EXHIBIT 4.14
JAFRA COSMETICS INTERNATIONAL, INC.
and
DISTRIBUIDORA COMERCIAL JAFRA, S.A. de C.V.,
as several and not joint Issuers and as Note Guarantors,
JAFRA WORLDWIDE HOLDINGS (LUX), S.ar.l.
and the other Note Guarantors from time to time parties hereto,
as Note Guarantors
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
INDENTURE
Dated as of May 20, 2003
10 3/4% SENIOR SUBORDINATED NOTES DUE 2011
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. Definitions.................................................1
Section 102. Other Definitions..........................................33
Section 103. Rules of Construction......................................34
Section 104. Incorporation by Reference of TIA..........................35
Section 105. Conflict with TIA..........................................35
Section 106. Compliance Certificates and Opinions.......................36
Section 107. Form of Documents Delivered to Trustee.....................36
Section 108. Acts of Noteholders; Record Dates..........................37
Section 109. Notices, etc., to Trustee and Company......................39
Section 110. Notices to Holders; Waiver.................................39
Section 111. Effect of Headings and Table of Contents...................40
Section 112. Successors and Assigns.....................................40
Section 113. Separability Clause........................................40
Section 114. Benefits of Indenture......................................40
Section 115. GOVERNING LAW..............................................40
Section 116. Legal Holidays.............................................40
Section 117. No Personal Liability of Directors, Officers, Employees,
Incorporators and Stockholders............................41
Section 118. Exhibits and Schedules.....................................41
Section 119. Counterparts...............................................41
Section 120. Company as Agent for Issuers...............................41
ARTICLE II
NOTE FORMS
Section 201. Forms Generally............................................41
Section 202. Form of Trustee's Certificate of Authentication............43
Section 203. Restrictive and Global Note Legends........................43
ARTICLE III
THE NOTES
Section 301. Title and Terms............................................45
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(continued)
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Section 302. Denominations..............................................47
Section 303. Execution, Authentication and Delivery and Dating..........47
Section 304. Temporary Notes............................................47
Section 305. Registration, Registration of Transfer and Exchange........48
Section 306. Mutilated, Destroyed, Lost and Stolen Notes................49
Section 307. Payment of Interest Rights Preserved.......................49
Section 308. Persons Deemed Owners......................................50
Section 309. Cancellation...............................................50
Section 310. Computation of Interest....................................51
Section 311. CUSIP Numbers..............................................51
Section 312. Book-Entry Provisions for Global Notes.....................51
Section 313. Special Transfer Provisions................................53
Section 314. Payment of Additional Interest.............................55
ARTICLE IV
COVENANTS
Section 401. Payment of Principal, Premium and Interest.................56
Section 402. Maintenance of Office or Agency............................56
Section 403. Money for Payments To Be Held in Trust.....................56
Section 404. Additional Amounts.........................................57
Section 405. SEC Reports................................................59
Section 406. Statement as to Default....................................60
Section 407. Limitation on Indebtedness.................................60
Section 408. Limitation on Other Subordinated Indebtedness..............63
Section 409. Limitation on Restricted Payments..........................63
Section 410. Limitation on Restrictions on Distributions from
Restricted Subsidiaries...................................67
Section 411. Limitation on Sales of Assets and Subsidiary Stock.........68
Section 412. Limitation on Transactions with Affiliates.................71
Section 413. Limitation on Liens........................................73
Section 414. Future Note Guarantors.....................................73
Section 415. Purchase of Notes Upon a Change in Control.................73
ARTICLE V
SUCCESSORS
Section 501. When the Company or an Issuer May Merge, etc...............75
Section 502. Successor Substituted......................................76
ii
Table of Contents
(continued)
Page
ARTICLE VI
REMEDIES
Section 601. Events of Default..........................................76
Section 602. Acceleration of Maturity; Rescission and Annulment.........78
Section 603. Other Remedies; Collection Suit by Trustee.................79
Section 604. Trustee May File Proofs of Claim...........................79
Section 605. Trustee May Enforce Claims Without Possession of Notes.....80
Section 606. Application of Money Collected.............................80
Section 607. Limitation on Suits........................................80
Section 608. Unconditional Right of Holders to Receive Principal, and
Interest..................................................81
Section 609. Restoration of Rights and Remedies.........................81
Section 610. Rights and Remedies Cumulative.............................81
Section 611. Delay or Omission Not Waiver...............................81
Section 612. Control by Holders.........................................82
Section 613. Waiver of Past Defaults....................................82
Section 614. Undertaking for Costs......................................82
Section 615. Waiver of Stay, Extension or Usury Laws....................83
ARTICLE VII
THE TRUSTEE
Section 701. Certain Duties and Responsibilities........................83
Section 702. Notice of Defaults.........................................84
Section 703. Certain Rights of Trustee..................................84
Section 704. Not Responsible for Recitals or Issuance of Notes..........85
Section 705. May Hold Notes.............................................85
Section 706. Money Held in Trust........................................85
Section 707. Compensation and Reimbursement.............................86
Section 708. Conflicting Interests......................................86
Section 709. Corporate Trustee Required; Eligibility....................86
Section 710. Resignation and Removal; Appointment of Successor..........87
Section 711. Acceptance of Appointment by Successor.....................88
Section 712. Merger, Conversion, Consolidation or Succession to
Business..................................................88
Section 713. Preferential Collection of Claims Against Issuers..........88
Section 714. Appointment of Authenticating Agent........................88
Section 715. Withholding Taxes..........................................89
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Table of Contents
(continued)
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ARTICLE VIII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND ISSUERS
Section 801. Issuers to Furnish Trustee Names and Addresses of Holders..89
Section 802. Preservation of Information; Communications to Holders.....89
Section 803. Reports by Trustee.........................................90
ARTICLE IX
AMENDMENT, SUPPLEMENT OR WAIVER
Section 901. Without Consent of Holders.................................90
Section 902. With Consent of Holders....................................91
Section 903. Execution of Amendments, Supplements or Waivers............92
Section 904. Revocation and Effect of Consents..........................93
Section 905. Conformity with TIA........................................93
Section 906. Notation on or Exchange of Notes...........................93
ARTICLE X
REDEMPTION OF NOTES
Section 1001. Right of Redemption.......................................93
Section 1002. Applicability of Article..................................95
Section 1003. Election to Redeem; Notice to Trustee.....................95
Section 1004. Selection by Trustee of Notes to Be Redeemed..............95
Section 1005. Notice of Redemption......................................96
Section 1006. Deposit of Redemption Price...............................97
Section 1007. Notes Payable on Redemption Date..........................97
Section 1008. Notes Redeemed in Part....................................97
ARTICLE XI
SATISFACTION AND DISCHARGE
Section 1101. Satisfaction and Discharge of Indenture...................98
Section 1102. Application of Trust Money................................99
ARTICLE XII
DEFEASANCE OR COVENANT DEFEASANCE
Section 1201. The Issuers' Option To Effect Defeasance or Covenant
Defeasance...............................................99
Section 1202. Defeasance and Discharge..................................99
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(continued)
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Section 1203. Covenant Defeasance......................................100
Section 1204. Conditions to Defeasance or Covenant Defeasance..........100
Section 1205. Deposited Money and U.S. Government Obligations To
Be Held in Trust; Other Miscellaneous Provisions........101
Section 1206. Reinstatement............................................102
Section 1207. Repayment to Issuers.....................................102
ARTICLE XIII
NOTE GUARANTEES
Section 1301. Guarantees Generally.....................................103
Section 1302. Continuing Guarantees....................................105
Section 1303. Release of Note Guarantees...............................105
Section 1304. Agreement to Subordinate.................................106
Section 1305. Waiver of Subrogation....................................107
Section 1306. Notation Not Required....................................107
Section 1307. Successors and Assigns of Note Guarantors................107
Section 1308. Execution and Delivery of Subsidiary Guarantees..........107
Section 1309. Notices..................................................108
ARTICLE XIV
SUBORDINATION
Section 1401. Agreement To Subordinate.................................108
Section 1402. Liquidation, Dissolution, Bankruptcy.....................108
Section 1403. Default on Senior Indebtedness...........................108
Section 1404. Acceleration of Payment of Notes.........................109
Section 1405. When a Distribution Must Be Paid Over....................110
Section 1406. Subrogation..............................................110
Section 1407. Relative Rights..........................................110
Section 1408. Subordination May Not Be Impaired by Issuers.............110
Section 1409. Rights of Trustee and Paying Agent.......................110
Section 1410. Distribution or Notice to Representative.................111
Section 1411. Article 14 Not To Prevent Events of Default or
Limit Right To Accelerate...............................111
Section 1412. Trust Moneys Not Subordinated............................111
Section 1413. Trustee Entitled To Rely.................................111
Section 1414. Trustee To Effectuate Subordination......................112
Section 1415. Trustee Not Fiduciary for Holders of Senior
Indebtedness............................................112
Section 1416. Reliance by Holders of Senior Indebtedness on
Subordination Provisions................................112
Section 1417. Trustee's Compensation Not Prejudiced....................112
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(continued)
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ARTICLE XV
SUBORDINATION OF NOTE GUARANTEES
Section 1501. Agreement To Subordinate.................................112
Section 1502. Liquidation, Dissolution, Bankruptcy.....................113
Section 1503. Default on Senior Indebtedness...........................113
Section 1504. Acceleration of Payment of Notes.........................114
Section 1505. When a Distribution Must Be Paid Over....................115
Section 1506. Subrogation..............................................115
Section 1507. Relative Rights..........................................115
Section 1508. Subordination May Not Be Impaired by Note Guarantors.....115
Section 1509. Rights of Trustee and Paying Agent.......................115
Section 1510. Distribution or Notice to Representative.................116
Section 1511. Article 15 Not To Prevent Events of Default or Limit
Right To Accelerate.....................................116
Section 1512. Trust Moneys Not Subordinated............................116
Section 1513. Trustee Entitled To Rely.................................116
Section 1514. Trustee To Effectuate Subordination......................117
Section 1515. Trustee Not Fiduciary for Holders of Senior
Indebtedness............................................117
Section 1516. Reliance by Holders of Senior Indebtedness on
Subordination Provisions................................117
Section 1517. Trustee's Compensation Not Prejudiced....................117
Exhibit A Form of Note
Exhibit B Form of Certificate of Beneficial Ownership
Exhibit C Form of Regulation S Certificate
Exhibit D Form of First Supplemental Indenture
Exhibit E Form of Supplemental Indenture
vi
Certain Sections of this Indenture relating to Sections 310 through 318
inclusive of the Trust Indenture Act of 1939:
Trust Indenture Act Section Indenture Section
Section 310(a)(1)..............................................709
(a)(2)....................................................709
(a)(3).........................................Not Applicable
(a)(4).........................................Not Applicable
(b).......................................................708
Section 311(a).................................................713
(b).......................................................713
(b)(2)....................................................803
Section 312(a).................................................801
802
(b).......................................................802
(c).......................................................802
Section 313(a).................................................803
(b).......................................................803
(c).......................................................803
(d).......................................................803
Section 314(a).................................................405
(a)(4)....................................................102
406
(b)............................................Not Applicable
(c)(1)....................................................102
(c)(2)....................................................102
(c)(3).........................................Not Applicable
(d)............................................Not Applicable
(e).......................................................102
vii
Trust Indenture Act Section Indenture Section
Section 315(a).................................................701
(b).......................................................702
803
(c).......................................................701
(d).......................................................701
(d)(1)....................................................701
(d)(2)....................................................701
(d)(3)....................................................701
(e).......................................................614
Section 316(a).................................................101
612
(a)(1)(A).................................................602
612
(a)(1)(B).................................................613
(a)(2).........................................Not Applicable
(b).......................................................608
(c).......................................................104
Section 317(a)(1)..............................................603
(a)(2)....................................................604
(b).......................................................403
Section 318(a).................................................107
----------------------
This cross-reference table shall not for any purpose be deemed to be part of the
Indenture.
viii
INDENTURE, dated as of May 20, 2003 (as
amended, supplemented or otherwise modified from time to
time, the "Indenture"), among Jafra Cosmetics
International, Inc., a corporation organized under the
laws of the state of Delaware, and Distribuidora
Comercial Jafra, S.A. de C.V., a corporation organized
under the laws of Mexico, as several and not joint
Issuers and as Note Guarantors; Jafra Worldwide Holdings
(Lux), S.ar.l., a societe a responsabilite limitee
organized under the laws of Luxembourg, as Note
Guarantor; and U.S. Bank National Association, a
national banking association, as Trustee.
RECITALS OF THE ISSUERS AND NOTE GUARANTORS
Each Issuer has duly authorized the execution and delivery of this
Indenture to provide for the issuance of the Notes. Each Note Guarantor party
hereto as of the date hereof has duly authorized the execution and delivery of
this Indenture to provide for its guarantee of the Notes, as provided in this
Indenture. Each Note Guarantor party hereto as of the date hereof has received
good and valuable consideration for its execution and delivery of the Indenture
and its guarantee of the Notes.
All things necessary to make the Original Notes, when executed and
delivered by the Issuers and authenticated and delivered by the Trustee
hereunder and duly issued by the Issuers, the valid several obligations of the
Issuers, and to make this Indenture a valid agreement of the Issuers and each
Note Guarantor party hereto as of the date hereof, in accordance with the terms
of the Original Notes and this Indenture, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually agreed, for the equal and ratable
benefit of all Holders of the Notes, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 101. Definitions.
"Acquired Indebtedness" means Indebtedness of any Person that is
assumed by the Company or any Restricted Subsidiary in connection with its
acquisition of assets from such Person or any Affiliate thereof or is issued and
outstanding on or prior to the date on which such Person was acquired by the
Company or any Restricted Subsidiary or merged or consolidated
with or into the Company or any Restricted Subsidiary (other than Indebtedness
Incurred to finance, or otherwise in connection with, such acquisition).
"Additional Assets" means (i) any property or assets that replace
the property or assets that are the subject of an Asset Disposition; (ii) any
property or assets (other than Indebtedness and Capital Stock) to be used by the
Company or a Restricted Subsidiary in a Related Business; (iii) the Capital
Stock of a Person that is engaged in a Related Business and becomes a Restricted
Subsidiary as a result of the acquisition of such Capital Stock by the Company
or another Restricted Subsidiary; or (iv) Capital Stock of any Person that at
such time is a Restricted Subsidiary, acquired from a third party.
"Additional Notes" means any notes issued under this Indenture in
addition to the Original Notes (other than any Notes issued pursuant to Section
304, 305, 306, 312(c), 312(d) or 1008).
"Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For 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.
"Asset Disposition" means any sale, lease, transfer or other
disposition of shares of Capital Stock of a Restricted Subsidiary (other than
Designated Equity Interests, or (in the case of a Foreign Subsidiary) to the
extent required by applicable law), property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Company or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction), other than (i) a disposition to the
Company or any Restricted Subsidiary, (ii) a disposition in the ordinary course
of business, (iii) the sale or discount (with or without recourse, and on
customary or commercially reasonable terms) of accounts receivable or notes
receivable arising in the ordinary course of business, or the conversion or
exchange of accounts receivable for notes receivable, (iv) any Restricted
Payment Transaction, (v) a disposition that is governed by Article 5, (vi) any
Financing Disposition, (vii) any "fee in lieu" or other disposition of assets to
any governmental authority or agency that continue in use by the Company or any
Restricted Subsidiary, so long as the Company or any Restricted Subsidiary may
obtain title to such assets upon reasonable notice by paying a nominal fee,
(viii) any exchange of like property pursuant to Section 1031 (or any successor
section) of the Code, (ix) any financing transaction with respect to property
built or acquired by the Company or any Restricted Subsidiary after the Issue
Date, including any sale/leaseback transaction or asset securitization, (x) any
disposition arising from foreclosure, condemnation or similar action with
respect to any property or other assets, (xi) any disposition of Capital Stock,
Indebtedness or other securities of an Unrestricted Subsidiary, (xii) a
disposition of Capital Stock of a Restricted Subsidiary pursuant to an agreement
or other obligation with or to a Person (other than the Company or a Restricted
Subsidiary) from whom such Restricted Subsidiary was acquired, or from whom such
Restricted
2
Subsidiary acquired its business and assets (having been newly formed in
connection with such acquisition), entered into in connection with such
acquisition, (xiii) a disposition of not more than 5% of the outstanding Capital
Stock of a Foreign Subsidiary that has been approved by the Board of Directors,
(xiv) any disposition or series of related dispositions for aggregate
consideration not exceeding $1.0 million, (xv) a disposition of Capital Stock of
a Parent in connection with any Exercise, or of any Capital Stock of a Parent
purchased or otherwise acquired in connection with any Exercise or any Permitted
Parent Payment or (xvi) a disposition of any Capital Stock, property or assets
of any Foreign Subsidiary existing on the Issue Date (other than Jafra
Distribution (Mexico), any Mexican Subsidiary Guarantor, Jafra Cosmetics
Dominicana S.A., CDRJ Europe Holding Company B.V. or any Restricted Subsidiary
of CDRJ Europe Holding Company B.V. existing on the Issue Date), or of any
property or assets of any other Restricted Subsidiary existing on the Issue Date
that are used in any business or operations conducted in any jurisdiction other
than the United States, Mexico, the Dominican Republic and Europe; provided that
any such disposition shall not include property or assets owned by either Issuer
or any Subsidiary Guarantor and used in any business or operations conducted in
the United States, Mexico, the Dominican Republic or Europe.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 714 to act on behalf of the Trustee to authenticate Notes of
one or more series.
"Average Life" means, as of the date of determination, with respect
to any Indebtedness or Preferred Stock, the quotient obtained by dividing (i)
the sum of the products of the numbers of years from the date of determination
to the dates of each successive scheduled principal payment of such Indebtedness
or redemption or similar payment with respect to such Preferred Stock multiplied
by the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means (i) any and all amounts, whether
outstanding on the Issue Date or thereafter incurred, payable under or in
respect of any Credit Facility, including principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company, either Issuer or any
Restricted Subsidiary whether or not a claim for post-filing interest is allowed
in such proceedings), fees, charges, expenses, reimbursement obligations,
guarantees, other monetary obligations of any nature and all other amounts
payable thereunder or in respect thereof and (ii) all Hedging Obligations
arising in connection therewith to any party to any Credit Facility (or any
affiliate thereof).
"Board of Directors" means the board of directors or other governing
body of the Company or any committee thereof duly authorized to act on behalf of
such board or governing body.
"Borrowing Base" means the sum (determined as of the end of the most
recently ended fiscal quarter for which consolidated financial statements of the
Company are available) of (1) 60% of Inventory of the Company and its Restricted
Subsidiaries and (2) 80% of Receivables of the Company and its Restricted
Subsidiaries.
3
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banking institutions are authorized or required by law
to close in New York City.
"Capital Stock" of any Person means any and all shares of, rights to
purchase, warrants or options for, or other equivalents of or interests in
(however designated) equity of such Person, including any Preferred Stock, but
excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required
to be classified and accounted for as a capitalized lease for financial
reporting purposes in accordance with GAAP. The Stated Maturity of any
Capitalized Lease Obligation shall be the date of the last payment of rent or
any other amount due under the related lease.
"Cash Equivalents" means any of the following: (a) securities issued
or fully guaranteed or insured by the United States Government or any agency or
instrumentality thereof, (b) time deposits, certificates of deposit or bankers'
acceptances of (i) any lender under the Senior Credit Agreement or (ii) any
commercial bank having capital and surplus in excess of $500,000,000 and the
commercial paper of the holding company of which is rated at least A-1 or the
equivalent thereof by S&P or at least P-1 or the equivalent thereof by Xxxxx'x
(or if at such time neither is issuing ratings, then a comparable rating of
another nationally recognized rating agency), (c) commercial paper rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Xxxxx'x (or if at such time neither is issuing ratings, then a
comparable rating of another nationally recognized rating agency) and (d)
investments in money market funds complying with the risk limiting conditions of
Rule 2a-7 or any successor rule of the SEC under the Investment Company Act of
1940, as amended.
"CDR" means Xxxxxxx, Dubilier & Rice, Inc.
"CDR Fund V" means Xxxxxxx, Dubilier & Rice Fund V Limited
Partnership, a Cayman Islands exempted limited partnership, and any successor in
interest thereto.
"Change of Control" means:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the Company; provided that so long as
the Company is a Subsidiary of a Parent, no Person shall be deemed to be
or become a "beneficial owner" of more than 50% of the total voting power
of the Voting Stock of the Company unless such Person (x) shall be or
become a "beneficial owner" of more than 50% of the total voting power of
the Voting Stock of such Parent and (y) shall not be a Subsidiary of a
Parent;
(ii) the Company ceases to beneficially own, directly or indirectly,
100% of the aggregate voting power of the Voting Stock of either Issuer
(excluding beneficial
4
ownership of any other Person attributable to Designated Equity
Interests), other than in a transaction by the Company in compliance with
the provisions of Article 5 in which the Company's Successor succeeds to
such beneficial ownership of the Company;
(iii) during any period of two consecutive years (during which
period the Company has been a party to this Indenture), individuals who at
the beginning of such period were members of the board of directors of the
Company (together with any new members thereof whose election by such
board of directors or whose nomination for election by holders of Capital
Stock of the Company was approved by one or more Permitted Holders or by a
vote of a majority of the members of such board of directors then still in
office who were either members thereof 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 such board of directors
then in office; or
(iv) the Company merges or consolidates with or into, or sells or
transfers (in one or a series of related transactions) all or
substantially all of the assets of the Company and its Restricted
Subsidiaries to, another Person (other than one or more Permitted Holders)
and any "person" (as defined in clause (i) above), other than one or more
Permitted Holders, is or becomes the "beneficial owner" (as defined in
clause (i) above), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of the surviving Person in such merger or
consolidation, or the transferee Person in such sale or transfer of
assets, as the case may be; provided that so long as such surviving or
transferee Person is a Subsidiary of a parent Person, no Person shall be
deemed to be or become a "beneficial owner" of more than 50% of the total
voting power of the Voting Stock of such surviving or transferee Person
unless such Person (x) shall be or become a "beneficial owner" of more
than 50% of the total voting power of the Voting Stock of such parent
Person and (y) shall not be a Subsidiary of a parent Person of such
surviving or transferee Person.
"Clearstream" means Clearstream Banking, societe anonyme, or any
successor securities clearing agency.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Jafra Worldwide Holdings (Lux), S.ar.l., a
Luxembourg societe a responsabilite limitee, and any successor in interest
thereto.
"Company Request", "Company Order" and "Company Consent" mean,
respectively, a written request, order or consent signed in the name of the
Company or the Issuers, as the case may be, pursuant to Section 120 by an
Officer of the Company (in the case of the Company) or an Officer of each Issuer
(in the case of the Issuers).
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of Consolidated EBITDA of the Company and
its Restricted Subsidiaries for the period of the most recent four consecutive
fiscal quarters ending prior to the
5
date of such determination for which consolidated financial statements of the
Company are available to (ii) Consolidated Interest Expense for such four fiscal
quarters; provided, that
(1) if since the beginning of such period the Company or any
Restricted Subsidiary has Incurred any Indebtedness that remains
outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Consolidated Coverage Ratio is an
Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving effect on a pro
forma basis to such Indebtedness as if such Indebtedness had been Incurred
on the first day of such period (except that in making such computation,
the amount of Indebtedness under any revolving credit facility outstanding
on the date of such calculation shall be computed based on (A) the average
daily balance of such Indebtedness during such four fiscal quarters or
such shorter period for which such facility was outstanding or (B) if such
facility was created after the end of such four fiscal quarters, the
average daily balance of such Indebtedness during the period from the date
of creation of such facility to the date of such calculation),
(2) if since the beginning of such period the Company or any
Restricted Subsidiary has repaid, repurchased, redeemed, defeased or
otherwise acquired, retired or discharged any Indebtedness (each, a
"Discharge") or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio involves a Discharge of Indebtedness (in
each case other than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been permanently repaid),
Consolidated EBITDA and Consolidated Interest Expense for such period
shall be calculated after giving effect on a pro forma basis to such
Discharge of such Indebtedness, including with the proceeds of such new
Indebtedness, as if such Discharge had occurred on the first day of such
period,
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have disposed of any company, any business or
any group of assets constituting an operating unit of a business (any such
disposition, a "Sale"), the Consolidated EBITDA for such period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive)
attributable to the assets that are the subject of such Sale for such
period or increased by an amount equal to the Consolidated EBITDA (if
negative) attributable thereto for such period and Consolidated Interest
Expense for such period shall be reduced by an amount equal to (A) the
Consolidated Interest Expense attributable to any Indebtedness of the
Company or any Restricted Subsidiary repaid, repurchased, redeemed,
defeased or otherwise acquired, retired or discharged with respect to the
Company and its continuing Restricted Subsidiaries in connection with such
Sale for such period (including through the assumption of such
Indebtedness by another Person) plus (B) if the Capital Stock of any
Restricted Subsidiary is sold, the Consolidated Interest Expense for such
period attributable to the Indebtedness of such Restricted Subsidiary to
the extent the Company and its continuing Restricted Subsidiaries are no
longer liable for such Indebtedness after such Sale,
6
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger, consolidation or otherwise) shall have
made an Investment in any Person that thereby becomes a Restricted
Subsidiary, or otherwise acquired any company, any business or any group
of assets constituting an operating unit of a business, including any such
Investment or acquisition occurring in connection with a transaction
causing a calculation to be made hereunder (any such Investment or
acquisition, a "Purchase"), Consolidated EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto (including the Incurrence of any related Indebtedness) as if such
Purchase occurred on the first day of such period, and
(5) if since the beginning of such period any Person became a
Restricted Subsidiary or was merged or consolidated with or into the
Company or any Restricted Subsidiary, and since the beginning of such
period such Person shall have Discharged any Indebtedness or made any Sale
or Purchase that would have required an adjustment pursuant to clause (2),
(3) or (4) above if made by the Company or a Restricted Subsidiary during
such period, Consolidated EBITDA and Consolidated Interest Expense for
such period shall be calculated after giving pro forma effect thereto as
if such Discharge, Sale or Purchase occurred on the first day of such
period.
