Person securing such Person's obligations in respect of bankers
acceptances issued or created for the account of such Person to facilitate
the purchase, shipment or storage of such inventory or other goods;
(xiv) Liens securing reimbursement obligations with respect to
commercial letters of credit which encumber documents and other property
or assets relating to such letters of credit and products and proceeds
thereof;
16
(xv) Liens encumbering deposits made to secure obligations arising
from statutory, regulatory, contractual or warranty requirements of the
Company or any of its Restricted Subsidiaries, including rights of offset
and setoff;
(xvi) Liens securing Acquired Indebtedness incurred in accordance
with Section 10.11; provided that (A) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary of the Company and
were not granted in connection with, or in anticipation of, the incurrence
of such Acquired 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 Restricted Subsidiaries other than
the property or assets that secured the Acquired Indebtedness prior to the
time such Indebtedness became Acquired Indebtedness of the Company or a
Restricted Subsidiary of the Company and are no more favorable to the
lienholders than those securing the Acquired Indebtedness prior to the
incurrence of such Acquired Indebtedness by the Company or a Restricted
Subsidiary of the Company; and
(xvii) Liens on substantially all of the assets of W&G, Ltd. under
any Working Capital Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Security" shall have the meaning set forth in Appendix A.
"Pledge Agreement" means that certain Pledge and Security Agreement, dated
the Issue Date executed by the Pledgor, in favor of the Trustee for the benefit
of the Holders, pursuant to which 66% of the Capital Stock of W&G, Ltd. has been
pledged and substantially in the form attached as Exhibit A hereto, as such
agreement may be amended, modified or supplemented from time to time.
"Pledgor" means WG Apparel, Inc., a wholly owned Subsidiary of the
Company, as the Pledgor under the Pledge Agreement.
"Predecessor Security" of any particular Security means every previous
Security, including any Security of a different series, evidencing all or a
portion of the same debt as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and delivered under
Section 3.6 hereof in exchange for a mutilated security or in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Security.
17
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all classes and
series of preferred or preference stock of such Person.
"Principals" means (i) Xxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx, Xxxx X.
Xxxxxxx, Xx., Xxxx Xxxxxx, Xxxx X. Xxx, Xxxxxxx X. Xxxxx, and other members of
the Company's principal management or (ii) the Company's Savings and Employee
Stock Ownership Plan and its other retirement plans holding shares of the
Company's Capital Stock.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or assets, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person.
"Public Equity Offering" means an offer and sale of Common Stock of the
Company pursuant to a registration statement that has been declared effective by
the Commission pursuant to the Securities Act (other than a registration
statement on Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company).
"Purchase Money Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries incurred in connection with the purchase of property or
assets for the business of the Company and its Restricted Subsidiaries.
"Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Disqualified Capital Stock.
"Redemption Date" when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 20, 1996, by and among the Company, the Subsidiary
Guarantors and Xxxxxx, Read & Co. Inc., as such agreement may be amended,
modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Related Business" means the businesses of the Company and the Restricted
Subsidiaries on the date on which the Securities were originally issued and any
business related, ancillary or complementary to the business of the Company and
the Restricted Subsidiaries on such date.
18
"Responsible Officer" when used with respect to the Trustee, means any
officer in the Corporate Trust Department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
to whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Investment" means (without duplication) any Investment other
than a Permitted Investment including without limitation a Subsidiary designated
as an Unrestricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the date of the Indenture, unless such Subsidiary of the
Company is an Unrestricted Subsidiary or is designated as an Unrestricted
Subsidiary in the manner described in the definition of the term "Unrestricted
Subsidiary."
"S&P" means Standard and Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Sale/Leaseback Transaction" means any direct or indirect arrangement
pursuant to which properties or assets are sold or transferred by the Company or
a Restricted Subsidiary and are thereafter leased back from the purchaser or
transferee thereof by the Company or one of its Restricted Subsidiaries.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor act thereto.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5 hereof.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7 hereof.
"Stated Maturity" means, when used with respect to any Indebtedness or any
installment of interest thereon, the date specified in the instrument evidencing
or governing such Indebtedness as the fixed date on which the principal of such
Indebtedness or such installment of interest is due and payable.
"Subordinated Indebtedness" means any Indebtedness of the Company or the
Subsidiary Guarantors which is expressly subordinated in right of payment to the
Securities or Subsidiary Guarantees, respectively.
19
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Stock is at the time, directly or indirectly, owned by
such Person, by one or more Subsidiaries of such Person or by such Person and
one or more Subsidiaries thereof or (ii) any other Person (other than a
corporation), including, without limitation, a joint venture, in which such
Person, one or more Subsidiaries thereof or such Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, have at least majority ownership interest entitled to vote in the
election of directors, managers or trustees thereof (or other Person performing
similar functions).
"Subsidiary Guarantors" means (i) WG Apparel, Inc., Clinton Management
Corporation, Clinton Machinery Corporation, W&G Daon, Inc., J & E Sewing
Supplies, Inc., W&G Tennessee Imports, Inc., Clinton Leasing Corp., Clinton
Equipment Corp., Paradise Color Incorporated and Leadtec Systems, Inc. and (ii)
any other Subsidiary of the Company or a Subsidiary thereof that executes a
Subsidiary Guarantee in accordance with the provisions of this Indenture, and
their respective successors and assigns.
"Subsidiary Guarantee" means the guarantee of the Subsidiary Guarantors as
provided herein.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this Indenture was executed until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA, except as
provided in Section 9.5 hereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Unrestricted Subsidiary" means (i) the Leasing Company, (ii) any
Subsidiary of the Company that at the time of determination will be designated
an Unrestricted Subsidiary by the Board of Directors of the Company as provided
below and (iii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Subsidiary of the Company as an
Unrestricted Subsidiary so long as (a) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable pursuant to the terms of any
Indebtedness of such Subsidiary; (b) no default with respect to any Indebtedness
of such Subsidiary would permit (upon notice, lapse of time or otherwise) any
holder of any other Indebtedness of the Company or any Restricted Subsidiary to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity; (c) such designation as an
Unrestricted Subsidiary would be permitted under Section 10.10; (d) such
designation shall not result in the creation or imposition of any Lien on any of
the properties or assets of the Company or any Restricted Subsidiary (other than
any Permitted Lien) and (e) the Company could incur $1.00 of additional
Indebtedness (not including the incurrence of Permitted Indebtedness) under
clause (a) of Section 10.11; provided, however, that with respect to clause (a)
above, the Company or a
20
Restricted Subsidiary may be liable for Indebtedness of an Unrestricted
Subsidiary if (x) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 10.10, in each case, at the time of
incurrence, or (y) the liability would be a Permitted Investment in each case at
the time of designation of such Subsidiary as an Unrestricted Subsidiary. Any
such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by filing a Board Resolution with the Trustee giving effect to such
designation along with an Officers' Certificate stating that such designation is
in compliance with the requirements under the Indenture. The Board of Directors
of the Company may designate any Unrestricted Subsidiary as a Restricted
Subsidiary if, immediately after giving effect to such designation on a pro
forma basis, (i) no Default or Event of Default shall have occurred and be
continuing, (ii) the Company could incur $1.00 of additional Indebtedness (not
including the incurrence of Permitted Indebtedness) under clause (a) of Section
10.11 hereof and (iii) if any of the Properties of the Company or any of its
Restricted Subsidiaries would upon such designation become subject to any Lien
(other than a Permitted Lien), the creation or imposition of such Lien shall
have been in compliance with Section 10.13.
"Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"W&G, Ltd." means Xxxxxxx & Xxxxx, Ltd., a corporation organized under the
laws of England and Wales and wholly owned by the Pledgor.
"W&G, Ltd. Credit Facility" means the (pound)1,000,000 term loan facility
of W&G, Ltd. with Xxxxxx & Co.
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary to
the extent (i) all of the Capital Stock or other ownership interests in such
Restricted Subsidiary, other than any directors' qualifying shares mandated by
applicable law, is owned directly or indirectly by the Company or (ii) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such foreign jurisdiction or individual or corporate
citizens of such foreign jurisdiction in order for such Restricted Subsidiary to
transact business in such foreign jurisdiction, provided that the Company,
directly or indirectly, owns the remaining Capital Stock or ownership interest
in such Restricted Subsidiary and, by contract or otherwise, controls the
management and business of such Restricted Subsidiary and derives the economic
benefits of
21
ownership of such Restricted Subsidiary to substantially the same extent as if
such Restricted Subsidiary were a wholly owned Subsidiary.
"Working Capital Agreements" means (i) the New Credit Facility, (ii) the
W&G, Ltd. Credit Facility, (iii) with respect to any Person (including the
Company), without duplication, any agreement or agreements between such Person
and a financial institution or any institutions providing for the making of
loans or advances on a revolving basis, the issuance of letters of credit and/or
the creation of bankers' acceptances to fund such Person's general corporate
requirements, and (iv) any refinancings, renewals, replacements, modifications
and extensions of any of the agreements described in clauses (i), (ii) and
(iii).
SECTION 1.2. Other Definitions.
Defined
Term in Section
---- ----------
"Change of Control Notice"............................ 10.14(c)
"Change of Control Offer"............................. 10.14(a)
"Change of Control Purchase Date"..................... 10.14(c)
"Change of Control Purchase Price".................... 10.14(a)
"Excess Proceeds"..................................... 10.15(b)
"Net Proceeds Deficiency"............................. 10.15(c)
"Net Proceeds Offer".................................. 10.15(c)
"Net Proceeds Payment Date"........................... 10.15(c)
"Offered Price"....................................... 10.15(c)
"Payment Amount"...................................... 10.15(c)
"Payment Restriction"................................. 10.17
"Purchase Notice"..................................... 10.15(c)
"Restricted Payment".................................. 10.10(a)
"Surviving Entity".................................... 8.1
"Trigger Date"........................................ 10.15(c)
"U.S. Government Obligations"......................... 12.4(a)
SECTION 1.3. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities,
"indenture security holder" means a Holder,
22
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee,
and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.4. Rules of Construction.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and all accounting
calculations will be determined in accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(d) the masculine gender includes the feminine and the neuter;
(e) a "day" means a calendar day;
(f) the term "merger" includes a statutory share exchange and the
term "merged" has a correlative meaning; and
(g) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited by
this Indenture.
23
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities and Subsidiary Guarantees endorsed thereon shall be
printed, lithographed or engraved on steel-engraved borders or may be produced
in any other manner, all as determined by the Officers executing such Securities
as evidenced by their execution of such Securities.
Securities (including the Trustee's certificate of authentication) shall
be issued initially in the form of one or more permanent global Securities
substantially in the form set forth in Exhibit 1 to Appendix A (each being
herein called a "Global Security") deposited with the Trustee, as custodian for
the Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. Subject to the limitation set forth in Section 3.1, the
principal amounts of the Global Securities may be increased or decreased from
time to time by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities (including the Trustee's certificate of authentication)
exchanged for beneficial interests in a Global Security as described in Appendix
A shall be issued initially in the form of permanent certificated securities in
registered form in substantially the form set forth in Exhibit 1 to Appendix A
("Physical Securities").
SECTION 2.2. Form of Securities.
Provisions relating to the Initial Securities, the Private Exchange
Securities and the Exchange Securities are set forth in Appendix A, which is
hereby incorporated in and expressly made part of this Indenture. The Initial
Securities, the Subsidiary Guarantees endorsed thereon and the Trustee's
certificate of authentication thereon shall be substantially in the form of
Exhibit 1 to Appendix A which is hereby incorporated in and expressly made a
part of this Indenture. The Exchange Securities, the Private Exchange
Securities, the Subsidiary Guarantees endorsed thereon and the Trustee's
certificate of authentication thereon shall be substantially in the form of
Exhibit 2 to Appendix A, which is hereby incorporated in and expressly made a
part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Company). Each Security shall be
dated the date of its authentication. The terms of the Securities set forth in
Exhibits 1 and 2 of Appendix A are part of the terms of this Indenture.
24
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture for original issue is limited to $85,000,000.
The aggregate principal amount of Securities Outstanding at any one time may not
exceed such amount except as provided in Section 3.6 hereof.
The Initial Securities shall be known and designated as the "12 1/4%
Series A Senior Notes Due 2003" of the Company. Their Stated Maturity shall be
December 15, 2003, and they shall bear interest at the rate of 12 1/4% per annum
from the Issue Date, or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, payable semiannually in cash in
arrears on June 15 and December 15 in each year, commencing June 15, 1997, and
at said Stated Maturity, until the principal thereof is paid or duly provided
for.
The principal of (and premium, if any, on) and interest and Liquidated
Damages, if any, on the Securities shall be payable at the office or agency of
the Company maintained for such purpose in the City of New York; provided,
however, that, at the option of the Company, interest may be paid on Physical
Securities on or before the due date (i) by check mailed to addresses of the
Persons entitled thereto as such addresses shall appear on the Security
Register, or (ii) with respect to any Holder owning Securities in the principal
amount of $500,000 or more, by wire transfer to an account maintained by such
Holder located in the United States, as specified in a written notice to the
Trustee by any such Holder requesting payment by wire transfer and specifying
the account to which transfer is requested.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subject to defeasance at the option of the Company
as provided in Article XII hereof.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board, its President or a Vice President of the Company, under its
corporate seal reproduced thereon and attested by its Secretary or an Assistant
Secretary of the Company. The signature of any of these
25
officers on the Securities may be manual or facsimile signatures of the present
or any future such authorized officer and may be imprinted or otherwise
reproduced on the Securities.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time after the execution and delivery of this Indenture, the
Company may deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture. Such Company Order shall specify the principal amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated, and applicable delivery instructions.
Each Security shall be dated the date of its authentication.
No Security or Subsidiary Guarantee endorsed thereon shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
and the Subsidiary Guarantees endorsed thereon have been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
In case the Company, pursuant to and in compliance with Article VIII
hereof, shall be consolidated or merged with or into any other Person or shall
sell, convey, transfer, lease or otherwise dispose of all or substantially all
of its Properties to any Person, and the successor Person resulting from such
consolidation, or surviving such merger, or into which the Company shall have
been merged, or the Person which shall have received a sale, conveyance,
transfer, lease or other disposition as aforesaid, shall have executed an
indenture supplemental hereto with the Trustee pursuant to Article VIII hereof,
any of the Securities authenticated or delivered prior to such sale,
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person be exchanged for other
Securities executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Securities surrendered for such exchange and of like principal
amount; and the Trustee, upon Company Request of the successor Person, shall
authenticate and deliver Securities as specified in such request for the purpose
of such exchange. If Securities shall at any time be authenticated and delivered
in any new name of a successor Person pursuant to this Section in exchange or
substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without
26
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 10.2
hereof, without charge to the Holders. Upon surrender for cancellation of any
one or more temporary Securities, the Company and each Subsidiary Guarantor
shall execute and, upon Company Order, the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations and of like tenor and aggregate principal amount. Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 3.5. Registration of Transfer and Exchange.
The Company shall cause to be kept a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times and during normal business hours, the Security Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as security
registrar (the "Security Registrar") for the purpose of registering Securities
and transfers of Securities as herein provided.
Subject to the provisions of this Section and Appendix A, upon surrender
for registration of transfer of any Security at the office or agency of the
Company designated pursuant to Section 10.2 hereof, the Company and each
Subsidiary Guarantor shall execute, and upon Company Order, the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities with the Subsidiary Guarantees endorsed
thereon of like tenor and of any authorized denomination and of a like aggregate
principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, be deemed to have agreed that transfers of beneficial interests
in such Global Security
27
may be effected only through a book-entry system maintained by the Depository
(or its agent), and that ownership of a beneficial interest in a Global Security
shall be required to be reflected in a book-entry.
At the option of any Holder, Securities may be exchanged for other
Securities with the Subsidiary Guarantees endorsed thereon of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at the office or agency of the Company designated
pursuant to Section 10.2 hereof. Whenever any Securities are so surrendered for
exchange, the Company and each Subsidiary Guarantee shall execute and, upon
Company Order, the Trustee shall authenticate and deliver, the Securities with
the Subsidiary Guarantees endorsed thereon which the Holder making the exchange
is entitled to receive.
All Securities with the Subsidiary Guarantees endorsed thereon issued upon
any registration of transfer or exchange of Securities shall be the valid
obligations of the Company and each Subsidiary Guarantor, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer or
exchange, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer, exchange
or redemption of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer, exchange or redemption of
Securities, other than exchanges pursuant to Section 3.4, 9.6 or 11.8 hereof not
involving any transfer.
Neither the Trustee, the Security Registrar nor the Company shall be
required (i) to issue, register the transfer of or exchange any Physical
Security during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities selected for redemption under
Section 11.4 hereof and ending at the close of business on the day of such
mailing of the relevant notice of redemption, or (ii) to register the transfer
of or exchange any Physical Security so selected for redemption in whole or in
part, except the unredeemed portion of any such Security being redeemed in part
or (iii) to register the transfer of or exchange any Physical Security between a
Regular Record Date and the next succeeding Interest Payment Date.
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If (i) any mutilated Security is surrendered to the Trustee or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such Security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
28
Trustee that such Security has been acquired by a bona fide purchaser, the
Company and each Subsidiary Guarantor shall execute and upon Company Order the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security with the Subsidiary Guarantees endorsed thereon of like tenor and of
like principal amount bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Every new Security issued and authenticated pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company and the Subsidiary
Guarantors whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 10.2
hereof.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Securities (such defaulted interest
and interest thereon herein collectively called "Defaulted Interest") may be
paid by the Company, at its election in each case, as provided in clause (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Holders in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment at least 60 days
prior to the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an
29
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 prior to the date of the proposed payment,
and such money when deposited shall be held in trust for the benefit of
the Holders entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment. The Trustee shall promptly notify the Company of
such Special Record Date, and in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be given to the Holders
entitled to such Defaulted Interest in the manner provided for in Section
15.5 hereof, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so given, such Defaulted Interest shall
be paid to the Holders in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) 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 Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. Persons Deemed Owners.
Prior to the due presentment of a Security for registration of transfer,
the Company, the Security Registrar, the Trustee and any agent of the Company or
the Trustee may treat the Person in whose name such Security is registered as
the owner of such Security for the purpose of receiving payment of principal of
(and premium, if any, on) and (subject to Section 3.9 hereof) interest and
Liquidated Damages, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and none of the Company,
the Subsidiary Guarantors, the Security Registrar, the Trustee or any agent of
the Company or the Trustee shall be affected by notice to the contrary.
30
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and, upon Company Order, shall be promptly canceled
by it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall, upon Company Order, be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order or, if no such Company Order has been provided, in accordance with
the Trustee's usual practice; provided, however, that the Trustee shall not be
required to destroy canceled Securities.