For purposes of this definition, whenever pro forma effect is to be
given to any Sale, Purchase or other transaction, or the amount of income or
earnings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred or repaid, repurchased, redeemed,
defeased or otherwise acquired, retired or discharged in connection therewith,
the pro forma calculations in respect thereof (including in respect of
anticipated cost savings or synergies relating to any such Sale, Purchase or
other transaction) shall be as determined in good faith by a responsible
financial or accounting Officer of the Company. If any Indebtedness bears a
floating rate of interest and is being given pro forma effect, the interest
expense on such Indebtedness shall be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period (taking
into account any Interest Rate Agreement applicable to such Indebtedness). If
any Indebtedness bears, at the option of the Company or a Restricted Subsidiary,
a rate of interest based on a prime or similar rate, a eurocurrency interbank
offered rate or other fixed or floating rate, and such Indebtedness is being
given pro forma effect, the interest expense on such Indebtedness shall be
calculated by applying such optional rate as the Company or such Restricted
Subsidiary may designate. If any Indebtedness that is being given pro forma
effect was Incurred under a revolving credit facility, the interest expense on
such Indebtedness shall be computed based upon the average daily balance of such
Indebtedness during the applicable period. Interest on a Capitalized Lease
Obligation shall be deemed to accrue at an interest rate determined in good
faith by a responsible financial or accounting officer of the Company to be the
rate of interest implicit in such Capitalized Lease Obligation in accordance
with GAAP.
"Consolidated EBITDA" means, for any period, the Consolidated Net
Income for such period, (A) plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) provision for all taxes (whether
or not paid, estimated or accrued) based on income,
7
profits or capital, (ii) Consolidated Interest Expense and any Receivables Fees,
(iii) depreciation, amortization (including amortization of goodwill and
intangibles and amortization and write-off of financing costs) and all other
non-cash charges or non-cash losses, and (iv) any expenses or charges related to
any Equity Offering, Investment or Indebtedness permitted by this Indenture
(whether or not consummated or incurred) and (B) plus the losses or minus the
gains, as the case may be, for such period from business or operations conducted
by the Company or any of its Restricted Subsidiaries in South America or
Thailand (other than any gains or losses related to a business or operation in
South America or Thailand first entered into after the Issue Date).
"Consolidated Interest Expense" means, for any period, (i) the total
interest expense of the Company and its Restricted Subsidiaries to the extent
deducted in calculating Consolidated Net Income, net of any interest income of
the Company and its Restricted Subsidiaries, including any such interest expense
consisting of (a) interest expense attributable to Capitalized Lease
Obligations, (b) amortization of debt discount, (c) interest in respect of
Indebtedness of any other Person that has been Guaranteed by the Company or any
Restricted Subsidiary, but only to the extent that such interest is actually
paid by the Company or any Restricted Subsidiary, (d) non-cash interest expense,
(e) the interest portion of any deferred payment obligation, and (f)
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing, plus (ii) Preferred Stock dividends
paid in cash in respect of Disqualified Stock of the Company held by Persons
other than the Company or a Restricted Subsidiary and minus (iii) to the extent
otherwise included in such interest expense referred to in clause (i) above,
Receivables Fees and amortization or write-off of financing costs, in each case
under clauses (i) through (iii) as determined on a Consolidated basis in
accordance with GAAP; provided, however, that gross interest expense shall be
determined after giving effect to any net payments made or received by the
Company and its Restricted Subsidiaries with respect to Interest Rate
Agreements.
"Consolidated Net Income" means, for any period, the net income
(loss) of the Company and its Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP and before any reduction in respect
of Preferred Stock dividends; provided, however, that there shall not be
included in such Consolidated Net Income:
(i) any net income (loss) of any Person if such Person is not a
Restricted Subsidiary, except that (A) subject to the limitations
contained in clause (iv) below, the Company's equity in the net income of
any such Person for such period shall be included in such Consolidated Net
Income up to the aggregate amount actually distributed by such Person
during such period to the Company or a Restricted Subsidiary as a dividend
or other distribution (subject, in the case of a dividend or other
distribution to a Restricted Subsidiary, to the limitations contained in
clause (iii) below) and (B) the Company's equity in the net loss of such
Person shall be included to the extent of the aggregate Investment of the
Company or any of its Restricted Subsidiaries in such Person,
(ii) any net income (loss) of any Person acquired by the Company or
a Restricted Subsidiary in a pooling of interests transaction for any
period prior to the date
8
of such acquisition,
(iii) any net income (loss) of any Restricted Subsidiary that is not
an Issuer or a Subsidiary Guarantor if such Restricted Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of similar distributions by such Restricted
Subsidiary, directly or indirectly, to the Company by operation of the
terms of such Restricted Subsidiary's charter or any agreement,
instrument, judgment, decree, order, statute or governmental rule or
regulation applicable to such Restricted Subsidiary or its stockholders
(other than (x) restrictions that have been waived or otherwise released,
(y) restrictions pursuant to the Notes or this Indenture and (z)
restrictions in effect on the Issue Date with respect to a Restricted
Subsidiary and other restrictions with respect to such Restricted
Subsidiary that taken as a whole are not materially less favorable to the
Noteholders than such restrictions in effect on the Issue Date), except
that (A) subject to the limitations contained in clause (iv) below, the
Company's equity in the net income of any such Restricted Subsidiary for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of any dividend or distribution that was or that could
have been made by such Restricted Subsidiary during such period to the
Company or another Restricted Subsidiary (subject, in the case of a
dividend that could have been made to another Restricted Subsidiary, to
the limitation contained in this clause) and (B) the net loss of such
Restricted Subsidiary shall be included to the extent of the aggregate
Investment of the Company or any of its other Restricted Subsidiaries in
such Restricted Subsidiary,
(iv) any gain or loss realized upon the sale or other disposition of
any asset of the Company or any Restricted Subsidiary (including pursuant
to any sale/leaseback transaction) that is not sold or otherwise disposed
of in the ordinary course of business (as determined in good faith by the
Board of Directors),
(v) any item classified as an extraordinary, unusual or nonrecurring
gain, loss or charge (including fees, expenses and charges associated with
the Transactions and any acquisition, merger or consolidation after the
Issue Date),
(vi) the cumulative effect of a change in accounting principles,
(vii) all deferred financing costs written off and premiums paid in
connection with any early extinguishment of Indebtedness,
(viii) any unrealized gains or losses in respect of Currency
Agreements,
(ix) any unrealized foreign currency transaction gains or losses in
respect of Indebtedness of any Person denominated in a currency other than
the functional currency of such Person,
(x) (a) any non-cash compensation charge arising from any grant of
stock, stock options or other equity-based awards and (b) any compensation
expense incurred in
9
connection with dividends, distributions or other payments to holders of
Capital Stock of the Company or a Parent (or of warrants, options or
rights to acquire, or deferred shares or other equity-linked interests,
relating to any such Capital Stock), and
(xi) to the extent otherwise included in Consolidated Net income,
any unrealized foreign currency translation or transaction gains or losses
in respect of Indebtedness or other obligations of the Company or any
Restricted Subsidiary owing to the Company or any Restricted Subsidiary.
In the case of any unusual or nonrecurring gain, loss or charge not
included in Consolidated Net Income pursuant to clause (v) above in any
determination thereof, the Company will deliver an Officer's Certificate to the
Trustee promptly after the date on which Consolidated Net Income is so
determined, setting forth the nature and amount of such unusual or nonrecurring
gain, loss or charge.
"Consolidated Total Assets" means, as of any date of determination,
the total assets shown on the consolidated balance sheet of the Company and its
Restricted Subsidiaries as of the most recent date for which such a balance
sheet is available, determined on a consolidated basis in accordance with GAAP
(and, in the case of any determination relating to any Incurrence of
Indebtedness or any Investment, on a pro forma basis including any property or
assets being acquired in connection therewith), provided that for purposes of
paragraph (b) of Section 407 and the definition of "Permitted Investment,"
Consolidated Total Assets shall not be less than $278.4 million.
"Consolidation" means the consolidation of the accounts of each of
the Restricted Subsidiaries with those of the Company in accordance with GAAP;
provided, however, that "Consolidation" will not include consolidation of the
accounts of any Unrestricted Subsidiary, but the interest of the Company or any
Restricted Subsidiary in any Unrestricted Subsidiary will be accounted for as an
investment. The term "Consolidated" has a correlative meaning.
"Corporate Trust Office" means the office of the Trustee in the
Borough of Manhattan, the City of New York, at which at any particular time its
corporate trust business shall be administered, which office on the Issue Date
is located at 000 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, XX 00000, Mail Station:
EX-NY-WALL.
"Credit Facilities" means one or more of (i) the Senior Credit
Facility and (ii) other facilities or arrangements, in each case with one or
more banks or other institutions providing for revolving credit loans, term
loans, receivables financings (including through the sale of receivables to such
institutions or to special purpose entities formed to borrow from such
institutions against such receivables), letters of credit or other Indebtedness,
in each case, including all agreements, instruments and documents executed and
delivered pursuant to or in connection with any of the foregoing, including any
notes and letters of credit issued pursuant thereto and any guarantee and
collateral agreement, patent and trademark security agreement, mortgages or
letter of credit applications and other guarantees, pledge agreements, security
agreements and collateral documents, in each case as the same may be amended,
supplemented,
10
waived or otherwise modified from time to time, or refunded, refinanced,
restructured, replaced, renewed, repaid, increased or extended from time to time
(whether in whole or in part, whether with the original banks or other
institutions or other banks or other institutions or otherwise, and whether
provided under any original Credit Facility or one or more other credit
agreements, indentures, financing agreements or other Credit Facilities or
otherwise). Without limiting the generality of the foregoing, the term "Credit
Facility" shall include any agreement (i) changing the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding
Subsidiaries as additional borrowers or guarantors thereunder, (iii) increasing
the amount of Indebtedness Incurred thereunder or available to be borrowed
thereunder or (iv) otherwise altering the terms and conditions thereof.
"Currency Agreement" means, in respect of a Person, any foreign
exchange contract, currency swap agreement or other similar agreement or
arrangements (including derivative agreements or arrangements), as to which such
Person is a party or a beneficiary.
"Default" means any event or condition that is, or after notice or
passage of time or both would be, an Event of Default.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designated Equity Interests" means (i) directors' qualifying
shares, or (ii) in the case of a Foreign Subsidiary, Capital Stock required by
law to be held by a Person other than the Company or any Restricted Subsidiary.
"Designated Non-Cash Consideration" means the fair market value of
any non-cash consideration that is received by the Company or one of its
Restricted Subsidiaries in connection with an Asset Disposition and that is
designated as Designated Non-Cash Consideration pursuant to an Officer's
Certificate setting forth the basis of such fair market valuation. A particular
item of Designated Non-Cash Consideration will no longer be considered to be
outstanding when it has been paid, redeemed or otherwise retired or sold or
otherwise disposed of in compliance with Section 411.
"Designated Senior Indebtedness" with respect to a Person means (i)
the Bank Indebtedness and (ii) any other Senior Indebtedness of such Person
that, at the date of determination, has an aggregate principal amount equal to
or under which, at the date of determination, the holders thereof are committed
to lend up to, at least $10.0 million and is specifically designated by such
Person in an agreement or instrument evidencing or governing such Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of this Indenture.
"Disinterested Director" means, with respect to any Affiliate
Transaction, a member of the Board of Directors having no material direct or
indirect financial interest in or with respect to such Affiliate Transaction. A
member of the Board of Directors shall not be deemed to have such a financial
interest in any Affiliate Transaction by reason of such member's
11
holding Capital Stock of the Company or a Parent or any options, warrants or
other rights in respect of such Capital Stock.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock (other than Management Stock) that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event (other than following the
occurrence of a Change of Control or other similar event described under such
terms as a "change of control," or any Asset Disposition) (i) matures or is
mandatorily redeemable pursuant to a sinking fund obligation or otherwise, (ii)
is convertible or exchangeable for Indebtedness or Disqualified Stock or (iii)
is redeemable at the option of the holder thereof (other than following the
occurrence of a Change of Control or other similar event described under such
terms as a "change of control," or any Asset Disposition), in whole or in part,
in each case on or prior to the final Stated Maturity of the Notes.
"Equity Offering" means a sale of Capital Stock (x) that is a sale
of Capital Stock (other than Disqualified Stock) of the Company, or (y) proceeds
of which in an amount equal to or exceeding the Redemption Amount are
contributed to the Company or any of its Restricted Subsidiaries.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the
Euroclear System, or any successor securities clearing agency.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Issuers' 10 3/4% Senior Subordinated
Notes Due 2011, containing terms substantially identical to the Initial Notes or
any Initial Additional Notes (except that (i) such Exchange Notes may omit terms
with respect to transfer restrictions and may be registered under the Securities
Act, and (ii) certain provisions relating to an increase in the stated rate of
interest thereon may be eliminated), that are issued and exchanged for (a) the
Initial Notes, as provided for in a registration rights agreement relating to
such Initial Notes and this Indenture, or (b) such Initial Additional Notes as
may be provided in any registration rights agreement relating to such Additional
Notes and this Indenture (including any amendment or supplement hereto).
"Excluded Contribution" means Net Cash Proceeds, or the fair value,
as determined in good faith by the Board of Directors, of property or assets,
received by the Company as capital contributions to the Company after the Issue
Date or from the issuance or sale (other than to a Subsidiary of the Company) of
Capital Stock (other than Disqualified Stock) of the Company, in each case to
the extent designated as an Excluded Contribution pursuant to an Officer's
Certificate of the Company and not previously included in the calculation set
forth in Section 409(a)(3)(B)(x) for purposes of determining whether a
Restricted Payment may be made.
"Financing Disposition" means any sale, transfer, conveyance or
other disposition of property or assets by the Company or any Subsidiary thereof
to any Receivables Entity, or by
12
any Receivables Subsidiary, in each case in connection with the Incurrence by a
Receivables Entity of Indebtedness, or obligations to make payments to the
obligor on Indebtedness, which may be secured by a Lien in respect of such
property or assets.
"First Supplemental Indenture" means the First Supplemental
Indenture, to be entered into substantially in the form attached hereto as
Exhibit D.
"Foreign Subsidiary" means (a) any Restricted Subsidiary of the
Company that is not organized under the laws of the United States of America or
any state thereof or the District of Columbia and (b) any Restricted Subsidiary
of the Company that has no material assets other than securities of one or more
Foreign Subsidiaries, and other assets relating to an ownership interest in any
such securities or Subsidiaries.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect on the Issue Date (for purposes of the
definitions of the terms "Consolidated Coverage Ratio," "Consolidated EBITDA,"
"Consolidated Interest Expense," "Consolidated Net Income" and "Consolidated
Total Assets," all defined terms in this Indenture to the extent used in or
relating to any of the foregoing definitions, and all ratios and computations
based on any of the foregoing definitions) and as in effect from time to time
(for all other purposes of this Indenture), including those set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession.
All ratios and computations based on GAAP contained in this Indenture shall be
computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness or other obligation
of any other Person; provided, however, that the term "Guarantee" shall not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Noteholder" means the Person in whose name a Note is
registered in the Note Register.
"Holding Company Expenses" means (i) costs (including all
professional fees and expenses) incurred by a Parent to comply with its
reporting obligations under applicable laws or under this Indenture or in
connection with any Credit Facility or any other agreement or instrument
relating to Indebtedness of the Company or any Restricted Subsidiary, or
otherwise incurred in connection with compliance with applicable laws or
applicable rules or regulations of any governmental, regulatory or
self-regulatory body or stock exchange, including any reports filed with respect
to the Securities Act, Exchange Act or the respective rules and regulations
13
promulgated thereunder, (ii) indemnification obligations of a Parent owing to
directors, officers, employees or other Persons under its charter or by-laws or
pursuant to written agreements with any such Person, (iii) obligations of a
Parent in respect of director and officer insurance (including premiums
therefor), (iv) other operational expenses of a Parent incurred in the ordinary
course of business, and (v) expenses incurred by a Parent in connection with any
public offering of Capital Stock or Indebtedness (x) where the net proceeds of
such offering are intended to be received by or contributed or loaned to the
Company or a Restricted Subsidiary, or (y) in a prorated amount of such expenses
in proportion to the amount of such net proceeds intended to be so received,
contributed or loaned, or (z) otherwise on an interim basis prior to completion
of such offering so long as a Parent shall cause the amount of such expenses to
be repaid to the Company or the relevant Restricted Subsidiary out of the
proceeds of such offering promptly if completed.
"Incur" means issue, assume, enter into any Guarantee of, incur or
otherwise become liable for; provided, however, that any Indebtedness or Capital
Stock of a Person existing at the time such Person becomes a Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary. Accrual of
interest, the accretion of accreted value and the payment of interest in the
form of additional Indebtedness will not be deemed to be an Incurrence of
Indebtedness. Any Indebtedness issued at a discount (including Indebtedness on
which interest is payable through the issuance of additional Indebtedness) shall
be deemed Incurred at the time of original issuance of the Indebtedness at the
initial accreted amount thereof.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(i) the principal of indebtedness of such Person for borrowed money,
(ii) the principal of obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments,
(iii) all reimbursement obligations of such Person in respect of
letters of credit or other similar instruments (the amount of such
obligations being equal at any time to the aggregate then undrawn and
unexpired amount of such letters of credit or other instruments plus the
aggregate amount of drawings thereunder that have not then been
reimbursed),
(iv) all obligations of such Person to pay the deferred and unpaid
purchase price of property (except Trade Payables), which purchase price
is due more than one year after the date of placing such property in final
service or taking final delivery and title thereto,
(v) all Capitalized Lease Obligations of such Person,
(vi) the redemption, repayment or other repurchase amount of such
Person
14
with respect to any Disqualified Stock of such Person or (if such Person
is a Subsidiary of the Company other than an Issuer or a Subsidiary
Guarantor) any Preferred Stock of such Subsidiary, but excluding, in each
case, any accrued dividends (the amount of such obligation to be equal at
any time to the maximum fixed involuntary redemption, repayment or
repurchase price for such Capital Stock, or if less (or if such Capital
Stock has no such fixed price), to the involuntary redemption, repayment
or repurchase price therefor calculated in accordance with the terms
thereof as if then redeemed, repaid or repurchased, and if such price is
based upon or measured by the fair market value of such Capital Stock,
such fair market value shall be as determined in good faith by the Board
of Directors or the board of directors or other governing body of the
issuer of such Capital Stock),
(vii) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of Indebtedness of such Person
shall be the lesser of (A) the fair market value of such asset at such
date of determination (as determined in good faith by the Company) and (B)
the amount of such Indebtedness of such other Persons,
(viii) all Guarantees by such Person of Indebtedness of other
Persons to the extent Guaranteed by such Person, and
(ix) to the extent not otherwise included in this definition, net
Hedging Obligations of such Person (the amount of any such obligation to
be equal at any time to the termination value of such agreement or
arrangement giving rise to such Hedging Obligation that would be payable
by such Person at such time).
The amount of Indebtedness of any Person at any date shall be determined as set
forth above or otherwise provided in this Indenture, or otherwise shall equal
the amount thereof that would appear on a balance sheet of such Person
(excluding any notes thereto) prepared in accordance with GAAP.
"Initial Additional Notes" means Additional Notes issued in an
offering not registered under the Securities Act (and any Notes issued in
respect thereof pursuant to Section 304, 305, 306, 312(c), 312(d) or 1008).
"Initial Mexican Subsidiary Guarantors" means Jafra Mexico,
Distribuidora Venus, S.A. de C.V., Dirsamex, S.A. de C.V., Serviday, S.A. de
C.V., Cosmeticos y Fragancias, S.A. de C.V., JafraFin S.A. de C.V. and Jafra
Cosmetics, S.A. de C.V., each a corporation organized under the laws of
Mexico.
"Initial Notes" means the Issuers' 10 3/4% Senior Subordinated
Notes Due 2011, issued on the Issue Date (and any Notes issued in respect
thereof pursuant to Section 304, 305, 306, 312(c), 312(d) or 1008).
15
"Interest Payment Date" means, when used with respect to any Note
and any installment of interest thereon, the date specified in such Note as the
fixed date on which such installment of interest is due and payable, as set
forth in such Note.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement (including derivative agreements or
arrangements), as to which such Person is party or a beneficiary.
"Inventory" means goods held for sale or lease by a Person in the
ordinary course of business, net of any reserve for goods that have been
segregated by such Person to be returned to the applicable vendor for credit, as
determined in accordance with GAAP.
"Investment" in any Person by any other Person means any direct or
indirect advance, loan or other extension of credit (other than to customers
(including sales consultants), suppliers, directors, officers or employees of
any Person in the ordinary course of business) or capital contribution (by means
of any transfer of cash or other property to others or any payment for property
or services for the account or use of others) to, or any purchase or acquisition
of Capital Stock, Indebtedness or other similar instruments issued by, such
Person. For purposes of the definition of "Unrestricted Subsidiary" and Section
409, (i) "Investment" shall include the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of any Subsidiary of the Company at the time that such Subsidiary is designated
an Unrestricted Subsidiary; provided, however, that upon a redesignation of such
Subsidiary as a Restricted Subsidiary, the Company shall be deemed to continue
to have a permanent "Investment" in an Unrestricted Subsidiary in an amount (if
positive) equal to (x) the Company's "Investment" in such Subsidiary at the time
of such redesignation less (y) the portion (proportionate to the Company's
equity interest in such Subsidiary) of the fair market value of the net assets
of such Subsidiary at the time of such redesignation, (ii) any property
transferred to or from an Unrestricted Subsidiary shall be valued at its fair
market value at the time of such transfer and (iii) in each case under clause
(i) or (ii) above, fair market value shall be as determined in good faith by the
Board of Directors. Guarantees shall not be deemed to be Investments. The amount
of any Investment outstanding at any time shall be the original cost of such
Investment, reduced (at the Company's option) by any dividend, distribution,
interest payment, return of capital, repayment or other amount or value received
in respect of such Investment; provided, however, that to the extent that the
amount of Restricted Payments outstanding at any time is so reduced by any
portion of any such amount or value that would otherwise be included in the
calculation of Consolidated Net Income, such portion of such amount or value
shall not be so included for purposes of calculating the amount of Restricted
Payments that may be made pursuant to Section 409(a).
"Investor" means CDR Fund V.
"Issue Date" means the first date on which Initial Notes are issued.
16
"Issuer" means Jafra Distribution (Mexico) and Jafra US.
"Jafra Distribution (Mexico)" means Distribuidora Comercial Jafra,
S.A. de C.V., a corporation organized under the laws of Mexico, and any
successor in interest thereto.
"Jafra Mexico" means Jafra Cosmetics International, S.A. de C.V., a
Mexican corporation, and any successor in interest thereto.
"Jafra US" means Jafra Cosmetics International, Inc., a Delaware
corporation, and any successor in interest thereto.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).
"Management Advances" means (1) loans or advances made to directors,
officers or employees of a Parent, the Company or any Restricted Subsidiary (x)
in respect of travel, entertainment or moving-related expenses incurred in the
ordinary course of business, (y) in respect of moving-related expenses incurred
in connection with any closing or consolidation of any facility or (z) in the
ordinary course of business and (in the case of this clause (z)) not exceeding
$2.5 million in the aggregate outstanding at any time, (2) promissory notes of
Management Investors acquired in connection with the issuance of Management
Stock to such Management Investors, (3) Management Guarantees or (4) other
Guarantees of borrowings by Management Investors in connection with the purchase
of Management Stock, which Guarantees are permitted under Section 407.
"Management Agreements" means, collectively, the Consulting
Agreement and the Indemnification Agreement, each dated as of April 30, 1998,
each between CDRJ Investments (Lux) S.A. and CD&R (and its permitted successors
and assigns thereunder), as each may be assumed from CDRJ Investments (Lux) S.A.
by the Company and as each may be amended, supplemented, waived or otherwise
modified from time to time in accordance with the terms thereof and of this
Indenture.
"Management Guarantees" means guarantees (x) of up to an aggregate
principal amount of $10.0 million of borrowings by Management Investors in
connection with their purchase of Management Stock or (y) made on behalf of, or
in respect of loans or advances made to directors, officers or employees of a
Parent, the Company or any Restricted Subsidiary (1) in respect of travel,
entertainment and moving-related expenses incurred in the ordinary course of
business, or (2) in the ordinary course of business and (in the case of this
clause (2)) not exceeding $2.5 million in the aggregate outstanding at any time.
"Management Investors" means the officers, directors, employees and
other members of the management of a Parent, the Company or any of its
Subsidiaries, or family members or relatives thereof, or trusts or partnerships
for the benefit of any of the foregoing, or
17
any of their heirs, executors, successors and legal representatives, who at any
date beneficially own or have the right to acquire, directly or indirectly,
Capital Stock of the Company or a Parent.
"Management Stock" means Capital Stock of the Company or a Parent
(including any options, warrants or other rights in respect thereof) held by any
of the Management Investors.
"Mexican Subsidiary Guarantor" means (i) Jafra Mexico and (ii) each
Restricted Subsidiary of Jafra Distribution (Mexico) or Jafra Mexico that enters
into a Subsidiary Guarantee.