SECTION 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 3.11. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided, however, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
31
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities, as expressly provided for in this Indenture) as to all Outstanding
Securities, and the Trustee, at the expense of the Company, shall, upon payment
of all amounts due the Trustee under Section 6.6 hereof, execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(a) either
(1) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which
have been replaced or paid as provided in Section 3.6 hereof and (ii)
Securities for whose payment money or United States governmental
obligations of the type described in clause (i) of the definition of Cash
Equivalents have theretofore been deposited in trust with the Trustee or
any Paying Agent or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 10.3 hereof) have been delivered to the Trustee for
cancellation, or
(2) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their final Stated
Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the serving of notice
of redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (2)(i), (2)(ii) or (2)(iii) above,
has irrevocably deposited or caused to be deposited with the Trustee funds
in an amount sufficient to pay and discharge the entire Indebtedness on
such Securities not theretofore delivered to the Trustee for cancellation,
for principal of, premium, if any, and Liquidated Damages, if any, on such
Securities and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the final Stated
Maturity or Redemption Date, as the case may be, together with the Company
Order irrevocably directing the Trustee to apply such funds to the payment
thereof at maturity or redemption, as the case may be;
32
(b) the Company has paid or caused to be paid all other sums then due and
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, which, taken together, state that all conditions
precedent herein relating to the satisfaction and discharge of this Indenture
have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6 hereof and, if money
shall have been deposited with the Trustee pursuant to this Section, the
obligations of the Trustee under Section 4.2 hereof and the last paragraph of
Section 10.3 hereof and the Trustee's right under Article VI hereof shall
survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3 hereof,
all money deposited with the Trustee pursuant to Section 4.1 hereof shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal (and
premium and Liquidated Damages, if any) and interest for whose payment such
money has been deposited with the Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default" wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default in the payment of the principal of or premium, if any,
on any of the Securities when the same becomes due and payable, whether
such payment is due at Stated Maturity, xxxx xxxxxxxxxx, xxxx xxxxxxxxxx
pursuant to a Change of Control Offer or a Net Proceeds Offer, upon
acceleration or otherwise; or
(b) default in the payment of any installment of interest or
Liquidated Damages, if any, on any of the Securities, when it becomes due
and payable, and the continuance of such default for a period of 30 days;
or
33
(c) default in the performance or breach of the provisions of
Article VIII hereof or Section 10.10, 10.11, 10.12 or 10.13, the failure
to make or consummate a Change of Control Offer in accordance with the
provisions of Section 10.14 or the failure to make or consummate a Net
Proceeds Offer in accordance with the provisions of Section 10.15; or
(d) the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in the Securities
or this Indenture (other than a default specified in subparagraph (a), (b)
or (c) above) or the Subsidiary Guarantees, as the case may be, for a
period of 30 days after written notice of such failure stating that it is
a "notice of default" hereunder and requiring the Company or such
Subsidiary Guarantor, as the case may be, to remedy the same shall have
been given (x) to the Company or such Subsidiary Guarantor, as the case
may be, by the Trustee or (y) to the Company or such Subsidiary Guarantor,
as the case may be, and the Trustee, by the Holders of at least 25% in
aggregate principal amount of the Securities then Outstanding; or
(e) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of, premium, if any,
or interest on any Indebtedness of the Company (other than the Securities)
or any Subsidiary for money borrowed when due, or any other default
resulting in acceleration of any Indebtedness of the Company or any
Subsidiary for money borrowed, provided that the aggregate principal
amount of such Indebtedness shall exceed $2,500,000; or
(f) one or more final judgments or orders rendered against the
Company or any Subsidiary that are unsatisfied and that require the
payment in money, either individually or in an aggregate amount in excess
of $2,500,000, which judgments or orders are not paid, discharged or
stayed for a period of 60 days; or
(g) the entry of a decree or order by a court having jurisdiction in
the premises (A) for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) adjudging the
Company or any Restricted Subsidiary bankrupt or insolvent, or approving a
petition seeking reorganization, arrangement, adjustment or composition of
the Company or any Restricted Subsidiary under the Federal Bankruptcy Code
or any applicable federal or state law, or appointing under any such law a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Restricted Subsidiary or of a
substantial part of its consolidated assets, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
34
(h) the commencement by the Company or any Restricted Subsidiary of
a voluntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or any other case or proceeding to be adjudicated
bankrupt or insolvent, or the consent by the Company or any Restricted
Subsidiary to the entry of a decree or order for relief in respect thereof
in an involuntary case or proceeding under the Federal Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by
the Company or any Restricted Subsidiary of a petition or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or other similar official)
of the Company or any Restricted Subsidiary or of any substantial part of
its consolidated assets, or the making by it of an assignment for the
benefit of creditors under any such law, or the admission by it in writing
of its inability to pay its debts generally as they become due or taking
of corporate action by the Company or any Restricted Subsidiary in
furtherance of any such action; or
(i) except as permitted hereunder and the Securities, the cessation
of the effectiveness of any Subsidiary Guarantee or the repudiation by any
Subsidiary Guarantor (or any Person acting on behalf of any Subsidiary
Guarantor) of its obligations under its Subsidiary Guarantee; or
(j) except as permitted hereunder and the Securities, the cessation
of the effectiveness of the Pledge Agreement or the repudiation by the
Pledgor thereunder (or any Person acting on behalf of such Pledgor) of its
obligations under the Pledge Agreement.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(g) or (h) hereof) occurs and is continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Securities
then Outstanding, by written notice to the Company (and to the Trustee if such
notice is given by the Holders), may, and the Trustee upon the request of the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities shall, by a notice in writing to the Company, declare all unpaid
principal of, premium, if any, and accrued and unpaid interest and Liquidated
Damages, if any, on all the Securities to be due and payable immediately, upon
which declaration all amounts payable in respect of the Securities shall be
immediately due and payable. If an Event of Default specified in Section 5.1(g)
or (h) hereof occurs and is continuing, the amounts described above shall become
and be immediately due and payable without any declaration, notice or other act
on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and before a
judgment or decree for payment of the money due has been obtained by the Trustee
as hereinafter in this
35
Article provided, the Holders of a majority in aggregate principal amount of the
Securities Outstanding, by written notice to the Company and the Trustee, may
rescind and annul each such declaration and its consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(1) all overdue interest on all Outstanding Securities,
(2) all unpaid principal of (and premium or Liquidated
Damages, if any, on) any Outstanding Securities which have become
due otherwise than by such declaration of acceleration, including
any Securities required to have been purchased on a Change of
Control Date or a Net Proceeds Payment Date pursuant to a Change of
Control Offer or a Net Proceeds Offer, as applicable, and interest
on such unpaid principal at the rate borne by the Securities,
(3) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne
by the Securities (without duplication of any amount paid or
deposited pursuant to clauses (1) and (2) above), and
(4) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
(b) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction as certified to the Trustee by the
Company in an Officer's Certificate and Opinion of Counsel; and
(c) all Events of Default, other than the non-payment of amounts of
principal of (or premium, if any, on) or interest or Liquidated Damages,
if any, on Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13
hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
36
Notwithstanding the foregoing, if an Event of Default specified in Section
5.1(e) hereof shall have occurred and be continuing, such Event of Default and
any consequential acceleration shall be automatically rescinded if the
Indebtedness that is the subject of such Event of Default has been repaid, or if
the default relating to such Indebtedness is waived or cured and if such
Indebtedness has been accelerated, then the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness (provided, in each
case, that such payment, waiver, cure or rescission is effected within a period
of 10 days from the continuation of such default beyond the applicable grace
period or the occurrence of such acceleration), and written notice of such
repayment, or cure or waiver and rescission, as the case may be, shall have been
given to the Trustee by the Company and countersigned by the holders of such
Indebtedness or a trustee, fiduciary or agent for such holders, within 30 days
after any such acceleration in respect of the Securities, and so long as such
rescission of any such acceleration of the Securities does not conflict with any
judgment or decree as certified to the Trustee by the Company by an Officers'
Certificate and Opinion of Counsel.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(a) default is made in the payment of any installment of interest or
Liquidated Damages, if any, on any Security when such interest or
Liquidated Damages becomes due and payable and such default continues for
a period of 30 days, or
(b) default is made in the payment of the principal (or premium, if
any, on) any Security at the Maturity thereof or with respect to any
Security required to have been purchased by the Company on the Change of
Control Purchase Date or the Net Proceeds Payment Date pursuant to a
Change of Control Offer or Net Proceeds Offer, as applicable,
then the Company will, upon the demand of the Trustee, pay to the Trustee for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal (and premium or Liquidated Damages, if
any) and interest, and interest on any overdue principal (and premium or
Liquidated Damages, if any) and, to the extent that payment of such interest
shall be legally enforceable, upon any overdue installment of interest, at the
rate borne by the Securities, and in addition thereto, 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.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
money adjudged or decreed to be payable in the manner provided by law out of the
Property of the Company or any other obligor upon the Securities, wherever
situated.
37
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proof of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, or any other obligor upon the
Securities, their creditors or the Property of the Company or of such other
obligor, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company or such other obligor for the payment of overdue principal, premium
or Liquidated Damages, if any, or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal (and
premium or Liquidated Damages, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents and
take any other actions including participation as a full member of any
creditor or other committee as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceedings and
(b) to collect and receive any money or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.6 hereof.
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 Securities
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.
38
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or Securities or
Subsidiary Guarantees endorsed thereon may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name and as trustee of an express
trust, and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal (or
premium or Liquidated Damages, if any) or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: to the payment of all amounts due the Trustee under Section
6.6 hereof;
SECOND: to the payment of the amounts then due and unpaid for
principal of (and premium, if any, on) and interest and Liquidated
Damages, if any, on the Securities in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest and Liquidated
Damages, if any, respectively; and
THIRD: the balance, if any, to the Company.
SECTION 5.7. Limitations on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
39
(c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority or more in aggregate principal amount of the Outstanding
Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium,
Liquidated Damages and Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article XII hereof) and
in such Security of the principal of (and premium if any, on) and (subject to
Section 3.7 hereof) interest and Liquidated Damages, if any, on such Security on
the respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture 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, subject to any determination in
such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereunder and all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.6 hereof, 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
40
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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct 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, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders not joining
therein.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any existing Default or Event of Default hereunder and its consequences,
except a Default or Event of Default
(a) in respect of the payment of the principal of (or premium, if
any, on) or interest or Liquidated Damages, if any, on any Security, or
(b) in respect of a covenant or provision hereof which under Article
IX hereof cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected thereby.
41
Upon any such waiver, such Default or Event of Default shall cease to
exist for every purpose under this Indenture, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 5.14. Waiver of Stay, Extension or Usury Laws.
Each of the Company and each Subsidiary Guarantor covenants (to the extent
that each may lawfully do so) that it will not at any time insist upon, plead or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension, or usury law or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company from paying all
or any portion of the principal of (premium, if any, on) or interest or
Liquidated Damages, if any, on the Securities as contemplated herein, 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 each Subsidiary
Guarantor hereby expressly waives all benefit or advantage of any such law, and
covenant that they 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 5.15. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, 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, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the Trustee
or to any suit instituted by any Holders of more than 10% in principal amount of
the Outstanding Securities.
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
42
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, and shall be fully protected in so relying, 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, in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) this paragraph shall not limit the effect of Section 6.1(b);
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2. Certain Rights of Trustee.
Subject to the provisions of Section 6.1 hereof:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from action upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
43
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence or indebtedness 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 reasonably
see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it in good faith to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; and
(i) the Trustee shall not be deemed to have notice or knowledge of
any matter unless a Responsible Officer has actual knowledge thereof or
unless written notice thereof is received by the Trustee at its Corporate
Trust Office and such notice references the Securities generally, the
Company or this Indenture.
The Trustee shall not be required to advance, 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.
44
SECTION 6.3. Trustee Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Securities, except for the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. The Trustee shall not be accountable for
the use or application by the Company of any Securities or the proceeds thereof.
SECTION 6.4. May Hold Securities.
The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to TIA Sections 310(b)
and 311 in the case of the Trustee, may otherwise deal with the Company with the
same rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 6.5. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by law. The Trustee shall be under no
liability for interest on any money received by it hereunder except as otherwise
agreed with the Company.
SECTION 6.6. Compensation and Reimbursement.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agent and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's wilful
misconduct, negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without wilful misconduct,
negligence or bad faith on its part, (i) arising out of or in connection
with the acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim or liability in
45
connection with the exercise or performance of any of its powers or duties
hereunder or (ii) in connection with enforcing this indemnification
provision.
The obligations of the Company under this Section 6.6 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding. As security for the performance of such obligations of
the Company, the Trustee shall have a claim and lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for payment of principal of (and premium or Liquidated
Damages, if any, on) or interest on particular Securities. Such lien shall
survive the satisfaction and discharge of this Indenture or any other
termination under any Insolvency or Liquidation Proceeding.
When the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in paragraph (g) or (h) of Section 5.1 of this
Indenture, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Insolvency or Liquidation
Proceeding.
SECTION 6.7. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 6.7, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 6.8. Conflicting Interests.
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act; 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.
46
SECTION 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10 hereof.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 6.10 hereof shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 6.7 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon
47
its acceptance of such appointment, become the successor Trustee and supersede
the successor Trustee appointed by the Company. If no successor Trustee shall
have been so appointed by the Company or the Holders and accepted appointment in
the manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all other
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee. The evidence of such successorship may, but
need not be, evidenced by a supplemental indenture.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 15.5 hereof. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 6.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all amounts due it under
Section 6.6 hereof, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all money and
other Property held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
and in case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the
48
name of any predecessor hereunder or in the name of the successor Trustee; and
in all such cases such certificates shall have the full force which it is
anywhere in the Securities of like tenor or in this Indenture provided;
provided, however, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
SECTION 6.12. Notice of Defaults.
Within 90 days after the occurrence of any Default hereunder, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such Default hereunder, which a Responsible Officer of the Trustee has
actual knowledge of, unless such Default shall have been cured or waived;
provided, however, that, except in the case of a Default in the payment of the
principal of (or premium or Liquidated Damages, if any, on) or interest on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders; and
provided, further, that in the case of any Default under Section 5.1(b) or
5.1(d) no such notice to Holders shall be given until at least 30 days after the
occurrence thereof.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Holders' Lists; Holder Communications; Disclosures Respecting
Holders.
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. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list. If the Trustee is not
the Security Registrar, the Company shall furnish to the Trustee semi-annually
before each Regular Record Date, and at such other times as the Trustee may
reasonably request in writing, a list, in such form as the Trustee may
reasonably request, as of such date of the names and addresses of the Holders
then known to the Company. The Company and the Trustee shall also satisfy any
other requirements imposed upon each of them by TIA Section 312(a).
Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Securities.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company, the Security Registrar and the Trustee that none of the Company, the
Security Registrar or the Trustee, or any agent of any of them, shall be held
accountable by reason of the disclosure of any information as to the names and
addresses of the Holders in accordance with TIA Section 312, regardless of the
source from which such information was derived, that each of such Persons shall
have the protection of TIA Section
49
312(c) and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 7.2. Reports by Trustee.
Within 60 days after July 31 of each year commencing with July 31, 1997,
the Trustee shall transmit by mail to all Holders, as their names and addresses
appear in the Security Register, a brief report dated as of such July 31 in
accordance with, and to the extent required under TIA Section 313(a). The
Trustee shall also comply with TIA Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders of
Securities, shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
SECTION 7.3. Reports by Company.
The Company shall:
(a) file with the Trustee, within 15 days after the date on which
the Company files or is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then the Company shall file with the Trustee such
information, documents or reports as required pursuant to Section 10.9
hereof;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(c) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information,
documents and reports (without exhibits except to the extent required by
TIA Section 313(c)) required to be filed by the Company pursuant to
paragraph (a) or (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
50
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not, in any single transaction or a series of related
transactions, merge or consolidate with or into any other Person, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of the Properties of the Company and its Restricted Subsidiaries on a
consolidated basis to any Person or group of Affiliated Persons, and the Company
shall not permit any of its Restricted Subsidiaries to enter into any such
transaction or series of transactions if, in any event, such transaction or
series of transactions, in the aggregate, would result in a sale, assignment,
conveyance, transfer, lease or other disposition of all or substantially all of
the Properties of the Company and its Restricted Subsidiaries on a consolidated
basis to any other Person or group of Affiliated Persons, unless:
(a) either (i) if the transaction is a merger or consolidation, the
Company shall be the surviving Person of such merger or consolidation, or
(ii) the Person (if other than the Company) formed by such consolidation
or into which the Company is merged or to which the Properties of the
Company or its Restricted Subsidiaries, as the case may be, are sold,
assigned, conveyed, transferred, leased or otherwise disposed of (any such
surviving Person or transferee Person being called the "Surviving Entity")
shall be a corporation organized and existing under the laws of the United
States of America, any state thereof or the District of Columbia and
shall, in either case, expressly assume by a supplemental indenture to
this Indenture executed and delivered to the Trustee, in form satisfactory
to the Trustee, all the obligations of the Company or the Restricted
Subsidiaries with respect to the Securities and this Indenture, and, in
any case, this Indenture shall remain in full force and effect;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any Indebtedness not previously an obligation of the Company or any of its
Restricted Subsidiaries which becomes an obligation of the Company or any
of its Restricted Subsidiaries in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default shall have
occurred and be continuing;
(c) except in the case of the consolidation or merger of any
Restricted Subsidiary with or into the Company, immediately after giving
effect to such transaction or transactions on a pro forma basis, the
Consolidated Net Worth of the Company (or the Surviving Entity if the
Company is not the continuing obligor under this Indenture) is at least
equal to the Consolidated Net Worth of the Company immediately before such
transaction or transactions;
51
(d) except in the case of the consolidation or merger of the Company
with or into a Restricted Subsidiary or any Restricted Subsidiary with or
into the Company or another Restricted Subsidiary, immediately before and
immediately after giving effect to such transaction or transactions on a
pro forma basis (assuming that the transaction or transactions occurred on
the first day of the period of four full fiscal quarters ending
immediately prior to the consummation of such transaction or transactions,
with the appropriate adjustments with respect to the transaction or
transactions being included in such pro forma calculation), the Company
(or the Surviving Entity if the Company is not the continuing obligor
under this Indenture) could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) under Section 10.11(a) hereof;
(e) if any of the Properties of the Company or any of its Restricted
Subsidiaries would upon such transaction or series of related transactions
become subject to any Lien (other than a Permitted Lien), the creation or
imposition of such Lien shall have been in compliance with Section 10.13
hereof; and
(f) the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) shall have delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee, (i)
an Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer, lease or other disposition and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture complies with this Indenture and that all
conditions precedent set forth in this Section 8.1 have been satisfied.
SECTION 8.2. Successor Substituted.
Upon any consolidation or merger or any sale, assignment, lease,
conveyance, transfer or other disposition of all or substantially all of the
Properties of the Company and its Restricted Subsidiaries on a consolidated
basis in accordance with Section 8.1 in which the Company is not the continuing
corporation, the Surviving Entity shall succeed to, and be substituted for, and
may exercise every right and power of, the Company under this Indenture with the
same effect as if such Surviving Entity had been named as the Company herein,
and thereafter the Company (which term shall for this purpose mean the Person
named as the "Company" in the first paragraph of this Indenture of any successor
Person which shall theretofore become such in the manner described in Section
8.1), except in the case of a lease, shall be discharged from all obligations
and covenants under this Indenture and the Securities, and the Company may be
liquidated and dissolved.
52
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, the Subsidiary Guarantors and the Trustee upon Company
Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
contained herein and in the Securities or;
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(c) to comply with any requirement of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(d) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Sections
6.9 and 6.10; or
(e) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture provided that such action shall not
adversely affect the interests of the Holders in any material respect; or
(f) to secure the Securities pursuant to the requirements of Section
10.13 or otherwise;
(g) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(h) to reflect the release of any Subsidiary Guarantor from its
Subsidiary Guarantee pursuant to Section 13.4 or to add as a Subsidiary
Guarantor any Subsidiary of the Company pursuant to Section 13.5 in the
manner provided by this Indenture.
After an amendment under this Section becomes effective, the Company shall
mail to Holders of Securities a notice briefly describing such amendment. The
failure to give such notice
53
to all Holders of Securities, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, the Subsidiary Guarantors and the Trustee upon Company Request may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or alter the provisions with
respect to redemption of the Securities, or reduce the principal amount
thereof or the rate of interest thereon or any premium thereon or any
Liquidated Damages thereon, or change the coin or currency in which
principal of any Security or any premium or the interest or any Liquidated
Damages, if any, on any Security is payable, or impair the right to
institute suit for the enforcement of any such payment on or with respect
to any Security; or
(b) reduce the percentage of aggregate principal amount of the
Outstanding Securities, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder or the consequences of a default provided for
in this Indenture; or
(c) modify any of the provisions of this Section or Sections 5.13
and 10.19 hereof, except to increase any such percentage or to provide
that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security
affected thereby or the rights of any Holder to receive payments of
principal of or premium, if any or interest or Liquidated Damages, if any,
on the Securities; or
(d) change the ranking of the Securities in a manner adverse to the
Holders or expressly subordinate in right of payment the Securities to any
other Indebtedness; or
(e) amend, change or modify the obligation of the Company to make
and consummate a Change of Control Offer in the event of a Change of
Control or to make and consummate a Net Proceeds Offer with respect to any
Asset Sale or modify any of the provisions or definitions with respect
thereto; or
54
(f) release any security that may have been granted in respect of
the Securities.
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Holders of Securities a notice briefly describing such amendment. The
failure to give such notice to all Holders of Securities, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive
(subject to Section 6.1), and shall be fully protected relying upon, an Opinion
of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect, if
this Indenture shall then be qualified under the TIA.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and, upon Company Order, authenticated and
delivered by the Trustee in exchange for Outstanding Securities of like tenor
and in like principal amount.
55
SECTION 9.7. Notice of Supplemental Indentures and Waivers.
Promptly after (i) the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.2 hereof or (ii)
a waiver under Section 5.13 or 10.19 hereof becomes effective, the Company shall
give notice thereof to the Holders of each Outstanding Security affected, in the
manner provided for in Section 15.5, setting forth in general terms the
substance of such supplemental indenture or waiver as the case may be.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium or Liquidated Damages, if any,
and Interest.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of (and premium or Liquidated
Damages, if any, on) and interest on the Securities in accordance with the terms
of the Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office shall be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company will give prompt written notice to the Trustee of
any change in the location of any 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 aforementioned office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind any such designation. Further,
if at any time there shall be no such office or agency in The City of New York
where the Securities may be presented or surrendered for payment, the Company
shall forthwith designate and maintain such an office or agency in The City of
New York, in order that the Securities shall at all times be payable in The City
of New York. The Company will 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.
56
SECTION 10.3. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it shall, on
or before 11:00 a.m., New York City time, on each due date of the principal of
(and premium or Liquidated Damages, if any, on) or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium or Liquidated
Damages, if any) or interest so becoming due until such sum shall be paid to
such Persons or otherwise disposed of as herein provided and will promptly
notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will on or before 11:00 a.m., New York City time, on each due
date of the principal of (and premium or Liquidated Damages, if any, on), or
interest on, any Securities, deposit with a Paying Agent immediately available
funds sufficient to pay the principal (and premium or Liquidated Damages, if
any) or interest so becoming due, such funds to be held in trust for the benefit
of the Persons entitled to such principal, premium, Liquidated Damages or
interest, and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of such action or any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest or Liquidated Damages, if any, on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal (and
premium, if any) or interest or Liquidated Damages, if any; and
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
57
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any, on) or interest
or Liquidated Damages, if any, on any Security and remaining unclaimed for two
years after such principal (and premium, if any) or interest or Liquidated
Damages, if any, has become due and payable shall be paid to the Company on
Company Request, or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York (an "Authorized Newspaper"), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 10.4. Corporate Existence.
Except as expressly permitted by Article VIII hereof, Section 10.15 hereof
or other provisions of this Indenture, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve any such existence of its Restricted Subsidiaries, rights or
franchises, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 10.5. Payment of Taxes; Maintenance of Properties; Insurance.
The Company shall or, as applicable, shall cause its Restricted
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or Property of the Company or any
Restricted Subsidiary and (b) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a Lien upon the Property of the
Company or any Restricted Subsidiary; 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 contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP.