"Moody's" means Xxxxx'x Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments
received (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise, but only as
and when received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other non-cash form) therefrom, in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and expenses
incurred, and all Federal, state, provincial, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such Asset
Disposition (including as a consequence of any transfer of funds in connection
with the application thereof in accordance with Section 411), (ii) all payments
made, and all installment payments required to be made, on any Indebtedness that
is secured by any assets subject to such Asset Disposition, in accordance with
the terms of any Lien upon such assets, or that must by its terms, or in order
to obtain a necessary consent to such Asset Disposition, or by applicable law,
be repaid out of the proceeds from such Asset Disposition, (iii) all
distributions and other payments required to be made to minority interest
holders in Subsidiaries or joint ventures as a result of such Asset Disposition,
or to any other Person (other than the Company or a Restricted Subsidiary)
owning a beneficial interest in the assets disposed of in such Asset Disposition
and (iv) any liabilities or obligations associated with the assets disposed of
in such Asset Disposition and retained by the Company or any Restricted
Subsidiary after such Asset Disposition, including pension and other
post-employment benefit liabilities, liabilities related to environmental
matters, and liabilities relating to any indemnification obligations associated
with such Asset Disposition.
"Net Cash Proceeds," with respect to any issuance or sale of any
securities of the Company or any Subsidiary by the Company or any Subsidiary, or
any capital contribution, means the cash proceeds of such issuance, sale or
contribution net of attorneys' fees, accountants' fees, underwriters' or
placement agents' fees, discounts or commissions and brokerage, consultant and
other fees actually incurred in connection with such issuance, sale or
contribution and net of taxes paid or payable as a result thereof.
"Non-U.S. Person" means a Person who is not a U.S. person, as
defined in Regulation S.
18
"Note Guarantee" means any of (i) the Guarantee of the Notes by the
Company, the Guarantee of the Guaranteed Jafra US Obligations by Jafra
Distribution (Mexico), the Guarantee of the Guaranteed Jafra Distribution
(Mexico) Obligations by Jafra US, and the Subsidiary Guarantees of the Initial
Mexican Subsidiary Guarantors, to be entered into on the Issue Date, as provided
in Section 1301, and (ii) any Subsidiary Guarantee that may from time to time be
entered into by a Restricted Subsidiary pursuant to Section 414.
"Note Guarantor" means any of the Company and its Restricted
Subsidiaries that enters into a Note Guarantee.
"Notes" means the Initial Notes, any Additional Notes, the Exchange
Notes and any notes issued in respect thereof pursuant to Section 304, 305, 306,
312(c), 312(d) or 1008.
"Notice" means, with respect to any Designated Senior Indebtedness,
that the Trustee has actual written notice of such Designated Senior
Indebtedness, including an address to which notice may be delivered by the
Trustee to the holders thereof or any Representative thereof.
"Officer" means, with respect to the Company, an Issuer or any other
obligor upon the Notes, the Chairman of the Board, the President, the Chief
Executive Officer, the Chief Financial Officer, any Vice President, the
Controller, the Treasurer or the Secretary of such Person.
"Officer's Certificate" means, with respect to the Company, an
Issuer or any other obligor upon the Notes, a certificate signed by one Officer
of such Person.
"Opinion of Counsel" means a written opinion from legal counsel who
is reasonably acceptable to the Trustee. The counsel may be an employee of or
counsel to the Company, an Issuer or the Trustee.
"Original Notes" means the Initial Notes and any Exchange Notes
issued in exchange therefor.
"Outstanding" when used with respect to Notes means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Notes for whose payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
in trust for the Holders of such Notes, provided that, if such Notes are
to be redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor reasonably satisfactory to the
Trustee has been made; and
19
(iii) Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture.
A Note does not cease to be Outstanding because an Issuer or any
Affiliate of the Issuers holds the Note, provided that in determining whether
the Holders of the requisite amount of Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by an Issuer or any Affiliate of an Issuer shall be disregarded and deemed
not to be Outstanding, except that, for the purpose of determining whether the
Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent or waiver, only Notes which the
Trustee actually knows are so owned shall be so disregarded. Notes so owned that
have been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the reasonable satisfaction of the Trustee the pledgee's right to
act with respect to such Notes and that the pledgee is not an Issuer or an
Affiliate of any Issuer.
"Parent" means any Person of which the Company at any time is or
becomes a Subsidiary after the Issue Date.
"Paying Agent" means any Person authorized by either Issuer to pay
the principal of (and premium, if any) or interest on any Notes on behalf of
such Issuer.
"Permitted Holder" means any of the following: (i) any of the
Investor, Management Investors, CDR and their respective Affiliates; (ii) any
investment fund or vehicle managed, sponsored or advised by CDR; (iii) any
limited or general partners of, or other investors in, any of the Investor and
its Affiliates, or any such investment fund or vehicle; and (iv) any Person
acting in the capacity of an underwriter in connection with a public or private
offering of Capital Stock of a Parent or the Company.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in, or consisting of, any of the following:
(i) a Restricted Subsidiary, the Company, or a Person that will,
upon the making of such Investment, become a Restricted Subsidiary;
(ii) another Person if as a result of such Investment such other
Person is merged or consolidated with or into, or transfers or conveys all
or substantially all its assets to, or is liquidated into, the Company or
a Restricted Subsidiary;
(iii) Temporary Cash Investments or Cash Equivalents;
(iv) receivables owing to the Company or any Restricted Subsidiary,
if created or acquired in the ordinary course of business;
(v) any securities or other Investments received as consideration
in, or retained in connection with, sales or other dispositions of
property or assets, including
20
Asset Dispositions made in compliance with Section 411;
(vi) securities or other Investments received in
settlement of debts created in the ordinary course of business and
owing to the Company or any Restricted Subsidiary, or as a result of
foreclosure, perfection or enforcement of any Lien, or in satisfaction
of judgments, including in connection with any bankruptcy proceeding or
other reorganization of another Person;
(vii) Investments in existence or made pursuant to legally
binding written commitments in existence on the Issue Date;
(viii) Currency Agreements, Interest Rate Agreements and
related Hedging Obligations, which obligations are Incurred in
compliance with Section 407;
(ix) pledges or deposits (x) with respect to leases or
utilities provided to third parties in the ordinary course of business
or (y) otherwise described in the definition of "Permitted Liens" or
made in connection with Liens permitted under Section 413;
(x) (1) Investments in any Receivables Subsidiary, or in
connection with a Financing Disposition by or to any Receivables
Entity, including Investments of funds held in accounts permitted or
required by the arrangements governing such Financing Disposition or
any related Indebtedness, or (2) any promissory note issued by the
Company or a Parent to a Receivables Subsidiary; provided that if such
Parent receives cash from the relevant Receivables Entity in exchange
for such note, an equal cash amount is contributed by such Parent to
the Company;
(xi) bonds secured by assets leased to and operated by the
Company or any Restricted Subsidiary that were issued in connection
with the financing of such assets so long as the Company or any
Restricted Subsidiary may obtain title to such assets at any time by
paying a nominal fee, canceling such bonds and terminating the
transaction;
(xii) Notes;
(xiii) any Investment to the extent made using Capital
Stock of the Company (other than Disqualified Stock), or Capital Stock
of a Parent, as consideration;
(xiv) (1) Management Advances or (2) Capital Stock of a
Parent purchased or otherwise acquired in connection with any Exercise
or any Permitted Parent Payment; and
(xv) other Investments in an aggregate amount outstanding
at any time not to exceed 8% of Consolidated Total Assets.
"Permitted Liens" means:
21
(i) Liens for taxes, assessments or other governmental
charges not yet delinquent or the nonpayment of which in the aggregate
would not reasonably be expected to have a material adverse effect on
the Company and its Restricted Subsidiaries, or that are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the
Company or a Subsidiary thereof, as the case may be, in accordance with
GAAP;
(ii) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other like Liens arising in the ordinary
course of business in respect of obligations that are not overdue for a
period of more than 60 days, or that are bonded or that are being
contested in good faith and by appropriate proceedings;
(iii) pledges, deposits or Liens in connection with
workers' compensation, unemployment insurance and other social security
and other similar legislation or other insurance-related obligations
(including pledges or deposits securing liability to insurance carriers
under insurance or self-insurance arrangements);
(iv) pledges, deposits or Liens to secure the performance
of bids, tenders, trade, government or other contracts (other than for
borrowed money), obligations for utilities, leases, licenses, statutory
obligations, completion guarantees, surety, judgment, appeal or
performance bonds, other similar bonds, instruments or obligations, and
other obligations of a like nature incurred in the ordinary course of
business;
(v) easements (including reciprocal easement agreements),
rights-of-way, building, zoning and similar restrictions, utility
agreements, covenants, reservations, restrictions, encroachments,
changes, and other similar encumbrances or title defects incurred, or
leases or subleases granted to others, in the ordinary course of
business, which do not in the aggregate materially interfere with the
ordinary conduct of the business of the Company and its Subsidiaries,
taken as a whole;
(vi) Liens existing on, or provided for under written
arrangements existing on, the Issue Date, or (in the case of any such
Liens securing Indebtedness of the Company or any of its Subsidiaries
existing or arising under written arrangements existing on the Issue
Date) securing any Refinancing Indebtedness in respect of such
Indebtedness so long as the Lien securing such Refinancing Indebtedness
is limited to all or part of the same property or assets (plus
improvements, accessions, proceeds or dividends or distributions in
respect thereof) that secured (or under such written arrangements could
secure) the original Indebtedness;
(vii) (i) mortgages, liens, security interests,
restrictions, encumbrances or any other matters of record that have
been placed by any developer, landlord or other third party on property
over which the Company or any Restricted Subsidiary of the Company has
easement rights or on any leased property and subordination or similar
agreements relating thereto and (ii) any condemnation or eminent domain
proceedings affecting any real property;
22
(viii) Liens securing Hedging Obligations, Purchase Money
Obligations or Capitalized Lease Obligations Incurred in compliance
with Section 407;
(ix) Liens arising out of judgments, decrees, orders or
awards in respect of which the Company shall in good faith be
prosecuting an appeal or proceedings for review, which appeal or
proceedings shall not have been finally terminated, or if the period
within which such appeal or proceedings may be initiated shall not have
expired;
(x) leases, subleases, licenses or sublicenses to third
parties;
(xi) Liens securing (1) Indebtedness Incurred in
compliance with clause (b)(i), (b)(iv), (b)(v), (b)(vii), (b)(viii)(E)
or (b)(x) of Section 407, or clause (b)(iii) thereof (other than
Refinancing Indebtedness Incurred in respect of the Notes or
Indebtedness described in paragraph (a) thereof), (2) Bank
Indebtedness, (3) commercial bank Indebtedness, (4) Indebtedness of any
Restricted Subsidiary that is not a Subsidiary Guarantor or an Issuer,
(5) the Notes or any Guarantee thereof or (6) Indebtedness or other
obligations of any Receivables Entity;
(xii) Liens existing on property or assets of a Person at
the time such Person becomes a Subsidiary of the Company (or at the
time the Company or a Restricted Subsidiary acquires such property or
assets); provided, however, that such Liens are not created in
connection with, or in contemplation of, such other Person becoming
such a Subsidiary (or such acquisition of such property or assets), and
that such Liens are limited to all or part of the same property or
assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written
arrangements under which such Liens arose, could secure) the
obligations to which such Liens relate;
(xiii) Liens on Capital Stock or other securities of an
Unrestricted Subsidiary that secure Indebtedness or other obligations
of such Unrestricted Subsidiary;
(xiv) any encumbrance or restriction (including put and
call agreements) with respect to Capital Stock of any joint venture or
similar arrangement pursuant to any joint venture or similar agreement;
and
(xv) Liens securing Refinancing Indebtedness Incurred in
respect of any Indebtedness secured by, or securing any refinancing,
refunding, extension, renewal or replacement (in whole or in part) of
any other obligation secured by, any other Permitted Liens, provided
that any such new Lien is limited to all or part of the same property
or assets (plus improvements, accessions, proceeds or dividends or
distributions in respect thereof) that secured (or, under the written
arrangements under which the original Lien arose, could secure) the
obligations to which such Liens relate.
"Permitted Parent Payments" means loans, advances, dividends
or distributions to a Parent or other payments by the Company or any Restricted
Subsidiary (including through the
23
purchase or other acquisition of Capital Stock of a Parent) (A) to permit such
Parent to satisfy obligations under the Management Agreements or (B) to pay or
permit such Parent to pay any Holding Company Expenses or any Related Taxes.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Place of Payment" means a city or any political subdivision
thereof referred to in Article 3 and initially designated under Section 402.
"Predecessor Notes" of any particular Note means every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.
"Preferred Stock" as applied to the Capital Stock of any
corporation means Capital Stock of any class or classes (however designated)
that by its terms is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other class
of such corporation.
"Purchase Money Obligations" means any Indebtedness Incurred
to finance or refinance the acquisition, leasing, construction or improvement of
property (real or personal) or assets, and whether acquired through the direct
acquisition of such property or assets or the acquisition of the Capital Stock
of any Person owning such property or assets, or otherwise.
"QIB" or "Qualified Institutional Buyer" means a "qualified
institutional buyer," as that term is defined in Rule 144A under the Securities
Act.
"Receivable" means a right to receive payment arising from a
sale or lease of goods or services by a Person pursuant to an arrangement with
another Person pursuant to which such other Person is obligated to pay for goods
or services under terms that permit the purchase of such goods and services on
credit, as determined in accordance with GAAP.
"Receivables Entity" means (x) any Receivables Subsidiary or
(y) any other Person that is engaged in the business of acquiring, selling,
collecting, financing or refinancing Receivables, accounts (as defined in the
Uniform Commercial Code as in effect in any jurisdiction from time to time),
other accounts or other receivables, or related assets.
"Receivables Fees" means distributions or payments made
directly or by means of discounts with respect to any participation interest
issued or sold in connection with, and other fees paid to a Person that is not a
Restricted Subsidiary in connection with, any Receivables Financing.
24
"Receivables Financing" means any financing of Receivables of
the Company or any Restricted Subsidiary that have been transferred to a
Receivables Entity in a Financing Disposition.
"Receivables Subsidiary" means a Subsidiary of the Company
that (a) is engaged solely in the business of acquiring, selling, collecting,
financing or refinancing Receivables, accounts (as defined in the Uniform
Commercial Code as in effect in any jurisdiction from time to time) and other
accounts and receivables (including any thereof constituting or evidenced by
chattel paper, instruments or general intangibles), all proceeds thereof and all
rights (contractual and other), collateral and other assets relating thereto,
and any business or activities incidental or related to such business, and (b)
is designated as a "Receivables Subsidiary" by the Board of Directors.
"Redemption Date" when used with respect to any Note to be
redeemed or purchased means the date fixed for such redemption or purchase by or
pursuant to this Indenture and the Notes.
"Redemption Price" when used with respect to any Note to be
redeemed or purchased means the price at which it is to be redeemed or purchased
pursuant to this Indenture and the Notes.
"refinance" means refinance, refund, replace, renew, repay,
modify, restate, defer, substitute, supplement, reissue, resell or extend
(including pursuant to any defeasance or discharge mechanism); and the terms
"refinances," "refinanced" and "refinancing" as used for any purpose in this
Indenture shall have a correlative meaning.
"Refinancing Indebtedness" means Indebtedness that is Incurred
to refinance any Indebtedness existing on the Issue Date or Incurred in
compliance with this Indenture (including Indebtedness of the Company that
refinances Indebtedness of any Restricted Subsidiary (to the extent permitted in
this Indenture) and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of another Restricted Subsidiary) including Indebtedness that
refinances Refinancing Indebtedness; provided, however, that with respect to any
Refinancing Indebtedness (other than Bank Indebtedness), (i) if the Indebtedness
being refinanced is a Subordinated Obligation, the Refinancing Indebtedness has
a final Stated Maturity at the time such Refinancing Indebtedness is Incurred
that is the same as or later than the final Stated Maturity of the Indebtedness
being refinanced (or, if shorter, the Notes), (ii) such Refinancing Indebtedness
is Incurred in an aggregate principal amount (or if issued with original issue
discount, an aggregate issue price) that is equal to or less than the sum of (x)
the aggregate principal amount (or if issued with original issue discount, the
aggregate accreted value) then outstanding of the Indebtedness being refinanced,
plus (y) fees, underwriting discounts, premiums and other costs and expenses
incurred in connection with such Refinancing Indebtedness, and (iii) Refinancing
Indebtedness shall not include (x) Indebtedness of a Restricted Subsidiary that
is not a Subsidiary Guarantor or an Issuer that refinances Indebtedness of the
Company, an Issuer or a Subsidiary Guarantor that was Incurred by the Company,
such Issuer or such Subsidiary Guarantor pursuant
25
to Section 407(a) or (y) Indebtedness of the Company or a Restricted Subsidiary
that refinances Indebtedness of an Unrestricted Subsidiary.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the date specified for that purpose in Section 301.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially
in the form attached hereto as Exhibit C.
"Related Business" means those businesses in which the Company
or any of its Subsidiaries is engaged on the Issue Date, or that are related,
complementary, incidental or ancillary thereto or extensions, developments or
expansions thereof.
"Related Taxes" means (x) any taxes, charges or assessments,
including income, sales, use, transfer, rental, ad valorem, value-added, stamp,
property, consumption, franchise, license, capital, net worth, gross receipts,
excise, occupancy, intangibles or similar taxes, charges or assessments (other
than U.S. federal, state or local taxes measured by income and U.S. federal,
state or local withholding imposed on payments made by a Parent), required to be
paid by such Parent by virtue of its being incorporated or having Capital Stock
outstanding (but not by virtue of owning stock or other equity interests of any
corporation or other entity other than the Company or any of its Subsidiaries),
or being a holding company parent of the Company or having received Capital
Stock of the Company or other assets as a capital contribution, or receiving
dividends from or other distributions in respect of the Capital Stock of the
Company, or having guaranteed any obligations of the Company or any Subsidiary
thereof, or having made any payment in respect of any of the items for which the
Company is permitted to make payments to such Parent pursuant to Section 409, or
(y) any other U.S. taxes measured by income for which such Parent is liable up
to an amount not to exceed with respect to U.S. federal taxes the amount of any
such taxes that the Company would have been required to pay on a separate
company basis or on a consolidated basis if the Company had filed a consolidated
return on behalf of an affiliated group (as defined in Section 1504 of the Code)
of which it were the common parent, or with respect to U.S. state and local
taxes, the amount of such taxes that the Company would have been required to pay
on a separate company basis or on a combined basis if the Company had filed a
combined return on behalf of an affiliated group consisting only of the Company
and its Subsidiaries.
"Representative" means the trustee, agent or representative
(if any) for an issue of Senior Indebtedness.
"Resale Restriction Termination Date" means, with respect to
any Note, the date that is two years (or such other period as may hereafter be
provided under Rule 144(k) under the Securities Act or any successor provision
thereto as permitting the resale by non-affiliates of Restricted Securities
without restriction) after the later of the original issue date in respect of
26
such Note and the last date on which an Issuer or any Affiliate of an Issuer was
the owner of such Note (or any Predecessor Note thereto).
"Responsible Officer" when used with respect to the Trustee
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president or assistant vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
and any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Payment Transaction" means any Restricted Payment
permitted pursuant to Section 409, any Permitted Payment, any Permitted
Investment, or any transaction (other than Guarantees) specifically excluded
from the definition of the term "Restricted Payment."
"Restricted Security" has the meaning assigned to such term in
Rule 144(a)(3) under the Securities Act; provided, however, that the Trustee
shall be entitled to receive, at its request, and conclusively rely on an
Opinion of Counsel with respect to whether any Note constitutes a Restricted
Security.
"Restricted Subsidiary" means any Subsidiary of the Company
other than an Unrestricted Subsidiary.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" with respect to a Person means any
Indebtedness of such Person secured by a Lien.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Agreement" means the credit agreement dated as
of May 20, 2003, among the Company, the Issuers, the guarantors named therein,
the banks and other financial institutions party thereto from time to time, and
Credit Suisse First Boston, as administrative agent, as such agreement may be
assumed by any successor in interest, and as such agreement may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or otherwise).
"Senior Credit Facility" means the collective reference to the
Senior Credit Agreement, any Loan Documents (as defined therein), any notes and
letters of credit issued
27
pursuant thereto and any guarantee and collateral agreement, patent and
trademark security agreement, mortgages, letter of credit applications and other
guarantees, pledge agreements, security agreements and collateral documents, and
other instruments and documents, executed and delivered pursuant to or in
connection with any of the foregoing, in each case as the same may be amended,
supplemented, waived or otherwise modified from time to time, or refunded,
refinanced, restructured, replaced, renewed, repaid, increased or extended from
time to time (whether in whole or in part, whether with the original agent and
lenders or other agents and lenders or otherwise, and whether provided under the
original Senior Credit Agreement or one or more other credit agreements,
indentures (including the Indenture) or financing agreements or otherwise).
Without limiting the generality of the foregoing, the term "Senior Credit
Facility" shall include any agreement (i) changing the maturity of any
Indebtedness incurred thereunder or contemplated thereby, (ii) adding
Subsidiaries of the Company as additional borrowers or guarantors thereunder,
(iii) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder or (iv) otherwise altering the terms and conditions
thereof.
"Senior Indebtedness" means, with respect to either Issuer or
any Note Guarantor, the following obligations, whether outstanding on the date
of this Indenture or thereafter issued, without duplication: (i) all Bank
Indebtedness, (ii) all obligations of such Person in respect of any Receivables
Financing, and (iii) all obligations of such Person consisting of the principal
of and premium, if any, and accrued and unpaid interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person regardless of whether post-filing
interest is allowed in such proceeding) on, and fees and other amounts owing in
respect of, all other Indebtedness of such Person, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is expressly provided that the obligations in respect of such Indebtedness are
not senior in right of payment to the Notes or the Note Guarantee of such
Person; provided, however, that Senior Indebtedness shall not include (1) any
obligation of such Person to any Subsidiary of such Person, (2) any liability
for Federal, state, foreign, local or other taxes owed or owing by such Person,
(3) any accounts payable or other liability to trade creditors arising in the
ordinary course of business (including Guarantees thereof or instruments
evidencing such liabilities), (4) any Indebtedness of such Person that is
expressly subordinated in right of payment to any other Indebtedness of such
Person, (5) any Capital Stock of such Person or (6) that portion of any
Indebtedness of such Person that is Incurred by such Person in violation of
Section 407 (but no such violation shall be deemed to exist for purposes of this
clause (6) if any holder of such Indebtedness or such holder's representative
shall have received an Officer's Certificate of the Company to the effect that
such Incurrence of such Indebtedness does not (or that the Incurrence of the
entire committed amount thereof at the date on which the initial borrowing
thereunder is made would not) violate Section 407). If any Senior Indebtedness
is disallowed, avoided or subordinated pursuant to the provisions of Section 548
of Title 11 of the United States Code or any applicable state fraudulent
conveyance law, such Senior Indebtedness nevertheless will constitute Senior
Indebtedness.
"Senior Subordinated Indebtedness" with respect to either
Issuer or any Note Guarantor means the Notes (in the case of such Issuer) or the
Note Guarantee of such Person (in
28
the case of such Note Guarantor) and any other Indebtedness of such Person that
ranks pari passu with the Notes or such Note Guarantee, as the case may be.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" of the Company within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC, as in effect on the Issue
Date.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"S&P" means Standard & Poor's Ratings Service, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors.
"Stated Maturity" means, with respect to any security, the
date specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency).
"Subordinated Obligations" with respect to either Issuer or
any Note Guarantor means any Indebtedness of such Person (whether outstanding on
the Issue Date or thereafter Incurred) that is expressly subordinated in right
of payment to the Notes (in the case of such Issuer) or to the Note Guarantee of
such Person (in the case of such Note Guarantor), pursuant to a written
agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other equity interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof
is at the time owned or controlled, directly or indirectly, by (i) such Person
or (ii) one or more Subsidiaries of such Person.
"Subsidiary Guarantee" means any of (i) the Guarantees of the
Guaranteed Jafra US Obligations by the U.S. Subsidiary Guarantors and the
Guarantees of the Guaranteed Jafra Distribution (Mexico) Obligations by the
Mexican Subsidiary Guarantors, to be entered into on the Issue Date as provided
in Section 1301, and (ii) any Guarantee in respect of the Notes that may from
time to time be entered into by a Restricted Subsidiary pursuant to Section 414.
"Subsidiary Guarantor" means any Restricted Subsidiary that
enters into a Subsidiary Guarantee.
"Temporary Cash Investments" means any of the following: (i)
any investment in (x) direct obligations of the United States of America or any
agency or instrumentality thereof or obligations Guaranteed by the United States
of America or any agency or instrumentality thereof or (y) direct obligations of
any foreign country recognized by the United States of America rated
29
at least "A" by S&P or "A-1" by Xxxxx'x (or, in either case, the equivalent of
such rating by such organization or, if no rating of S&P or Xxxxx'x then exists,
the equivalent of such rating by any nationally recognized rating organization),
(ii) overnight bank deposits, and investments in time deposit accounts,
certificates of deposit, bankers' acceptances and money market deposits (or,
with respect to foreign banks, similar instruments) maturing not more than one
year after the date of acquisition thereof issued by (x) any lender under the
Senior Credit Agreement or (y) a bank or trust company that is organized under
the laws of the United States of America, any state thereof or any foreign
country recognized by the United States of America having capital and surplus
aggregating in excess of $250 million (or the foreign currency equivalent
thereof) and whose long term debt is rated at least "A" by S&P or "A-1" by
Xxxxx'x (or, in either case, the equivalent of such rating by such organization
or, if no rating of S&P or Xxxxx'x then exists, the equivalent of such rating by
any nationally recognized rating organization) at the time such Investment is
made, (iii) repurchase obligations with a term of not more than 30 days for
underlying securities of the types described in clause (i) or (ii) above entered
into with a bank meeting the qualifications described in clause (ii) above, (iv)
Investments in commercial paper, maturing not more than 270 days after the date
of acquisition, issued by a Person (other than the Company or any of its
Subsidiaries) with a rating at the time as of which any Investment therein is
made of "P-2" (or higher) according to Xxxxx'x or "A-2" (or higher) according to
S&P (or, in either case, the equivalent of such rating by such organization or,
if no rating of S&P or Xxxxx'x then exists, the equivalent of such rating by any
nationally recognized rating organization), (v) Investments in securities
maturing not more than one year after the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States of
America, or by any political subdivision or taxing authority thereof, and rated
at least "A" by S&P or "A" by Xxxxx'x (or, in either case, the equivalent of
such rating by such organization or, if no rating of S&P or Xxxxx'x then exists,
the equivalent of such rating by any nationally recognized rating organization),
(vi) Preferred Stock (other than of the Company or any of its Subsidiaries)
having a rating of "A" or higher by S&P or "A2" or higher by Xxxxx'x (or, in
either case, the equivalent of such rating by such organization or, if no rating
of S&P or Xxxxx'x then exists, the equivalent of such rating by any nationally
recognized rating organization), (vii) investment funds investing 95% of their
assets in securities of the type described in clauses (i)-(vi) above (which
funds may also hold reasonable amounts of cash pending investment or
distribution), (viii) any money market deposit accounts issued or offered by a
domestic commercial bank or a commercial bank organized and located in a country
recognized by the United States of America, in each case, having capital and
surplus in excess of $250 million (or the foreign currency equivalent thereof),
or investments in money market funds complying with the risk limiting conditions
of Rule 2a-7 (or any successor rule) of the SEC under the Investment Company Act
of 1940, as amended and (ix) similar short-term investments approved by the
Board of Directors in the ordinary course of business.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C.Sections 77aaa-7bbbb) as in effect on the Issue Date.
"Trade Payables" means, with respect to any Person, any
accounts payable or any indebtedness or monetary obligation to trade creditors
created, assumed or guaranteed by such
30
Person arising in the ordinary course of business in connection with the
acquisition of goods or services.
"Transactions" means, collectively, any or all of the
following:
(1) the formation of Jafra Distribution (Mexico) as a
Subsidiary of CDRJ Latin American Holding Company B.V., and the
recapitalization of the Capital Stock of Jafra Mexico;
(2) the entry into this Indenture, the offer and issuance of
the Notes, and the provision of the Note Guarantees by the Note
Guarantors;
(3) the entry into the Senior Credit Facility and Incurrence
of Indebtedness thereunder by one or more of the Company, the Issuers
and their respective Subsidiaries;
(4) the acquisition by Jafra Distribution (Mexico) of
Preferred Stock of Jafra Mexico from Jafra Mexico and from one or more
of CDRJ Latin American Holding Company B.V. and its Subsidiaries; and
the acquisition by Jafra Distribution (Mexico) of certain fixed assets
and liabilities of a Subsidiary of Jafra Mexico related to its
distribution business;
(5) the satisfaction and discharge of the indenture for the
11-3/4% Senior Subordinated Notes due 2008 of Jafra US and Jafra
Mexico, including the deposit of funds with the trustee under such
indenture in connection therewith, and/or the redemption or other
acquisition or retirement of such Senior Subordinated Notes;
(6) the repayment of amounts outstanding under the existing
Credit Facility to which one or more of Jafra US, Jafra Mexico, CDRJ
Investments (Lux) S.A. and their respective Subsidiaries are party, the
termination of commitments thereunder, and the collateralization of
letters of credit remaining outstanding (if any);
(7) the distribution of up to approximately $158.6 million to
CDRJ North Atlantic (Lux) S.ar.l. by one or more of its Subsidiaries,
and the distribution by CDRJ North Atlantic (Lux) S.ar.l. of up to
approximately $158.6 million to CDRJ Investments (Lux) S.A.;
(8) the transfer by CDRJ North Atlantic (Lux) S.ar.l. of its
assets and liabilities to the Company, including the Capital Stock of
Jafra US and CDRJ Latin American Holding Company B.V.;
(9) the entry into an agreement appointing the Company as the
liquidator of CDRJ Investments (Lux) S.A., including with respect to
making the liquidating distributions of CDRJ Investments (Lux) S.A.
described in clause (10) below and the performance by the Company of
its duties as liquidator under Luxembourg law and its obligations under
such agreement;
31
(10) the making of (i) a liquidating distribution by CDRJ
Investments (Lux) S.A. to the holders of its capital stock (or
equivalent equity interests) of (x) up to approximately $158.6 million
and (y) all of its other assets, including the outstanding capital
stock (or equivalent equity interests) of CDRJ North Atlantic (Lux)
S.ar.l.; and (ii) certain compensating payments to holders of options
to acquire Capital Stock of CDRJ Investments (Lux) S.A. (or CDRJ North
Atlantic (Lux) S.ar.l.), in connection with such liquidating
distribution; and
(11) all other transactions relating to any of the foregoing
(including payment of fees and expenses related to any of the
foregoing).
"Trust Officer" means the Chairman of the Board, the President
or any other officer or assistant officer of the Trustee assigned by the Trustee
to administer its corporate trust matters.
"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) any Subsidiary of the
Company that at the time of determination is an Unrestricted Subsidiary, as
designated by the Board of Directors in the manner provided below, and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate
any Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary of the Company) to be an Unrestricted Subsidiary unless such
Subsidiary or any of its Subsidiaries owns any Capital Stock or Indebtedness of,
or owns or holds any Lien on any property of, the Company or any other
Restricted Subsidiary of the Company that is not a Subsidiary of the Subsidiary
to be so designated; provided, however, that either (A) the Subsidiary to be so
designated has total consolidated assets of $1,000 or less or (B) if such
Subsidiary has consolidated assets greater than $1,000, then such designation
would be permitted under Section 409. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
immediately after giving effect to such designation either (x) the Company could
incur at least $1.00 of additional Indebtedness under Section 407(a) or (y) the
Consolidated Coverage Ratio would be greater than it was immediately prior to
giving effect to such designation. Any such designation by the Board of
Directors shall be evidenced to the Trustee by promptly filing with the Trustee
a copy of the resolution of the Board of Directors giving effect to such
designation and an Officer's Certificate of the Company certifying that such
designation complied with the foregoing provisions.
"U.S. Government Obligation" means (x) any security that is
(i) a direct obligation of the United States of America for the payment of which
the full faith and credit of the United States of America is pledged or (ii) an
obligation of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, which, in either case under the preceding clause (i) or (ii),
is not callable or redeemable at the option of the issuer thereof, and (y) any
depositary receipt issued by a bank (as defined in
32
Section 3(a)(2) of the Securities Act) as custodian with respect to any U.S.
Government Obligation that is specified in clause (x) above and held by such
bank for the account of the holder of such depositary receipt, or with respect
to any specific payment of principal of or interest on any U.S. Government
Obligation that is so specified and held, 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 depositary receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal or interest evidenced by such depositary receipt.
"U.S. Subsidiary" means any Restricted Subsidiary of the
Company other than a Foreign Subsidiary.
"U.S. Subsidiary Guarantor" means any U.S. Subsidiary of Jafra
US that enters into a Subsidiary Guarantee.
"Vice President" when used with respect to any Person means
any vice president of such Person, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" of an entity means all classes of Capital Stock
of such entity then outstanding and normally entitled to vote in the election of
directors or all interests in such entity with the ability to control the
management or actions of such entity.
Section 102. Other Definitions.
Defined in
Term Section
---- ----------
"Act"............................................................ 108
"Additional Amounts"............................................. 404
"Affiliate Transaction".......................................... 412
"Agent Members".................................................. 312
"Amendment"...................................................... 410
"Authentication Order"........................................... 303
"Bankruptcy Law"................................................. 601
"Blockage Notice"................................................ 1403
"Covenant Defeasance"............................................ 1203
"Custodian"...................................................... 601
"Defaulted Interest"............................................. 307
"Defeasance"..................................................... 1202
"Defeased Notes"................................................. 1201
"Event of Default"............................................... 601
"Excessive Additional Amounts"................................... 1001
"Exercise"....................................................... 409
"Expiration Date"................................................ 108
33
"Global Notes"................................................... 201
"Guaranteed Jafra Distribution (Mexico) Obligations"............. 1301
"Guaranteed Jafra US Obligations"................................ 1301
"Guaranteed Note Obligations".................................... 1301
"Guarantor Blockage Notice"...................................... 1503
"Guarantor Non-payment Default".................................. 1503
"Guarantor Payment Blockage Period".............................. 1503
"Guarantor Payment Default"...................................... 1503
"Initial Agreement".............................................. 410
"Initial Lien"................................................... 413
"Jafra Distribution (Mexico) Portion"............................ 301
"Jafra US Portion"............................................... 301
"Non-payment Default"............................................ 1403
"Note Register" and "Note Registrar" ............................ 305
"Offer".......................................................... 411
"Offshore Global Note"........................................... 201
"Offshore Note Exchange Date".................................... 313
"Offshore Physical Note"......................................... 201
"Offshore Temporary Global Note"................................. 201
"pay its Note Guarantee"......................................... 1503
"pay the Notes".................................................. 1403
"Payment Blockage Period"........................................ 1403
"Payment Default"................................................ 1403
"Payor".......................................................... 404
"Permitted Payment".............................................. 409
"Physical Notes"................................................. 201
"Portion"........................................................ 301
"Private Placement Legend"....................................... 203
"Redemption Amount".............................................. 1001
"Refinancing Agreement".......................................... 410
"Restricted Payment"............................................. 409
"Several Share".................................................. 301
"Successor"...................................................... 501
"Successor Jurisdiction"......................................... 404
"Taxes".......................................................... 404
"U.S. Global Note"............................................... 201
"U.S. Physical Note"............................................. 201
Section 103. Rules of Construction. For all purposes of this
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) the terms defined in this Indenture have the meanings
assigned to them in this Indenture;
34
(2) "or" is not exclusive;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(4) 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;
(5) all references to "$" or "dollars" shall refer to the
lawful currency of the United States of America;
(6) the words "include," "included" and "including" as used
herein shall be deemed in each case to be followed by the phrase
"without limitation," if not expressly followed by such phrase or the
phrase "but not limited to";
(7) words in the singular include the plural, and words in the
plural include the singular; and
(8) any reference to a Section or Article refers to such
Section or Article of this Indenture.
Section 104. Incorporation by Reference of TIA. Whenever this
Indenture refers to a provision of the TIA, the provision is incorporated by
reference in and made a part of this Indenture. This Indenture is subject to the
mandatory provisions of the TIA, which are incorporated by reference in and made
a part of this Indenture. Any terms incorporated by reference in this Indenture
that are defined by the TIA, defined by any TIA reference to another statute or
defined by SEC rule under the TIA, have the meanings so assigned to them
therein. The following TIA terms have the following meanings:
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company, an
Issuer, any other Note Guarantor, and any other obligor on the
indenture securities.
Section 105. Conflict with TIA. If any provision hereof
limits, qualifies or conflicts with a provision of the TIA that is required
under the TIA to be a part of and govern this Indenture, the latter provision
shall control. If any provision of this Indenture modifies or excludes any
provision of the TIA that may be so modified or excluded, the latter provision
shall be deemed (i) to apply to this Indenture as so modified or (ii) to be
excluded, as the case may be.
35
Section 106. Compliance Certificates and Opinions. Upon any
application or request by the Company, by the Issuers, by the Company on behalf
of the Issuers, or by any other obligor upon the Notes (including any Note
Guarantor), to the Trustee to take any action under any provision of this
Indenture, the Company or the Issuers or such other obligor (including any Note
Guarantor), as the case may be, shall furnish to the Trustee such certificates
and opinions as may be required under the TIA. Each such certificate or opinion
shall be given in the form of one or more Officer's Certificates, if to be given
by an Officer, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the TIA and any other requirements set forth in
this Indenture. Notwithstanding the foregoing, in the case of any such request
or application as to which the furnishing of any Officer's Certificate or
Opinion of Counsel is specifically required by any provision of this Indenture
relating to such particular request or application, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided for in this Indenture (except
for certificates provided for in Section 406) shall include:
(1) a statement that the individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or
she made such examination or investigation as is necessary to enable
him or her 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 such
individual, such condition or covenant has been complied with.
Section 107. 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 that the certificate or
opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or opinion
of counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Officer or Officers to the
effect that the information with respect to such
36
factual matters is in the possession of the Company or an Issuer, unless such
counsel knows that the certificate or opinion or representations with respect to
such matters are 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 108. Acts of Noteholders; Record Dates. (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 agent 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 Issuers or the Company, as the
case may be. 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 any
purpose of this Indenture and (subject to Section 701) conclusive in favor of
the Trustee, the Issuers and any other obligor upon the Notes, if made in the
manner provided in this Section 108.
(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 the certificate of any 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 an officer of a corporation or a member of a partnership or
other entity, on behalf of such corporation or partnership or other entity, such
certificate or affidavit shall also constitute sufficient proof of such Person's
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 that the Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Note shall bind the Holder
of every Note issued upon the transfer thereof or in exchange therefor or in
lieu thereof, in respect of anything done or suffered to be done by the Trustee,
the Issuers or any other obligor upon the Notes in reliance thereon, whether or
not notation of such action is made upon such Note.
(e) (i) The Issuers may set any day as a record date for the
purpose of determining the Holders of Outstanding Notes entitled to give, make
or take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Indenture to be given, made or
taken by Holders of Notes, provided that the Issuers may not set a record date
for, and the provisions of this paragraph shall not apply with respect to, the
giving or making of any notice, declaration, request or direction referred to in
the next paragraph. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Notes on such
37
record date (or their duly designated proxies), and no other Holders, shall be
entitled to take the relevant action, whether or not such Persons remain Holders
after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite principal amount of Outstanding Notes on such record date.
Nothing in this paragraph shall be construed to prevent the Issuers from setting
a new record date for any action for which a record date has previously been set
pursuant to this paragraph (whereupon the record date previously set shall
automatically and with no action by any Person be cancelled and of no effect),
and nothing in this paragraph shall be construed to render ineffective any
action taken by Holders of the requisite principal amount of Outstanding Notes
on the date such action is taken. Promptly after any record date is set pursuant
to this paragraph, the Issuers, at their several expense, shall cause notice of
such record date, the proposed action by Holders and the applicable Expiration
Date to be given to the Trustee in writing and to each Holder of Notes in the
manner set forth in Section 110.
(ii) The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Notes entitled to
join in the giving or making of (A) any Notice of Default, (B) any
declaration of acceleration referred to in Section 602, (C) any request
to institute proceedings referred to in Section 607(2) or (D) any
direction referred to in Section 612, in each case with respect to
Notes. If any record date is set pursuant to this paragraph, the
Holders of Outstanding Notes on such record date, and no other Holders,
shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record
date; provided that no such action shall be effective hereunder unless
taken on or prior to the applicable Expiration Date by Holders of the
requisite principal amount of Outstanding Notes on such record date.
Nothing in this paragraph shall be construed to prevent the Trustee
from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by
any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Notes on the
date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Trustee, at the Issuers' several
expense, shall cause notice of such record date, the proposed action by
Holders and the applicable Expiration Date to be given to the Company
in writing and to each Holder of Notes in the manner set forth in
Section 110.
(iii) With respect to any record date set pursuant to this
Section 108, the party hereto that sets such record dates may designate
any day as the "Expiration Date" and from time to time may change the
Expiration Date to any earlier or later day; provided that no such
change shall be effective unless notice of the proposed new Expiration
Date is given to the Issuers or the Trustee, whichever such party is
not setting a record date pursuant to this Section 108(e) in writing,
and to each Holder of Notes in the manner set forth in Section 110, on
or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this
Section, the party hereto that set such record date shall be deemed to
have initially designated the 180th day
38
after such record date as the Expiration Date with respect thereto,
subject to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(iv) Without limiting the foregoing, a Holder entitled
hereunder to take any action hereunder with regard to any particular
Note may do so with regard to all or any part of the principal amount
of such Note or by one or more duly appointed agents each of which may
do so pursuant to such appointment with regard to all or any part of
such principal amount.
Section 109. Notices, etc., to Trustee and Company. Any
request, demand, authorization, direction, notice, consent, waiver or 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 by the Company or by the
Issuers or any other obligor upon the Notes shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at 000 Xxxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Corporate Trust Department (telephone:
(000) 000-0000; telecopier: (000) 000-0000) or at any other address
furnished in writing to the Company by the Trustee, or
(2) the Company or the Issuers by the Trustee or by any Holder
shall be sufficient for every purpose hereunder if in writing and
mailed, first-class postage prepaid, to the Company or the Issuers
addressed to any of them, as the case may be, c/o Jafra Cosmetics
International, Inc., 0000 Xxxxxxxxx Xxxx, Xxxxxxxx Xxxxxxx, Xxxxxxxxxx
00000, Attention: Chief Financial Officer (telephone: (000) 000-0000;
telecopier: (000) 000-0000), with copies to Debevoise & Xxxxxxxx, 000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxxxx,
Esq. (telephone: (000) 000-0000; telecopier: (000) 000-0000), or at any
other address previously furnished in writing to the Trustee by the
Company.
Section 110. Notices to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such
Holder's address as it appears in the Note 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.
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
39
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 regular mail service,
or by reason of any other cause, it shall be impossible to mail notice of any
event as required by any provision of this Indenture, then such notification as
shall be made with the approval of the Trustee (such approval not to be
unreasonably withheld) shall constitute a sufficient notification for every
purpose hereunder.
Section 111. 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 112. Successors and Assigns. All covenants and
agreements in this Indenture by the Company or an Issuer shall bind its
respective successors and assigns, whether so expressed or not.
Section 113. Separability Clause. In case any provision in
this Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 114. Benefits of Indenture. Nothing in this Indenture
or in the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any Paying Agent and the Holders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture, except as provided in Article 14 and Article 15.
Section 115. GOVERNING LAW. THIS INDENTURE AND THE NOTES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT
THAT THE SAME ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF
THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE TRUSTEE, THE
ISSUERS, ANY OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF
THE NOTES) THE HOLDERS, AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES
FEDERAL OR STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE OR
THE NOTES.
Section 116. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Note shall not be a
Business Day at any Place of Payment, then (notwithstanding any other provision
of this Indenture or of the Notes) payment of interest or principal and premium
(if any) need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity.
40
Section 117. No Personal Liability of Directors, Officers,
Employees, Incorporators and Stockholders. No director, officer, employee,
incorporator or stockholder, as such, of the Company, the Issuers, any Note
Guarantor or any Subsidiary of any thereof shall have any liability for any
obligation of the Company, the Issuers or any Note Guarantor under the
Indenture, the Notes or any Note Guarantee, or for any claim based on, in
respect of, or by reason of, any such obligation or its creation. Each
Noteholder, by accepting the Notes, waives and releases all such liability. The
waiver and release are part of the consideration for issuance of the Notes.
Section 118. Exhibits and Schedules. All exhibits and
schedules attached hereto are by this reference made a part hereof with the same
effect as if herein set forth in full.
Section 119. Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 120. Company as Agent for Issuers. To the extent
permitted by the TIA and any other applicable law, each Issuer hereby appoints
the Company as its attorney-in-fact, which appointment is coupled with an
interest, to take any action that this Indenture may require or permit such
Issuer to take, including
(1) the giving of any certification, opinion, order, request
or consent (whether by Officer's Certificate, Opinion of Counsel,
Company Order, Company Request, Company Consent or otherwise),
(2) the giving of any notice (including under Section 1001),
and
(3) the setting of any record date,
such appointment to remain in effect until such Issuer shall otherwise notify
the Trustee in writing.
ARTICLE II
NOTE FORMS
Section 201. Forms Generally. (a) The Notes and the Trustee's
certificate of authentication relating thereto shall be in substantially the
forms set forth, or referenced, in this Article 2 and Exhibit A annexed hereto,
which Exhibit is hereby incorporated in and expressly made a part of this
Indenture. The Notes may have such appropriate insertions, omissions,
substitutions, notations, legends, endorsements, identifications and other
variations as are required or permitted by law, stock exchange rule or
Depository rule or usage, agreements to which the Issuers are subject, if any,
or other customary usage, or as may consistently herewith be determined by the
Officers of each Issuer executing such Notes, as evidenced by such execution
(provided always that any such notation, legend, endorsement, identification or
41
variation is in a form acceptable to the Issuers). Each Note shall be dated the
date of its authentication. The terms of the Notes set forth in Exhibit A are
part of the terms of this Indenture. Any portion of the text of any Note may be
set forth on the reverse thereof, with an appropriate reference thereto on the
face of the Note.
Initial Notes and any Additional Notes offered and sold in
reliance on Rule 144A under the Securities Act shall, unless (in the case of
Additional Notes) the Issuers otherwise notify the Trustee in writing, be issued
in the form of one or more permanent global Notes in substantially the form set
forth in Exhibit A (each, a "U.S. Global Note"), deposited with the Trustee, as
custodian for the Depositary or its nominee, duly executed by the Issuers and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a U.S. Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Initial Notes and any Additional Notes offered and sold in
offshore transactions in reliance on Regulation S under the Securities Act
shall, unless (in the case of Additional Notes) the Issuers otherwise notify the
Trustee in writing, be issued in the form of one or more temporary global Notes
in substantially the form set forth in Exhibit A (each, an "Offshore Temporary
Global Note"), deposited with the Trustee, as custodian for the Depositary or
its nominee, duly executed by the Issuers and authenticated by the Trustee as
hereinafter provided. Following the Offshore Note Exchange Date with respect to
any such Offshore Temporary Global Note, beneficial interests in the Offshore
Temporary Global Note shall be exchanged as provided in Sections 312 and 313 for
beneficial interests in one or more permanent global Notes in the form of
Exhibit A (each an "Offshore Permanent Global Note" and, together with the
Offshore Temporary Global Notes, the "Offshore Global Notes"), deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Issuers and authenticated by the Trustee as hereinafter provided.
Simultaneously with the authentication of an Offshore Permanent Global Note, the
Trustee shall cancel the related Offshore Temporary Global Note. The aggregate
principal amount of an Offshore Global Note may from time to time be increased
or decreased by adjustments made in the records of the Trustee, as custodian for
the Depositary or its nominee, as hereinafter provided.
Subject to the limitations on the issuance of certificated
Notes set forth in Sections 312 and 313, Initial Notes and any Initial
Additional Notes issued pursuant to Section 305 in exchange for or upon transfer
of beneficial interests (x) in a U.S. Global Note shall be in the form of
permanent certificated Notes substantially in the form set forth in Exhibit A
(the "U.S. Physical Notes") or (y) in an Offshore Global Note (if any), on or
after the Offshore Note Exchange Date with respect to such Offshore Global Note,
shall be in the form of permanent certificated Notes substantially in the form
set forth in Exhibit A (the "Offshore Physical Notes"), respectively, as
hereinafter provided.
The U.S. Physical Notes and Offshore Physical Notes shall be
construed to include any certificated Notes issued in respect thereof pursuant
to Section 304, 305, 306 or 1008, and the U.S. Global Notes and Offshore Global
Notes shall be construed to include any
42
global Notes issued in respect thereof pursuant to Section 304, 305, 306 or
1008. The Offshore Physical Notes and the U.S. Physical Notes, together with any
other certificated Notes issued and authenticated pursuant to this Indenture,
are sometimes collectively herein referred to as the "Physical Notes". The U.S.
Global Notes and the Offshore Global Notes, together with any other global Notes
that are issued and authenticated pursuant to this Indenture, are sometimes
collectively referred to as the "Global Notes."
Exchange Notes shall be issued substantially in the form set
forth in Exhibit A and, subject to Section 312(b), shall be in the form of one
or more Global Notes.
Section 202. Form of Trustee's Certificate of Authentication.
This is one of the Notes referred to in the within-mentioned Indenture.
_______________________________
as Trustee
By_____________________________
Authorized Officer
Dated:
If an appointment of an Authenticating Agent is made pursuant
to Section 714, the Notes may have endorsed thereon, in lieu of the Trustee's
certificate of authentication, an alternative certificate of authentication in
the following form:
This is one of the Notes referred to in the within-mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION
______________________________
as Trustee
By____________________________
____________________________
As Authenticating Agent
By____________________________
___________________________
Authorized Officer
Dated:
Section 203. Restrictive and Global Note Legends. Each Global
Note and Physical Note shall bear the following legend set forth below (the
"Private Placement Legend") on the face thereof until the Private Placement
Legend is removed or not required in accordance with Section 313(4):
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
43
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND HAS NOT
BEEN REGISTERED UNDER ANY STATE SECURITIES LAWS, AND THIS NOTE (AND ANY
INTEREST OR PARTICIPATION HEREIN) MAY NOT BE OFFERED, SOLD, ASSIGNED,
PLEDGED, ENCUMBERED OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT ("RULE 144A") OR (B) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION AND (2) AGREES
FOR THE BENEFIT OF THE ISSUERS THAT (A) THIS NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED OR DISPOSED OF ONLY (I) INSIDE
THE UNITED STATES TO A PERSON WHOM 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,
(II) OUTSIDE THE UNITED STATES IN A TRANSACTION IN ACCORDANCE WITH RULE
904 UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE), (IV) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR (V) TO THE ISSUERS, IN EACH OF CASES (I)
THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES, AND SUBJECT TO THE ISSUERS' AND THE
TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (X) PURSUANT
TO CLAUSE (II) OR (III) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (Y) IN THE CASE OF ANY OF THE FOREGOING CLAUSES (I) THROUGH
(V), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE OTHER SIDE OF THIS NOTE IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE ISSUERS AND THE TRUSTEE, THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE
FROM IT OF THE RESALE RESTRICTION REFERRED TO ABOVE. AS USED HEREIN,
THE TERMS "UNITED STATES," "OFFSHORE TRANSACTION" AND "U.S. PERSON"
HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Each Global Note, whether or not an Initial Note, shall also
bear the following legend on the face thereof:
44
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN 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 NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS
SET FORTH IN SECTIONS 312 AND 313 OF THE INDENTURE.