58
The Company shall or, as applicable, shall cause its Restricted
Subsidiaries to, cause all material Properties owned by the Company or any
Restricted Subsidiary and used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted), all as in
the judgment of the Company or such Restricted Subsidiary may be necessary so
that its business may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company or any
Restricted Subsidiary from discontinuing the maintenance of any such Properties
if such discontinuance is, in the judgment of the Company or such Restricted
Subsidiary, as the case may be, desirable in the conduct of the business of the
Company or such Restricted Subsidiary and not disadvantageous in any material
respect to the Holders. Notwithstanding the foregoing, nothing contained in this
Section 10.5 shall limit or impair in any way the right of the Company and its
Restricted Subsidiaries to sell, divest and otherwise to engage in transactions
that are otherwise permitted by this Indenture.
The Company shall at all times keep all of its, and cause its Restricted
Subsidiaries to keep their, Properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or damage
to the extent that property of similar character and in a similar location is
usually so insured by corporations similarly situated and owning like
Properties.
The Company or any Restricted Subsidiary may adopt such other plan or
method of protection, in lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or reserve to be held and
applied to make good losses from casualties, or otherwise, conforming to the
systems of self-insurance maintained by corporations similarly situated and in a
similar location and owning like Properties, as may be determined by the Board
of Directors of the Company or such Restricted Subsidiary.
SECTION 10.6. Limitation on Sale-Leaseback Transactions.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to any Sale/Leaseback Transaction unless (i) the Company or such
Restricted Subsidiary, as the case may be, would be able to incur Indebtedness
(not including the incurrence of Permitted Indebtedness) pursuant to and in an
amount equal to the Attributable Indebtedness with respect to such
Sale/Leaseback Transaction pursuant to Sections 10.11(a), (ii) the Company or
such Restricted Subsidiary receives proceeds from such Sale/Leaseback
Transaction at least equal to the Fair Market Value of the Property subject
thereto and (iii) the Company applies an amount in cash equal to the Net
Available Proceeds of the Sale/Leaseback Transaction in accordance with the
provisions of Section 10.15 hereof as if such Sale/Leaseback Transaction were an
Asset Sale.
59
SECTION 10.7. Limitation on Conduct of Business.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in the conduct of any business other than any Related
Business.
SECTION 10.8. Statement by Officers as to Default.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company and within 45 days of the end of each of
the first, second and third quarters of each fiscal year of the Company, a
written certificate signed by a principal executive officer, principal financial
officer or principal accounting officer stating that a review of the activities
of the Company and its Restricted Subsidiaries during the preceding fiscal
quarter or fiscal year, as applicable, has been made under the supervision of
the signing Person with a view to determining whether the Company has kept,
observed, performed and fulfilled its obligations under this Indenture, and
further stating, as to each such Person signing such certificate, that to the
best of such Person's knowledge the Company has kept, observed, performed and
fulfilled each and every covenant contained in this Indenture and no Default or
Event of Default has occurred and is continuing (or, if a Default or Event of
Default shall have occurred to either such Person's knowledge, describing all
such Defaults or Events of Default of which such Person may have knowledge and
what action the Company is taking or proposes to take with respect thereto).
Such written statement shall comply with TIA Section 314(a)(4). For purposes of
this Section 10.8(a), such compliance shall be determined without regard to any
period of grace or requirement of notice under this Indenture.
(b) The Company shall, so long as any of the Securities is Outstanding,
deliver to the Trustee, upon any of its Officers becoming aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company proposes to take with respect thereto,
within 10 days of its occurrence.
SECTION 10.9. Provision of Financial Information.
The Company shall file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act. The
Company shall also be required (i) to file with the Trustee (with exhibits), and
provide to each Holder of Securities (without exhibits), without cost to such
Holder, copies of such reports and documents within 15 days after the date on
which the Company files such reports and documents with the Commission or the
date on which the Company would be required to file such reports and documents
if the Company were so required and (ii) if filing such reports and documents
with the Commission is not accepted by the Commission or is prohibited under the
Exchange Act, to supply at its cost copies of such reports and documents
(including any exhibits
60
thereto) to any Holder of Securities, securities analyst or prospective investor
promptly upon written request given in accordance with Section 15.4 hereof.
SECTION 10.10. Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take the following actions:
(i) declare or pay any dividend on, or make any other distribution
to holders of, any shares of Capital Stock of the Company (other than
dividends or distributions payable solely in shares of Qualified Capital
Stock of the Company or in options, warrants or other rights to purchase
Qualified Capital Stock of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value any
Capital Stock of the Company or any Affiliate thereof (other than Capital
Stock owned by a Restricted Subsidiary) or any options, warrants, or other
rights to acquire such Capital Stock;
(iii) make any principal payment on or repurchase, redeem, defease
or otherwise acquire or retire for value, prior to any scheduled principal
payment, scheduled sinking fund payment or maturity, any Subordinated
Indebtedness; or
(iv) make any Restricted Investment;
(such payments or other actions described in clauses (i) through (iv) being
collectively referred to as "Restricted Payments"), unless at the time of and
after giving effect to the proposed Restricted Payment (the amount of any such
Restricted Payment, if other than cash, shall be the amount determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (1) no Default or Event of Default shall have
occurred and be continuing, (2) the Company could incur $1.00 of additional
Indebtedness (excluding Permitted Indebtedness) in accordance with Section
10.11(a) hereof and (3) the aggregate amount of all Restricted Payments declared
or made after the date of this Indenture shall not exceed the sum (without
duplication) of the following:
(A) 50% of the Consolidated Net Income of the Company (or, if such
Consolidated Net Income shall be a loss, minus 100% of such loss) accrued
on a cumulative basis during the period beginning on October 1, 1996 and
ending on the last day of the Company's last fiscal quarter for which
quarterly or annual financial statements are available next preceding such
proposed Restricted Payment, plus
(B) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any of
its Restricted Subsidiaries) of shares of Qualified Capital Stock of the
Company or any options, warrants or rights to purchase such shares of
Qualified Capital Stock of the Company, plus
61
(C) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company (other than from any of its Restricted
Subsidiaries) upon the exercise of any options, warrants or rights to
purchase shares of Qualified Capital Stock of the Company, plus
(D) the aggregate Net Cash Proceeds received after the date of this
Indenture by the Company from the issuance or sale (other than to any of
its Restricted Subsidiaries) of Indebtedness or shares of Disqualified
Capital Stock that have been converted into or exchanged for Qualified
Capital Stock of the Company, together with the aggregate cash received by
the Company at the time of such conversion or exchange, plus
(E) the aggregate Net Cash Proceeds received by the Company from the
issuance or sale of its Qualified Capital Stock subsequent to the date of
original issuance of the Securities to any employee stock ownership plan
or a trust established by the Company or any of its Restricted
Subsidiaries for the benefit of their employees to the extent that any
such Net Cash Proceeds are equal to an increase in the Consolidated Net
Worth of the Company resulting from principal repayments paid by such
employee stock ownership plan or trust with respect to Indebtedness
incurred by it to finance the purchase of such Qualified Capital Stock,
plus
(F) to the extent not otherwise included in Consolidated Net Income,
the net reduction in Investments by the Company and its Restricted
Subsidiaries, subsequent to the Issue Date, in any Person resulting from
dividends, repayments of loans or advances, or other transfers of assets
to the Company or a Restricted Subsidiary, or from the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary (valued in each case as
provided in the definition of Investment), not to exceed the total amount
of Investments (other than Permitted Investments) made by the Company and
its Restricted Subsidiaries in such Unrestricted Subsidiary that were
previously treated as a Restricted Payment.
(b) Notwithstanding paragraph (a) above, the Company and its Restricted
Subsidiaries may take the following actions so long as (in the case of clauses
(ii), (iii) and (iv) below) no Default or Event of Default shall have occurred
and be continuing:
(i) the payment of any dividend on any Capital Stock of the Company
or any Restricted Subsidiary within 60 days after the date of declaration
thereof, if at such declaration date such declaration complied with the
provisions of paragraph (a) above (and such payment shall be deemed to
have been paid on such date of declaration for purposes of any calculation
required by the provisions of paragraph (a) above);
(ii) the repurchase, redemption or other acquisition or retirement
of any shares of any class of Capital Stock of the Company or any
Restricted Subsidiary, in exchange for, or out of the aggregate Net Cash
Proceeds of, a substantially concurrent issue and sale (other than to a
Restricted Subsidiary) of shares of Qualified Capital Stock of the Company
62
(other than Capital Stock issued or sold to a Subsidiary of the Company or
an employee stock ownership plan or to a trust established by the Company
or any of its Subsidiaries for the benefit of their employees);
(iii) the repurchase, redemption, repayment, defeasance or other
acquisition or retirement for value of any Subordinated Indebtedness in
exchange for, or out of the aggregate Net Cash Proceeds from, a
substantially concurrent issuance and sale (other than to a Restricted
Subsidiary) of shares of Qualified Capital Stock of the Company; and
(iv) the repurchase of shares of, or options to purchase shares of,
Capital Stock (other than Preferred Stock) of the Company or any of its
Subsidiaries from employees, former employees, directors or former
directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors or their respective estates), pursuant to the terms of the
agreements (including employment agreements) or plans (or amendments
thereto) approved by the Board of Directors of the Company under which
such individuals purchase or sell or are granted the option or right to
purchase or sell such Capital Stock (other than Preferred Stock);
provided, however, that the aggregate amount of such repurchases shall not
exceed $250,000 in any calendar year.
The actions described in clauses (i), (ii), (iii) and (iv) of this paragraph (b)
shall be Restricted Payments that shall be permitted to be made in accordance
with this paragraph (b) but shall reduce the amount that would otherwise be
available for Restricted Payments under clause (C) of paragraph (a), provided,
that any dividend paid pursuant to clause (i) of this paragraph (b) shall reduce
the amount that would otherwise be available under clause (C) of paragraph (a)
when declared, but not also when subsequently paid pursuant to such clause (i).
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officer's Certificate stating that the
Restricted Payment complies with the Indenture and setting forth in reasonable
detail the basis upon which the required calculations were computed.
(c) In computing Consolidated Net Income under paragraph (a), (1) the
Company shall use audited financial statements for the portions of the relevant
period for which audited financial statements are available on the date of
determination and unaudited financial statements and other current financial
data based on the books and records of the Company for the remaining portion of
such period and (2) the Company shall be permitted to rely in good faith on the
financial statements and other financial data derived from the books and records
of the Company that are available on the date of determination. If the Company
makes a Restricted Payment which, at the time of the making of such Restricted
Payment would in the good faith determination of the Company be permitted under
the requirements of this Indenture, such Restricted Payment shall be deemed to
have been made in compliance with this Indenture notwithstanding any subsequent
63
adjustments made in good faith to the Company's financial statements affecting
Consolidated Net Income of the Company for any period.
SECTION 10.11. Limitation on Indebtedness and Disqualified Capital Stock.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume, guarantee or in any manner become
directly or indirectly liable for the payment of (collectively, "incur") any
Indebtedness (including any Acquired Indebtedness but excluding any Permitted
Indebtedness), or issue any Disqualified Capital Stock, unless, an a pro forma
basis after giving effect to such incurrence or issuance and the application of
the proceeds therefrom, the Consolidated Fixed Charge Coverage Ratio for the
four most recent consecutive fiscal quarters would have been equal to or greater
than 2.0 to 1.0.
(b) Neither the Company nor any Subsidiary Guarantor shall incur any
Indebtedness unless such Indebtedness is expressly pari passu with, or
subordinated in right of payment to, in the case of the Company, the Securities
or, in the case of a Subsidiary Guarantor, its Subsidiary Guarantee.
SECTION 10.12. Limitation on Issuance and Sales of Capital Stock by
Restricted Subsidiaries.
The Company (i) shall not permit any Restricted Subsidiary to issue or
sell any Capital Stock to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary and (ii) shall not permit any Person other than the
Company or a Wholly Owned Restricted Subsidiary to own any Capital Stock of any
Restricted Subsidiary, except, in the case of clause (i) or (ii), with respect
to a Wholly Owned Restricted Subsidiary as described in of the definition of
"Wholly Owned Restricted Subsidiary". The sale of all of the Capital Stock of
any Restricted Subsidiary is permitted by this Section 10.12 but is subject to
the limitations of Section 10.15.
SECTION 10.13. Limitation on Liens.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, except for Permitted Liens, upon any of
their respective Properties, whether now owned or acquired after the date of
this Indenture, or any income or profits or proceeds therefrom, or assign or
otherwise convey any right to receive income or profits therefrom, to secure any
Indebtedness of the Company or such Restricted Subsidiary, unless prior to, or
contemporaneously therewith, the Securities are equally and ratably secured;
provided, however, that if such Indebtedness is expressly subordinated to the
Securities, the Lien securing such Indebtedness shall be subordinated and junior
to the Lien securing the Securities with the same relative priority as such
Indebtedness has with respect to the Securities.
64
SECTION 10.14. Purchase of Securities, Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of the
then Outstanding Securities, in whole or in part, from the Holders of such
Securities in integral multiples of $1,000, at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the principal amount of such
Securities, plus accrued and unpaid interest, if any, and Liquidated Damages, if
any, to the Change of Control Purchase Date (as defined below), in accordance
with the procedures set forth in paragraphs (b), (c) and (d) of this Section.
The Company shall, subject to the provisions described below, be required to
purchase all Securities properly tendered into the Change of Control Offer and
not withdrawn. The Company will not be required to make a Change of Control
Offer upon a Change of Control if another Person makes the Change of Control
Offer at the same purchase price, at the same times and otherwise in substantial
compliance with the requirements applicable to a Change of Control Offer to be
made by the Company and purchases all Securities validly tendered and not
withdrawn under such Change of Control Offer.
(b) The Change of Control Offer is required to remain open for at least 20
Business Days and until the close of business on the fifth Business Day prior to
the Change of Control Purchase Date (as defined below).
(c) Not later than the 30th date following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 15.4 and
each Holder of the Securities in the manner provided in Section 15.5, a notice
(the "Change of Control Notice") governing the terms of the Change of Control
Offer and stating:
(1) that a Change in Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Securities,
or portion thereof, at the Change of Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day and no earlier than 30 days nor later than 60
days from the date such notice is mailed;
(4) that any Security, or portion thereof, not tendered or accepted
for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of this
Section 10.14, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant
65
to the Change of Control Offer shall cease to accrue interest after the
Change of Control Purchase Date; and
(6) the instructions a Holder must follow in order to have his
Securities repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Paying Agent at the address specified in the
Change of Control Notice at least five Business Days prior to the Change of
Control Purchase Date. Holders will be entitled to withdraw their election if
the Paying Agent receives, not later than three Business Days prior to the
Change of Control Purchase Date, a telegram, telex, facsimile transmission or
letter setting forth the name of the Holder, the certificate number(s) (in the
case of Physical Securities) and principal amount of the Securities delivered
for purchase by the Holder as to which his election is to be withdrawn and a
statement that such Holder is withdrawing his election to have such Securities
purchased. Holders whose Securities are purchased only in part will be issued
new Securities of like tenor and equal in principal amount to the unpurchased
portion for the Securities surrendered.
On or prior to the Change of Control Purchase Date, the Company shall (i)
accept for payment Securities or portion thereof validly tendered pursuant to
the Change of Control Offer, (ii) irrevocably deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so tendered, and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted. The Paying Agent shall promptly mail or deliver to
Holders of the Securities so tendered payment in an amount equal to the Change
of Control Purchase Price for the Securities, and the Company shall execute and,
upon Company Order, the Trustee shall authenticate and mail or make available
for delivery to such Holders a new Security of like tenor and equal in principal
amount to any unpurchased portion of the Security which any such Holder did not
surrender for purchase. The Company shall announce the results of a Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date. For purposes of this Section 10.14, the Trustee will act as the Paying
Agent.
(e) The Company shall comply with 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 the event that a Change of Control occurs and the
Company is required to purchase Securities as described in this Section 10.14.
SECTION 10.15. Limitation on Asset Sales.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, engage in any Asset Sales unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value of the Properties sold or otherwise
disposed of pursuant to the Asset Sale, (ii) at least 80% of the consideration
received by the Company or the Restricted Subsidiary, as the case may be, in
66
respect of such Asset Sale consists of cash or Cash Equivalents and (iii) the
Company delivers to the Trustee an Officers' Certificate certifying that such
Asset Sale complies with clauses (i) and (ii) of this Section 10.15(a). The
amount (without duplication) of any Indebtedness (other than Subordinated
Indebtedness) of the Company or such Restricted Subsidiary that is expressly
assumed by the transferee in such Asset Sale and with respect to which the
Company or such Restricted Subsidiary, as the case may be, is unconditionally
released by the holder of such Indebtedness, shall be deemed to be cash or Cash
Equivalents for purposes of clause (ii) and shall also be deemed to constitute a
repayment of, and a permanent reduction in, the amount of such Indebtedness for
purposes of the following paragraph (b). 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 Available
Proceeds thereof shall be applied in accordance with this Section 10.15. A
transfer of assets by the Company to a Restricted Subsidiary or by a Subsidiary
to the Company or to a Restricted Subsidiary will not be deemed to be an Asset
Sale and a transfer of assets that constitutes a Restricted Investment and that
is permitted under Section 10.10 will not be deemed to be an Asset Sale. 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 Article VIII, the successor corporation shall
be deemed to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this Section 10.15, and shall
comply with the provisions of this Section 10.15 with respect to such deemed
sale as if it were an Asset Sale. In addition, the Fair Market Value of such
Properties of the Company or its Subsidiaries deemed to be sold shall be deemed
to be Net Available Proceeds for purposes of this Section 10.15.
(b) If the Company or any Restricted Subsidiary engages in an Asset Sale,
the Company or any Restricted Subsidiary may either, no later than 270 days
after such Asset Sale, (i) apply all or any of the Net Available Proceeds
therefrom to repay Indebtedness (other than Subordinated Indebtedness) of the
Company or any Restricted Subsidiary, provided, in each case, that the related
loan commitment (if any) is thereby permanently reduced by the amount of such
Indebtedness so repaid, or (ii) invest all or any part of the Net Available
Proceeds thereof in Properties that replace the Properties that were the subject
of such Asset Sale or in other Properties that will be used in the business of
the Company and its Restricted Subsidiaries. The amount of such Net Available
Proceeds not applied or invested as provided in this paragraph shall constitute
"Excess Proceeds".
(c) When the aggregate amount of Excess Proceeds equals or exceeds
$5,000,000 (the "Trigger Date"), the Company shall make an offer to purchase,
from all Holders of the Securities, an aggregate principal amount of Securities
equal to such Excess Proceeds as follows:
(i) Not later than the 30th date following the Trigger Date, the
Company shall give to the Trustee in the manner provided in Section 15.4
hereof and each Holder of the
67
Securities in the manner provided in Section 15.5 hereof, a notice (a
"Purchase Notice") offering to purchase (a "Net Proceeds Offer") from all
Holders of the Securities the maximum principal amount (expressed as a
multiple of $1,000) of Securities that may be purchased out of an amount
(the "Payment Amount") equal to such Excess Proceeds.
(ii) The offer price for the Securities shall be payable in cash in
an amount equal to 100% of the principal amount of the Securities tendered
pursuant to a Net Proceeds Offer, plus accrued and unpaid interest, if
any, and the Liquidated Damages, if any, to the date such Net Proceeds
Offer is consummated (the "Offered Price"), in accordance with the
procedures set forth in paragraph (d) of this Section. To the extent that
the aggregate Offered Price of the Securities tendered pursuant to a Net
Proceeds Offer is less than the Payment Amount relating thereto (such
shortfall constituting a "Net Proceeds Deficiency"), the Company may use
such Net Proceeds Deficiency, or a portion thereof, for general corporate
purposes, subject to the limitations of Section 10.10 hereof.
(iii) If the aggregate Offered Price of Securities validly tendered
and not withdrawn by Holders thereof exceeds the Payment Amount,
Securities to be purchased will be selected on a pro rata basis by the
Trustee based on the aggregate principal amount of Securities so tendered.
Upon completion of a Net Proceeds Offer, the amount of Excess Proceeds
shall be zero.
(iv) The Purchase Notice shall set forth a purchase date (the "Net
Proceeds Payment Date"), which shall be on a Business Day no earlier than
30 days nor later than 60 days from the Trigger Date. The Purchase Notice
shall also state (i) that a Trigger Date with respect to one or more Asset
Sales has occurred and that such Holder has the right to require the
Company to repurchase such Holder's Securities at the Offered Price,
subject to the limitations described in the foregoing paragraph (iii),
(ii) any information regarding such Net Proceeds Offer required to be
furnished under the Exchange Act and any other securities laws and
regulations thereunder, (iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest, (iv)
that, unless the Company defaults in depositing money with the Paying
Agent in accordance with the last paragraph of clause (d) of this Section
10.15, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Payment Date, and (v) the
instructions a Holder must follow in order to have his Securities
repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Securities purchased will be required to
surrender such Securities to the Paying Agent at the address specified in the
Purchase Notice at least five Business Days prior to the Net Proceeds Payment
Date. Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than three Business Days prior to the Net Proceeds Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the certificate number(s) (in the case of Physical Securities)
and principal amount of the
68
Securities delivered for purchase by the Holder as to which his election is to
be withdrawn and a statement that such Holder is withdrawing his election to
have such Securities purchased. Holders whose Securities are purchased only in
part will be issued new Securities of like tenor and equal in principal amount
to the unpurchased portion of the Securities surrendered.