Each Offshore Temporary Global Note shall also bear the
following legend on the face thereof:
EXCEPT AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN), BENEFICIAL
OWNERSHIP INTERESTS IN THIS OFFSHORE TEMPORARY GLOBAL NOTE WILL NOT BE
EXCHANGEABLE FOR INTERESTS IN THE OFFSHORE PERMANENT GLOBAL NOTE OR ANY
OTHER SECURITY REPRESENTING AN INTEREST IN THE SECURITIES REPRESENTED
HEREBY WHICH DO NOT CONTAIN A LEGEND CONTAINING RESTRICTIONS ON
TRANSFER, UNTIL THE EXPIRATION OF THE "40 DAY DISTRIBUTION COMPLIANCE
PERIOD" (WITHIN THE MEANING OF RULE 903(b)(2) OF REGULATION S UNDER THE
SECURITIES ACT). DURING SUCH 40 DAY DISTRIBUTION COMPLIANCE PERIOD,
BENEFICIAL OWNERSHIP INTERESTS IN THIS OFFSHORE TEMPORARY GLOBAL NOTE
MAY ONLY BE SOLD, PLEDGED OR TRANSFERRED THROUGH EUROCLEAR BANK
S.A./N.A., AS OPERATOR OF THE EUROCLEAR SYSTEM OR CLEARSTREAM BANKING,
SOCIETE ANONYME.
ARTICLE III
THE NOTES
Section 301. Title and Terms. The aggregate principal amount
of Notes that may be authenticated and delivered and Outstanding under this
Indenture is not limited, except
45
as provided in Section 407 and except as may be limited by applicable law. The
Original Notes will be issued in an aggregate principal amount of $200.0
million. All the Original Notes shall vote and consent together on all matters
as one class, and none of the Original Notes will have the right to vote or
consent as a class separate from one another on any matter. Additional Notes
(including any Exchange Notes issued in exchange therefor) may vote (or consent)
as a class with the other Notes and otherwise be treated as Notes for all
purposes of this Indenture.
The Notes will be the several obligations of the Issuers. Of
the aggregate principal amount of Original Notes of $200.0 million, Jafra US
will be severally liable with respect to the payment of $80.0 million of
principal, together with interest thereon (the "Jafra US Portion"), and Jafra
Distribution (Mexico) will be severally liable with respect to the payment of
$120.0 million of principal, together with interest thereon (the "Jafra
Distribution (Mexico) Portion," and each of the Jafra US Portion and Jafra
Distribution (Mexico) Portion, a "Portion"). Except as otherwise described
herein, Jafra US and Jafra Distribution (Mexico) will be severally liable in
respect of each outstanding Note (including any Additional Notes) in the
relative proportions of the Jafra US Portion and the Jafra Distribution (Mexico)
Portion, respectively (sixty percent (60%) in the case of Jafra Distribution
(Mexico) and forty percent (40%) in the case of Jafra US). With respect to each
Issuer, such relative proportion of any amount is referred to as such Issuer's
"Several Share."
The Issuers and, by acquiring the Notes, the Holders agree to
treat $400 of each $1,000 principal amount of the Notes as indebtedness of Jafra
US. and $600 of each $1,000 principal amount of the Notes as indebtedness of
Jafra Distribution (Mexico) for U.S. federal, state and local and non-U.S. tax
purposes.
The Notes shall be known and designated as the "10 3/4%
Senior Subordinated Notes Due 2011" of the Issuers. The final Stated Maturity of
the Notes shall be May 15, 2011. Interest on the Outstanding principal amount of
Notes will accrue at the rate of 10 3/4% per annum and will be payable
semi-annually in arrears on May 15 and November 15 in each year, commencing on
November 15, 2003, to holders of record on the immediately preceding May 1 and
November 1, respectively (each such May 1 and November 1, a "Regular Record
Date"). Interest on the Original Notes will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid, from the Issue Date; and interest on any Additional Notes (and Exchange
Notes issued in exchange therefor) will accrue from the most recent date to
which interest has been paid or duly provided for or, if no interest has been
paid on such Additional Notes, from the date of issuance of such Additional
Notes; provided, that if any Note is surrendered for exchange on or after a
record date for an Interest Payment Date that will occur on or after the date of
such exchange, interest on the Note received in exchange thereof will accrue
from the date of such Interest Payment Date.
The principal of, and premium, if any, and interest, on the
Notes shall be payable at the office or agency of the Issuers maintained for
that purpose in the Borough of Manhattan, The City of New York (the "Place of
Payment"); provided, however, that at the option of the
46
Issuers payment of interest on a Note may be made by check mailed to the address
of the Person entitled thereto as such address shall appear in the Note
Register.
Section 302. Denominations. The Notes shall be issuable only
in registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 303. Execution, Authentication and Delivery and
Dating. The Notes shall be executed on behalf of each Issuer by one Officer of
such Issuer. The signature of any such Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of an
individual who was at any time a proper Officer of either Issuer shall bind such
Issuer, notwithstanding that such individual has ceased to hold such office
prior to the authentication and delivery of such Notes or did not hold such
office at the date of such Notes.
At any time and from time to time after the execution and
delivery of this Indenture, the Issuers may deliver Notes executed by the
Issuers to the Trustee for authentication; and the Trustee shall authenticate
and deliver (i) Initial Notes for original issue in the aggregate principal
amount not to exceed $200,000,000 and (ii) Additional Notes from time to time
for original issue in aggregate principal amounts specified by the Issuers and
(iii) Exchange Notes from time to time for issue in exchange for a like
principal amount of Initial Notes or Initial Additional Notes, in each case
specified in clauses (i) through (iii) above, upon a written order of the
Issuers in the form of an Officer's Certificate of the Issuers (an
"Authentication Order"). Such Officer's Certificate shall specify the amount of
Notes to be authenticated and the date on which the Notes are to be
authenticated, whether the Notes are to be Initial Notes, Additional Notes or
Exchange Notes and whether the Notes are to be issued as one or more Global
Notes or Physical Notes and such other information as the Issuers may include or
the Trustee may reasonably request.
All Notes shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any Note
shall be conclusive evidence, and the only evidence, that such Note has been
duly authenticated and delivered hereunder.
Section 304. Temporary Notes. Until definitive Notes are ready
for delivery, the Issuers may prepare and upon receipt of an Authentication
Order the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuers consider appropriate for temporary Notes. If temporary Notes are issued,
the Issuers will cause definitive Notes to be prepared without unreasonable
delay. After the preparation of definitive Notes, the temporary Notes shall be
exchangeable for definitive Notes upon surrender of the temporary Notes at the
office or agency of the Issuers in a Place of Payment, without charge to the
Holder. Upon surrender for
47
cancellation of any one or more temporary Notes the Issuers shall execute and
upon receipt of an Authentication Order the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Notes of
authorized denominations. Until so exchanged the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as definitive
Notes of the same series and tenor.
Section 305. Registration, Registration of Transfer and
Exchange. The Issuers shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Issuers in a Place of Payment being herein sometimes
collectively referred to as the "Note Register") in which, subject to such
reasonable regulations as it may prescribe, the Issuers shall provide for the
registration of Notes and of transfers of Notes. The Trustee is hereby appointed
"Note Registrar" for the purpose of registering Notes and transfers of Notes as
herein provided.
Upon surrender for transfer of any Note at the office or
agency of the Issuers in a Place of Payment, in compliance with all applicable
requirements of this Indenture and applicable law, the Issuers shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes of the same series, of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other
Notes of the same series, of any authorized denominations and of a like tenor
and aggregate principal amount, upon surrender of the Notes to be exchanged at
such office or agency. Whenever any Notes are so surrendered for exchange, the
Issuers shall execute, and the Trustee shall authenticate and deliver, the Notes
that the Holder making the exchange is entitled to receive.
All Notes issued upon any transfer or exchange of Notes shall
be the valid obligations of the Issuers, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Notes surrendered upon such
transfer or exchange.
Every Note presented or surrendered for transfer or exchange
shall (if so required by the Issuers or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Issuers and the Note Registrar duly executed, by the Holder thereof or such
Holder's attorney duly authorized in writing.
No service charge shall be made for any transfer or exchange
of Notes, but the Issuers may require payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Notes under this Section 305.
The Issuers shall not be required (i) to issue, transfer or
exchange any Note during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption (or purchase) of Notes
selected for redemption (or purchase) under Section 1004 and ending at the close
of business on the day of such mailing, or (ii) to transfer or exchange any Note
so selected for redemption (or purchase) in whole or in part.
48
Section 306. Mutilated, Destroyed, Lost and Stolen Notes. If
(i) any mutilated Note is surrendered to the Trustee, or the Issuers and the
Trustee receive evidence to their satisfaction of the destruction, loss or theft
of any Note, and (ii) there is delivered to the Issuers 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 Issuers or the Trustee that such Note has
been acquired by a bona fide purchaser, the Issuers shall execute and upon
receipt of an Authentication Order the Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a new Note of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Note has
become or is about to become due and payable, the Issuers in their discretion
may, instead of issuing a new Note, pay such Note.
Upon the issuance of any new Note under this Section 306, the
Issuers may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Note issued pursuant to this Section 306 in lieu of
any destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuers, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and ratably with any and all other
Notes duly issued hereunder.
The provisions of this Section 306 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 Notes.
Section 307. Payment of Interest Rights Preserved. Interest on
any Note that is payable, and is punctually paid or duly provided for, on any
Interest Payment Date shall be paid to the Person in whose name that Note (or
one or more Predecessor Notes) is registered at the close of business on the
Regular Record Date for such interest specified in Section 301.
Any interest on any Note that is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder; and such Defaulted Interest may be paid by the Issuer responsible
therefor, at its election in each case; as provided in clause (1) or clause (2)
below:
(1) Such Issuer may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) 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. Such Issuer shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Note
49
and the date of the proposed payment, and at the same time such Issuer
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements reasonably satisfactory to the
Trustee for such deposit prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as provided in this clause
(1). Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 nor
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 such Issuer of such
Special Record Date and, in the name and at the expense of such Issuer,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first class postage
prepaid, to each Holder at such Holder's address as it appears in the
Note Register, 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 mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) Such Issuer may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
such Issuer to the Trustee of the proposed payment pursuant to this
clause (2), such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section 307, each
Note delivered under this Indenture upon transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, that were carried by such other Note.
Section 308. Persons Deemed Owners. The Company, the Issuers,
any Subsidiary Guarantor, the Trustee and any agent of any of them may treat the
Person in whose name any Note is registered as the owner of such Note for the
purpose of receiving payment of principal of (and premium, if any), and (subject
to Section 307) interest on, such Note and for all other purposes whatsoever,
whether or not such Note be overdue, and neither the Company, the Issuers, any
Subsidiary Guarantor, the Trustee nor any agent of any of them shall be affected
by notice to the contrary.
Section 309. Cancellation. All Notes surrendered for payment,
redemption, transfer, exchange or conversion shall, if surrendered to any Person
other than the Trustee, be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Issuers may at any time
deliver to the Trustee for cancellation any Notes previously authenticated and
delivered hereunder that either Issuer may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly cancelled by the
Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this
50
Section, except as expressly permitted by this Indenture. All cancelled Notes
held by the Trustee shall be disposed of as directed by a Company Order of the
Issuers and in accordance with Section 313.
Section 310. Computation of Interest. Interest on the Notes
shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers. The Issuers in issuing the Notes
may use "CUSIP" numbers (if then generally in use), and if so, the Trustee may
use the CUSIP numbers in notices of redemption or exchange as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness or accuracy of the CUSIP number
printed in the notice or on the Notes, and that reliance may be placed only on
the other identification numbers printed on the Notes.
Section 312. Book-Entry Provisions for Global Notes. (a) Each
Global Note initially shall (i) be registered in the name of the Depositary for
such Global Note or the nominee of such Depositary and (ii) be delivered to the
Trustee as custodian for such Depositary. Neither of the Issuers nor any agent
of the Issuers shall have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Note, or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
Members of, or participants in, the Depositary ("Agent
Members") shall have no rights under this Indenture with respect to any Global
Note, and the Depositary may be treated by the Issuers, any other obligor upon
the Notes, the Trustee and any agent of any of them as the absolute owner of
such Global Note for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Issuers, any other obligor upon the Notes, the
Trustee or any agent of any of them from giving effect to any written
certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and its Agent Members, the operation of
customary practices governing the exercise of the rights of a beneficial owner
of any Note. The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action that a Holder is
entitled to take under this Indenture or the Notes.
(b) Transfers of a Global Note shall be limited to transfers
of such Global Note in whole, but, subject to the immediately succeeding
sentence, not in part, to the Depositary, its successors or their respective
nominees. Interests of beneficial owners in a Global Note may not be transferred
or exchanged for Physical Notes unless (i) the Issuers have consented thereto in
writing, or such transfer or exchange is made pursuant to the next sentence, and
(ii) such transfer or exchange is in accordance with the applicable rules and
procedures of the Depositary and the provisions of Sections 305 and 313. Subject
to the limitation on issuance of Physical Notes set forth in Section 313(3),
Physical Notes shall be transferred to all beneficial owners in exchange for
their beneficial interests in the relevant Global Note, if (i) the Depositary
notifies the Issuers that it is unwilling or unable to continue as Depositary
for the applicable Global Note or the Depositary ceases to be a "Clearing
Agency" registered under the Exchange
51
Act and a successor depositary is not appointed by the Issuers within 90 days,
(ii) the Issuers, at their option, notify the Trustee in writing that they elect
to cause the issuance of Physical Notes under this Indenture or (iii) an Event
of Default has occurred and is continuing and the Note Registrar has received a
written request from the Depositary to issue Physical Notes.
(c) In connection with any transfer or exchange of a portion
of the beneficial interest in any Global Note to beneficial owners for Physical
Notes pursuant to paragraph (b) of this Section 312, the Note Registrar shall
record on its books and records the date and a decrease in the principal amount
of such Global Note in an amount equal to the beneficial interest in the Global
Note being transferred, and the Issuers shall execute, and the Trustee shall
authenticate and deliver, one or more Physical Notes of like tenor and principal
amount of authorized denominations.
(d) In connection with a transfer of an entire Global Note to
beneficial owners pursuant to paragraph (b) of this Section 312, the applicable
Global Note shall be deemed to be surrendered to the Trustee for cancellation,
and the Issuers shall execute, and the Trustee shall authenticate and deliver,
to each beneficial owner identified by the Depositary in exchange for its
beneficial interest in the applicable Global Note, an equal aggregate principal
amount at maturity of U.S. Physical Notes (in the case of any U.S. Global Note),
Offshore Physical Notes (in the case of any Offshore Global Note) or other
Physical Notes (in the case of any other Global Note), as the case may be, of
authorized denominations.
(e) The transfer and exchange of a Global Note or beneficial
interests therein shall be effected through the Depositary, in accordance with
this Indenture (including applicable restrictions on transfer set forth in
Section 313) and the procedures of the Depositary therefor. Any beneficial
interest in one of the Global Notes that is transferred to a Person who takes
delivery in the form of an interest in a different Global Note will, upon
transfer, cease to be an interest in such Global Note and become an interest in
the other Global Note and, accordingly, will thereafter be subject to all
transfer restrictions, if any, and other procedures applicable to beneficial
interests in such other Global Note for as long as it remains such an interest.
A transferor of a beneficial interest in a Global Note shall deliver to the
Registrar a written order given in accordance with the Depositary's procedures
containing information regarding the participant account of the Depositary to be
credited with a beneficial interest in the relevant Global Note. Subject to
Section 313, the 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 such Global Note and to debit the account
of the Person making the transfer the beneficial interest in the Global Note
being transferred.
(f) Any Physical Note delivered in exchange for an interest in
a Global Note pursuant to paragraph (b) of this Section 312 shall, unless such
exchange is made on or after the Resale Restriction Termination Date applicable
to such Note and except as otherwise provided in Section 203 and Section 313,
bear the Private Placement Legend.
(g) The Issuers, any other obligor upon the Notes or the
Trustee, in the discretion of any of them, may treat as the Act of a Holder any
instrument or writing of any
52
Person that is identified by the Depositary as the owner of a beneficial
interest in the Global Note, provided that the fact and date of the execution of
such instrument or writing is proved in accordance with Section 108(b).
Section 313. Special Transfer Provisions. (1) Transfers to
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Note that is a Restricted Security to
any Non-U.S. Person: The Note Registrar shall register such transfer if it
complies with all other applicable requirements of this Indenture (including
Section 305) and,
(a) if (x) such transfer is after the relevant Resale
Restriction Termination Date with respect to such Note or (y)
the proposed transferor has delivered to the Note Registrar a
Regulation S Certificate and, unless otherwise agreed by the
Issuers and the Trustee, an opinion of counsel, certifications
and other information satisfactory to the Issuers and the
Trustee, and
(b) if the proposed transferor is or is acting
through an Agent Member holding a beneficial interest in a
Global Note, upon receipt by the Note Registrar of (x) the
certificate, opinion, certifications and other information, if
any, required by clause (a) above and (y) written instructions
given in accordance with the Depositary's and the Note
Registrar's procedures;
whereupon (i) the Note Registrar shall reflect on its books and records the date
and (if the transfer does not involve a transfer of any Outstanding Physical
Note) a decrease in the principal amount of the relevant Global Note in an
amount equal to the principal amount of the beneficial interest in the relevant
Global Note to be transferred, and (ii) either (A) if the proposed transferee is
or is acting through an Agent Member holding a beneficial interest in a relevant
Offshore Global Note, the Trustee shall reflect on its books and records the
date and an increase in the principal amount of such Offshore Global Note in an
amount equal to the principal amount of the beneficial interest being so
transferred or (B) otherwise the Issuers shall execute and the Trustee shall
authenticate and deliver one or more Physical Notes of like tenor and amount.
(2) Transfers to QIBs. The following provisions shall apply
with respect to the registration of any proposed transfer of a Note that is a
Restricted Security to a QIB (excluding transfers to Non-U.S. Persons): The Note
Registrar shall register such transfer if it complies with all other applicable
requirements of this Indenture (including Section 305) and,
(a) if such transfer is being made by a proposed
transferor who has checked the box provided for on the form of
such Note stating, or has otherwise certified to the Issuers
and the Note Registrar in writing, that the sale has been made
in compliance with the provisions of Rule 144A to a transferee
who has signed the certification provided for on the form of
such Note stating, or has otherwise certified to the Issuers
and the Note Registrar in writing, that it is purchasing such
Note for its own account or an account with respect to which
it exercises sole investment discretion and that it and any
such account is a QIB
53
within the meaning of Rule 144A, and is aware that the sale to
it is being made in reliance on Rule 144A and acknowledges
that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not
to request such information and that it is aware that the
transferor is relying upon its foregoing representations in
order to claim the exemption from registration provided by
Rule 144A; and
(b) if the proposed transferee is an Agent Member,
and the Note to be transferred consists of a Physical Note
that after transfer is to be evidenced by an interest in a
Global Note or consists of a beneficial interest in a Global
Note that after the transfer is to be evidenced by an interest
in a different Global Note, upon receipt by the Note Registrar
of written instructions given in accordance with the
Depositary's and the Note Registrar's procedures, whereupon
the Note Registrar shall reflect on its books and records the
date and an increase in the principal amount of the transferee
Global Note in an amount equal to the principal amount of the
Physical Note or such beneficial interest in such transferor
Global Note to be transferred, and the Trustee shall cancel
the Physical Note so transferred or reflect on its books and
records the date and a decrease in the principal amount of
such transferor Global Note, as the case may be.
(3) Limitation on Issuance of Physical Notes. No Physical Note
shall be exchanged for a beneficial interest in any Global Note, except in
accordance with Section 312 and this Section 313.
A beneficial owner of an interest an Offshore Temporary Global
Note (and, in the case of any Additional Notes for which no Offshore Temporary
Global Note is issued, any Offshore Global Note) shall not be permitted to
exchange such interest for a Physical Note or (in the case of such interest in
an Offshore Temporary Global Note) an interest in an Offshore Permanent Global
Note until a date, which must be after the expiration of the distribution
compliance period set forth in Regulation S, on which the Issuers receive a
certificate of beneficial ownership substantially in the form of Exhibit B from
such beneficial owner (a "Certificate of Beneficial Ownership"). Such date, as
it relates to an Offshore Global Note, is herein referred to as the "Offshore
Note Exchange Date."
(4) Private Placement Legend. Upon the transfer, exchange or
replacement of Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Notes that do not bear the Private Placement Legend.
Upon the transfer, exchange or replacement of Notes bearing the Private
Placement Legend, the Note Registrar shall deliver only Notes that bear the
Private Placement Legend unless (i) the requested transfer is after the relevant
Resale Restriction Termination Date with respect to such Notes, (ii) upon
written request of the Issuers after there is delivered to the Note Registrar an
opinion of counsel (which opinion and counsel are satisfactory to the Issuers
and the Trustee) to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act, (iii) with respect to an Offshore Global Note
(on or after the Offshore Note Exchange Date with
54
respect to such Offshore Global Note) or Offshore Physical Note, in each case
with the agreement of the Issuers, or (iv) such Notes are sold or exchanged
pursuant to an effective registration statement under the Securities Act.
(5) Other Transfers. The Note Registrar shall effect and
register, upon receipt of a written request from the Issuers so to do, a
transfer not otherwise permitted by this Section 313, such registration to be
done in accordance with the otherwise applicable provisions of Section 313, upon
the furnishing by the proposed transferor or transferee of a written opinion of
counsel (which opinion and counsel are satisfactory to the Issuers and the
Trustee) to the effect that, and such other certifications or information as the
Issuers may require to confirm that, the proposed transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
A Note that is a Restricted Security may not be transferred
other than as provided in this Section 313. A beneficial interest in a Global
Note that is a Restricted Security may not be exchanged for a beneficial
interest in another Global Note other than through a transfer in compliance with
this Section 313.
(6) General. By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture.
The Note Registrar shall retain copies of all letters, notices
and other written communications received pursuant to Section 312 or this
Section 313 (including all Notes received for transfer pursuant to Section 313).
The Issuers shall have the right to require the Note Registrar to deliver to the
Issuers, at the Issuers' several expense, copies of all such letters, notices or
other written communications at any reasonable time upon the giving of
reasonable written notice to the Note Registrar.
In connection with any transfer of any Note, the Trustee, the
Note Registrar and the Issuers shall be entitled to receive, shall be under no
duty to inquire into, may conclusively presume the correctness of, and shall be
fully protected in relying upon the certificates, opinions and other information
referred to herein (or in the forms provided herein, attached hereto or to the
Notes, or otherwise) received from any Holder and any transferee of any Note
regarding the validity, legality and due authorization of any such transfer, the
eligibility of the transferee to receive such Note and any other facts and
circumstances related to such transfer.
Section 314. Payment of Additional Interest. (a) Under certain
circumstances the Issuers will be obligated to pay certain additional amounts of
interest to the Holders of certain Initial Notes, as more particularly set forth
in such Initial Notes.
(b) Under certain circumstances the Issuers may be obligated
to pay certain additional amounts of interest to the Holders of certain Initial
Additional Notes, as may be more particularly set forth in such Initial
Additional Notes.
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ARTICLE IV
COVENANTS
Section 401. Payment of Principal, Premium and Interest. Jafra US shall
duly and punctually pay its Several Share of the principal of (and premium, if
any) and interest on the Notes, severally, in accordance with the terms of the
Notes and this Indenture.
Jafra Distribution (Mexico) shall duly and punctually pay its Several
Share of the principal of (and premium, if any) and interest on the Notes,
severally, in accordance with the terms of the Notes and this Indenture.
Section 402. Maintenance of Office or Agency. The Issuers shall maintain
in the Borough of Manhattan, The City of New York an office or agency where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for transfer or exchange and where notices and demands to or upon
the Issuers in respect of the Notes and this Indenture may be served. The
Issuers shall give prompt written notice to the Trustee of the location, and of
any change in the location, of such office or agency. If at any time the Issuers
shall fail to maintain such office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee. The
Issuers hereby designate the Corporate Trust Office as the initial Place of
Payment and appoint the Trustee its agent to receive all such presentations,
surrenders, notices and demands so long as such Corporate Trust Office remains
the Place of Payment.
Section 403. Money for Payments To Be Held in Trust. If either Issuer
shall at any time act as its own Paying Agent, it will, on or before each due
date of the principal of (and premium, if any) or interest on, any of the Notes,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay its Several Share of the principal (and premium, if any)
or interest so becoming due until such sums 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.
If either Issuer is not acting as its own Paying Agent, it will, prior to
each due date of the principal of (and premium, if any) or interest on, any
Notes, deposit with a Paying Agent a sum sufficient to pay its Several Share of
the principal (and premium, if any) or interest, so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) each Issuer will
promptly notify the Trustee of its action or failure so to act.
If either Issuer is not acting as its own Paying Agent, such Issuer will
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 403, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if
56
any) or interest on Notes 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;
(2) give the Trustee notice of any default by the Issuers (or any
other obligor upon the Notes) in the making of any such payment of
principal (and premium, if any) or interest;
(3) 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; and
(4) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture and TIA relating to the duties, rights and
liabilities of such Paying Agent.
The Issuers 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 Issuers 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 Issuers 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
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Issuers, in trust for the payment of the principal of (and premium, if any)
or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid in the appropriate proportion to the Issuers on Company Request, or (if
then held by the Issuers) shall be discharged from such trust; and the Holder of
such Note shall thereafter, as an unsecured general creditor, look only to the
Issuers for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Issuers as
trustee thereof, shall thereupon cease.