On or prior to the Net Proceeds Payment Date, the Company shall (i) accept
for payment Securities or portions thereof validly tendered pursuant to a Net
Proceeds Offer in an aggregate principal amount equal to the Payment Amount or
such lesser amount of Securities as has been tendered, (ii) irrevocably deposit
with the Paying Agent money sufficient to pay the purchase price of all
Securities or portions thereof so tendered in an aggregate principal amount
equal to the Payment Amount or such lesser amount and (iii) deliver or cause to
be delivered to the Trustee the Securities so accepted. The Paying Agent shall
promptly mail or deliver to Holders of the Securities so accepted payment in an
amount equal to the purchase price, and the Company shall execute and the
Trustee shall authenticate and mail or make available for delivery to such
Holders a new Security of like tenor and equal in principal amount to any
unpurchased portion of the Security which any such Holder did not surrender for
purchase. Any Securities not so accepted will be promptly mailed or delivered to
the Holder thereof. The Company shall announce the results of a Net Proceeds
Offer on or as soon as practicable after the Net Proceeds Payment Date. For
purposes of this Section 10.15, the Trustee will act as the Paying Agent.
(e) The Company shall not permit any Restricted Subsidiary to enter into
or suffer to exist any agreement that would place any restriction of any kind
(other than pursuant to law or regulation) on the ability of the Company to make
a Net Proceeds Offer following any Asset Sale. The Company shall comply with
Rule 14e-1 under the Exchange Act and any other securities laws and regulations
thereunder, if applicable, in the event that an Asset Sale occurs and the
Company is required to purchase Securities as described in this Section 10.15.
SECTION 10.16. Limitation on Transactions with Affiliates.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of Property or the rendering of any
service) with, or for the benefit of, any of their respective Affiliates (each
an "Affiliate Transaction") other than (i) Affiliate Transactions permitted by
paragraph (b) of this Section 10.16, (ii) Affiliate Transactions on terms that
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than would be available in a comparable arm's length transaction with an
unrelated Person, (iii) with respect to any one transaction or series of related
transactions involving aggregate payments in excess of $1,000,000 but less than
$5,000,000 in the aggregate, the Company delivers an Officers' Certificate to
the Trustee certifying that (A) such transaction or series of related
transactions complies with clause (ii) above and (B) such transaction or series
of related transactions has been approved by the Board of Directors (including a
majority of the Disinterested Directors) of the Company, and (iv) with respect
to any one transaction or series of related transactions involving aggregate
payments in
69
excess of $5,000,000, the Company delivers an Officers' Certificate to the
Trustee certifying to the two matters referred to in clause (iii) above and that
the Company has obtained a written opinion, a copy of which shall be attached to
such Officers' Certificate, from an independent nationally recognized investment
banking firm or appraisal firm specializing or having a speciality in the type
and subject matter of the transaction or series of related transactions at
issue, which opinion shall be to the effect set forth in clause (ii) above or
shall state that such transaction or series of related transactions is fair from
a financial point of view to the Company or such Restricted Subsidiary, as the
case may be.
(b) The restrictions set forth in paragraph (a) shall not apply to (i)
transactions exclusively between or among the Company and any of its Restricted
Subsidiaries or exclusively between or among Restricted Subsidiaries so long as
such transactions are not otherwise prohibited hereunder, (ii) reasonable
indemnities of officers, directors and employees of the Company or any
Restricted Subsidiary permitted by bylaw or statutory provisions, (iii) the
payment of reasonable and customary regular fees to directors of the Company or
any of its Restricted Subsidiaries who are not employees of the Company or any
Affiliate and (iv) reasonable employee compensation and other benefit
arrangements approved by the Board of Directors of the Company.
SECTION 10.17. Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or suffer to exist or allow to become effective
any consensual encumbrance or restriction of any kind on the ability of any
Restricted Subsidiary (a) to pay dividends, in cash or otherwise, or make any
other distributions on its Capital Stock, or make payments on any Indebtedness
owed, to the Company or any other Restricted Subsidiary, (b) to make loans or
advances to the Company or any other Restricted Subsidiary or (c) to transfer
any of its Property to the Company or any other Restricted Subsidiary (any such
restrictions being collectively referred to herein as a "Payment Restriction"),
except in any such case for such encumbrances or restrictions existing under or
by reason of (i) this Indenture or any other agreement in effect or entered into
on the date of this Indenture, or (ii) any agreement, instrument or charter of
or in respect of a Restricted Subsidiary entered into prior to the date on which
such Restricted Subsidiary became a Restricted Subsidiary and outstanding on
such date and not entered into in connection with or in contemplation of
becoming a Restricted Subsidiary, provided such consensual encumbrance or
restriction is not applicable to any Properties subsequently acquired by such
Restricted Subsidiary, or (iii) pursuant to an agreement effecting a
modification, renewal, refinancing, replacement or extension of any agreement,
instrument or charter (other than this Indenture) referred to in clause (i) or
(ii) above, provided, however, that the provisions relating to such encumbrance
or restriction are not materially less favorable to the Holders of the
Securities than those under or pursuant to the agreement, instrument or charter
so modified, renewed, refinanced, replaced or extended, or (iv) customary
provisions restricting the subletting or assignment of any lease or the transfer
of copyrighted or patented materials, or (v) provisions
70
in agreements that restrict the assignment of such agreements or rights
thereunder, or (vi) the sale or other disposition of any Properties subject to a
Lien securing Indebtedness.
SECTION 10.18. Limitation on Preferred Stock of Subsidiaries.
The Company will not permit any of its Restricted Subsidiaries to issue
any Preferred Stock (other than to the Company or to a wholly owned Subsidiary)
or permit any Person (other than the Company or a wholly owned Subsidiary) to
own any Preferred Stock of any Restricted Subsidiary of the Company.
SECTION 10.19. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.5 through 10.13 and Section
10.16 and 10.18 hereof if, before or after the time for such compliance, the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities, by Act of such Holders, waive such compliance in such instance with
such term, provision or condition, but no such waiver shall extend to or affect
such term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed, at the election of the Company, as a whole
or from time to time in part, at any time on or after December 15, 2001, upon no
less than 30 or more than 60 days' notice to each Holder of Securities to be
redeemed, subject to the conditions and at the redemption prices (expressed as
percentages of principal amount) set forth below, if redeemed during the
twelve-month period beginning on December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2001..................................... 106.125%
2002..................................... 103.063%
together in the case of any such redemption with accrued and unpaid interest and
Liquidated Damages, if any, to the applicable date of redemption (subject to the
right of Holders of record on the relevant Regular Record Date to receive
interest due on an Interest Payment Date that is on or prior to such date of
redemption), all as provided herein.
71
Notwithstanding the foregoing, at any time on or prior to December 15,
1999, up to 30% of the originally issued principal amount of Securities may be
redeemed, at the election of the Company, upon not less than 30 or more than 60
days' notice to each Holder of Securities to be redeemed, from the Net Cash
Proceeds of a Public Equity Offering, at a redemption price equal to 112 1/4% of
the principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to date of redemption, provided that at least
$59,500,000 of the originally issued principal amount of Securities remains
Outstanding immediately after such redemption and that such redemption occurs
within 60 days following the closing of such Public Equity Offering.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section
11.1 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 11.4. Any election to redeem
Securities shall be revocable until the Company gives a notice of redemption
pursuant to Section 11.5 to the Holders of Securities to be redeemed.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not less than 30 days nor more than
60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities not previously called for redemption, pro rata, by lot or by any
other method as the Trustee shall deem fair and appropriate and which may
provide for the selection for redemption of portions of the principal of
Securities; provided, however, that any such partial redemption shall be in
integral multiples of $1,000.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs of this Section 11.4 shall
not apply with respect to any redemption affecting only a Global Security,
whether such Global Security is to be
72
redeemed in whole or in part. In the case of any such redemption in part, the
unredeemed portion of the principal amount of the Global Security shall be in an
authorized denomination.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided for in Section
15.5 hereof not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) in the case of a partial redemption of Physical Securities, the
identification of the particular Securities to be redeemed, and, if any
Global Security or Physical Security is to be redeemed in part, the
portion of the principal amount thereof to be redeemed;
(d) that on the Redemption Date the Redemption Price (together with
accrued interest, if any, to the Redemption Date payable as provided in
Section 11.7 hereof) will become due and payable upon each such Security,
or the portion thereof, to be redeemed, and that, unless the Company shall
default in the payment of the Redemption Price and any applicable accrued
and unpaid interest, interest thereon will cease to accrue on and after
said date; and
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, which shall be the office or agency
of the Company maintained for such purpose pursuant to Section 10.2
hereof.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Failure to give such
notice by mailing to any Holder of Securities or any defect therein shall not
affect the validity of any proceedings for the redemption of other Securities.
73
SECTION 11.6. Deposit of Redemption Price.
On or before 11:00 a.m., New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3 hereof) immediately available funds in an amount
sufficient to pay the Redemption Price of, and accrued and unpaid interest on,
all the Securities which are to be redeemed on such Redemption Date.
SECTION 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued and unpaid interest,
if any, to the Redemption Date), and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued and
unpaid interest) such Securities shall cease to bear interest. Upon surrender of
any such Security for redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price, together with accrued and
unpaid interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Regular Record Dates according to their terms and the provisions of
Section 3.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium and Liquidated Damages, if
any) shall, until paid, bear interest from the Redemption Date at the rate borne
by the Securities.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 10.2 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and, upon
Company Order, the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, of like tenor and in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal amount of the Security so surrendered.
74
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.1. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 12.2 or Section 12.3
hereof be applied to all Outstanding Securities upon compliance with the
conditions set forth below in this Article XII.
SECTION 12.2. Defeasance and Discharge.
Upon the Company's exercise under Section 12.1 hereof of the option
applicable to this Section 12.2, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to all
Outstanding Securities on and after the date the conditions set forth in Section
12.4 hereof are satisfied (hereinafter, "legal defeasance"). For this purpose,
such legal defeasance means that the Company shall be deemed (i) to have paid
and discharged its obligations under the Outstanding Securities, provided,
however, that the Securities shall continue to be deemed to be "Outstanding" for
purposes of Section 12.5 hereof and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and (ii) to have satisfied all its
other obligations with respect to such Securities and this Indenture (and the
Trustee, at the expense and direction of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities to receive, solely from the trust fund
described in Section 12.4 hereof and as more fully set forth in such Section,
payments in respect of the principal of (and premium if any, on) and interest on
such Securities when such payments are due (or at such time as the Securities
would be subject to redemption at the option of the Company in accordance with
this Indenture), (B) the obligations of the Company under Section 3.3, 3.4, 3.5,
3.6, 5.8, 6.6, 6.9, 6.10, 10.2 and 10.3, (C) the rights, powers, trusts, duties
and immunities of the Trustee hereunder, and (D) the obligations of the Company
under this Article XII. Subject to compliance with this Article XII, the Company
may exercise its option under this Section 12.2 notwithstanding the prior
exercise of its option under Section 12.3 hereof with respect to the Securities.
SECTION 12.3. Covenant Defeasance.
Upon the Company's exercise under Section 12.1 hereof of the option
applicable to this Section 12.3, (i) the Company shall be released from its
obligations under clauses (c), (d) and (e) under Section 8.1, any covenant in
Sections 10.5 through 10.18 and any covenant in Articles XIII and XIV, (ii) the
Subsidiary Guarantors shall be released from the Subsidiary Guarantees and the
Collateral shall be released from the Lien securing the Securities and (iii) the
occurrence of any event specified in Sections 5.1(c), 5.1(d) (with respect to
clauses (c), (d) and (e) under Section 8.1, Sections 10.5 though 10.18, and
Section 10.19) 5.1(e), 5.1(f), 5.1(g) (with respect
75
to any Restricted Subsidiary) and 5.1(h) (with respect to any Restricted
Subsidiary) shall be deemed not to be or result in an Event of Default, in each
case with respect to the Outstanding Securities on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance"),
and the Securities shall thereafter be deemed not to be "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with such covenants, but shall
continue to be deemed "Outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Outstanding
Securities, the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Article or
Section (to the extent so specified in the case of Sections 5.1(d), 5.1(g) and
5.1(h) hereof), whether directly or indirectly, by reason of any reference
elsewhere herein to any such Article or Section or by reason of any reference in
any such Article or Section to any other provision herein or in any other
document, but, except as specified above, the remainder of this Indenture and
such Securities shall be unaffected thereby.
SECTION 12.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
12.2 or Section 12.3 hereof to the Outstanding Securities:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.7 hereof who shall agree to comply with the provisions of
this Article XII applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for,
and dedicated solely to, the benefit of the Holders of such Securities,
(A) cash in United States dollars in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of (and premium, if any, on) and interest and
Liquidated Damages, if any, on the Outstanding Securities on the Stated
Maturity thereof (or Redemption Date, if applicable), provided that the
Trustee shall have been irrevocably instructed by a Company Order to apply
such money or the proceeds of such U.S. Government Obligations to said
payments with respect to the Securities. Before such a deposit, the
Company may give to the Trustee, in accordance with Section 11.3 hereof, a
notice of its election to redeem all of the Outstanding Securities at a
future date in accordance with Article XI hereof, which notice shall be
irrevocable. Such irrevocable redemption notice, if given, shall be given
effect in applying the foregoing. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the
United States of America for the timely payment of which its full faith
and credit is pledged or (y) obligations of a Person
76
controlled or supervised by and acting as an agency or instrumentality of
the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such
U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or
the specific payment of principal of or interest on the U.S. Government
Obligation evidenced by such depository receipt.
(b) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that the Holders of the Outstanding Securities will
not recognize income, gain or loss for federal income tax purposes as a
result of such legal defeasance or covenant defeasance and will be subject
to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such legal defeasance or
covenant defeasance had not occurred (in the case of legal defeasance,
such Opinion must refer to and be based upon a published ruling of the
Internal Revenue Service or a change in applicable federal income tax
laws).
(c) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as Sections 5.1(g) and 5.1(h) are concerned, at any time during
the period ending on the 91st day after the date of such deposit.
(d) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company.
(e) Such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company or any of its
Restricted Subsidiaries is a party or by which the Company or any of its
Restricted Subsidiaries is bound, as evidenced to the Trustee in an
Officers' Certificate delivered to the Trustee concurrently with such
deposit.
(f) The Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the deposit, the
trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting
creditors' right generally.
77
(g) The Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Outstanding Securities over the
other creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance under
Section 12.2 hereof or the covenant defeasance under Section 12.3 (as the
case may be) have been complied with.
SECTION 12.5. Deposited Money and U.S. Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.3 hereof,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively for
purposes of this Section 12.5, the "Trustee") pursuant to Section 12.4 hereof in
respect of the Outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company acting as its own Paying Agent) as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal (and premium and Liquidated Damages, if any) and interest,
but such money need not be segregated from other funds except to the extent
required by law.
The Company shall pay and indemnify the Trustee against all taxes, fees or
other charges imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 12.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.
Anything in this Article XII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 12.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.
SECTION 12.6. Reinstatement.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 12.5 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations
78
under this Indenture and the Securities shall be revived and reinstated as
though no deposit had occurred pursuant to Section 12.2 or 12.3 hereof, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 12.5 hereof; provided, however,
that if the Company makes any payment of principal of (or premium or Liquidated
Damages, if any, on) or interest on any Security following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money held by the Trustee or
Paying Agent.
ARTICLE XIII
SUBSIDIARY GUARANTEES
SECTION 13.1. Unconditional Guarantee.
Each of the Subsidiary Guarantors hereby jointly and severally
unconditionally Guarantees to each Holder of a Security authenticated and
delivered by the Trustee, and to the Trustee on behalf of such Holder, the full
and punctual payment of the principal of (and premium and Liquidated Damages, if
any) and interest on such Security when and as the same shall become due and
payable, whether at the Stated Maturity, by acceleration, call for redemption,
purchase or otherwise, in accordance with the terms of such Security and of this
Indenture. In case of the failure of the Company punctually to make any such
payment, each of the Subsidiary Guarantors hereby jointly and severally agrees
to pay or cause such payment to be made punctually when and as the same shall
become due and payable, whether at the Stated Maturity, by acceleration, call
for redemption, purchase or otherwise, and as if such payment were made by the
Company.
Each of the Subsidiary Guarantors hereby jointly and severally agrees that
its obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or this Indenture, the absence of
any action to enforce the same, any exchange, release or non-perfection of any
Lien on any collateral for, or any release or amendment or waiver of any term of
any other Guarantee of all or any of the Securities, or any consent to departure
from any requirement of any other Guarantee of all or any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter 11
of the Federal Bankruptcy Code, or the application of Section 1111(b)(2) of the
Federal Bankruptcy Code, any borrowing or grant of a security interest by the
Company, as debtor-in-possession, under Section 364 of the Federal Bankruptcy
Code, the disallowance, under Section 502 of the Federal Bankruptcy Code, of all
or any portion of the claims of the Trustee or any of the Holders for payment of
any of the Securities (including, without limitation, any interest, Liquidated
Damages or premium thereon), any waiver or consent by the Holder of such
Security or by the Trustee with respect to any provisions thereof or of this
Indenture or with respect to the provisions of this Article XIII as they apply
to any other Subsidiary Guarantor, the obtaining of any judgment against the
Company or any action to enforce the same or any other circumstances which might
otherwise constitute a legal or equitable discharge or defense of a guarantor.
Each of the Subsidiary Guarantors hereby waives the benefits of diligence,
presentment, demand of payment, any requirement that the Trustee or any
79
of the Holders protect, secure, perfect or insure any security interest in or
other Lien on any property subject thereto or exhaust any right or take any
action against the Company or any other Person, 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 or notice with respect to such
Security or the Indebtedness evidenced thereby and all demands whatsoever, and
covenants that its Subsidiary Guarantee will not be discharged in respect of
such Security except by complete performance of the obligations contained in
such Security and in such Subsidiary Guarantee. Each of the Subsidiary
Guarantors hereby agrees that, in the event of a default in payment of principal
(or premium or Liquidated Damages, if any) or interest on such Security, whether
at their Stated Maturity, by acceleration, call for redemption, purchase or
otherwise, legal proceedings may be instituted by the Trustee on behalf of, or
by, the Holder of such Security, subject to the terms and conditions set forth
in this Indenture, directly against all or any of the Subsidiary Guarantors to
enforce their respective Subsidiary Guarantees without first proceeding against
the Company. Each Subsidiary Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any of the Holders
are prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on the
Securities, or to enforce or exercise any other right or remedy with respect to
the Securities, such Subsidiary Guarantor agrees to pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders
of the Securities against the Company in respect of any amounts paid by such
Subsidiary Guarantor on account of such Securities pursuant to the provisions of
its Subsidiary Guarantee of this Indenture; provided, however, that no
Subsidiary Guarantor shall be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the principal of
(and premium and Liquidated Damages, if any) and interest on all Securities
issued hereunder shall have been paid in full.
Each Subsidiary Guarantee shall remain in full force and effect and
continue to be effective should any petition be filed by or against the Company
for liquidation or reorganization, should the Company become insolvent or make
an assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Securities is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by an obligee on the Securities whether as a "voidable
preference," "fraudulent transfer," or otherwise, all as though such payment or
performance has not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Securities shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
80
The Subsidiary Guarantors shall have the right to seek contribution from
any non-paying Subsidiary Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantees or under
this Article XIII in accordance with Section 13.7.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to the Subsidiary Guarantee and this Indenture are senior
unsecured obligations of such Subsidiary Guarantor.
SECTION 13.2. Execution and Delivery of Subsidiary Guarantees.
The Subsidiary Guarantee to be endorsed on the Securities is set forth in
Appendix A. Each of the Subsidiary Guarantors hereby agrees to execute its
Subsidiary Guarantee, in a form established pursuant to Appendix A, to be
endorsed on each Security authenticated and delivered by the Trustee.
The Subsidiary Guarantee shall be executed on behalf of each respective
Subsidiary Guarantor by any one of such Subsidiary Guarantor's Officers,
attested by its Secretary or Assistant Secretary. The signature of any or all of
these Officers on the Subsidiary Guarantee may be manual or facsimile.
A Subsidiary Guarantee bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of a Subsidiary Guarantor
shall bind such Subsidiary Guarantor, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of the Security on which such Subsidiary Guarantee is endorsed or did
not hold such offices at the date of such Subsidiary Guarantee.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
endorsed thereon on behalf of the Subsidiary Guarantors. Each of the Subsidiary
Guarantors hereby jointly and severally agrees that its Subsidiary Guarantee set
forth in Section 13.1 shall remain in full force and effect notwithstanding any
failure to endorse a Subsidiary Guarantee on any Security.
SECTION 13.3. Limitation on Merger or Consolidation.
No Subsidiary Guarantor shall consolidate or merge with or into, in one or
more related transactions, another Person or entity unless (i) such Subsidiary
Guarantor is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than such Subsidiary
Guarantor) 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 such
Subsidiary Guarantor) assumes all the Obligations of such Subsidiary Guarantor,
pursuant to a supplemental indenture in a form reasonably satisfactory to the
Trustee, under the Securities and this Indenture;
81
(iii) immediately after giving effect to such transaction no Default or Event of
Default exists; and (iv) the Company 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 most recently ended four full fiscal quarter period, be
permitted to incur at least $1.00 of additional Indebtedness (other than
Permitted Indebtedness) pursuant to the Consolidated Fixed Charge Coverage Ratio
set forth in Section 10.11(a).
Except as set forth in this Section 13.3, Section 13.4 and Articles VIII
and X hereof, nothing contained in this Indenture or in any of the Securities
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.
SECTION 13.4. Release of Subsidiary Guarantors.
(a) Concurrently with any consolidation or merger of a Subsidiary
Guarantor or any sale or conveyance of the Property of a Subsidiary Guarantor as
an entirety or substantially as an entirety, in each case as permitted by
Section 13.3 hereof, and upon delivery by the Company to the Trustee of an
Officers' Certificate and an Opinion of Counsel to the effect that such
consolidation, merger, sale or conveyance was made in accordance with Section
13.3 hereof, the Trustee shall execute any documents reasonably required in
order to evidence the release of such Subsidiary Guarantor from its obligations
under its Subsidiary Guarantees endorsed on the Securities and under this
Article XIII. Any Subsidiary Guarantor not released from its obligations under
its Subsidiary Guarantees endorsed on the Securities and under this Article XIII
shall remain liable for the full amount of principal of (and premium and
Liquidated Damages, if any) and interest on the Securities and for the other
obligations of a Subsidiary Guarantor under its Subsidiary Guarantees endorsed
on the Securities and under this Article XIII.
(b) Concurrently with the legal defeasance of the Securities under Section
12.2 hereof or the covenant defeasance of the Securities under Section 12.3
hereof, the Subsidiary Guarantors shall be released from all of their
obligations under their Subsidiary Guarantees endorsed on the Securities and
under this Article XIII.
(c) Upon the sale or disposition (by merger or otherwise) of any
Subsidiary Guarantor by the Company or any Restricted Subsidiary of the Company
to any entity that is not a Restricted Subsidiary of the Company and which sale
or disposition is otherwise in compliance with the terms of this Indenture,
including, without limitation, Section 8.1 and Section 10.15 of this Indenture,
such Subsidiary Guarantor shall automatically be released from all obligations
under its Subsidiary Guarantees endorsed on the Securities and under this
Article XIII.
(d) Upon the redesignation by the Company of a Subsidiary Guarantor from
Restricted Subsidiary to an Unrestricted Subsidiary in compliance with the
provisions of this Indenture, such Subsidiary may, at its option, cease to be a
Subsidiary Guarantor and shall be released from all
82
of the obligations of a Subsidiary Guarantor under its Subsidiary Guarantees
endorsed on the Securities and under this Article XIII, which release shall be
evidenced by a supplemental indenture executed by the Company, the Subsidiary
Guarantors and the Trustee.
SECTION 13.5. Additional Subsidiary Guarantors.
The Company may cause any Subsidiary to become a Subsidiary Guarantor with
respect to the Securities. If the Company or any of its Subsidiaries shall, in
compliance with the covenants in Article X, after the date of this Indenture,
(i) transfer or cause to be transferred, any Property to any Subsidiary that is
not a Subsidiary Guarantor (other than an Unrestricted Subsidiary) or (ii) make
any Investment in any Subsidiary that is not a Subsidiary Guarantor (other than
an Unrestricted Subsidiary), then the Company shall cause such Subsidiary to
execute a Subsidiary Guarantee and deliver an Opinion of Counsel, in accordance
with the terms of this Indenture. Any such Subsidiary shall become a Subsidiary
Guarantor by executing and delivering to the Trustee (a) a supplemental
indenture, in form and substance satisfactory to, and executed by, the Trustee
and executed by the Company, which subjects such Subsidiary to the provisions of
this Indenture as a Subsidiary Guarantor and (b) an Opinion of Counsel to the
effect that such supplemental indenture has been duly authorized and executed by
such Subsidiary and constitutes the legal, valid, binding and enforceable
obligation of such Subsidiary (subject to such customary exceptions concerning
creditors' rights and equitable principles).
SECTION 13.6. Limitation of Subsidiary Guarantor's Liability.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collection from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee or pursuant to Section 13.7, result in
the obligations of such Subsidiary Guarantor under its Subsidiary Guarantee not
constituting such a fraudulent transfer or conveyance.
SECTION 13.7. Contribution.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Subsidiary Guarantee, and so long as
the exercise of such right does not impair the rights of the Holders under the
83
Subsidiary Guarantees or under this Article XIII, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a pro rata amount, based on the net assets of each Subsidiary
Guarantor (including the Funding Subsidiary Guarantor), determined in accordance
with GAAP, subject to Section 13.6, for all payments, damages and expenses
incurred by that Funding Subsidiary Guarantor in discharging the Company's
obligations with respect to the Securities or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
ARTICLE XIV
PLEDGE AGREEMENT
SECTION 14.1. Unconditional Pledge.
The due and punctual payment of the principal of (and premium, if any) and
interest and Liquidated Damages, if any, on the Securities when and as the same
shall be due and payable, whether on a Stated Maturity, by acceleration,
repurchase, redemption or otherwise and performance of all other obligations of
the Company to the Holders or the Trustee under this Indenture and the
Securities, according to the terms hereunder or thereunder, shall be secured as
provided in the Pledge Agreement substantially in the form attached hereto as
Exhibit A which the Pledgor has entered into simultaneously with the execution
of this Indenture. Each Holder, by its acceptance thereof, consents and agrees
to the terms of the Pledge Agreement (including, without limitation, the
provisions providing for foreclosure and release of the Collateral) 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 Collateral Agent to enter into the Pledge
Agreement and to perform its obligations and exercise its rights thereunder in
accordance therewith. The Company shall deliver to the Trustee copies of all
documents delivered to the Collateral Agent pursuant to the Pledge Agreement,
and shall do or cause to be done all such acts and things as may be necessary or
proper, or as may be required by the provisions of the Pledge Agreement, to
assure and confirm to the Trustee and the Collateral Agent the security interest
in the Collateral contemplated hereby, by the Pledge Agreement or any part
thereof, as from time to time constituted, so as to render the same available
for purposes herein expressed. The Company shall take, or shall cause the
Pledgor under the Pledge Agreement to take, upon request of the Trustee, any and
all actions reasonably required to cause the Pledge Agreement to create and
maintain, as security for the Obligations of the Company hereunder, a valid and
enforceable perfected first priority Lien in and on all the Collateral, in favor
of the Collateral Agent for the benefit of the Holders, superior to and prior to
the rights of all third Persons and subject to no Liens other than Permitted
Liens.
SECTION 14.2. Recording and Opinions.
(a) The Company shall furnish to the Trustee on the Issue Date an Opinion
of Counsel either (i) stating that in the opinion of such counsel all action has
been taken with respect to the
84
recording, registering and filing of this Indenture, financing statements or
other instruments necessary to make effective the Liens intended to be created
by the Pledge Agreement, and reciting with respect to the security interest in
the Collateral, the details of such action, or (ii) stating that, in the opinion
of such counsel, no such action is necessary to make such Liens effective.
(b) The Company shall otherwise comply with the provisions of TIA Section
314(b).
SECTION 14.3. Release of Collateral.
(a) Upon the full and final payment and performance of all Obligations of
the Company under this Indenture and the Securities, the Pledge Agreement will
terminate and the Collateral will be released.
(b) To the extent applicable, the Company shall cause TIA Section 313(b),
relating to reports, and TIA Section 314(d), relating to the release of property
or securities from the Liens and security interests of the Pledge Agreement and
related to the substitution therefor of any property or securities to be
subjected to the Liens and security interests of the Pledge Agreement, to be
complied with. Any certificate or opinion required by TIA Section 314(d) may be
made by an Officer of the Company except in cases where TIA Section 314(d)
requires that such certificate or opinion be made by an independent Person,
which Person shall be an independent engineer, appraiser or other expert
selected by the Company and approved by the Trustee and the Collateral Agent in
the exercise of reasonable care.
SECTION 14.4. Authorization of Actions to be Taken by the Trustee Under
the Pledge Agreement.
Subject to the provisions of Section 6.1 and 6.2 hereof, the Trustee may,
in its sole discretion and without the consent of the Holders, direct, on behalf
of the Holders, the Collateral Agent to take all actions it deems necessary or
appropriate in order to (i) enforce any of the terms of the Pledge Agreement and
(ii) collect and receive any and all amounts payable in respect of the
Obligations of the Company hereunder. The Trustee shall have power to institute
and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Collateral by any acts that may be unlawful or in violation of
the Pledge Agreement or this Indenture, and such suits and proceedings as the
Trustee may deem expedient to preserve or protect its interests and the
interests of the Holders in the Collateral (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 interest hereunder or be
prejudicial to the interests of the Holders or of the Trustee).
85
SECTION 14.5. Authorization of Receipt of Funds by the Trustee Under the
Pledge Agreement.
The Trustee is authorized to receive any funds for the benefit of the
Holders distributed under the Pledge Agreement, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.
SECTION 14.6. Termination of Security Interest.
Upon (i) the payment in full of all obligations of the Company under this
Indenture and the Securities, or (ii) effectiveness of legal defeasance or
covenant defeasance in accordance with Article XII, (iii) the sale or
disposition (by merger or otherwise) of all of the capital stock included in the
Collateral to any entity that is not a Restricted Subsidiary or the Company
(subject to the release thereof from the Lien of the Pledge Agreement) and which
sale or other disposition is otherwise in compliance with the terms of this
Indenture, including without limitation, Section 8.1 and Section 10.15 of this
Indenture or (iv) the designation by the Company of Xxxxxxx & Xxxxx, Ltd. as an
Unrestricted Subsidiary, the Trustee shall, upon Company Request deliver a
certificate to the Collateral Agent instructing the Collateral Agent to release
the Liens pursuant to this Indenture and the Pledge Agreement.
ARTICLE XV
MISCELLANEOUS
SECTION 15.1. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or this Indenture. Each such certificate and each such opinion
shall be in the form of an Officers' Certificate or an Opinion of Counsel, as
applicable, and shall comply with the requirements of this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(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 for the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
86
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
The certificates and opinions provided pursuant to this Section 15.1 and
the statements required by this Section 15.1 shall comply in all respects with
TIA Sections 314(c) and (e).
SECTION 15.2. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such Officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based is or are erroneous.
Any such Opinion of Counsel may be based, insofar as it relates to factual
matters, upon an Officers' Certificate, unless such counsel knows that the
certificate with respect to such matters is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 15.3. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for
87
any purpose of this Indenture and (subject to Section 6.1) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee deems sufficient.
(c) The ownership, principal amount and serial numbers of Securities held
by any Person, and the date of holding the same, shall be provided by the
Security Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purpose of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date, provided that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
88
SECTION 15.4. Notices, etc. to Trustee and the Company.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing (in
the English language) and delivered in person or mailed by certified or
registered mail (return receipt requested) to the Trustee at its Corporate
Trust Office; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing (in the English language) and delivered in person or mailed
by certified or registered mail (return receipt requested) to the Company,
addressed to it at the Company's offices located at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Chief Executive Officer, or at any
other address otherwise furnished in writing to the Trustee by the
Company.
SECTION 15.5. Notice to Holders; Waiver.
Where this Indenture provides for notice of any event to Holders by the
Company, the Trustee or any Paying Agent, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing (in the English
language) and mailed, first-class postage prepaid, to each Holder affected by
such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers as
required by this Indenture, then such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
89
SECTION 15.6. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 15.7. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 15.8. Severability.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby,
and a Holder shall have no claim therefor against any party hereto.
SECTION 15.9. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person (other than the parties thereto, any Paying Agent, any
Securities Registrar and their successors hereunder and the Holders) any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 15.10. Governing Law; Trust Indenture Act Controls.
(a) THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE COMPANY AND EACH
SUBSIDIARY GUARANTOR IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF
MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS INDENTURE, OR THE SECURITIES, OR ANY SUBSIDIARY GUARANTEE AND
THE COMPANY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
(b) This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by operation of Section 318(c) of the Trust Indenture Act, or conflicts
with any provision (an "incorporated provision") required by or deemed to be
included in this
90
Indenture by operation of such Trust Indenture Act section, such imposed duties
or incorporated provisions shall control.
SECTION 15.11. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal (and premium and Liquidated Damages, if any)
need not be made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date or at the Stated Maturity or Maturity; provided, however, that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, Stated Maturity or Maturity, as the case may be.
SECTION 15.12. No Recourse Against Others.
A director, officer, employee, stockholder, incorporator or Affiliate, as
such, past, present or future, of the Company shall not have any personal
liability under the Securities or this Indenture by reason of his or its status
as a director, officer employee, stockholder, incorporator or Affiliate or any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder, by accepting any of the Securities,
waives and releases all such lability to the extent permitted by applicable law.
SECTION 15.13. Duplicate Originals.
The parties may sign any number of copies or counterparts of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
SECTION 15.14. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
91
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
ISSUER:
XXXXXXX & XXXXX, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: CFO
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: CEO
SUBSIDIARY GUARANTORS:
WG APPAREL, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: CEO
CLINTON MANAGEMENT CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: V.P.
S-1
CLINTON MACHINERY CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: V.P.
LEADTEC SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: V.P.
W&G DAON, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President
J&E SEWING SUPPLIES, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President
W&G TENNESSEE IMPORTS, INC.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: President
S-2
CLINTON LEASING CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: X.X.
XXXXXXX EQUIPMENT CORP.
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: V.P.
PARADISE COLOR INCORPORATED
By: /s/ Xxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxx X. Xxxxxxx, Xx.
Title: V.P.
[Signature page to follow]
S-3
TRUSTEE:
IBJ XXXXXXXX BANK & TRUST
COMPANY, as Trustee
By: /s/ Xxx Xxxxxx
-------------------------------------
Name: Xxx Xxxxxx
Title: Vice President
S-4
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO RULE 144A,
INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED IN RULE 501(A) (1),
(2), (3) OR (7)) AND TO CERTAIN PERSONS
IN OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.1. Definitions.
For the purposes of this Appendix A the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Offer" means the offer by the Company, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchaser" means Xxxxxx, Read & Co. Inc.
"Physical Security" means a certificated Initial Security bearing the
restricted securities legend set forth in Section 2.3(d) of this Appendix and
which is held by an IAI in accordance with Section 2.1(c) of this Appendix.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchaser to issue and deliver to
the Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Purchase Agreement" means the Purchase Agreement dated December 20, 1996,
between the Company, the Subsidiary Guarantors and the Initial Purchaser.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of December 20, 1996, by and among the Company, the Subsidiary
Guarantors and the Initial Purchaser, as such agreement may be amended, modified
or supplemented from time to time.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued by
the Company, in connection with the offer and sale of Initial Securities or
Private Exchange Securities, pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Physical Securities and Global
Securities that bear or are required to bear the legend set forth in Section
2.3(d) of this Appendix A.
1.2. Other Definitions.
Defined in
Appendix
Term A Section
---- ---------
"Agent Members"...................................... 2.1(b)
"Global Security".................................... 2.1(a)
"Regulation S"....................................... 2.1(a)
"Rule 144A".......................................... 2.1(a)
Terms used herein without definition have the meanings ascribed to them in
the Indenture.
2. The Securities.
2.1. Form and Dating.
The Initial Securities are being offered and sold by the Company pursuant
to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
Regulation S under the Securities Act ("Regulation S"), in each case as provided
in the Purchase Agreement, shall be issued initially in the form of one or more
permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Global Security"), which shall be
deposited on behalf of the Initial Purchaser with IBJ Xxxxxxxx Bank & Trust
Company, at its New York office, as custodian for the Depository (or with such
other custodian as the Depository may direct), and registered in the name of the
Depository or a nominee of the Depository, duly executed by the Company and duly
2
endorsed by each Subsidiary Guarantor and authenticated by the Trustee as
provided in the Indenture. The aggregate principal amount of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b) and pursuant to a Company Order, authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the Depository for such Global Security or Global Securities or the nominee
of such Depository and (b) shall be delivered by the Trustee to such Depository
or pursuant to such Depository's instructions or held by IBJ Xxxxxxxx Bank &
Trust Company as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or the custodian of the Depository or by the
Trustee under such Global Security, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
such Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Physical Securities. Except as provided in this Section 2.1 or Section
2.3 or 2.4 of Appendix A, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who are IAI's and are not QIBs and did not
purchase Initial Securities sold in reliance on Regulation S will receive
Physical Securities; provided, however, that upon transfer of such Physical
Securities to a QIB, such Physical Securities will, unless the Global Security
has previously been exchanged, be exchanged for an interest in a Global Security
pursuant to the provisions of Section 2.3 of Appendix A.
2.2. Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$85,000,000 and (2) Exchange Securities or Private Exchange Securities for issue
only in an Exchange Offer or a Private Exchange, respectively, pursuant to the
Registration Rights Agreement, for a like principal amount, in each case, upon a
Company Order. Such Company Order shall specify the amount of the Securities to
be authenticated and the date on which the original issue of Securities is to be
authenticated and whether the Securities are to be Initial Securities, Exchange
Securities or Private Exchange
3
Securities. The aggregate principal amount of Securities outstanding at any time
may not exceed $85,000,000, except as provided in Section 2.7 of the Indenture.
2.3. Transfer and Exchange. (a) Transfer and Exchange of Physical
Securities. When Physical Securities are presented to the Security Registrar or
a co-registrar with a request:
(x) to register the transfer of such Physical Securities; or
(y) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Security Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; provided, however, that the Physical Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Security
Registrar or co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.3(b) of Appendix A or pursuant to clause (A), (B) or (C) below, and are
accompanied by the following additional information and documents, as
applicable:
(A) if such Physical Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Security); or
(B) if such Physical Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Physical Securities are being transferred pursuant
to Rule 144, Rule 904 or another available exemption from
registration, (i) a certification to that effect (in the form set
forth on the reverse of the Security) and (ii) if the Company or
Security Registrar so requests, an Opinion of Counsel or other
evidence reasonably satisfactory to them as to the compliance with
the restrictions set forth in the legend set forth in Section
2.3(d)(i) of Appendix A.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a
4
Physical Security duly endorsed or accompanied by appropriate instruments of
transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Physical Security is being transferred (A) to a QIB in
accordance with Rule 144A, or (B) outside the United States in an offshore
transaction within the meaning of Regulation S and in compliance with Rule
904 under the Securities Act; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Physical Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Physical Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Physical Security so canceled. If no Global
Securities are then Outstanding, the Company shall issue and the Trustee shall
authenticate, upon the Company Order, a new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depository, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver to
the Security Registrar a written order given in accordance with the
Depository's procedure containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the
Global Security. The Security Registrar shall, in accordance with such
instructions, instruct the Depositary to credit to the account of the
Person specified in such instructions a beneficial interest in the Global
Security and to debit the account of the Person making the transfer the
beneficial interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this Appendix A (other
than the provisions set forth in Section 2.4 of Appendix A), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by
5
the Depository or any such nominee to a successor Depository or a nominee
of such successor Depository.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of
Appendix A prior to the consummation of an Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with Rule 144A or Regulation S, as the case may be) and such other
procedures as may from time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Physical Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT."
"THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), BUT ONLY IN THE CASE OF A TRANSFER THAT IS
EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED
IN
6
ITS NAME (OR ITS NOMINEE'S NAME) IN THE BOOKS MAINTAINED BY THE REGISTRAR, AND
SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE TRANSFEROR AND
AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
Each Physical Security will also bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
SECURITY REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM
THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Physical Security the Security Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a Physical
Security that does not bear the legend set forth above and rescind
any restriction on the sale or transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Security Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Physical Security that does not bear the legend set
forth above and rescind any restriction on the sale or transfer of
such Transfer Restricted Security, in either case, if the Holder
certifies in writing to the Security Registrar that its request for
such exchange was made in reliance on Rule 144 (such certification
to be in the form set forth on the reverse of the Initial Security).
in either case, if the Holder certifies in writing to the Security Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).
7
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Securities or such Private Exchange Securities will cease to
apply, the requirements requiring any such Initial Securities or such
Private Exchange Securities issued to certain Holders be issued in global
form will cease to apply, and an Initial Securities or Private Exchange
Securities in certificated or global form without legends will be
available to the transferee of the Holder of such Initial Securities or
Private Exchange Securities upon exchange of such transferring Holder's
certificated Initial Securities or Private Exchange Securities. Upon the
occurrence of any of the circumstances described in this paragraph, the
Company will deliver a Company Order instructing the Trustee to issue
Securities without legends.
(iv) Upon the consummation of an Exchange Offer with respect to the
Initial Securities pursuant to which certain Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
cease to apply and certificated Initial Securities with the restricted
securities legend set forth in Exhibit 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will be
available to Holders that exchange such Initial Securities in such
Exchange Offer. Upon the occurrence of any of the circumstances described
in this paragraph, the Company will deliver a Company Order instructing
the Trustee to issue Exchange Securities without legends.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which certain Holders of such Initial
Securities are offered Private Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be issued in global form
will still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(e) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated or Physical Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated or
Physical Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
8
(f) Obligations with Respect to Transfers and Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and, upon Company Order, the Trustee shall authenticate
certificated Securities, Physical Securities and Global Securities.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any transfer tax, assessments, or similar governmental
charge payable in connection therewith (other than any such transfer
taxes, assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.5 and 10.14).
(iii) The Security Registrar or co-registrar shall not be required
to register the transfer or exchange of (a) any Physical Security selected
for redemption in whole or in part pursuant to Article 3 of the Indenture,
except the unredeemed portion of any Physical Security being redeemed in
part, or (b) any Security for a period beginning 15 Business Days before
the mailing of a notice of an offer to repurchase or redeem Securities or
15 Business Days before an Interest Payment Date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Security
Registrar or any co-registrar may deem and treat the person in whose name
a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest on such Security
and for all other purposes whatsoever, whether or not such Security is
overdue, and none of the Company, the Trustee, the Paying Agent, the
Security Registrar or any co-registrar shall be affected by notice to the
contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, an Agent Member, or a participant
in the Depository or other Person with respect to the accuracy of the
records of the Depository or its nominee or of any participant or an Agent
Member, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or
other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect
to such Securities. All notices and communications to be given to the
Holder and all payments to be made to Holders under the Securities shall
be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global
Security). The rights
9
of beneficial owners in any Global Security shall be exercised only
through the Depository subject to the applicable rules and procedures of
the Depository. The Trustee may rely and shall be fully protected in
relying upon information furnished by the Depository with respect to its
members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of the Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4. Certificated Securities.