Section 404. Additional Amounts. All payments made by or on behalf of
Jafra Distribution (Mexico) under or with respect to the Notes or by or on
behalf of any Note Guarantor (other than Jafra US) under or with respect to any
Note Guarantee (in any case, the Person making such payment, a "Payor") shall be
made free and clear of and without withholding or deduction for or on account of
any present or future tax, duty, levy, impost, assessment or other governmental
charge (including penalties, interest and other liabilities related thereto)
imposed or levied by or on behalf of the Governments of Mexico, Luxembourg or
the jurisdiction of incorporation, seat of management or residence for income
tax purposes of any future Mexican Subsidiary Guarantor or any successors to the
Company, Jafra Distribution (Mexico) or any Mexican Subsidiary Guarantor (each a
"Successor Jurisdiction"), as the case may be, or of any territory thereof or by
any authority or agency therein or thereof having power to tax (hereinafter
"Taxes"), unless the Payor is required to withhold or deduct Taxes by law or by
the interpretation or administration thereof by the relevant government
authority or agency. If
57
a Payor is so required to withhold or deduct any amount for or on account of
Taxes from any payment made under or with respect to the Notes or a Note
Guarantee, such Payor will be required to pay such additional amounts
("Additional Amounts") as may be necessary so that the net amount received by
each Holder (including Additional Amounts) after such withholding or deduction
will not be less than the amount the Holder would have received if such Taxes
had not been withheld or deducted; provided, however, that no Additional Amounts
will be payable with respect to:
(i) any payment to a Holder which is subject to such Taxes by reason
of its (or the beneficial owner of the Notes) being connected with Mexico,
Luxembourg or any Successor Jurisdiction or any territory thereof other
than a connection arising from the mere holding of Notes or the receipt of
payments in respect of the Notes or the Note Guarantees;
(ii) any Taxes with respect to a Note presented for payment more
than 30 days after the date on which such payment became due and payable
or the date on which payment thereof is duly provided for and notice
thereof given to the Holders, whichever occurs later, except to the extent
that the Holder of such Note would have been entitled to such Additional
Amounts on presenting such Note for payment on any date during such 30-day
period;
(iii) Taxes that would not have been imposed but for the failure of
the Holder or beneficial owner of a Note to comply with any certification,
identification, information, or other documentation requirement under law,
regulation, administrative practice or an applicable treaty that is a
precondition to exemption from, or reduction in the rate of, the
imposition, deduction or withholding of Taxes; provided that at least 60
days prior to (a) the first payment date with respect to which this clause
(iii) shall be applied and (b) in the event of a change in such
certification, identification, information or other documentation
requirement, the first payment date subsequent to such change, the Payor
shall have notified the Trustee, in writing, that the Holders or
beneficial owners of the Notes will be required to provide such
information or documentation;
(iv) estate, inheritance, gift, sales, transfer, personal property
or other similar taxes imposed with respect to such Notes;
(v) any Tax which is only payable otherwise than by withholding or
deduction from payments in respect of the Notes or the Note Guarantees;
and
(vi) any combination of items (i), (ii), (iii), (iv) and (v) above.
Each Payor will also make such withholding or deduction and remit the full
amount deducted or withheld to the relevant authority as and when required in
accordance with applicable law. Each Payor will furnish to the Trustee of the
Notes, within 30 days after the date the payment of any Taxes is due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by such
Payor; provided, however, that if the relevant Payor is unable
58
to obtain such receipt within 30 days, notwithstanding such Payor's best efforts
to obtain such receipts, the Payor will furnish such receipts to the Trustee as
soon as receipts can be obtained.
Whenever in this Indenture there is mentioned, in any context, (a) the
payment of principal, (b) purchase prices in connection with a purchase of
Notes, (c) interest or (d) any other amount payable on or with respect to any of
the Notes or a Note Guarantee, such reference shall be deemed to include payment
of Additional Amounts provided for in this section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof.
Each Payor will pay any present or future stamp, court or documentary
taxes or any other similar taxes, charges or levies that arise in Mexico,
Luxembourg or any Successor Jurisdiction from the execution, delivery,
registration of, or enforcement of rights under, the Notes, the Indenture or any
other document or instrument in relation thereof.
The obligations of each Payor under this Section 404 shall survive any
termination, defeasance or discharge of the Indenture.
Section 405. SEC Reports. Notwithstanding that the Company may not be
required to be or remain subject to the reporting requirements of Section 13(a)
or 15(d) of the Exchange Act, from and after the Issue Date, the Company shall
file with the SEC (unless such filing is not permitted under the Exchange Act or
by the SEC), so long as Notes are outstanding, the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the SEC pursuant to the reporting requirements of such Section 13(a) or
15(d) if the Company were so subject, such documents to be filed with the SEC on
or prior to the respective dates by which the Company would have been required
so to file such documents if the Company were so subject; provided that if the
Company is a "foreign private issuer" (as such term is defined in Rule 3b-4
under the Exchange Act) the Company will file with the SEC (unless such filing
is not permitted under the Exchange Act or by the SEC) the following reports by
the dates indicated in satisfaction of the foregoing obligation to file reports
and other documents: (i) within 120 days from the end of each fiscal year, an
annual report on Form 20-F (or any successor form) containing the information
required to be contained therein for such fiscal year, and (ii) within 60 days
after the end of each of the first three quarters in each fiscal year, quarterly
reports on Form 6-K containing unaudited financial statements (including a
balance sheet and statement of income, changes in stockholders' equity and cash
flows) and Management's Discussion and Analysis of Financial Condition and
Results of Operations for and as of the end of such quarters (with comparable
financial statements for such quarter of the immediately preceding fiscal year).
The Company will also, within 15 days after the date on which the Company files
such reports, transmit by mail to all Holders, as their names and addresses
appear in the Note Register, and to the Trustee copies of any such information,
documents and reports (without exhibits) (or, in lieu of one or more of the
quarterly reports for fiscal 2003, a registration statement filed with the SEC
under the Securities Act or any amendment thereto, provided such registration
statement or amendment contains the information that would have been included in
each such report). The Company will be deemed to have satisfied such
requirements if a Parent files and provides reports, documents and information
of
59
the types otherwise so required to be filed by the Company, or of the types
required to be filed by a U.S. issuer with the SEC pursuant to Section 13(a) or
15(d) of the Exchange Act, in each case within the applicable time periods, and
the Company is not required to file such reports, documents and information
separately under the applicable rules and regulations of the SEC (after giving
effect to any exemptive relief) because of the filings by such Parent. The
Company (and, to the extent required under the TIA, any other obligor upon the
Notes) also shall comply with the other provisions of TIA Section 314(a).
Section 406. Statement as to Default. Each Issuer shall deliver to the
Trustee, within 120 days after the end of each fiscal year of such Issuer ending
after the date hereof, an Officer's Certificate, to the effect that to the best
knowledge of the signer thereof such Issuer is or is not in default in the
performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if such Issuer shall be in default, specifying all such
defaults and the nature and status thereof of which such signer may have
knowledge. To the extent required by the TIA, each Note Guarantor shall comply
with TIA Section 314(a)(4). The individual signing any certificate given by any
Person pursuant to this Section 406 shall be the principal executive, financial
or accounting officer of such Person, in compliance with TIA Section 314(a)(4).
Section 407. Limitation on Indebtedness. (a) The Company shall not, and
shall not permit any Restricted Subsidiary to, Incur any Indebtedness; provided,
however, that the Company, either Issuer or any Subsidiary Guarantor may Incur
Indebtedness if on the date of the Incurrence of such Indebtedness, after giving
effect to the Incurrence thereof, the Consolidated Coverage Ratio would be
greater than 2.25:1.00.
(b) Notwithstanding the foregoing paragraph (a), the Company and its
Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred pursuant to any Credit Facility (including
in respect of letters of credit or bankers' acceptances issued or created
thereunder) and Indebtedness of any Foreign Subsidiary Incurred other than
under the Senior Credit Facility, and (without limiting the foregoing), in
each case, any Refinancing Indebtedness in respect thereof, in a maximum
principal amount which, when taken together with the principal amount of
all Indebtedness Incurred pursuant to this clause (i) and then
outstanding, does not exceed the amount equal to (A) $130.0 million, plus
(B) the amount, if any, by which the Borrowing Base exceeds $65.0 million,
plus (C) in the case of any refinancing of any Credit Facility or any
portion thereof, the aggregate amount of fees, underwriting discounts,
premiums and other costs and expenses incurred in connection with such
refinancing;
(ii) Indebtedness (A) of any Restricted Subsidiary issued to and
held by the Company or (B) of the Company or any Restricted Subsidiary
issued to and held by any Restricted Subsidiary; provided, however, that
any subsequent issuance or transfer of any Capital Stock of such
Restricted Subsidiary to which such Indebtedness is owed, or any other
event, that results in such Restricted Subsidiary ceasing to be a
Restricted
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Subsidiary or any other subsequent transfer of such Indebtedness (except
to the Company or a Restricted Subsidiary) will be deemed, in each case,
an Incurrence of such Indebtedness by the issuer thereof;
(iii) Indebtedness represented by the Notes (other than any
Additional Notes that are not Exchange Notes), any Indebtedness (other
than the Indebtedness described in clause (i) or (ii) above) outstanding
on the Issue Date and any Refinancing Indebtedness Incurred in respect of
any Indebtedness described in this clause (iii) or paragraph (a) above;
(iv) Purchase Money Obligations and Capitalized Lease Obligations,
and any Refinancing Indebtedness with respect thereto, in an aggregate
principal amount at any time outstanding not exceeding an amount equal to
5% of Consolidated Total Assets at any time outstanding;
(v) Indebtedness of any Foreign Subsidiary Incurred for working
capital purposes;
(vi) (A) Guarantees by the Company or any Restricted Subsidiary of
Indebtedness or any other obligation or liability of the Company or any
Restricted Subsidiary (other than Indebtedness Incurred in violation of
this Section 407) or (B) Indebtedness of the Company or any Restricted
Subsidiary arising by reason of any Lien granted by or applicable to such
Person securing Indebtedness of the Company or any Restricted Subsidiary
(other than Indebtedness Incurred in violation of this Section 407);
(vii) Indebtedness of the Company or any Restricted Subsidiary (A)
arising from the honoring of a check, draft or similar instrument of such
Person drawn against insufficient funds, provided that such Indebtedness
is extinguished within five Business Days of its incurrence, or (B)
consisting of guarantees, indemnities, obligations in respect of earnouts
or other purchase price adjustments, or similar obligations, Incurred in
connection with the acquisition or disposition of any business, assets or
Person;
(viii) Indebtedness of the Company or any Restricted Subsidiary in
respect of (A) letters of credit, bankers' acceptances or other similar
instruments or obligations issued, or relating to liabilities or
obligations incurred, in the ordinary course of business (including those
issued to governmental entities in connection with self-insurance under
applicable workers' compensation statutes), or (B) completion guarantees,
surety, judgment, appeal or performance bonds, or other similar bonds,
instruments or obligations, provided, or relating to liabilities or
obligations incurred, in the ordinary course of business, or (C) Hedging
Obligations entered into for bona fide hedging purposes in the ordinary
course of business, or (D) Management Guarantees or (E) the financing of
insurance premiums in the ordinary course of business;
(ix) Indebtedness of a Receivables Subsidiary secured by a Lien on
all or part
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of the assets disposed of in, or otherwise incurred in connection with, a
Financing Disposition;
(x) Indebtedness of any Person that is assumed by the Company or any
Restricted Subsidiary in connection with its acquisition of assets from
such Person or any Affiliate thereof or is issued and outstanding on or
prior to the date on which such Person was acquired by the Company or any
Restricted Subsidiary or merged or consolidated with or into the Company
or any Restricted Subsidiary (other than Indebtedness Incurred to finance,
or otherwise in connection with, such acquisition); provided, however,
that on the date of such acquisition, merger or consolidation, after
giving effect thereto, the Company could Incur at least $1.00 of
additional Indebtedness pursuant to paragraph (a) above; and any
Refinancing Indebtedness with respect to any such Indebtedness; and
(xi) Indebtedness of the Company or any Restricted Subsidiary in an
aggregate principal amount which, when taken together with the principal
amount of all Indebtedness Incurred pursuant to this clause (xi) and then
outstanding, does not exceed an amount equal to 12.0% of Consolidated
Total Assets at any time outstanding.
(c) For purposes of determining compliance with, and the outstanding
principal amount of any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 407 (i) any other obligation of the obligor on
such Indebtedness (or of any other Person who could have Incurred such
Indebtedness under this Section 407) arising under any Guarantee, Lien or letter
of credit, bankers' acceptance or other similar instrument or obligation
supporting such Indebtedness shall be disregarded to the extent that such
Guarantee, Lien or letter of credit, bankers' acceptance or other similar
instrument or obligation secures the principal amount of such Indebtedness; (ii)
in the event that Indebtedness meets the criteria of more than one of the types
of Indebtedness described in paragraph (b) above, the Company, in its sole
discretion, shall classify such item of Indebtedness and may include the amount
and type of such Indebtedness in one or more of such clauses; and (iii) the
amount of Indebtedness issued at a price that is less than the principal amount
thereof shall be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.
(d) For purposes of determining compliance with any Dollar-denominated
restriction on the Incurrence of Indebtedness denominated in a foreign currency,
the Dollar-equivalent principal amount of such Indebtedness Incurred pursuant
thereto shall be calculated based on the relevant currency exchange rate in
effect on the date that such Indebtedness was Incurred, in the case of term
Indebtedness, or first committed, in the case of revolving credit Indebtedness;
provided that (x) the Dollar-equivalent principal amount of any such
Indebtedness outstanding on the Issue Date shall be calculated based on the
relevant currency exchange rate in effect on the Issue Date, (y) if such
Indebtedness is Incurred to refinance other Indebtedness denominated in a
foreign currency, and such refinancing would cause the applicable
Dollar-denominated restriction to be exceeded if calculated at the relevant
currency exchange rate in effect on the date of such refinancing, such
Dollar-denominated restriction shall be deemed not to have been exceeded so long
as the principal amount of such refinancing Indebtedness does not
62
exceed the principal amount of such Indebtedness being refinanced and (z) the
Dollar-equivalent principal amount of Indebtedness denominated in a foreign
currency and Incurred pursuant to the Senior Credit Facility shall be calculated
based on the relevant currency exchange rate in effect on, at the Company's
option, (i) the Issue Date, (ii) any date on which any of the respective
commitments under the Senior Credit Facility shall be reallocated between or
among facilities or subfacilities thereunder, or on which such rate is otherwise
calculated for any purpose thereunder, or (iii) the date of such Incurrence. The
principal amount of any Indebtedness Incurred to refinance other Indebtedness,
if Incurred in a different currency from the Indebtedness being refinanced,
shall be calculated based on the currency exchange rate applicable to the
currencies in which such respective Indebtedness is denominated that is in
effect on the date of such refinancing.
Section 408. Limitation on Other Subordinated Indebtedness. The Company
shall not permit either Issuer to Incur any Indebtedness that is expressly
subordinated in right of payment to any Senior Indebtedness of such Issuer,
unless such Indebtedness so Incurred ranks pari passu in right of payment with,
or is subordinated in right of payment to, such Issuer's Indebtedness with
respect to the Notes. The Company shall not Incur any Indebtedness that is
expressly subordinated in right of payment to any Senior Indebtedness of the
Company, unless such Indebtedness so Incurred ranks pari passu in right of
payment with the Company's Note Guarantee, or is subordinated in right of
payment to the Company's Note Guarantee. The Company shall not permit any
Subsidiary Guarantor to Incur any Indebtedness that is expressly subordinated in
right of payment to any Senior Indebtedness of such Subsidiary Guarantor, unless
such Indebtedness so Incurred ranks pari passu in right of payment with such
Subsidiary Guarantor's Subsidiary Guarantee, or is subordinated in right of
payment to such Subsidiary Guarantee. Unsecured Indebtedness shall not be deemed
to be subordinate or junior to secured Indebtedness merely because it is
unsecured, and Indebtedness that is not guaranteed by a particular Person shall
not be deemed to be subordinate or junior to Indebtedness that is so guaranteed
merely because it is not so guaranteed.
Section 409. Limitation on Restricted Payments. (a) The Company shall not,
and shall not permit any Restricted Subsidiary, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any such payment in connection with any merger or
consolidation to which the Company is a party) except (x) dividends or
distributions payable solely in its Capital Stock (other than Disqualified
Stock) and (y) dividends or distributions payable to the Company or any
Restricted Subsidiary (and, in the case of any such Restricted Subsidiary making
such dividend or distribution, to other holders of its Capital Stock on no more
than a pro rata basis, measured by value), (ii) purchase, redeem, retire or
otherwise acquire for value any Capital Stock of the Company held by Persons
other than the Company or a Restricted Subsidiary (other than any acquisition of
Capital Stock deemed to occur upon the exercise of options if such Capital Stock
represents a portion of the exercise price thereof), (iii) voluntarily purchase,
repurchase, redeem, defease or otherwise voluntarily acquire or retire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Subordinated Obligations (other than a purchase, redemption,
defeasance or other acquisition or retirement for value in anticipation of
satisfying a
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sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of such acquisition or retirement) or (iv) make
any Investment (other than a Permitted Investment) in any Person (any such
dividend, distribution, purchase, redemption, repurchase, defeasance, other
acquisition or retirement or Investment being herein referred to as a
"Restricted Payment"), if at the time the Company or such Restricted Subsidiary
makes such Restricted Payment:
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company could not incur at least an additional $1.00 of
Indebtedness pursuant to Section 407(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments (the amount so expended, if other than in cash, to be
as determined in good faith by the Board of Directors, whose determination
shall be conclusive) declared or made subsequent to the Issue Date and
then outstanding would exceed the sum of:
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from October 1, 2002 to
the end of the most recent fiscal quarter ending prior to the date
of such Restricted Payment for which consolidated financial
statements of the Company are available (or, in case such
Consolidated Net Income shall be a negative number, 100% of such
negative number);
(B) the aggregate Net Cash Proceeds, and fair value (as
determined in good faith by the Board of Directors) of property or
assets, received (x) by the Company as capital contributions to the
Company after the Issue Date or from the issuance or sale (other
than to a Restricted Subsidiary) of its Capital Stock (other than
Disqualified Stock) after the Issue Date (other than Excluded
Contributions) or (y) by the Company or any Restricted Subsidiary
from the issuance and sale by the Company or any Restricted
Subsidiary after the Issue Date of Indebtedness that shall have been
converted into or exchanged for Capital Stock of the Company (other
than Disqualified Stock), plus the amount of cash, property or
assets (determined as provided above) received by the Company or any
Restricted Subsidiary upon such conversion or exchange;
(C) the aggregate amount equal to the net reduction in
Investments in Unrestricted Subsidiaries resulting from (i)
dividends, distributions, interest payments, return of capital,
repayments of Investments or other transfers of assets to the
Company or any Restricted Subsidiary from any Unrestricted
Subsidiary, or (ii) the redesignation of any Unrestricted Subsidiary
as a Restricted Subsidiary (valued in each case as provided in the
definition of "Investment"), not to exceed in the case of any such
Unrestricted Subsidiary the aggregate amount of
64
Investments (other than Permitted Investments) made by the Company
or any Restricted Subsidiary in such Unrestricted Subsidiary after
the Issue Date; and
(D) in the case of any disposition or repayment of any
Investment constituting a Restricted Payment (without duplication of
any amount deducted in calculating the amount of Investments at any
time outstanding included in the amount of Restricted Payments), an
amount in the aggregate equal to the lesser of the return of
capital, repayment or other proceeds with respect to all such
Investments and the initial amount of all such Investments.
(b) The provisions of Section 409(a) will not prohibit any of the
following (each, a "Permitted Payment"):
(i) any purchase, redemption, repurchase, defeasance or other
acquisition or retirement of Capital Stock of the Company or Subordinated
Obligations made by exchange (including any such exchange pursuant to the
exercise of a conversion right or privilege in connection with which cash
is paid in lieu of the issuance of fractional shares) for, or out of the
proceeds of the substantially concurrent issuance or sale of, Capital
Stock of the Company (other than Disqualified Stock and other than Capital
Stock issued or sold to a Subsidiary) or a substantially concurrent
capital contribution to the Company; provided, however, that the Net Cash
Proceeds from such issuance, sale or capital contribution shall be
excluded in subsequent calculations under Section 409(a)(3)(B);
(ii) any purchase, redemption, repurchase, defeasance or other
acquisition or retirement of Subordinated Obligations (w) made by exchange
for, or out of the proceeds of the substantially concurrent issuance or
sale of, Indebtedness of either Issuer or any Note Guarantor or
Refinancing Indebtedness Incurred in compliance with Section 407, (x) from
Net Available Cash to the extent permitted under Section 411, (y)
following the occurrence of a Change of Control (or other similar event
described therein as a "change of control"), but only if the Company shall
have complied with Section 415 and, if required, purchased all Notes
tendered pursuant to the offer to repurchase all the Notes required
thereby, prior to purchasing or repaying such Subordinated Obligations, or
(z) consisting of Acquired Indebtedness;
(iii) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with Section 409(a);
(iv) Investments or other Restricted Payments in an aggregate amount
outstanding at any time not to exceed the amount of Excluded
Contributions;
(v) payments to purchase, repurchase or otherwise acquire Capital
Stock (including any options, warrants or other rights in respect
thereof), from Management Investors (including loans, advances, dividends
or distributions by the Company to a Parent to permit such Parent to make
any such purchase, repurchase or other acquisition),
65
or from a Parent in connection with any exercise by any Management
Investor of any option, warrant or other right to acquire Capital Stock of
a Parent from the Company or any Restricted Subsidiary (an "Exercise"),
such payments, loans, advances, dividends or distributions not to exceed
an amount (net of repayments of any such loans or advances) equal to (1)
$13.0 million, plus (2) $2.0 million multiplied by the number of calendar
years that have commenced since the Issue Date, plus (3) the Net Cash
Proceeds received by the Company or any Restricted Subsidiary since the
Issue Date (including through receipt of proceeds from the issuance or
sale of its capital stock to, or as a capital contribution from, a Parent)
(x) from the issuance or sale to Management Investors of Capital Stock
(including any options, warrants or other rights in respect thereof) or
(y) from a Parent not exceeding the amount of proceeds received by a
Parent from the issuance or sale to the Company or any Restricted
Subsidiary of Capital Stock of a Parent in connection with an Exercise, to
the extent such Net Cash Proceeds are not included in any calculation
under clause Section 409(a)(3)(B)(x);
(vi) the payment of (or loans, advances, dividends or distributions
by the Company to a Parent to pay) dividends on the common stock or equity
of the Company (or such Parent) following a public offering of such common
stock or equity, in an amount not to exceed in any fiscal year 6% of the
aggregate gross proceeds received by the Company in or from such public
offering;
(vii) Restricted Payments (including loans or advances) in an
aggregate amount which, when taken together with all Restricted Payments
made pursuant to this clause (vii) and then outstanding, net of repayments
of any such loans or advances, does not exceed $5.0 million at any time
outstanding;
(viii) payments by the Company or any Restricted Subsidiary to
satisfy obligations under the Management Agreements and Permitted Parent
Payments;
(ix) dividends or other distributions of Capital Stock, Indebtedness
or other securities of Unrestricted Subsidiaries; and
(x) the Transactions;
provided, that (A) in the case of clauses (iii), (vi) and (vii), the net amount
of any such Permitted Payment shall be included in subsequent calculations of
the amount of Restricted Payments, (B) in the case of clause (v), at the time of
any calculation of the amount of Restricted Payments, the net amount of
Permitted Payments that have then actually been made under clause (v) that is in
excess of 50% of the total amount of Permitted Payments then permitted under
clause (v) shall be included in such calculation of the amount of Restricted
Payments, (C) in all cases other than pursuant to clauses (A) and (B)
immediately above, the net amount of any such Permitted Payment shall be
excluded in subsequent calculations of the amount of Restricted Payments and (D)
solely with respect to clause (vii), no Default or Event of Default shall have
occurred or be continuing at the time of any such Permitted Payment after giving
effect thereto.