(a) A Global Security deposited with the Depository or with the Trustee as
custodian for the Depository pursuant to Section 2.1 of Appendix A shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 of Appendix A and (i) the Depository notifies
the Company that it is unwilling or unable to continue as Depository for such
Global Security or if at any time such Depository ceases to be a "clearing
agency" registered under the Exchange Act and a successor depository is not
appointed by the Company within 90 days of such notice, or (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depository to
the Trustee to be so transferred, in whole or from time to time in part, without
charge, and, upon Company Order, the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Securities of authorized denominations.
Any portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such cases as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(d) of
Appendix A, bear the restricted securities legend set forth in Exhibit l hereto.
(c) Subject to the provisions of Section 2.4(b) of Appendix A, the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under this
Indenture or the Securities.
10
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i) of Appendix A, (ii) or (iii), the Company will promptly make
available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
11
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT."
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED
12
OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c)
OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH
ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND
BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), BUT ONLY IN THE
CASE OF A TRANSFER THAT IS EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF
DEFINITIVE SECURITIES REGISTERED IN ITS NAME (OR ITS NOMINEE'S NAME) IN THE
BOOKS MAINTAINED BY THE REGISTRAR, AND SUBJECT TO THE RECEIPT BY THE REGISTRAR
OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF COUNSEL TO THE EFFECT
THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (2) TO THE COMPANY
OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.] (1)
----------
(1) Include if a Physical Security to be held by an institutional "accredited
investor" (as defined in Rule 501(a),(1),(2),(3) or (7) under the Securities
Act).
13
GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND LIQUIDATED DAMAGES, IF ANY, BY CERTAIN SUBSIDIARIES OF
XXXXXXX & XXXXX, INC.
CUSIP No. ____________
No. ______________ $____________
XXXXXXX & XXXXX, INC.
12 1/4% Series A Senior Note Due 2003
Xxxxxxx & Xxxxx, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________ or registered assigns the principal sum of ___________ Dollars on
December 15, 2003, at the office or agency of the Company referred to below, and
to pay interest thereon, commencing on June 15, 1997 and continuing semiannually
thereafter, on June 15 and December 15 in each year, accruing from January 3,
1997, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at the rate of 12 1/4% per annum, until the principal
hereof is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Securities from the
date on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered on the Security Register
at the close of business on the Regular Record Date for such interest, which
shall be the June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and such Defaulted Interest, and (to the
extent lawful) interest on such Defaulted Interest at the rate borne by the
Securities, may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered on the Security Register at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
any upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
Payment of the principal of (and premium, if any, on) and interest and
Liquidated Damages, if any, on this Security will be made at the office or
agency of the Company maintained for that purpose in The City of New York, in
such coin or currency of the United States of
14
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that payment of interest may be made on
Physical Securities at the option of the Company on or before the due date (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear on the Security Register or (ii) with respect to any Holder owning
Securities in the principal amount of $500,000 or more, by wire transfer to an
account maintained by the Holder located in the United States, as specified in a
written notice to the Trustee by any such Holder requesting payment by wire
transfer and specifying the account to which transfer is requested.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
XXXXXXX & XXXXX, INC.
By:__________________________
Title:
Attest:
_____________________________
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:___________ IBJ XXXXXXXX BANK & TRUST
COMPANY, TRUSTEE
By:_____________________________
Authorized Signatory
15
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
This Security is one of a duly authorized issue of securities of the
Company designated as its 12 1/4% Series A Senior Notes Due 2003 (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $85,000,000 which may be
issued under an indenture (herein called the "Indenture"; capitalized terms used
herein and not defined herein shall have the respective meanings set forth in
the Indenture) dated as of January 3, 1997 between the Company, the Subsidiary
Guarantors and IBJ Xxxxxxxx Bank & Trust Company (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities are subject to redemption, at the option of the Company, in
whole or in part, at any time on or after December 15, 2001, upon not less than
30 or more than 60 days' notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below if redeemed during the
twelve-month period beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2001........................................106.125%
2002........................................103.063%
together in the case of any such redemption with accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the Redemption Date), all as
provided in the Indenture.
Notwithstanding the foregoing, at any time on or prior to December 15,
1999 up to 30% of the originally issued principal amount of Securities may be
redeemed, at the option of the Company, upon not less than 30 or more than 60
days' notice to each Holder of Securities to be redeemed, from the Net Cash
Proceeds of a Public Equity Offering, at a Redemption Price equal to 112 1/4% of
the principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, provided that at least
$59,500,000 of the originally issued principal amount of Securities remains
Outstanding immediately after such redemption and that such redemption occurs
within 60 days following the closing of such Public Equity Offering.
16
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in accordance with the Indenture shall cease to bear interest from and
after the Redemption Date. In the event of redemption or purchase of this
Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
The Securities do not have the benefit of any mandatory redemption or
sinking fund obligations.
In the event of a Change of Control of the Company, and subject to certain
conditions and limitations provided in the Indenture, the Company will be
obligated to make an offer to purchase, on a Business Day not more than 60 or
less than 30 days following the occurrence of a Change of Control of the
Company, all of the then Outstanding Securities at a purchase price equal to
101% of the principal amount thereof, together with accrued and unpaid interest,
if any, to the Change of Control Purchase Date, all as provided in the
Indenture.
In the event of Asset Sales, under certain circumstances, the Company will
be obligated to make a Net Proceeds Offer to purchase all or a specified portion
of each Holder's Securities at a purchase price equal to 100% of the principal
amount of the Securities, together with accrued and unpaid interest, if any, to
the Net Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (i)
failure to pay principal or premium, if any, upon maturity, redemption or
otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer); (ii) default for 30 days in payment of interest or Liquidated Damages,
if any, on any of the Securities; (iii) default in the performance of agreements
relating to mergers, consolidations and sales of all or substantially all
assets, limitation on Indebtedness and Disqualified Capital Stock, limitation on
the issuance of preferred stock of Restricted Subsidiaries, limitation on
restricted payments or the failure to make or consummate a Change of Control
Offer or a Net Proceeds Offer; (iv) failure of the Company or any Subsidiary
Guarantor for 30 days after notice to comply with any other covenants in the
Indenture or the Securities or its Subsidiary Guarantee, as the case may be; (v)
certain payment defaults under, and the acceleration prior to the maturity of,
certain Indebtedness of the Company or any Subsidiary in an aggregate principal
amount in excess of $2,500,000; (vi) certain final judgments or orders against
the Company or any Subsidiary in an aggregate amount of more than $2,500,000 not
paid, discharged or stayed for a period of 60 days; (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary; and (viii) except as permitted by the Indenture and hereby,
cessation of the effectiveness of any Subsidiary Guarantee or the Pledge
Agreement or any repudiation thereof. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the Outstanding Securities may declare the principal amount of all the
Securities to be due and payable immediately, except
17
that (a) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary, the principal amount of the Securities will become due and payable
immediately without further action or notice, and (b) in the case of an Event of
Default which relates to certain payment defaults or acceleration with respect
to certain Indebtedness, any such Event of Default and any consequential
acceleration of the Securities will be automatically rescinded if any such
Indebtedness is repaid or if the default relating to such Indebtedness is cured
or waived and if the holders thereof have accelerated such Indebtedness then
such holders have rescinded their declaration of acceleration. No Holder may
pursue any remedy under the Indenture unless the Trustee shall have failed to
act after notice from such Holder of an Event of Default and written request by
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities, and the offer to the Trustee of indemnity reasonably satisfactory to
it; however, such provision does not affect the right to xxx for enforcement of
any overdue payment on a Security by the Holder thereof. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing default
(except default in payment of principal, premium, interest or Liquidated
Damages) if it determines in good faith that withholding the notice is in the
interest of the Holders. The Company is required to file annual and quarterly
reports with the Trustee as to the absence or existence of defaults.
The Indenture contains provisions for (i) defeasance at any time of the
entire indebtedness of the Company on this Security and (ii) discharge from
certain covenants and Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security. Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, to qualify or maintain the qualification of the
Indenture under the Trust Indenture Act and to make certain other specified
changes and other changes that do not materially adversely affect the interests
of any Holder in any material respect.
18
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest and Liquidated Damages, if any, on this Security at the times,
place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
A director, officer, employee, incorporator, stockholder or Affiliate of
the Company, as such, past, present or future shall not have any personal
liability under this Security or any other Security or the Indenture by reason
of his or its status as such director, officer, employee, incorporator,
stockholder or Affiliate, or any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of,
or by reason of such obligations or their creation. Each Holder, by accepting
this Security, waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of this Security.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 000 Xxxxx
00
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, Attention: Secretary (or such other address
as the Company may have furnished in writing to the Trustee).
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including without
limitation the obligations of the Holders with respect to a registration and
indemnification of the Company to the extent provided therein.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identifying information
printed hereon.
Interest on this Security shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
[FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE]
The Subsidiary Guarantors, referred to in this Security upon which this
notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor person under the Indenture, have
unconditionally guaranteed, jointly and severally, on a senior basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") (i) the due and punctual payment of the principal of and
interest on the Securities, whether at Stated Maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal and
interest, if any, on the Securities, the payment of Liquidated Damages on the
Securities, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article XIII of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Securities 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.
The obligations of each Subsidiary Guarantor to the Holders of Securities
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth, and are senior obligations of each such Subsidiary
Guarantor to the extent and in the manner provided,
20
in Article XIII of the Indenture, and may be released or limited under certain
circumstances. Reference is hereby made to such Indenture for the precise terms
of the Subsidiary Guarantee therein made.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication of the Securities upon which this
Subsidiary Guarantee is endorsed shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized signatories.
SUBSIDIARY GUARANTORS:
WG APPAREL, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON MANAGEMENT CORPORATION
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON MACHINERY CORPORATION
By:___________________________________
Name: ____________________________
Title: _____________________________
LEADTEC SYSTEMS, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
21
W&G DAON, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
J&E SEWING SUPPLIES, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
W&G TENNESSEE IMPORTS, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON LEASING CORP.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON EQUIPMENT CORP.
By:___________________________________
Name: ____________________________
Title: _____________________________
22
PARADISE COLOR INCORPORATED
By:___________________________________
Name: ____________________________
Title: _____________________________
23
ASSIGNMENT FORM
To assign this Security fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's Soc. Sec. or tax I.D. No.)
and irrevocably appoint _________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
_______________________________________________________________________________
Date: __________________ Your Signature: ______________________________________
_______________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to the Company; or
(2) |_| pursuant to an effective registration statement under the
Securities Act of 1933, as amended; or
(3) |_| inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933, as
amended) that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that such
transfer is being made in reliance on Rule 144A, in each case
pursuant to and in compliance with Rule 144A under the Securities
Act of 1933, as amended; or
24
(4) |_| outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933, as amended;
(5) |_| pursuant to Rule 144 under the Securities Act of 1933, as
amended; or
(6) |_| pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5) or
(6) is checked, the Trustee may require, prior to registering any such transfer
of the Securities, such legal opinions, certifications and other information as
the Company has reasonably requested to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act of 1933, as amended.
________________________________
Signature
Signature Guarantee:
_____________________________________ ________________________________
(Signature must be guaranteed) Signature
________________________________________________________________________________
TO BE COMPLETED BY PURCHASER IF BOX (3) ABOVE IS CHECKED.
25
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, 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 for ongoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: _______________________ _____________________________________________
NOTE: To be executed by an executive officer
26
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Exchange Amount of decrease in Amount of increase in Principal Principal amount of this Signature of authorized
Principal Amount of this Amount of this Global Security Global Security following officer of Trustee or
Global Security such decrease or increase Securities Custodian
27
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.14 or 10.15 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 10.14 or 10.15 of the Indenture, state the
amount in principal amount: $ ____________________
Date: ____________________ Your Signature: __________________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: ___________________________________________________________
(Signature must be guaranteed)
28
EXHIBIT 2
to
Appendix A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE
EXCHANGE SECURITY]
GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND LIQUIDATED DAMAGES, IF ANY, BY CERTAIN SUBSIDIARIES OF
XXXXXXX & XXXXX, INC.
[*/]
[**/]
CUSIP No. ___________
No. ___________ $____________
XXXXXXX & XXXXX, INC.
12 1/4% Series B Senior Note Due 2003
Xxxxxxx & Xxxxx, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________ or registered assigns the principal sum of ___________ Dollars on
December 15, 2003, at the office or agency of the Company referred to below, and
to pay interest thereon, commencing on June 15, 1997 and continuing semiannually
thereafter, on June 15 and December 15 in each year, accruing from January 3,
1997, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, at the rate of 12 1/4% per annum, until the principal
hereof is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Securities from the
date on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in
----------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit 2 with the Assignment Form included in
such Exhibit 1.
29
whose name this Security (or one or more Predecessor Securities) is registered
on the Security Register at the close of business on the Regular Record Date for
such interest, which shall be the June 1 or December 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
Any such interest not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date, and such
Defaulted Interest, and (to the extent lawful) interest on such Defaulted
Interest at the rate borne by the Securities, may be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered on the
Security Register at the close of business on a Special Record Date for the
payment of such Defaulted Interest to be fixed by the Trustee, notice whereof
shall be given to Holders of Securities not less than 10 days prior to such
Special Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, any upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
Payment of the principal of (and premium, if any, on) and interest and
Liquidated Damages, if any, on this Security will be made at the office or
agency of the Company maintained for that purpose in The City of New York, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
payment of interest may be made on Physical Securities at the option of the
Company on or before the due date (i) by check mailed to the address of the
Person entitled thereto as such address shall appear on the Security Register or
(ii) with respect to any Holder owning Securities in the principal amount of
$500,000 or more, by wire transfer to an account maintained by the Holder
located in the United States, as specified in a written notice to the Trustee by
any such Holder requesting payment by wire transfer and specifying the account
to which transfer is requested.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
30
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
XXXXXXX & XXXXX, INC.
By:_________________________
Title:
Attest:
_____________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:___________ IBJ XXXXXXXX BANK & TRUST
COMPANY, TRUSTEE
By:_____________________________
Authorized Signatory
[FORM OF REVERSE SIDE OF EXCHANGE
OR PRIVATE EXCHANGE SECURITY]
This Security is one of a duly authorized issue of securities of the
Company designated as its 12 1/4% Series B Senior Notes Due 2003 (herein called
the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $85,000,000 which may be
issued under an indenture (herein called the "Indenture"; capitalized terms used
herein and not defined herein shall have the respective meanings set forth in
the Indenture) dated as of January 3, 1997 between the Company, the Subsidiary
Guarantors and IBJ Xxxxxxxx Bank & Trust Company (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
31
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities are subject to redemption, at the option of the Company, in
whole or in part, at any time on or after December 15, 2001, upon not less than
30 or more than 60 days' notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below if redeemed during the
twelve-month period beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2001........................................106.125%
2002........................................103.063%
together in the case of any such redemption with accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the date of redemption), all as
provided herein.
Notwithstanding the foregoing, at any time on or prior to December 15,
1999 up to 30% of the originally issued principal amount of Securities may be
redeemed, at the option of the Company, upon not less than 30 or more than 60
days' notice to each Holder of Securities to be redeemed, from the Net Cash
Proceeds of a Public Equity Offering, at a Redemption Price equal to 112 1/4% of
the principal amount thereof, together with accrued and unpaid interest and
Liquidated Damages, if any, to the Redemption Date, provided that $59,500,000 of
the originally issued principal amount of Securities remains Outstanding
immediately after such redemption and that such redemption occurs within 60 days
following the closing of such Public Equity Offering.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in accordance with the Indenture shall cease to bear interest from and
after the Redemption Date. In the event of redemption or purchase of this
Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
The Securities do not have the benefit of any mandatory redemption or
sinking fund obligations.
In the event of a Change of Control of the Company, and subject to certain
conditions and limitations provided in the Indenture, the Company will be
obligated to make an offer to purchase,
32
on a Business Day not more than 60 or less than 30 days following the occurrence
of a Change of Control of the Company, all of the then Outstanding Securities at
a purchase price equal to 101% of the principal amount thereof, together with
accrued and unpaid interest, if any, to the Change of Control Purchase Date, all
as provided in the Indenture.
In the event of Asset Sales, under certain circumstances, the Company will
be obligated to make a Net Proceeds Offer to purchase all or a specified portion
of each Holder's Securities at a purchase price equal to 100% of the principal
amount of the Securities, together with accrued and unpaid interest, if any, to
the Net Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (i)
failure to pay principal or premium, if any, upon maturity, redemption or
otherwise (including pursuant to a Change of Control Offer or a Net Proceeds
Offer); (ii) default for 30 days in payment of interest or Liquidated Damages,
if any, on any of the Securities; (iii) default in the performance of agreements
relating to mergers, consolidations and sales of all or substantially all
assets, limitation on Indebtedness and Disqualified Capital Stock, limitation on
the issuance of preferred stock of Restricted Subsidiaries, limitation on
restricted payments or the failure to make or consummate a Change of Control
Offer or a Net Proceeds Offer; (iv) failure of the Company or any Subsidiary
Guarantor for 30 days after notice to comply with any other covenants in the
Indenture or the Securities or its Subsidiary Guarantee, as the case may be; (v)
certain payment defaults under, and the acceleration prior to the maturity of,
certain Indebtedness of the Company or any Subsidiary in an aggregate principal
amount in excess of $2,500,000; (vi) certain final judgments or orders against
the Company or any Subsidiary in an aggregate amount of more than $2,500,000 not
paid, discharged or stayed for a period of 60 days; (vii) certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary and (viii) cessation of the effectiveness of any Subsidiary Guarantee
or the Pledge Agreement or any repudiation thereof. If any Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities may declare the
principal amount of all the Securities to be due and payable immediately, except
that (a) in the case of an Event of Default arising from certain events of
bankruptcy, insolvency or reorganization of the Company or any Restricted
Subsidiary, the principal amount of the Securities will become due and payable
immediately without further action or notice, and (b) in the case of an Event of
Default which relates to certain payment defaults or acceleration with respect
to certain Indebtedness, any such Event of Default and any consequential
acceleration of the Securities will be automatically rescinded if any such
Indebtedness is repaid or if the default relating to such Indebtedness is cured
or waived and if the holders thereof have accelerated such Indebtedness then
such holders have rescinded their declaration of acceleration. No Holder may
pursue any remedy under the Indenture unless the Trustee shall have failed to
act after notice from such Holder of an Event of Default and written request by
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities, and the offer to the Trustee of indemnity reasonably satisfactory to
it; however, such provision does not affect the right to xxx for enforcement of
any overdue payment on a Security by the Holder thereof. Subject to certain
limitations, Holders of a majority in aggregate principal amount of the
Outstanding Securities may direct the Trustee in its exercise of
33
any trust or power. The Trustee may withhold from Holders notice of any
continuing default (except default in payment of principal, premium, interest or
Liquidated Damages) if it determines in good faith that withholding the notice
is in the interest of the Holders. The Company is required to file annual and
quarterly reports with the Trustee as to the absence or existence of defaults.
The Indenture contains provisions for (i) defeasance at any time of the
entire indebtedness of the Company on this Security and (ii) discharge from
certain covenants and Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security. Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, to qualify or maintain the qualification of the
Indenture under the Trust Indenture Act and to make certain other specified
changes and other changes that do not materially adversely affect the interests
of any Holder in any material respect.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest and Liquidated Damages, if any, on this Security at the times,
place, and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
34
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
A director, officer, employee, incorporator, stockholder or Affiliate of
the Company, as such, past, present or future shall not have any personal
liability under this Security or any other Security or the Indenture by reason
of his or its status as such director, officer, employee, incorporator,
stockholder or Affiliate, or any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of,
or by reason of such obligations or their creation. Each Holder, by accepting
this Security, waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of this Security.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx
00000, Attention: Secretary (or such other address as the Company may have
furnished in writing to the Trustee).
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including without
limitation the obligations of the Holders with respect to a registration and
indemnification of the Company to the extent provided therein.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identifying information
printed hereon.
35
Interest on this Security shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
[FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE]
The Subsidiary Guarantors, referred to in this Security upon which this
notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor person under the Indenture, have
unconditionally guaranteed, jointly and severally, on a senior basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") (i) the due and punctual payment of the principal of and
interest on the Securities, whether at Stated Maturity, by acceleration or
otherwise, the due and punctual payment of interest on the overdue principal and
interest, if any, on the Securities, the payment of Liquidated Damages on the
Securities, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article XIII of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Securities 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.
The obligations of each Subsidiary Guarantor to the Holders of Securities
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth, and are senior obligations of each such Subsidiary
Guarantor to the extent and in the manner provided, in Article XIII of the
Indenture, and may be released or limited under certain circumstances. Reference
is hereby made to such Indenture for the precise terms of the Subsidiary
Guarantee therein made.
36
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication of the Security upon which this
Subsidiary Guarantee is endorsed shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized signatories.
SUBSIDIARY GUARANTORS:
WG APPAREL, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON MANAGEMENT CORPORATION
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON MACHINERY CORPORATION
By:___________________________________
Name: ____________________________
Title: _____________________________
LEADTEC SYSTEMS, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
37
W&G DAON, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
J&E SEWING SUPPLIES, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
W&G TENNESSEE IMPORTS, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON LEASING CORP.
By:___________________________________
Name: ____________________________
Title: _____________________________
CLINTON EQUIPMENT CORP.