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Section 410. Limitation on Restrictions on Distributions from Restricted
Subsidiaries. The Company shall not, and shall not permit any Restricted
Subsidiary to, create or otherwise cause to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to (i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligations owed to the Company, (ii)
make any loans or advances to the Company or (iii) transfer any of its property
or assets to the Company, except any encumbrance or restriction:
(1) pursuant to an agreement or instrument in effect at or entered
into on the Issue Date, any Credit Facility, this Indenture or the Notes;
(2) pursuant to any agreement or instrument of a Person, or relating
to Indebtedness or Capital Stock of a Person, which Person is acquired by
or merged or consolidated with or into the Company or any Restricted
Subsidiary, or which agreement or instrument is assumed by the Company or
any Restricted Subsidiary in connection with an acquisition of assets from
such Person, as in effect at the time of such acquisition, merger or
consolidation (except to the extent that such Indebtedness was incurred to
finance, or otherwise in connection with, such acquisition, merger or
consolidation); provided, however, that for purposes of this clause (2),
if a Person other than the Company or the relevant Issuer is the
Successor, any Subsidiary thereof or agreement or instrument of such
Person or any such Subsidiary shall be deemed acquired or assumed, as the
case may be, by the Company or a Restricted Subsidiary, as the case may
be, when such Person becomes the Successor;
(3) pursuant to an agreement or instrument (a "Refinancing
Agreement") effecting a refinancing of Indebtedness Incurred pursuant to,
or that otherwise extends, renews, refunds, refinances or replaces, an
agreement or instrument referred to in clause (1) or (2) of this Section
410 or this clause (3) (an "Initial Agreement") or contained in any
amendment, supplement or other modification to an Initial Agreement (an
"Amendment"); provided, however, that the encumbrances and restrictions
contained in any such Refinancing Agreement or Amendment are not
materially less favorable to the Holders of the Notes taken as a whole
than encumbrances and restrictions contained in the Initial Agreement or
Initial Agreements to which such Refinancing Agreement or Amendment
relates (as determined in good faith by the Company);
(4) (A) that restricts in a customary manner the subletting,
assignment or transfer of any property or asset that is subject to a
lease, license or similar contract, or the assignment or transfer of any
lease, license or other contract, (B) by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any
property or assets of the Company or any Restricted Subsidiary not
otherwise prohibited by this Indenture, (C) contained in mortgages,
pledges or other security agreements securing Indebtedness of a Restricted
Subsidiary to the extent restricting the transfer of the property or
assets subject thereto, (D) pursuant to customary provisions restricting
dispositions of real property interests set forth in any reciprocal
easement agreements of
67
the Company or any Restricted Subsidiary, (E) pursuant to Purchase Money
Obligations that impose encumbrances or restrictions on the property or
assets so acquired, (F) on cash or other deposits or net worth imposed by
customers under agreements entered into in the ordinary course of
business, (G) pursuant to customary provisions contained in agreements and
instruments entered into in the ordinary course of business (including
leases and joint venture and other similar agreements entered into in the
ordinary course of business), (H) that arises or is agreed to in the
ordinary course of business and does not detract from the value of
property or assets of the Company or any Restricted Subsidiary in any
manner material to the Company or such Restricted Subsidiary or (I)
pursuant to Currency Agreements or Interest Rate Agreements;
(5) with respect to a Restricted Subsidiary (or any of its property
or assets) imposed pursuant to an agreement entered into for the direct or
indirect sale or disposition of all or substantially all the Capital Stock
or assets of such Restricted Subsidiary (or the property or assets that
are subject to such restriction) pending the closing of such sale or
disposition;
(6) by reason of any applicable law, rule, regulation or order or as
required by any regulatory authority having jurisdiction over the Company
or any Restricted Subsidiary or any of their businesses; or
(7) pursuant to an agreement or instrument (A) relating to any
Indebtedness permitted to be Incurred subsequent to the Issue Date
pursuant to the provisions of Section 407, (i) if the encumbrances and
restrictions contained in any such agreement or instrument taken as a
whole are not materially less favorable to the Holders of the Notes than
the encumbrances and restrictions contained in the Initial Agreements (as
determined in good faith by the Company), or (ii) if such encumbrance or
restriction is not materially more disadvantageous to the Holders of the
Notes than is customary in comparable financings (as determined in good
faith by the Company) and either (x) the Company determines that such
encumbrance or restriction will not materially affect the Company's
ability to make principal or interest payments on the Notes or (y) such
encumbrance or restriction applies only if a default occurs in respect of
a payment or financial covenant relating to such Indebtedness, (B)
relating to any sale of receivables by a Foreign Subsidiary or (C)
relating to Indebtedness of or a Financing Disposition to or by any
Receivables Entity.
Section 411. Limitation on Sales of Assets and Subsidiary Stock. (a) The
Company shall not, and shall not permit any Restricted Subsidiary to, make any
Asset Disposition unless
(i) the Company or such Restricted Subsidiary receives consideration
(including by way of relief from, or by any other Person assuming
responsibility for, any liabilities, contingent or otherwise) at the time
of such Asset Disposition at least equal to the fair market value of the
shares and assets subject to such Asset Disposition, as such fair market
value may be determined (and shall be determined, to the extent such Asset
68
Disposition or any series of related Asset Dispositions involves aggregate
consideration in excess of $5.0 million) in good faith by the Board of
Directors, whose determination shall be conclusive (including as to the
value of all noncash consideration);
(ii) in the case of any Asset Disposition (or series of related
Asset Dispositions) having a fair market value of $2.5 million or more, at
least 75% of the consideration therefor (excluding any consideration by
way of relief from, or by any other Person assuming responsibility for,
any liabilities, contingent or otherwise, that are not Indebtedness)
received by the Company or such Restricted Subsidiary is in the form of
cash; and
(iii) an amount equal to 100% of the Net Available Cash from such
Asset Disposition is applied by the Company (or any Restricted Subsidiary,
as the case may be) as follows:
(A) first, either (x) to the extent the Issuers elect (or to
the extent required by the terms of any Senior Indebtedness or any
Indebtedness of a Restricted Subsidiary), to prepay, repay or
purchase Senior Indebtedness or any Indebtedness of a Restricted
Subsidiary (in each case other than Indebtedness owed to the Company
or a Restricted Subsidiary) within 365 days after the date of such
Asset Disposition, or (y) to the extent the Company or such
Restricted Subsidiary elects, to reinvest in Additional Assets
(including by means of an investment in Additional Assets by a
Restricted Subsidiary with Net Available Cash received by the
Company or another Restricted Subsidiary) within 365 days from the
date of such Asset Disposition or, if such reinvestment in
Additional Assets is a project that is authorized by the Board of
Directors and committed to by the Company or any Restricted
Subsidiary and will take longer than such 365 days to complete, the
period of time necessary to complete such project;
(B) second, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A) above (such
balance, the "Excess Proceeds"), to make an offer (or to cause the
Issuers to make an offer) to purchase Notes and (to the extent the
Issuers elect, or to the extent required by the terms thereof) to
purchase, redeem or repay any other Senior Subordinated
Indebtedness, pursuant and subject to Section 411(b) and Section
411(c) and the agreements governing such other Indebtedness; and
(C) third, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B) above,
to fund (to the extent consistent with any other applicable
provision of this Indenture) any general corporate purpose
(including the repurchase, repayment or other acquisition or
retirement of any Subordinated Obligations);
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A)(x) or (B) above, the Company or such
Restricted Subsidiary
69
shall retire such Indebtedness and shall cause the related loan commitment (if
any) to be permanently reduced in an amount equal to the principal amount so
prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this Section 411, the Company
and the Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance with this Section 411 except to the extent that the aggregate
Net Available Cash from all Asset Dispositions that is not applied in accordance
with this Section 411 exceeds $10.0 million. If the aggregate principal amount
of Notes and Senior Subordinated Indebtedness validly tendered and not withdrawn
(or otherwise subject to purchase, redemption or repayment) in connection with
an offer pursuant to clause (B) above exceeds the Excess Proceeds, the Excess
Proceeds will be apportioned between the Notes and such Senior Subordinated
Indebtedness, with the portion of the Excess Proceeds payable in respect of the
Notes to equal the lesser of (x) the Excess Proceeds amount multiplied by a
fraction, the numerator of which is the outstanding principal amount of the
Notes and the denominator of which is the sum of the outstanding principal
amount of the Notes and the outstanding principal amount of the relevant Senior
Subordinated Indebtedness, and (y) the aggregate principal amount of Notes
validly tendered and not withdrawn.
For the purposes of clause (ii) of paragraph (a) above, the following are
deemed to be cash: (1) Temporary Cash Investments and Cash Equivalents, (2) the
assumption of Indebtedness of the Company (other than Disqualified Stock of the
Company) or any Restricted Subsidiary and the release of the Company or such
Restricted Subsidiary from all liability on payment of the principal amount of
such Indebtedness in connection with such Asset Disposition, (3) Indebtedness of
any Restricted Subsidiary that is no longer a Restricted Subsidiary as a result
of such Asset Disposition, to the extent that the Company and each other
Restricted Subsidiary are released from any Guarantee of payment of the
principal amount of such Indebtedness in connection with such Asset Disposition,
(4) securities received by the Company or any Restricted Subsidiary from the
transferee that are converted by the Company or such Restricted Subsidiary into
cash, (5) consideration consisting of Indebtedness of the Company or any
Restricted Subsidiary and (6) any Designated Non-Cash Consideration received by
the Company or any Restricted Subsidiary in such Asset Disposition having an
aggregate fair market value, taken together with all other Designated Non-Cash
Consideration received pursuant to this Section 411 that is at that time
outstanding, not to exceed $10.0 million at the time of the receipt of such
Designated Non-Cash Consideration (with the fair market value of each item of
Designated Non-Cash Consideration being measured at the time received and
without giving effect to subsequent changes in value).
(b) In the event of an Asset Disposition that requires the purchase of
Notes pursuant to Section 411(a)(iii)(B), the Issuers shall purchase (on a
several basis in proportion to each Issuer's Several Share in respect of the
Notes) Notes tendered pursuant to an offer by the Issuers for the Notes (the
"Offer"), at a purchase price of 100% of their principal amount plus accrued and
unpaid interest to the date of purchase, in accordance with the procedures
(including prorating in the event of oversubscription) set forth in Section
411(c). If the aggregate purchase price of the Notes tendered pursuant to the
Offer is less than the Net Available Cash allotted to
70
the purchase of Notes, the remaining Net Available Cash will be available to the
Company and its Restricted Subsidiaries for use in accordance with Section
411(a)(iii)(B) (to repay Senior Subordinated Indebtedness) or Section
411(a)(iii)(C). The Issuers shall not be required to make an Offer for Notes
pursuant to this Section 411 if the Net Available Cash available therefor (after
application of the proceeds as provided in Section 411(a)(iii)(A)) is less than
$10.0 million for any particular Asset Disposition (which lesser amounts shall
be carried forward for purposes of determining whether an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition).
(c) The Issuers shall, not later than 45 days after the Issuers become
obligated to make an Offer pursuant to this Section 411, mail a notice to each
Holder with a copy to the Trustee stating: (1) that an Asset Disposition that
requires the purchase of a portion of the Notes has occurred and that such
Holder has the right (subject to the prorating described below) to require the
Issuers, on a several basis in proportion to each Issuer's Several Share in
respect of the Notes, to purchase a portion of such Holder's Notes at a purchase
price in cash equal to 100% of the principal amount thereof, plus accrued and
unpaid interest, if any, to the date of purchase (subject to Section 307); (2)
the circumstances and relevant facts and financial information regarding such
Asset Disposition; (3) the repurchase date (which shall be no earlier than 30
days nor later than 60 days from the date such notice is mailed); (4) the
instructions determined by the Issuers, consistent with this Section 411, that a
Holder must follow in order to have its Notes purchased; and (5) the amount of
the Offer. If, upon the expiration of the period for which the Offer remains
open, the aggregate principal amount of Notes surrendered by Holders exceeds the
amount of the Offer, the Issuers shall select the Notes to be purchased on a pro
rata basis (with such adjustments as may be deemed appropriate by the Issuers so
that only Notes in denominations of $1,000 or integral multiples thereof, shall
be purchased).
(d) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 411. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 411, the Issuers shall
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 411 by virtue
thereof.
Section 412. Limitation on Transactions with Affiliates. (a) The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, enter into or conduct any transaction or series of related
transactions (including the purchase, sale, lease or exchange of any property or
the rendering of any service) with any Affiliate of the Company (an "Affiliate
Transaction") unless (i) the terms of such Affiliate Transaction are not
materially less favorable to the Company or such Restricted Subsidiary, as the
case may be, than those that could be obtained at the time in a transaction with
a Person who is not such an Affiliate, and (ii) if such Affiliate Transaction
involves aggregate consideration in excess of $5.0 million, the terms of such
Affiliate Transaction have been approved by a majority of the Disinterested
Directors. For purposes of this Section 412(a) any Affiliate Transaction shall
be deemed to have satisfied the requirements set forth in this Section 412(a) if
(x) such Affiliate Transaction is approved by a
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majority of the Disinterested Directors or (y) in the event there are no
Disinterested Directors, a fairness opinion is provided by a nationally
recognized appraisal or investment banking firm with respect to such Affiliate
Transaction.
(b) The provisions of Section 412(a) will not apply to:
(i) any Restricted Payment Transaction,
(ii) (1) the entering into, maintaining or performance of any
employment contract, collective bargaining agreement, benefit plan,
program or arrangement, related trust agreement or any other similar
arrangement for or with any employee, officer or director heretofore or
hereafter entered into in the ordinary course of business, including
vacation, health, insurance, deferred compensation, severance, retirement,
savings or other similar plans, programs or arrangements, (2) the payment
of compensation, performance of indemnification or contribution
obligations, or any issuance, sale, grant or award of stock, options,
other equity-related interests or other securities, to employees, officers
or directors in the ordinary course of business, (3) the payment of fees
to directors of the Company or any of its Restricted Subsidiaries in the
ordinary course of business, (4) any transaction with an officer or
director in the ordinary course of business not involving more than
$100,000 in any one case, or (5) Management Advances and payments in
respect thereof,
(iii) any transaction with the Company, any Restricted Subsidiary or
any Receivables Entity,
(iv) any transaction arising out of agreements or instruments in
existence on the Issue Date, and any payments made pursuant thereto,
(v) execution, delivery and performance of the Management
Agreements, including payment to CDR or any Affiliate of CDR of fees of up
to $1.0 million in any fiscal year plus all out-of-pocket expenses
incurred by CDR or any such Affiliate in connection with its performance
of management consulting, monitoring, financial advisory or other services
with respect to the Company and its Restricted Subsidiaries,
(vi) the Transactions, all transactions in connection therewith
(including the financing thereof), and, without duplication of clause (v)
above, all fees or expenses paid or payable in connection with the
Transactions,
(vii) any transaction with one or more customers, clients,
suppliers, or purchasers or sellers of property or services, in the
ordinary course of business, which is fair to the Company or the relevant
Restricted Subsidiary in the reasonable determination of the Board of
Directors or senior management thereof, or is on terms not materially less
favorable to the Company or the relevant Restricted Subsidiary than those
that could be obtained at the time in a transaction with a Person who is
not an Affiliate of the Company; and
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(viii) any transaction in the ordinary course of business, or
approved by a majority of the Board of Directors, between the Company or
any Restricted Subsidiary and any Affiliate of the Company controlled by
the Company that is a joint venture or similar entity; provided, however,
that no other Affiliate of the Company (other than a Restricted
Subsidiary) has any Investment in such joint venture or similar entity.
Section 413. Limitation on Liens. The Company shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, create or permit to
exist any Lien (other than Permitted Liens) on any of its property or assets
(including Capital Stock of any other Person), whether owned on the Issue Date
or thereafter acquired, securing any Indebtedness of either Issuer or any Note
Guarantor that by its terms is expressly subordinated in right of payment to or
ranks pari passu in right of payment with the Notes or such Note Guarantor's
Note Guarantee (the "Initial Lien"), unless contemporaneously therewith
effective provision is made to secure the Indebtedness of such Issuer or Note
Guarantor due under this Indenture and the Notes or, in respect of Liens on any
Restricted Subsidiary's property or assets, any Note Guarantee of such
Restricted Subsidiary, equally and ratably with such obligation for so long as
such obligation is so secured by such Initial Lien. Any such Lien thereby
created in favor of the Notes or any such Note Guarantee will be automatically
and unconditionally released and discharged upon (i) the release and discharge
of the Initial Lien to which it relates, or (ii) any sale, exchange or transfer
to any Person not an Affiliate of the Company of the property or assets secured
by such Initial Lien, or of all of the Capital Stock held by the Company or any
Restricted Subsidiary in, or all or substantially all the assets of, any
Restricted Subsidiary creating such Lien.
Section 414. Future Note Guarantors. Except as described below, the
Company shall cause each U.S. Subsidiary of Jafra US that is organized or
acquired by Jafra US after the Issue Date to execute and deliver to the Trustee
a supplemental indenture or other instrument pursuant to which such Subsidiary
will guarantee payment of the Guaranteed Jafra US Obligations, whereupon such
Subsidiary will become a Subsidiary Guarantor. The Company shall also cause each
Restricted Subsidiary of Jafra Distribution (Mexico) or Jafra Mexico that is
organized or acquired by Jafra Distribution (Mexico) or Jafra Mexico after the
Issue Date to execute and deliver to the Trustee a supplemental indenture or
other instrument pursuant to which such Subsidiary will guarantee payment of the
Guaranteed Jafra Distribution (Mexico) Obligations, whereupon such Subsidiary
will become a Subsidiary Guarantor. The Company will not be required to cause
any U.S. Subsidiary of Jafra US to become a Subsidiary Guarantor unless and
until such time as such Subsidiary, together with any other U.S. Subsidiary of
Jafra US that has not then become a Subsidiary Guarantor, accounts for two
percent or more of Consolidated Total Assets. In addition, the Company may at
its option cause any Subsidiary thereof that is not a Subsidiary Guarantor so to
guarantee payment of the Guaranteed Note Obligations of either Issuer and become
a Subsidiary Guarantor.
Section 415. Purchase of Notes Upon a Change in Control. (a) Upon a Change
of Control, each Holder will have the right to require the Issuers to
repurchase, on a several basis in proportion to each Issuer's Several Share in
respect of the Notes, all or any part of such Holder's Notes at a purchase price
in cash equal to 101% of the principal amount thereof, plus
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accrued and unpaid interest, if any, to the date of repurchase (subject to
Section 307); provided, however, that the Issuers shall not be obligated to
repurchase Notes pursuant to this Section 415 in the event that they have
exercised their right to redeem all the Notes as provided in Article 10.
(b) In the event that, at the time of such Change of Control, the terms of
the Bank Indebtedness restrict or prohibit the repurchase of Notes pursuant to
this Section 415, then prior to the mailing of the notice to Holders provided
for in Section 415(c) but in any event not later than 30 days following the date
the Company obtains actual knowledge of any Change of Control (unless the
Issuers have exercised their right to redeem all the Notes as provided in
Article 10), the Issuers shall (i) repay in full all Bank Indebtedness or offer
to repay in full all Bank Indebtedness and repay the Bank Indebtedness of each
lender who has accepted such offer or (ii) obtain the requisite consent under
the agreements governing the Bank Indebtedness to permit the repurchase of the
Notes as provided for in Section 415(c). The Issuers shall first comply with the
provisions of the immediately preceding sentence before they shall be required
to repurchase Notes pursuant to the provisions set forth below in this Section
415. The Issuers' failure to comply with the provisions of this Section 415(b)
or the provisions of Section 415(c) shall constitute an Event of Default under
Section 601(4) and not Section 601(2).
(c) Unless the Issuers have exercised their right to redeem all the Notes
under Article 10, the Issuers shall, not later than 30 days following the date
the Company obtains actual knowledge of any Change of Control having occurred,
mail a notice to each Holder with a copy to the Trustee stating: (1) that a
Change of Control has occurred or may occur and that such Holder has, or upon
such occurrence will have, the right to require the Issuers, severally in
proportion to their respective obligations in respect of the Notes, to purchase
such Holder's Notes at a purchase price in cash equal to 101% of the principal
amount thereof, plus accrued and unpaid interest, if any, to the date of
purchase (subject to the right of Holders of record on a record date to receive
interest on the relevant interest payment date); (2) the circumstances and
relevant facts and financial information regarding such Change of Control; (3)
the repurchase date (which shall be no earlier than 30 days nor later than 60
days from the date such notice is mailed); (4) the instructions determined by
the Issuers, consistent with this Section 415, that a Holder must follow in
order to have its Notes purchased; and (5) if such notice is mailed prior to the
occurrence of a Change of Control, that such offer is conditioned on the
occurrence of such Change of Control.
(d) The Issuers shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Notes pursuant to this
Section 415. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 415, the Issuers shall
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Section 415 by virtue
thereof.
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ARTICLE V
SUCCESSORS
Section 501. When the Company or an Issuer May Merge, etc. The Company
shall not, and shall not permit either Issuer to, consolidate with or merge with
or into, or convey, transfer or lease all or substantially all its assets to,
any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor")
will be a Person organized and existing under the laws of the United
States of America, any State thereof or the District of Columbia, or (in
the case of the Company only) the Xxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx of
the Netherlands (including the Netherlands Antilles) or any other member
of the European Union, or (in the case of Jafra Distribution (Mexico)
only) Mexico, and the Successor (if not the Company or such Issuer) will
expressly assume all the obligations of the Company or such Issuer under
the Company's Note Guarantee (in the case of the Company) or the Notes (in
the case of such Issuer) and this Indenture by executing and delivering to
the Trustee a supplemental indenture or one or more other documents or
instruments in form reasonably satisfactory to the Trustee;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor or
any Restricted Subsidiary as a result of such transaction as having been
Incurred by the Successor or such Restricted Subsidiary at the time of
such transaction), no Default will have occurred and be continuing;
(iii) immediately after giving effect to such transaction, either
(A) the Company (or, if applicable, its Successor) could Incur at least
$1.00 of additional Indebtedness pursuant Section 407(a) or (B) the
Consolidated Coverage Ratio of the Company (or, if applicable, its
Successor) would equal or exceed the Consolidated Coverage Ratio of the
Company immediately prior to giving effect to such transaction;
(iv) each Note Guarantor (other than any party to any such
consolidation or merger) shall have delivered a supplemental indenture or
other document or instrument in form reasonably satisfactory to the
Trustee, confirming its Note Guarantee; and
(v) the Company will have delivered to the Trustee an Officer's
Certificate of the Company and an Opinion of Counsel, each to the effect
that such consolidation, merger or transfer complies with the provisions
described in this paragraph of this Section 501; provided that (x) in
giving such opinion such counsel may rely on an Officer's Certificate of
the Company as to compliance with the foregoing clauses (ii) and (iii) and
as to any matters of fact, and (y) no Opinion of Counsel will be required
for a consolidation, merger or transfer described in the last paragraph of
this Section 501.
Any Indebtedness that becomes an obligation of the Company or any
Restricted Subsidiary (or that is deemed to be Incurred by any Restricted
Subsidiary that becomes a
75
Restricted Subsidiary) as a result of any such transaction undertaken in
compliance with this Section 501, and any Refinancing Indebtedness with respect
thereto, shall be deemed to have been Incurred in compliance with Section 407.
Clauses (ii) and (iii) of the first paragraph of this Section 501 will not
apply to any transaction in which (1) any Restricted Subsidiary consolidates or
merges with or into or transfers all or part of its properties and assets to the
Company or an Issuer or (2) the Company consolidates or merges with or into or
transfers all or substantially all its assets to (x) an Affiliate incorporated
or organized for the purpose of reincorporating or reorganizing the Company in
another jurisdiction in the United States of America, Cayman Islands, Luxembourg
or Kingdom of the Netherlands (including the Netherlands Antilles) or any other
member of the European Union, or changing its legal structure to a corporation
or other entity or (y) a Restricted Subsidiary of the Company so long as all
assets of the Company and the Restricted Subsidiaries immediately prior to such
transaction (other than Capital Stock of such Restricted Subsidiary) are owned
by such Restricted Subsidiary and its Restricted Subsidiaries immediately after
the consummation thereof.
Section 502. Successor Substituted. Upon any transaction involving the
Company or either Issuer in accordance with Section 501, in which the Company or
the relevant Issuer is not the Successor, the Successor will succeed to, and be
substituted for, and may exercise every right and power of, the Company or the
relevant Issuer under this Indenture, and thereafter the predecessor Company or
the relevant Issuer shall be relieved of all obligations and covenants under
this Indenture.
ARTICLE VI
REMEDIES
Section 601. Events of Default. An "Event of Default" occurs if:
(1) the Issuers default in any payment of interest on any Note when
due, whether or not such payment shall be prohibited by Article 14, and
such default continues for a period of 30 days;
(2) the Issuers default in the payment of the principal of (or
premium, if any, on) any Note when the same becomes due at its Stated
Maturity, upon optional redemption, upon required purchase, upon
declaration of acceleration or otherwise, whether or not such payment
shall be prohibited by Article 14;
(3) the Company or an Issuer fails to comply with Article 5;
(4) the Company fails to comply with Section 407, 408, 409, 410,
411, 412, 413, 414 or 415 (other than a failure to purchase the Notes) and
such failure continues for 30 days after the notice specified in the
penultimate paragraph of this Section 601;
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(5) the Company fails to comply with any of its agreements in the Notes or
this Indenture (other than those referred to in (1), (2), (3) or (4) above) and
such failure continues for 60 days after the notice specified in the penultimate
paragraph of this Section 601;
(6) any Subsidiary Guarantor fails to comply with its obligations under
any Subsidiary Guarantee and such failure continues for 30 days after the notice
specified in the penultimate paragraph of this Section 601;
(7) the Company, either of the Issuers or any Significant Subsidiary fails
to pay any Indebtedness within any applicable grace period after final maturity
or the acceleration of any such Indebtedness by the holders thereof because of a
default if the total amount of such Indebtedness unpaid or accelerated exceeds
$10,000,000 or its foreign currency equivalent;
(8) the Company, either of the Issuers or any Significant Subsidiary
pursuant to or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
(9) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(A) is for relief against the Company, either of the Issuers or any
Significant Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company, either of the Issuers or
any Significant Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company, either of
the Issuers or any Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 days;
(10) the rendering of any judgment or decree for the payment of money in
an amount (net of any insurance or indemnity payments actually received within
90 days from the entry thereof, or to be received in respect thereof in the
event any appeal thereof shall be unsuccessful) in excess of $10,000,000 or its
foreign currency equivalent against
77
the Company, either of the Issuers or any Significant Subsidiary by a court or
other adjudicatory authority of competent jurisdiction that is not discharged,
or bonded or insured by a third Person, if such judgment or decree remains
outstanding for a period of 90 days following such judgment or decree and is not
discharged, waived or stayed; or
(11) the failure of any Note Guarantee by the Company or by a
Subsidiary Guarantor that is a Significant Subsidiary to be in full force
and effect (except as contemplated by the terms thereof or of this
Indenture) or the denial or disaffirmation in writing by the Company or
any Subsidiary Guarantor that is a Significant Subsidiary of its
obligations under its Note Guarantee (other than by reason of the
termination of this Indenture or such Note Guarantee or the release of
such Note Guarantee in accordance with such Note Guarantee or this
Indenture), if such Default continues for 10 days.
The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
A Default under clause (4), (5) or (6) is not an Event of Default
until the Trustee or the Holders of at least 25% in principal amount of the
Outstanding Notes notify the Company (and the Trustee in the case of a notice by
Holders) of the Default and the Company does not cure such Default within the
time specified therein after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a "Notice
of Default". When a Default or an Event of Default is cured, it ceases.