By:___________________________________
Name: ____________________________
Title: _____________________________
38
PARADISE COLOR INCORPORATED
By:___________________________________
Name: ____________________________
Title: _____________________________
39
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's Soc. Sec. or tax I.D. No.)
and irrevocably appoint ___________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
________________________________________________________________________________
Date: _________________________ Your Signature: ____________________________
________________________________________________________________________________
Sign exactly as your name appears on the other side of this Security.
40
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.14 or 10.15 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 10.14 or 10.15 of the Indenture, state the amount:
Date: _________________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the other side of
the Security)
Signature Guarantee: ___________________________________________________________
EXHIBIT A TO INDENTURE
FORM OF PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made and entered into as of
January 3, 1997 by WG APPAREL, INC., a Delaware corporation and a wholly owned
Subsidiary of Xxxxxxx & Xxxxx, Inc. (the "Pledgor"), having its principal office
at 000 Xxxxx Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000, in favor of IBJ XXXXXXXX BANK &
TRUST COMPANY, having an office at Xxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
as collateral agent (the "Collateral Agent") for the holders (the "Holders") of
the Notes (as defined below). Capitalized terms used and not defined herein
shall have the meanings given to such terms in the Indenture referred to below.
W I T N E S S E T H :
WHEREAS, the Pledgor is the legal and beneficial owner of all of the
issued and outstanding shares of capital stock set forth on Schedule I hereto
(the "Pledged Shares") of Xxxxxxx & Xxxxx, Ltd. (the "Issuer"); and
WHEREAS, Xxxxxxx & Xxxxx, Inc. (the "Company") and IBJ Xxxxxxxx Bank &
Trust Company, as trustee, have entered into that certain Indenture dated as of
January 3, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Indenture"), pursuant to which the Company issued $85,000,000 in
aggregate principal amount of 12 1/4% Series A Senior Notes Due 2003 (together
with any Exchange Securities and Private Exchange Securities and any notes
issued in replacement thereof or in exchange or substitution therefor, the
"Notes"); and
WHEREAS, the terms of the Indenture require that Pledgor (i) pledge to the
Collateral Agent for the ratable benefit of the Holders and grant to the
Collateral Agent for the ratable benefit of the Holders a security interest in
the Pledged Collateral (as defined herein) and (ii) execute and deliver this
Agreement in order to secure the payment and performance by the Company of all
of the obligations of the Company under the Indenture and the Notes (the
"Obligations").
AGREEMENT
NOW, THEREFORE, in consideration of the premises, and in order to induce
the Holders to purchase the Notes, the Pledgor hereby agrees with the Collateral
Agent for its benefit and the ratable benefit of the Holders as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Collateral Agent for
its benefit and for the ratable benefit of the Holders and grants to the
Collateral Agent for its benefit and ratable benefit of the Holders a continuing
first priority security interest in all of Pledgor's right, title and interest
in the following (the "Pledged Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all products and proceeds of any of the Pledged Shares, including,
without limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions and other property or proceeds from time to time received,
receivable or otherwise distributed to Pledgor in respect of or in exchange for
any or all of the Pledged Shares or any of the foregoing; and
(b) an undivided sixty-six percent (66%) interest in all additional shares
of, and all securities convertible into and all warrants, options or other
rights to purchase, Capital Stock of, or other Equity Interests (as defined
below) in, the Issuer from time to time acquired by the Pledgor in any manner,
and the certificates representing such additional shares and Equity Interests
(any such additional shares and Equity Interests and other items shall
constitute part of the Pledged Shares under and as defined in this Agreement);
and
(c) all products and proceeds of any of the foregoing, including, without
limitation, all dividends, cash, options, warrants, rights, instruments,
subscriptions, and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing.
For purposes of this Agreement, "Equity Interests" means Capital Stock and
all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for Capital Stock).
SECTION 2. Security for Obligations. This Agreement secures the prompt and
complete payment and performance when due (whether at Stated Maturity, by
acceleration or otherwise) of all Obligations of the Pledgor hereunder, under
the Indenture and the Notes (including, without limitation, interest and any
other Obligations accruing after the date of any filing by the Pledgor of any
petition in bankruptcy or the commencement of any bankruptcy, insolvency or
similar proceeding with respect to the Pledgor).
SECTION 3. Delivery of Pledged Collateral. The Pledgor hereby agrees that
all certificates or instruments representing or evidencing the Pledged
Collateral shall be immediately delivered to and held at all times by the
Collateral Agent pursuant hereto in the State of New York and shall be in
suitable form for transfer by delivery, or issued in the name of the Pledgor and
accompanied by instruments of transfer or assignment duly executed in blank and
undated, and in either case having attached thereto all requisite federal or
state stock transfer tax stamps, all in form and substance satisfactory to the
Collateral Agent.
2
SECTION 4. Representations and Warranties. The Pledgor hereby makes all
representations and warranties applicable to the Pledgor contained in the
Indenture. The Pledgor further represents and warrants that:
(a) The execution, delivery and performance by the Pledgor of this
Agreement are within the Pledgor's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene, or constitute a
default under, any provision of applicable law or regulation or of the
certificate of incorporation or bylaws of the Pledgor or of any agreement,
judgment, injunction, order, decree or other instrument binding upon the
Pledgor, or result in the creation or imposition of any Lien on any assets of
the Pledgor, other than the Lien contemplated hereby.
(b) The Pledged Shares have been duly authorized and validly issued and
are fully paid and non-assessable.
(c) The Pledged Shares constitute 66% of the authorized, issued and
outstanding Equity Interests of the Issuer and constitute 66% of the shares of
Equity Interests of the Issuer beneficially owned by the Pledgor. The Pledgor
owns the remaining 34% of the Equity Interests of the Issuer (the "Unencumbered
Shares") free and clear of any Lien or claims of any Person.
(d) The Pledgor is the legal, record and beneficial owner of the Pledged
Collateral, free and clear of any Lien or claims of any Person except for the
security interest created by this Agreement.
(e) The Pledgor has full power and authority to enter into this Agreement
and has the right to vote, pledge and grant a security interest in the Pledged
Collateral as provided by this Agreement.
(f) This Agreement has been duly executed and delivered by the Pledgor and
constitutes a legal, valid and binding obligation of the Pledgor, enforceable
against the Pledgor in accordance with its terms, except as the enforceability
thereof may be limited by (i) the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights and remedies of creditors and (ii) the
effect of general principles of equity, whether enforcement is considered in a
proceeding in equity or at law.
(g) Upon the delivery to the Collateral Agent of the Pledged Collateral
and the filing of Uniform Commercial Code (the "UCC") financing statements, the
pledge of the Pledged Collateral pursuant to this Agreement creates a valid and
perfected first priority security interest in the Pledged Collateral, securing
the payment of the Obligations for the benefit of the Collateral Agent and the
Holders and enforceable as such against all creditors of the Pledgor and any
Persons purporting to purchase any of the Pledged Collateral from the Pledgor.
3
(h) No consent of any other Person and no consent, authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (i) for the pledge by the Pledgor of
the Pledged Collateral pursuant to this Agreement or for the execution, delivery
or performance of this Agreement by the Pledgor or (ii) for the exercise by the
Collateral Agent of the voting or other rights provided for in this Agreement or
the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required in connection with such disposition by laws affecting
the offering and sale of securities).
(i) No litigation, investigation or proceeding of or before any arbitrator
or governmental authority is pending or, to the best knowledge of the Pledgor,
threatened by or against the Pledgor or against any of its properties or
revenues with respect to this Agreement or any of the transactions contemplated
hereby.
(j) The pledge of the Pledged Collateral pursuant to this Agreement is not
prohibited by any law or governmental regulation, release, interpretation or
opinion of the Board of Governors of the Federal Reserve System or other
regulatory agency (including, without limitation, Regulations G, T, U and X of
the Board of Governors of the Federal Reserve System) which is binding upon the
Pledgor.
(k) All information set forth herein relating to the Pledged Collateral is
accurate and complete in all material respects.
SECTION 5. Further Assurance. The Pledgor will at all times cause the
security interests granted pursuant to this Agreement to constitute valid
perfected first priority security interests in the Pledged Collateral (other
than with respect to Permitted Liens), enforceable as such against all creditors
of the Pledgor and (except as otherwise specifically provided herein) any
Persons purporting to purchase any Pledged Collateral from the Pledgor. The
Pledgor will, promptly upon the reasonable request by the Collateral Agent,
execute and deliver or cause to be executed and delivered, or use its best
efforts to procure, all stock powers, proxies, tax stamps, assignments,
instruments and other documents, all in form and substance reasonably
satisfactory to the Collateral Agent, deliver any instruments to the Collateral
Agent and take any other actions that are reasonably necessary or desirable to
perfect, continue the perfection of, or protect the first priority of the
Collateral Agent's security interest in, the Pledged Collateral, to protect the
Pledged Collateral against the rights, claims, or interests of third persons, to
enable the Collateral Agent to exercise or enforce its rights and remedies
hereunder, or otherwise to effect the purposes of this Agreement. The Pledgor
also hereby authorized the Collateral Agent to file any financing or
continuation statements with respect to the Pledged Collateral without the
signature of the Pledgor to the extent permitted by applicable law. The Pledgor
will pay all costs incurred in connection with any of the foregoing.
4
SECTION 6. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default (as defined in the Indenture) shall
have occurred and be continuing, the Pledgor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Pledged Shares or
any part thereof for any purpose not inconsistent with the terms of this
Agreement or the Indenture; provided, however, that the Pledgor shall not
exercise or shall refrain from exercising any such right if such action would
have a material adverse effect on the value of the Pledged Collateral or any
part thereof or be inconsistent with or violate any provisions of this Agreement
or the Indenture.
(b) So long as no Event of Default (as defined in the Indenture) shall
have occurred and be continuing, and subject to the other terms and conditions
of the Indenture, the Pledgor shall be entitled to receive, and to utilize
(subject to the provisions of the Indenture) free and clear of the Lien of this
Agreement, all regular and ordinary cash dividends paid from time to time in
respect of the Pledged Shares.
(c) Any and all (i) dividends, other distributions, interest and principal
payments paid or payable in the form of instruments and/or other property (other
than cash dividends permitted under Section 6(b) hereof) received, receivable or
otherwise distributed in respect of, or in exchange for, any Pledged Collateral,
(ii) dividends and other distributions paid or payable in cash in respect of any
Pledged Shares in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid-in
surplus, and (iii) cash paid, payable or otherwise distributed in redemption of,
or in exchange for, any Pledged Collateral, shall in each case be forthwith
delivered to the Collateral Agent to be held as Pledged Collateral and shall, if
received by the Pledgor, be received in trust for the benefit of the Collateral
Agent for the benefit of the Holders, be segregated from the other property and
funds of the Pledgor and be forthwith delivered to the Collateral Agent as
Pledged Collateral in the same form as so received (with any necessary
endorsements).
(d) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Pledgor all such proxies, dividend and interest
payment orders and other instruments as the Pledgor may reasonably request for
the purpose of enabling the Pledgor to exercise the voting and other rights that
it is entitled pursuant to Section 6(a) and 6(b) above.
(e) Upon the occurrence and during the continuance of an Event of Default
(as defined in the Indenture), (i) all rights of the Pledgor to exercise the
voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 6(a) shall cease, and all such rights shall, at the
option of the Collateral Agent, thereupon become vested in the Collateral Agent,
which, to the extent permitted by law, shall thereupon have the sole right to
exercise such voting and other consensual rights, and (ii) all dividends and
other distributions payable in respect of the Pledged Collateral shall be paid
to the Collateral Agent and the Pledgor's right to receive such cash payments
pursuant to Section 6(b) hereof shall immediately cease.
5
(f) Upon the occurrence and during the continuance of an Event of Default
(as defined in the Indenture), the Pledgor shall execute and deliver (or cause
to be executed and delivered) to the Collateral Agent all such proxies, dividend
and interest payment orders and other instruments as the Collateral Agent may
reasonably request for the purpose of enabling the Collateral Agent to exercise
the voting and other rights that it is entitled to exercise pursuant to Section
6(e) above.
(g) All dividends and other distributions that are received by the Pledgor
contrary to the provisions of this Section 6 shall be received in trust for the
benefit of the Collateral Agent, the Holders, shall be segregated from the other
property or funds of the Pledgor and shall be forthwith delivered to the
Collateral Agent as Pledged Collateral in the same form as so received (with any
necessary endorsements).
SECTION 7. Covenants. The Pledgor hereby covenants and agrees with the
Collateral Agent and the Holders that it will (i) comply with all of the
obligations, requirements and restrictions applicable to the Pledgor contained
in the Indenture and (ii) if the Trustee and the Collateral Agent shall not be
the same Person, notify the Collateral Agent of the occurrence of an Event of
Default. The Pledgor further covenants and agrees, from and after the date of
this Agreement and until the Obligations have been paid in full, as follows:
(a) The Pledgor agrees that it will not (i) sell, assign, transfer, convey
or otherwise dispose of, or grant any option or warrant with respect to, any of
the Pledged Collateral or Unencumbered Shares without the prior written consent
of the Collateral Agent and the Holders, (ii) create or permit to exist any Lien
upon or with respect to any of the Pledged Collateral or Unencumbered Shares,
except for the security interest granted under this Agreement and Permitted
Liens, and at all times will be the sole beneficial owner of the Pledged
Collateral and the Unencumbered Shares, (iii) enter into any agreement or
understanding that purports to or that restricts or inhibits the Collateral
Agent's rights or remedies hereunder, including, without limitation, the
Collateral Agent's right to sell or otherwise dispose of the Pledged Collateral,
(iv) take any action, or permit the taking of any action by the Issuer, with
respect to the Pledged Collateral, the taking of which would result in a
material impairment of the economic value of the Pledged Collateral as
collateral or a violation of the Indenture or this Agreement, (v) permit the
Issuer to merge or consolidate with or into another person or entity other than
the Pledgor or sell or transfer all or substantially all of its assets to
another person or entity other than the Pledgor, unless (x) Pledgor shall have
delivered to the Collateral Agent an Opinion of Counsel substantially in the
form of Exhibit A hereto and a certificate executed by the President and Chief
Financial Officer of Pledgor substantially in the form of Exhibit B hereto, (y)
an undivided sixty-six percent (66%) interest in all outstanding Capital Stock
of the surviving entity in such merger or consolidation or of the entity to whom
such sale or transfer was made and (z) the Pledgor shall otherwise have complied
with the Indenture, or (vi) fail to pay or discharge any tax, assessment or levy
of any nature not later than the date of any proposed sale under any judgment,
writ or warrant of attachment with regard to the Pledged Collateral.
6
(b) The Pledgor agrees that immediately upon becoming the beneficial owner
of any additional shares of Capital Stock, notes, other securities or Equity
Interests of the Issuer or of any other subsidiary of the Pledgor or the Issuer
that is not a Subsidiary Guarantor, including as a result of the merger or
consolidation of the Issuer with or into another entity, it will pledge and
deliver to the Collateral Agent for its benefit and the ratable benefit of the
Holders and grant to the Collateral Agent for its benefit and the ratable
benefit of the Holders, a continuing first priority security interest in an
undivided sixty-six percent (66%) interest in such shares, notes, other
securities or Equity Interests (as well as instruments of transfer or assignment
duly executed in blank and undated together with any necessary stock transfer
tax stamps, all in form and substance reasonably satisfactory to the Collateral
Agent).
SECTION 8. Power of Attorney. In addition to all of the powers granted to
the Collateral Agent pursuant to Section 14.4 of the Indenture, the Pledgor
hereby appoints and constitutes the Collateral Agent as the Pledgor's
attorney-in-fact to exercise all of the following powers upon and at any time
after the occurrence and during the continuance of an Event of Default (as
defined in the Indenture): (i) collection of proceeds of any Pledged Collateral;
(ii) conveyance of any item of Pledged Collateral to any purchaser thereof;
(iii) giving of any notices or recording of any Liens under Section 5 hereof;
(iv) making of any payments or taking any acts under Section 9 hereof; and (v)
paying or discharging taxes or Liens levied or placed upon or threatened against
the Pledged Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Collateral Agent in its
sole discretion, and such payments made by the Collateral Agent to become the
obligations of the Pledgor to the Collateral Agent, due and payable immediately
without demand. The Collateral Agent's authority hereunder shall include,
without limitation, the authority to endorse and negotiate, for the Collateral
Agent's own account, any checks or instruments in the name of the Pledgor,
execute and give receipt for any certificate of ownership or any document,
transfer title to any item of Pledged Collateral, sign the Pledgor's name on all
financing statements or any other documents deemed necessary or appropriate to
preserve, protect or perfect the security interest in the Pledged Collateral and
to file the same, prepare, file and sign the Pledgor's name on any notice of
Lien, and prepare, file and sign the Pledgor's name on a proof of claim in
bankruptcy or similar document against any customer of the Pledgor, and to take
any other actions arising from or incident to the powers granted to the
Collateral Agent in this Agreement. This power of attorney is coupled with an
interest and is irrevocable by the Pledgor.
SECTION 9. Collateral Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Pledgor under Section 14 hereof.
SECTION 10. No Assumption of Duties; Reasonable Care. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the security interest in and to the Pledged Collateral
granted hereby and shall not be interpreted to, and shall not, impose any duties
on the Collateral Agent in connection therewith. The Collateral
7
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Pledged Collateral in its possession if the Pledged
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood that the
Collateral Agent shall not have any responsibility for (i) ascertaining or
taking action with respect to calls, conversions, exchanges, maturities, tenders
or other matters relative to any Pledged Collateral, whether or not the
Collateral Agent has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect
to any Pledged Collateral.
SECTION 11. Subsequent Changes Affecting Collateral. The Pledgor
represents to the Collateral Agent and the Holders that the Pledgor has made its
own arrangements for keeping informed of changes or potential changes affecting
the Pledged Collateral (including, but not limited to, rights to convert, rights
to subscribe, payment of dividends, payments of interest and/or principal,
reorganization or other exchanges, tender offers and voting rights), and the
Pledgor agrees that the Collateral Agent and the Holders shall have no
responsibility or liability for informing the Pledgor of any such changes or
potential changes or for taking any action or omitting to take any action with
respect thereto. The Pledgor covenants that it will not, without the prior
written consent of the Collateral Agent and the Holders, vote to enable, or take
any other action to permit, the Issuer to issue any Capital Stock or other
Equity Interest or to sell or otherwise dispose of, or grant any option with
respect to, any of the Pledged Collateral or create or permit to exist any Lien
upon or with respect to any of the Pledged Collateral, except for the security
interests granted under this Agreement. The Pledgor will defend the right, title
and interest of the Collateral Agent and the Holders in and to the Pledged
Collateral against the claims and demands of all Persons.
SECTION 12. Remedies Upon Default.
(a) If any Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the Collateral Agent and the Holders shall have, in
addition to all other rights given by law or by this Agreement or the Indenture,
all of the rights and remedies with respect to the Pledged Collateral of a
secured party under the UCC as in effect in the State of New York at that time.
The Collateral Agent may, without notice and at its option, transfer or
register, and the Pledgor shall register or cause to be registered upon request
therefor by the Collateral Agent, the Pledged Collateral or any part thereof on
the books of the Issuer into the name of the Collateral Agent or the Collateral
Agent's nominee(s), with or without any indication that such Pledged Collateral
is subject to the security interest hereunder. In addition, with respect to any
Pledged Collateral that shall then be in or shall thereafter come into the
possession or custody of the Collateral Agent, the Collateral Agent may sell or
cause the same to be sold at any broker's board or at public or private sale, in
one or more sales or lots, at such price or prices as the Collateral Agent may
deem best, for cash or on credit or for future delivery, without assumption of
any credit risk. The purchaser of any or all Pledged Collateral so sold shall
thereafter hold the same absolutely, free from any claim, encumbrance or right
of any kind whatsoever. Unless any of the Pledged Collateral threatens to
decline speedily in value or is or becomes of a type sold on a
8
recognized market, the Collateral Agent will give the Pledgor reasonable notice
of the time and place of any public sale thereof, or of the time after which any
private sale or other intended disposition is to be made. Any sale of the
Pledged Collateral conducted in conformity with reasonable commercial practices
of banks, insurance companies, commercial finance companies, or other financial
institutions disposing of property similar to the Pledged Collateral shall be
deemed to be commercially reasonable. Any requirements of reasonable notice
shall be met if such notice is mailed to the Pledgor as provided below in
Section 18.1, at least ten days before the time of the sale or disposition. Any
other requirement of notice, demand or advertisement for sale is, to the extent
permitted by law, waived. The Collateral Agent or any Holder may, in its own
name or in the name of a designee or nominee, buy any of the Pledged Collateral
at any public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees and
disbursements) of, or incident to, the enforcement of any of the provisions
hereof shall be recoverable from the proceeds of the sale or other disposition
of the Pledged Collateral.
(b) The Pledgor agrees to cause the Issuer to cooperate with and assist
the Collateral Agent to comply with the provisions of the securities or "Blue
Sky" laws, if applicable, of any jurisdiction that the Trustee shall designate
for the sale of the Pledged Shares.
(c) In view of the fact that federal and state securities laws may impose
certain restrictions on the method by which a sale of the Pledged Collateral may
be effected after the occurrence of and during the continuance of an Event of
Default (as defined in the Indenture), Pledgor agrees that upon the occurrence
or existence of any such Event of Default, the Collateral Agent may, from time
to time, attempt to sell all or any part of the Pledged Collateral by means of a
private placement, restricting the prospective purchasers to those who will
represent and agree that they are purchasing for investment only and not for
distribution. In so doing, the Collateral Agent may solicit offers to buy the
Pledged Collateral, or any part of it, for cash, from a limited number of
investors who might be interested in purchasing the Pledged Collateral. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Collateral
Agent shall be under no obligation to delay a sale of any of the Pledged
Collateral for the period of time necessary to permit the Issuer of such
securities to register them for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer agrees to do so.
(d) The Pledgor further agrees to use its best efforts to do or cause to
be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Collateral pursuant to this Section 12 valid
and binding and in compliance with any and all other applicable requirements of
law. The Pledgor further agrees that a breach of any of the covenants contained
in this Section 12 will cause irreparable injury to the Collateral Agent and the
Holders that the Collateral Agent and the Holders have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 12 shall be
9
specifically enforceable against the Pledgor, and the Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Default or Event of Default has
occurred.
SECTION 13. Irrevocable Authorization and Instruction of the Issuer. The
Pledgor hereby authorizes and instructs the Issuer to comply with any
instruction received by the Issuer from the Collateral Agent that (i) states
that an Event of Default has occurred under the Indenture and (ii) is otherwise
in accordance with the terms of this Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that the Issuer shall be
fully protected in so complying.
SECTION 14. Fees and Expenses. The Pledgor will upon demand pay to the
Collateral Agent the amount of any and all reasonable fees and expenses
(including, without limitation, the reasonable fees and disbursements of its
counsel, of any investment banking firm, business broker or other selling agent
and of any other experts and agents retained by the Collateral Agent) that the
Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent and the Holders
hereunder or (iv) the failure by the Pledgor to perform or observe any of the
provisions hereof.
SECTION 15. Security Interest Absolute. All rights of the Collateral Agent
and the Holders and the security interests created hereunder, and all
obligations of the Pledgor hereunder, shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Indenture or any Note or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any other
term of, all or any of the Obligations, or any other amendment or waiver of or
any consent to any departure from the Indenture;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstances that might otherwise constitute a defense
available to, or a discharge of, the Pledgor in respect of the Obligations or of
this Agreement.
SECTION 16. Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default (as defined in the Indenture), the proceeds
of any sale of, or other realization upon, all or any part of the Pledged
Collateral and any cash held shall be applied by the Collateral Agent in the
following order of priorities:
10
first, to payment of the expenses of such sale or other realization,
including reasonable compensation to agents and counsel for the Collateral
Agent, and all expenses, liabilities and advances incurred or made by the
Collateral Agent in connection therewith, and any other unreimbursed fees and
expenses for which the Collateral Agent is to be reimbursed pursuant to Section
14 hereof;
second, to the ratable payment (based on the principal amount of Notes
deemed by the Indenture to be outstanding at the time of distribution) of
accrued but unpaid interest on such outstanding Notes;
third, to the ratable payment (based on the principal amount of Notes
deemed by the Indenture to be outstanding at the time of distribution) of unpaid
principal of such outstanding Notes;
fourth, to the ratable payment (based on the principal amount of Notes
deemed by the Indenture to be outstanding at the time of distribution) of all
other Obligations, until all Obligations shall have been paid in full; and
finally, to payment to the Pledgor or its successors or assigns, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 17. Uncertificated Securities. Notwithstanding anything to the
contrary contained herein, if any Pledged Shares (whether now owned or hereafter
acquired) are uncertificated Pledged Shares, the Pledgor shall promptly notify
the Collateral Agent, and shall promptly take all actions reasonably required to
perfect the security interest of the Collateral Agent under applicable law
(including, in any event, under Sections 8-313 and 8-321 of the New York UCC).
The Pledgor further agrees to take such actions as the Collateral Agent deems
reasonably necessary or desirable to effect the foregoing and to permit the
Collateral Agent to exercise any of its rights and remedies hereunder, and
agrees to provide an Opinion of Counsel satisfactory to the Collateral Agent
with respect to any such pledge of uncertificated Pledged Shares promptly upon
request of the Collateral Agent.
SECTION 18. Miscellaneous Provisions.
Section 18.1 Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner as set forth in Section 15.4 or 15.5 of the Indenture, and if to any
Holder delivered to the addresses set forth in such Section and
11
if to the Pledgor:
c/x Xxxxxxx & Xxxxx, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Chief Executive Officer
Telephone: 000.000.0000
Telecopier: 908.541.6249
if to the Collateral Agent:
IBJ Xxxxxxxx Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Administration
Telephone: 000.000.0000
Telecopier: 212.858.2952
Section 18.2 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Pledgor to the Collateral Agent to take any action
or omit to take any action under this Agreement, the Pledgor shall deliver to
the Collateral Agent an Officers' Certificate and/or an Opinion of Counsel in
accordance with the requirements of Section 15.1 of the Indenture.
Section 18.3 No Adverse Interpretation of Other Agreements. This Agreement
may not be used to interpret another pledge, security or debt agreement of the
Pledgor, the Issuer or any subsidiary of any of them. No such pledge, security
or debt agreement may be used to interpret this Agreement.
Section 18.4 Severability. The provisions of this Agreement are severable,
and if any clause or provision shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect in that jurisdiction only such clause or provision, or part thereof, and
shall not in any manner affect such clause or provision in any other
jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
Section 18.5 Headings. The headings of the Sections of this Agreement 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 or provisions
hereof.
Section 18.6 Counterpart Originals. This Agreement may be signed in two or
more counterparts. Each signed copy shall be an original, but all of them
together represent one and the same agreement. Each counterpart may be executed
and delivered by telecopy, if such delivery is promptly followed by the original
manually signed copy sent by overnight courier.
12
Section 18.7 Benefits of Agreement. Nothing in this Agreement, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, and the Holders any benefit or any legal or equitable
right, remedy or claim under this Agreement.
Section 18.8 Amendments, Waivers and Consents. Any amendment or waiver of
any provision of this Agreement and any consent to any departure by the Pledgor
from any provision of this Agreement shall be effective only if made or given in
compliance with all of the terms and provisions of the Indenture necessary for
amendments or waivers of, or consents to any departure by the Pledgor from any
provision of the Indenture, as applicable, and neither the Collateral Agent nor
any Holder shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. Failure of the Collateral Agent or any Holder to exercise, or
delay in exercising, any right, power or privilege hereunder shall not operate
as a waiver thereof. No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. A waiver by the Collateral
Agent or any Holder of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy that the Collateral Agent or
such Holder would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any rights or remedies provided by law.
Section 18.9 Interpretation of Agreement. Time is of the essence in each
provision of this Agreement of which time is an element. All terms not defined
herein or in the Indenture shall have the meaning set forth in the applicable
UCC, except where the context otherwise requires. To the extent a term or
provision of this Agreement conflicts with the Indenture and is not dealt with
herein with more specificity, the Indenture, as the case may be, shall control
with respect to the subject matter of such term or provision. Acceptance of or
acquiescence in a course of performance rendered under this Agreement shall not
be relevant to determine the meaning of this Agreement even though the accepting
or acquiescing party had knowledge of the nature of the performance and
opportunity for objection.
Section 18.10 Continuing Security Interest. This Agreement shall create a
continuing security interest in the Pledged Collateral and shall (i) remain in
full force and effect until the payment in full of all the Obligations and all
the fees and expenses owing to the Collateral Agent, (ii) be binding upon the
Pledgor, its successors and assigns, and (iii) inure, together with the rights
and remedies of the Collateral Agent hereunder, to the benefit of the Collateral
Agent, the Holders and their respective successors, transferees and assigns.
Section 18.11 Reinstatement. This Agreement shall continue to be effective
or be reinstated if at any time any amount received by the Collateral Agent or
any Holder in respect of the Obligations is rescinded or must otherwise be
restored or returned by the Collateral Agent or any Holder upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Pledgor or upon
the appointment of any receiver, intervenor, conservator, trustee or similar
13
official for the Pledgor or any substantial part of its assets, or otherwise,
all as though such payments had not been made.
Section 18.12 Survival of Provisions. All representations, warranties and
covenants of the Pledgor contained herein shall survive the execution and
delivery of this Agreement and shall terminate only upon the full and final
payment and performance by the Pledgor of the Obligations and all fees and
expenses owing to the Collateral Agent.
Section 18.13 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled.
Section 18.14 Authority of the Collateral Agent.
(a) The Collateral Agent shall have and be entitled to exercise all powers
hereunder that are specifically granted to the Collateral Agent by the terms
hereof, together with such powers as are reasonably incident thereto. The
Collateral Agent may perform any of its duties hereunder or in connection with
the Pledged Collateral by or through agents or employees and shall be entitled
to retain counsel and to act in reliance upon the advice of counsel concerning
all such matters. Neither the Collateral Agent nor any director, officer,
employee, attorney or agent of the Collateral Agent shall be responsible for the
validity, effectiveness or sufficiency hereof or of any document or security
furnished pursuant hereto. The Collateral Agent and its directors, officers,
employees, attorneys and agents shall be entitled to rely on any communication,
instrument or document believed by it or them to be genuine and correct and to
have been signed or sent by the proper person or persons. The Pledgor agrees to
indemnify and hold harmless the Collateral Agent, the Holders and any other
Person from and against any and all costs, expenses (including the reasonable
fees and disbursements of counsel (including, the allocated costs of inside
counsel)), claims and liabilities incurred by the Collateral Agent, the Holders
or such Person hereunder, unless such claim or liability shall be due to willful
misconduct or gross negligence on the part of such Person.
(b) The Pledgor acknowledges that the rights and responsibilities of the
Collateral Agent under this Agreement with respect to any action taken by the
Collateral Agent or the exercise or non-exercise by the Collateral Agent of any
option, right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall be conclusively presumed to be
acting as agent for the Holders with full and valid authority so to act or
refrain from acting, and the Pledgor shall not be obligated or entitled to make
any inquiry respecting such authority.
Section 18.15 Resignation or Removal of the Collateral Agent. Until such
time as the Obligations and all fees and expenses of the Collateral Agent shall
have been paid in full, the Collateral Agent may at any time by giving written
notice to the Pledgor and the Holders resign and be discharged of the
responsibilities hereby created, such resignation to become effective upon
14
(i) the appointment of a successor Collateral Agent and (ii) the acceptance of
such appointment by such successor Collateral Agent. As promptly as practicable
after the giving of any such notice, the Holders shall appoint a successor
Collateral Agent, which successor Collateral Agent shall be reasonably
acceptable to the Pledgor. If no successor Collateral Agent shall be appointed
and shall have accepted such appointment within 90 days after the Collateral
Agent gives the aforesaid notice of resignation, the Collateral Agent may apply
to any court of competent jurisdiction to appoint a successor Collateral Agent
to act until such time, if any, as a successor shall have been appointed as
provided in this Section 18.15. Any successor so appointed by such court shall
immediately and without further act be superseded by any successor Collateral
Agent appointed by the Holders as provided in this Section 18.15. Simultaneously
with its replacement as Collateral Agent hereunder, the Collateral Agent so
replaced shall deliver to its successor all documents, instruments, certificates
and other items of whatever kind (including, without limitation, the
certificates and instruments evidencing the Pledged Collateral and all
instruments of transfer or assignment) held by it pursuant to the terms hereof.
The Collateral Agent that has resigned shall be entitled to fees, costs and
expenses to the extent incurred or arising, or relating to events occurring,
before its replacement or removal.
Section 18.16 Termination of Agreement; Release.
(a) Subject to the provisions of Section 18.11 hereof, this Agreement
shall terminate (i) upon full and final payment and performance of the
Obligations (and upon receipt by the Collateral Agent of the Pledgor's written
certification that all such Obligations have been satisfied) and payment in full
of all fees and expenses owing by the Pledgor to the Collateral Agent or (ii)
upon the Legal Defeasance of all of the Obligations pursuant to Section 12.2 of
the Indenture (other than those surviving Obligations specified therein). At
such time, the Collateral Agent shall reassign and redeliver to the Pledgor all
of the Pledged Collateral hereunder that has not been sold, disposed of,
retained or applied by the Collateral Agent in accordance with the terms hereof.
Such reassignment and redelivery shall be without warranty by or recourse to the
Collateral Agent, except as to the absence of any prior assignments by the
Collateral Agent of its interest in the Pledged Collateral, and shall be at the
expense of the Pledgor.
(b) The Pledgor agrees that it will not, except as permitted by the
Indenture or Section 7(a) hereof, sell or dispose of, or grant any option or
warrant with respect to, any of the Pledged Collateral; provided, however, that
if the Pledgor shall sell any of the Pledged Collateral in accordance with the
terms of the Indenture, including the requirement that Pledgor apply the Net
Cash Proceeds, if any, of such sale in accordance with Section 10.15 of the
Indenture, the Collateral Agent shall, at the request of the Pledgor and subject
to requirements of Section 14.3 of the Indenture, release the Pledged Collateral
subject to such sale free and clear of the Lien and security interest under this
Agreement; provided further that if the sale or other disposition of Pledged
Collateral is to the Issuer, subject to Section 7(a) hereof, the Collateral
Agent shall at the request of the Pledgor, release that portion of the Pledged
Collateral so transferred, for the sole purpose of registering the change of
ownership in such Pledged Collateral.
15
Section 18.17 Final Expression. This Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their Agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.
Section 18.18 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; WAIVER OF DAMAGES.
(i) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK. THE PLEDGOR IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND THE PLEDGOR
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED BY ANY SUCH COURT.
(ii) THE PLEDGOR AGREES THAT THE COLLATERAL AGENT SHALL, IN ITS OWN NAME
OR IN THE NAME AND ON BEHALF OF ANY HOLDER HAVE THE RIGHT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TO PROCEED AGAINST THE PLEDGOR OR ITS PROPERTY IN A
COURT IN ANY LOCATION REASONABLY SELECTED IN GOOD FAITH TO ENABLE THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR AGREES THAT IT WILL NOT
ASSERT ANY PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY THE COLLATERAL
AGENT TO REALIZE ON SUCH PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER
IN FAVOR OF THE COLLATERAL AGENT. THE PLEDGOR WAIVES ANY OBJECTION THAT IT MAY
HAVE TO THE LOCATION OF THE COURT IN WHICH THE COLLATERAL AGENT HAS COMMENCED A
PROCEEDING DESCRIBED IN THIS PARAGRAPH INCLUDING, WITHOUT LIMITATION, ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS.
(iii) EACH OF THE PLEDGOR, THE COLLATERAL AGENT AND EACH HOLDER WAIVE ANY
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT. INSTEAD, ANY DISPUTES RESOLVED IN COURT WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY.
(iv) THE PLEDGOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF
THE AFOREMENTIONED COURTS IN ANY ACTION OR
16
PROCEEDING WITH RESPECT TO THIS AGREEMENT BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE PLEDGOR AT ITS ADDRESS SET
FORTH IN SECTION 15.4 OF THE INDENTURE, SUCH SERVICE TO BECOME EFFECTIVE FIVE
(5) BUSINESS DAYS AFTER SUCH MAILING.
(v) NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT OR ANY
HOLDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE PLEDGOR IN ANY OTHER
JURISDICTION.
(vi) The Pledgor hereby agrees that neither the Collateral Agent nor any
Holder shall have any liability to the Pledgor (whether sounding in tort,
contract or otherwise) for losses suffered by the Pledgor in connection with,
arising out of, or in any way related to, the transactions contemplated and the
relationship established by this Agreement, or any act, omission or event
occurring in connection therewith, unless it is determined by a final and
nonappealable judgment of a court that is binding on the Collateral Agent or
such Holder, as the case may be, that such losses were solely the result of acts
or omissions on the part of the Collateral Agent or such Holder, as the case may
be, constituting gross negligence or willful misconduct.
(vii) Except as otherwise provided for in this Agreement or which are not
waivable under applicable law, the Pledgor waives all rights of notice and
bearing of any kind prior to the exercise by the Collateral Agent or any Holder
of its rights during the continuance of an Event of Default (as defined in the
Indenture) to repossess the Pledged Collateral with judicial process or to
replevy, attach or levy upon the Pledged Collateral or other security for the
Obligations. The Pledgor waives the posting of any bond otherwise required of
the Collateral Agent or any Holder in connection with any judicial process or
proceeding to obtain possession of, replevy, attach or levy upon the Pledged
Collateral or other security for the Obligations, to enforce any judgment or
other court order entered in favor of the Collateral Agent or any Holder or to
enforce by specific performance, temporary restraining order or preliminary or
permanent injunction this Agreement.
Section 18.19 Acknowledgments. The Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement;
(b) neither the Collateral Agent nor any Holder has any fiduciary
relationship to the Pledgor, and the relationship between the Collateral Agent
and the Holders on the one hand, and the Pledgor, on the other hand, is solely
that of a secured party and a creditor; and
(c) no joint venture exists among (i) the Holders or (ii) the Pledgor and
the Holders.
[Signature Page Follows]
17
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have each caused
this Agreement to be duly executed and delivered as of the date first above
written.
PLEDGOR:
WG APPAREL, INC.
By:___________________________________
Name: ____________________________
Title: _____________________________
COLLATERAL AGENT:
IBJ XXXXXXXX BANK & TRUST COMPANY,
as Collateral Agent
By:___________________________________
Name: ____________________________
Title: _____________________________
S-1
SCHEDULE I
PLEDGED SHARES
Number of Pledged Share Certificate Percentage of
Issuer Shares Number Outstanding
------ ----------------- ----------------- -------------
Xxxxxxx & Xxxxx, Ltd. 16830 Vol. 2 No. 3 66%
EXHIBIT A
FORM OF OPINION OF COUNSEL
(i) [New Entity] is a corporation duly incorporated, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has the
requisite corporate power and authority to own and to operate its properties and
to carry on its business;
(ii) All of the outstanding Capital Stock of [New Entity] has been validly
authorized and issued and is fully paid and nonassessable and, to the best
knowledge of such counsel after diligent inquiry, is owned by the Pledgor,
directly or indirectly, free and clear of any security interest, claim, lien or
encumbrance, other than the security interests created by the Pledge Agreement,
and, to the best knowledge of such counsel after diligent inquiry, there are no
outstanding rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of Capital Stock or other Equity Interest
in [New Entity];
(iii) (A) Pledgor has the requisite corporate power and authority to
create, deliver and perfect the security interests created under the Pledge
Agreement; (B) the Pledge Agreement has been duly authorized, executed and
delivered by Pledgor and constitutes the legal, valid and binding obligation of
Pledgor enforceable against it in accordance with its terms; (C) after giving
effect to the [merger] [consolidation] [sale or transfer of all or substantially
all assets], and assuming the Collateral Agent is holding the certificates
representing the Pledged Collateral in the State of New York, the Pledge
Agreement will create a valid and perfected security interest in the Pledged
Collateral (including, without limitation, all of the Equity Interests of [New
Entity]) in favor of the Collateral Agent, on behalf and for the benefit of
itself, the Holders, subject to no other consensual security interest in favor
of any other person, and no filings or recordings will be required in order to
perfect or maintain the security interests created under the Pledge Agreement in
such Pledged Collateral; and
(iv) The consummation of the [merger] [consolidation] [sale or transfer of
all or substantially all assets] does not (A) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Pledgor, the Issuer or [New Entity] is a
party by which the Pledgor, the Issuer or [New Entity] is bound or to which any
of the property or assets of the Pledgor, the Issuer or [New Entity] is subject,
nor will such action result in any violation of the provisions of the respective
charter or by-laws of the Pledgor, the Issuer or [New Entity], nor will such
action result in any violation of any application law or statute or any
applicable order, rule or regulation known to us of any court or governmental
agency or body having jurisdiction over the Pledgor and its subsidiaries or any
of their respective properties, or (B) result in the creation of any Lien upon
any other properties or assets of the Pledgor, the Issuer or [New Entity] (other
than Liens created by the Pledge Agreement).
EXHIBIT B
FORM OF CONSOLIDATED NET WORTH CERTIFICATE
The undersigned, __________________ and __________________, respectively the
President and Chief Financial Officer of WG Apparel, Inc., a Delaware
corporation (the "Pledgor"), certify that they are authorized to execute this
Certificate in the name and on behalf of the Pledgor, and further certify as
follows (capitalized terms used but not defined herein have the respective
meanings assigned to them in the Pledge and Security Agreement, dated January 3,
1997 (the "Pledge Agreement"), between the Pledgor and IBJ Xxxxxxxx Bank & Trust
Company, as Collateral Agent):
(d) We are familiar with the historical and current financial condition of
[name of Issuer merging, consolidating or transferring assets] (the
"Issuer") that proposes to [merge or consolidate with] [sell or transfer
all or substantially all of its assets to] [New Entity] (the "Successor
Issuer") pursuant to Section 7(a)(vii) of the Pledge Agreement.
(e) For the purposes of this Certificate, we have reviewed other financial
information and forecasts relating to the Issuer and the Successor Issuer
prepared by [the management of the Issuer] [______________, the
independent certified public accountants for the Pledgor] and the
Successor Issuer which we believe (as to the historical financial
information) fairly present the historical financial positions and results
of operations of the Issuer and the Successor Issuer as of the dates and
for the periods presented and (in the case of the forecasts) were based
upon reasonable assumptions and provide reasonable estimations of future
performance, although any forecasts are necessarily uncertain of
fulfillment. We know of no facts or circumstances arising subsequent to
the dates as of which such information and projections were prepared that
would materially alter such conclusions.
Based upon the foregoing, we have reached the conclusions that, after
giving effect to the transactions contemplated by Section 7(a)(vii) of the
Pledge Agreement and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the most recently ended four full
fiscal quarter period, the Company will be permitted to incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to the
Consolidated Fixed Charged Coverage Ratio set forth in Section 10.11(a) of the
Indenture.
WITNESS the signatures of the undersigned, this ________ day of
_______________________.
______________________________
President
______________________________
Chief Financial Officer