The Issuers shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any Event of Default under clause (7) or (10) and any event that with the giving
of notice or the lapse of time would become an Event of Default under clause
(4), (5) or (6), its status and what action the Issuers are taking or propose to
take with respect thereto.
Section 602 Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 601(8)
or Section 601(9) with respect to an Issuer) occurs and is continuing, the
Trustee by notice to the Issuers, or the Holders of at least a majority in
principal amount of the Outstanding Notes by notice to the Issuers and the
Trustee, in either case specifying in such notice the respective Event of
Default and that such notice is a "notice of acceleration," may declare the
principal of and accrued but unpaid interest on all the Notes to be due and
payable, provided that so long as any Designated Senior Indebtedness of an
Issuer shall be outstanding, such acceleration shall not be effective until the
earlier to occur of (x) five Business Days following delivery of a written
notice of such acceleration of the Notes to the Issuers and the holders of all
such Designated Senior
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Indebtedness of which the Trustee has Notice or each Representative thereof and
(y) the acceleration of any such Designated Senior Indebtedness. Upon the
effectiveness of such a declaration, such principal and interest will be due and
payable immediately. Notwithstanding the foregoing, if an Event of Default
specified in Section 601(8) or Section 601(9) with respect to an Issuer occurs
and is continuing, then the principal of and any accrued interest on all the
Outstanding Notes will ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
The Holders of a majority in principal amount of the Outstanding Notes by notice
to the Company and the Trustee may rescind an acceleration and its consequences
if the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except non-payment of
principal or interest that has become due solely because of such acceleration.
No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
Notwithstanding the foregoing, in the event an Event of Default
specified in Section 601(7) shall have occurred and be continuing, such Event of
Default and all consequences thereof (including without limitation any
acceleration or resulting payment default) shall be annulled, waived and
rescinded automatically and without any action by the Trustee or the Holders and
be of no further effect if within 30 days after such Event of Default (x) the
Indebtedness that is the subject of such Event of Default has been discharged or
paid in full, or (y) the holders thereof have rescinded or waived the
acceleration, notice or action (as the case may be) giving rise to such Event of
Default, or (z) the default in respect of such Indebtedness that is the basis
for such Event of Default has been cured.
Section 603. Other Remedies; Collection Suit by Trustee. If an Event
of Default occurs and is continuing, the Trustee may, but is not obligated under
Section 603 to pursue any available remedy to collect the payment of principal
of or interest on the Notes or to enforce the performance of any provision of
the Notes or this Indenture. If an Event of Default specified in Section 601(1)
or 601(2) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against each Issuer for its respective
Several Share of the whole amount then due and owing (together with interest on
any unpaid interest to the extent lawful with respect to such Several Share) and
the amounts provided for in Section 707.
Section 604. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Holders allowed in
any judicial proceedings relative to either Issuer or any other obligor upon the
Notes, its creditors or its property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 707.
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No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 605. Trustee May Enforce Claims Without Possession of Notes.
All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Trustee without the possession of any of the
Notes or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name 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 Notes in respect of which such judgment has been recovered.
Section 606. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article 6 shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal (or premium, if any) or interest, upon
presentation of the Notes 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
707;
Second: To holders of Senior Indebtedness of the Issuers to the
extent required by Article 14.
Third: To the payment of the amounts then due and unpaid upon the
Notes for principal (and premium, if any) and interest, 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 Notes for principal (and premium, if any) and
interest, respectively; and
Fourth: to the Issuers.
Section 607. Limitation on Suits. No Holder may pursue any remedy
with respect to this Indenture or the Notes unless:
(1) such Holder has previously given the Trustee written notice that
an Event of Default is continuing;
(2) Holders of at least 25% in principal amount of the Outstanding
Notes have requested the Trustee in writing to pursue the remedy;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against any loss, liability or expense;
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(4) the Trustee has not complied with the request within 60 days
after receipt of the request and the offer of security or indemnity; and
(5) the Holders of a majority in principal amount of the Outstanding
Notes have not given the Trustee a direction inconsistent with the request
within such 60-day period.
A Holder may not use this Indenture to affect, disturb or prejudice
the rights of another Holder, to obtain a preference or priority over another
Holder or to enforce any right under this Indenture except in the manner herein
provided and for the equal and ratable benefit of all Holders.
Section 608. Unconditional Right of Holders to Receive Principal and
Interest. Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the absolute and unconditional right to receive payment of
the principal of and all (subject to Section 307) interest on such Note on the
respective Stated Maturity or Interest Payment Dates expressed in such Note and
to institute suit for the enforcement of any such payment on or after such
respective Stated Maturity or Interest Payment Dates, and such right shall not
be impaired without the consent of such Holder.
Section 609. Restoration of Rights and Remedies. If the Trustee or
any Holder has instituted any proceeding to enforce any right or remedy under
this Indenture or any Note and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Issuers, any other obligor upon the
Notes, the Trustee and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
Section 610. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 611. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Note 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 6 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.
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Section 612. Control by Holders. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes shall have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee or of exercising any trust or power conferred on
the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 701, that the
Trustee determines is unduly prejudicial to the rights of other Holders or would
involve the Trustee in personal liability; provided, however, that the Trustee
may take any other action deemed proper by the Trustee that is not inconsistent
with such direction. Prior to taking any action under this Indenture, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all losses and expenses caused by taking or not taking such
action. This Section 612 shall be in lieu of Section 316(a)(1)(A) of the TIA,
and such Section 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Notes, as permitted by the TIA.
Section 613. Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Notes may on behalf of
the Holders of all the Notes waive any past Default hereunder and its
consequences, except a Default
(1) in the payment of the principal of (or premium, if any) or
interest on any Note (which may only be waived with the consent of each
Holder of Notes affected), or
(2) in respect of a covenant or provision hereof that pursuant to
the second paragraph of Section 902 cannot be modified or amended without
the consent of the Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereon. In
case of any such waiver, the Issuers, any other obligor upon the Notes, the
Trustee and the Holders shall be restored to their former positions and rights
hereunder and under the Notes, respectively. This paragraph of this Section 613
shall be in lieu of Section 316(a)(1)(B) of the TIA and such Section
316(a)(1)(B) of the TIA is hereby expressly excluded from this Indenture and the
Notes, as permitted by the TIA.
Section 614. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's 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 the Notes, or
in any suit against the Trustee for any action taken,
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suffered 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 attorneys' 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. This Section
614 shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Notes, or to any suit instituted
by any Holder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Note on or after the respective Stated
Maturity or Interest Payment Dates expressed in such Note.
Section 615. Waiver of Stay, Extension or Usury Laws. Each of the
Issuers (to the extent that it may lawfully do so) shall not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other similar law
wherever enacted, now or at any time hereafter in force, that would prohibit or
forgive such Issuer from paying all or any portion of its respective portions of
the principal of (or premium, if any) or interest on the Notes contemplated
herein or in the Notes or that may affect the covenants or the performance of
this Indenture; and each of the Issuers (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and shall
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE VII
THE TRUSTEE
Section 701. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture; but
in the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture, but need not
verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that (i) this paragraph does not
limit the effect of paragraph (a) of this Section 701; (ii) the Trustee shall
not be liable for any error of judgment made in good faith by a Trust Officer,
unless it is proved that the Trustee was negligent in ascertaining the pertinent
facts; and (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 612.
(d) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(e) 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
Sections 701 and 703 hereof.
Section 702. Notice of Defaults. Within 90 days after the occurrence
of any Default, the Trustee shall transmit by mail to all Holders, as their
names and addresses appear in the Note Register, notice of such Default
hereunder known to the Trustee 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, premium, if any, or interest on any Note, 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 Responsible Officers
of the Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders.
Section 703. Certain Rights of Trustee. Subject to the provisions of
Section 701:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, 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;
(2) any request or direction of the Company or the Issuers mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order thereof, and any resolution of any Person's board of directors shall
be sufficiently evidenced if certified by an Officer of such Person as
having been duly adopted and being in full force and effect on the date of
such certificate;
(3) 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)
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may, in the absence of bad faith on its part, rely upon an Officer's
Certificate of the Company or an Issuer;
(4) 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;
(5) 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;
(6) 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, note, other evidence of indebtedness or other paper or document; and
(7) 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.
Section 704. Not Responsible for Recitals or Issuance of Notes. The
recitals contained herein and in the Notes, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, the Issuers and
any Subsidiary Guarantors, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes, except that the Trustee represents that it is duly authorized to execute
and deliver this Indenture, authenticate the Notes and perform its obligations
hereunder and that the statements made by it in a Statement of Eligibility and
Qualification on Form T-1 supplied to the Issuers and any other obligor upon the
Notes in connection with the registration of any Notes and any Note Guarantees
issued hereunder are and will be true and accurate subject to the qualifications
set forth therein. Neither the Trustee nor any Authenticating Agent shall be
accountable for the use or application by the Company or the Issuers of Notes or
the proceeds thereof.
Section 705. May Hold Notes. The Trustee, any Authenticating Agent,
any Paying Agent, any Note Registrar or any other agent of the Issuers, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Section 708 and Section 713, may otherwise deal with an Issuer or its
Affiliates with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Note Registrar or such other agent.
Section 706. 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
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Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed in writing with the Issuers.
Section 707. Compensation and Reimbursement. Each Issuer severally
agrees,
(1) to pay to the Trustee from time to time such Issuer's Several
Share of reasonable compensation for all services rendered by the Trustee
hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for such Issuer's Several Share of all reasonable
out-of-pocket expenses incurred by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such
expense, disbursement or advance as may be attributable to its negligence
or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against,
such Issuer's Several Share of any loss, liability or expense incurred
without negligence or bad faith on the Trustee's part, arising out of or
in connection with the administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
An Issuer need not pay for any settlement made without its consent.
Section 708. Conflicting Interests. If the Trustee has or shall
acquire a conflicting interest within the meaning of the TIA, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the TIA and this Indenture. To
the extent permitted by the TIA, the Trustee shall not be deemed to have a
conflicting interest by virtue of being a trustee under this Indenture with
respect to Original Notes and Additional Notes, or a trustee under any other
indenture between the Company and the Trustee.
Section 709. Corporate Trustee Required; Eligibility. There shall at
all times be one (and only one) Trustee hereunder. The Trustee shall be a Person
that is eligible pursuant to the TIA to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and to
the extent permitted by the TIA, the combined capital and surplus of such Person
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 709, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
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Section 710. Resignation and Removal; Appointment of Successor. 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 711.
The Trustee may resign at any time by giving written notice thereof
to the Issuers. If the instrument of acceptance by a successor Trustee required
by Section 711 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.
The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Notes, delivered to the Trustee
and to the Company.
If at any time:
(1) the Trustee shall fail to comply with Section 708 after written
request therefor by the Issuers or by any Holder who has been a bona fide
Holder of a Note for at least six months, or
(2) the Trustee shall cease to be eligible under Section 709 and
shall fail to resign after written request therefor by the Issuers or by
any such Holder, 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, (A) the Issuers may remove the Trustee, or (B) subject
to Section 614, any Holder who has been a bona fide Holder of a Note 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 or Trustees.
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
Issuers shall promptly appoint a successor Trustee and shall comply with the
applicable requirements of Section 711. 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
principal amount of the Outstanding Notes delivered to the Issuers and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 711, become the successor Trustee and to that extent supersede the
successor Trustee appointed by the Issuers. If no successor Trustee shall have
been so appointed by the Issuers or the Holders and accepted appointment in the
manner required by Section 711, then, subject to Section 614, any Holder who has
been a bona fide Holder of a
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Note for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 110. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
Section 711. Acceptance of Appointment by Successor. In case of the
appointment hereunder of a successor Trustee, every such successor Trustee so
appointed shall execute, acknowledge and deliver to the Issuers 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 the request of the Issuers or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, 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 property and money held by such retiring Trustee hereunder.
Upon request of any such successor Trustee, the Issuers 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 referred
to above.
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 7.
Section 712. 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 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 7,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes 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 Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 713. Preferential Collection of Claims Against Issuers. If
and when the Trustee shall be or become a creditor of the Issuers (or any other
obligor upon the Notes), the Trustee shall be subject to the provisions of the
TIA regarding the collection of claims against the Issuers (or any such other
obligor).
Section 714. Appointment of Authenticating Agent. The Trustee may
appoint an Authenticating Agent acceptable to the Company to authenticate the
Notes. Any such
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appointment shall be evidenced by an instrument in writing signed by a Trust
Officer, a copy of which instrument shall be promptly furnished to the Company.
Unless limited by the terms of such appointment, an Authenticating Agent may
authenticate Notes whenever the Trustee may do so. Each reference in this
Indenture to authentication (or execution of a certificate of authentication) by
the Trustee includes authentication (or execution of a certificate of
authentication) by such Authenticating Agent. An Authenticating Agent has the
same rights as any Registrar, Paying Agent or agent for service of notices and
demands.
Section 715. Withholding Taxes. Notwithstanding any other provision
of this Agreement, the Trustee, as agent for the Issuers and the Note
Guarantors, shall exclude and withhold from each payment of principal and
interest and other amounts due hereunder or under the Notes or the Note
Guarantees any and all withholding taxes applicable thereto as required by law.
The Trustee agrees to act as such withholding agent and, in connection
therewith, whenever any present or future taxes or similar charges are required
to be withheld with respect to any amounts payable in respect of the Notes or
the Note Guarantees, to withhold such amounts and timely pay the same to the
appropriate authority in the name of and on behalf of the Holders, that it will
furnish to the Holders such forms or certificates as are necessary or
appropriate to provide the certification, identification, information or
documentation described in Section 404(iii), that it will file any necessary
withholding tax returns or statements when due, and that, as promptly as
possible after the payment thereof, it will deliver to each Holder appropriate
documentation showing the payment thereof, together with such additional
documentary evidence as such Holders may reasonably request from time to time.
ARTICLE VIII
HOLDERS' LISTS AND REPORTS BY
TRUSTEE AND ISSUERS
Section 801. Issuers to Furnish Trustee Names and Addresses of
Holders. The Issuers will furnish or cause to be furnished to the Trustee
(1) semi-annually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(2) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Issuers of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished pursuant to this Section 801.
Section 802. Preservation of Information; Communications to Holders.
The Trustee shall preserve, in as current a form as is reasonably practicable,
the names and addresses of Holders contained in the most recent list, if any,
furnished to the Trustee as provided in
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Section 801 and the names and addresses of Holders received by the Trustee in
its capacity as Note Registrar; provided, however, that if and so long as the
Trustee shall be the Note Registrar, the Note Register shall satisfy the
requirements relating to such list. None of the Company, the Issuers, any
Subsidiary Guarantor or the Trustee or any other Person shall be under any
responsibility with regard to the accuracy of such list. The Trustee may destroy
any list furnished to it as provided in Section 801 upon receipt of a new list
so furnished.
The rights of Holders to communicate with other Holders with respect
to their rights under this Indenture or under the Notes, and the corresponding
rights and privileges of the Trustee, shall be as provided by the TIA.
Every Holder of Notes, by receiving and holding the same, agrees
with the Issuers and the Trustee that neither the Issuers nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the TIA.
Section 803. Reports by Trustee. The Trustee shall transmit to
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required pursuant to the TIA at the times and in the manner provided
pursuant thereto. A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which any Notes are listed, with the SEC and with the Issuers. The Issuers will
notify the Trustee when any Notes are listed on any stock exchange.
ARTICLE IX
AMENDMENT, SUPPLEMENT OR WAIVER
Section 901. Without Consent of Holders. Without the consent of the
Holders of any Notes, the Company, the Issuers, the Trustee and (as applicable)
any Subsidiary Guarantor may enter into one or more indentures supplemental
hereto, for any of the following purposes:
(1) to cure any ambiguity, omission, defect or inconsistency,
(2) to provide for the assumption by a Successor of the obligations
of the Company or an Issuer under the Indenture,
(3) to provide for uncertificated Notes in addition to or in place
of certificated Notes,
(4) to add Guarantees with respect to the Notes, to secure the
Notes, to confirm and evidence the release, termination or discharge of
any Guarantee or Lien with respect to or securing the Notes when such
release, termination or discharge is provided for under this Indenture,
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(5) to add to the covenants of the Company or an Issuer for the
benefit of the Holders or to surrender any right or power conferred upon
the Company or an Issuer,
(6) to provide that any Indebtedness that becomes or will become an
obligation of a Successor or a Note Guarantor pursuant to a transaction
governed by Article 5 (and that is not a Subordinated Obligation) is
Senior Subordinated Indebtedness for purposes of this Indenture,
(7) to make any change that does not adversely affect the rights of
any Holder under the Notes or this Indenture,
(8) to provide for or confirm the issuance of Additional Notes; or
(9) to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA or otherwise.
Notwithstanding the foregoing provisions of this Section 901 and
Section 902, on the date hereof, the Company, the Issuers, the Initial Mexican
Subsidiary Guarantors and the Trustee may execute and deliver the First
Supplemental Indenture, in each case without notice to or consent of any Holder.
Section 902. With Consent of Holders. Subject to Section 608, the
Company, the Issuers, the Trustee and (if applicable) each Subsidiary Guarantor
may amend or supplement this Indenture or the Notes with the written consent of
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for Notes), and the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes by written notice to the
Trustee (including consents obtained in connection with a tender offer or
exchange offer for Notes) may waive any existing Default or Event of Default or
compliance by the Company, either Issuer or any Subsidiary Guarantor with any
provision of this Indenture, the Notes or any Subsidiary Guarantee.
Notwithstanding the provisions of this Section 902, without the
consent of each Holder affected, an amendment or waiver, including a waiver
pursuant to Section 613, may not:
(i) reduce the principal amount of the Notes whose Holders must
consent to an amendment or waiver;
(ii) reduce the rate of or extend the time for payment of interest
on any Notes;
(iii) reduce the principal or extend the Stated Maturity of any
Notes;
(iv) reduce the premium payable upon the redemption of any Note or
change the date on which any Note may be redeemed as described in Section
1001;
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(v) make any Note payable in money other than that stated in the
Notes;
(vi) make any change in Article 14 or Article 15 that adversely
affects the rights of any Holder in any material respect;
(vii) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Notes on or after the due dates
therefor or to institute suit for the enforcement of any payment on or
with respect to such Holder's Notes; or
(viii) make any change in the amendment or waiver provisions
described in this sentence.
In addition, without the consent of the Holders of 75% in principal
amount of the Notes then Outstanding, no amendment may release the Company or
either Issuer from any of its obligations under its Note Guarantee, except in
compliance with the terms thereof or of this Indenture.
Notwithstanding Section 901 and the foregoing provisions of this
Section 902, no amendment to Article 14 or Article 15 of this Indenture or the
definitions relating thereto that adversely affects the rights of any Holder of
Senior Indebtedness at the time outstanding (which Senior Indebtedness has been
previously designated in writing by the Company to the Trustee for this purpose)
may be made unless the holders of such Senior Indebtedness (or any group or
representative thereof authorized to give a consent) consent in writing to such
amendment.
It shall not be necessary for the consent of the Holders under this
Section 902 to approve the particular form of any proposed amendment, supplement
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 902
becomes effective, the Issuers shall mail to the Holders of each Note affected
thereby, with a copy to the Trustee, a notice briefly describing the amendment,
supplement or waiver. Any failure of the Issuers to mail such notice, or any
defect therein, shall not, however, in any way impair or affect the validity of
any supplemental indenture or the effectiveness of any such amendment,
supplement or waiver.
Section 903. Execution of Amendments, Supplements or Waivers. The
Trustee shall sign any amendment, supplement or waiver authorized pursuant to
this Article 9 if the amendment, supplement or waiver does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign it. In signing or refusing to sign such
amendment, supplement or waiver, the Trustee shall be entitled to receive, and
shall be fully protected in relying upon, an Officer's Certificate and an
Opinion of Counsel to the effect that the execution of such amendment,
supplement or waiver has been duly authorized, executed and delivered by the
Company and the Issuers and that, subject to applicable bankruptcy, insolvency,
fraudulent transfer, fraudulent conveyance, reorganization, moratorium and other
laws now or hereinafter in effect affecting creditors' rights or remedies
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generally and the general principles of equity (including standards of
materiality, good faith, fair dealing and reasonableness), whether considered in
a proceeding at law or at equity, such amendment, supplement or waiver is a
valid and binding agreement of the Company and the Issuers, enforceable against
the Company and the Issuers in accordance with its terms.
Section 904. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder is a
continuing consent by the Holder and every subsequent Holder of that Note or any
Note that evidences all or any part of the same debt as the consenting Holder's
Note, even if notation of the consent is not made on any Note. Subject to the
following paragraph of this Section 904, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note by notice to the Trustee or the
Issuers received by the Trustee or the Issuers, as the case may be, before the
date on which the Trustee receives an Officer's Certificate certifying that the
Holders of the requisite principal amount of Notes have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver. The
Issuers may, but shall not be obligated to, fix a record date for the purpose of
determining the Holders entitled to consent to any amendment, supplement or
waiver as set forth in Section 108.
After an amendment, supplement or waiver becomes effective, it shall
bind every Holder of Notes, unless it makes a change described in any of clauses
(i) through (viii) of the second paragraph of Section 902. In that case, the
amendment, supplement or waiver shall bind each Holder of a Note who has
consented to it and every subsequent Holder of such Note or any Note that
evidences all or any part of the same debt as the consenting Holder's Note.
Section 905. Conformity with TIA. Every amendment or supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 906. Notation on or Exchange of Notes. If an amendment,
supplement or waiver changes the terms of a Note, the Trustee shall (if required
by the Issuers and in accordance with the specific direction of the Issuers)
request the Holder of the Note to deliver it to the Trustee. The Trustee shall
(if required by the Issuers and in accordance with the specific direction of the
Issuers) place an appropriate notation on the Note about the changed terms and
return it to the Holder. Alternatively, if the Issuers or the Trustee so
determines, the Issuers in exchange for the Note shall issue and the Trustee
shall authenticate a new Note that reflects the changed terms. Failure to make
the appropriate notation or issue a new Note shall not affect the validity and
effect of such amendment, supplement or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 1001. Right of Redemption. (a) Except as set forth in this
Section 1001, the Notes will not be redeemable at the option of the Issuers
prior to May 15, 2007. Thereafter, the Notes will be redeemable, at the Issuers'
option, in whole or in part, and from time to time on
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and after May 15, 2007 and prior to maturity; provided, however, that any such
optional redemption may only be effected concurrently by both of the Issuers on
a pro rata basis as between their respective Portions, based on the relative
proportions of the Jafra US Portion and the Jafra Distribution (Mexico) Portion.
Such redemption may be made upon notice mailed by first-class mail to each
Holder's registered address in accordance with Section 1005. Any such redemption
and notice may, in the Issuers' discretion, be subject to the satisfaction of
one or more conditions precedent. The Notes will be so redeemable at the
following Redemption Prices (expressed as a percentage of principal amount),
plus accrued interest, if any, to the relevant Redemption Date (subject to
Section 307), if redeemed during the 12-month period commencing on May 15 of the
years set forth below:
PERIOD REDEMPTION
PRICE
2007............................. 105.375%
2008............................. 102.688%
2009 and thereafter.............. 100.000%
(b) In addition, at any time and from time to time prior to May 15,
2006, the Issuers at their option may concurrently redeem the Notes, on a pro
rata basis as between their respective Portions (based on the relative
proportions of the Jafra US Portion and the Jafra Distribution (Mexico)
Portion), in an aggregate principal amount equal to up to 35% of the original
aggregate principal amount of the Notes (including the principal amount of any
Additional Notes), with funds in an aggregate amount (the "Redemption Amount")
not exceeding the aggregate cash proceeds of one or more Equity Offerings, at a
Redemption Price (expressed as a percentage of principal amount thereof) of
110.750% plus accrued interest, if any, to the Redemption Date (subject to
Section 307); provided, however, that an aggregate principal amount of the Notes
equal to at least 65% of the original aggregate principal amount of the Notes
(including the principal amount of any Additional Notes) must remain outstanding
after each such redemption. The Issuers may make such redemption upon notice
mailed by first-class mail to each Holder's registered address in accordance
with Section 1005 (but in no event more than 180 days after the completion of
the related Equity Offering). Any such notice may be given prior to the
completion of the related Equity Offering, and any such redemption or notice
may, at the Issuers' discretion, be subject to the satisfaction of one or more
conditions precedent, including the completion of the related Equity Offering.
(c) [Intentionally omitted]
(d) The Jafra Distribution (Mexico) Portion of the Notes may be
redeemed, at the option of Jafra Distribution (Mexico), at any time as a whole
but not in part, on not less than 30 nor more than 60 days' notice in accordance
with Section 1005, at a Redemption Price equal to 100% of the principal amount
thereof, plus accrued and unpaid interest (if any) to the date of redemption
(subject to Section 307), in the event Jafra Distribution (Mexico), any
successor to Jafra Distribution (Mexico) or any current or future Note Guarantor
of such Jafra Distribution
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(Mexico) Portion has become or would become obligated to pay, on the next date
on which any amount would be payable with respect to the Notes, and such
obligation cannot be avoided by such Person's taking reasonable measures
available to it, any Additional Amounts in excess of Additional Amounts that
Jafra Distribution (Mexico), such successor or such Note Guarantor would be
required to pay if payments by Jafra Distribution (Mexico), such successor or
such Note Guarantor were subject to a 4.9% Mexican withholding tax as a result
of a change in or an amendment to applicable treaties or laws (including any
regulations promulgated thereunder) of Mexico (or any political subdivision or
taxing authority thereof or therein), or any change in or amendment to any
official position regarding the application or interpretation of such treaties,
laws or regulations, which change or amendment is announced or becomes effective
on or after May 2, 2003 ("Excessive Additional Amounts"); provided, however,
that no such notice of redemption may be given earlier than 60 days prior to the
earliest date on which Jafra Distribution (Mexico), such successor or such Note
Guarantor would, but for such redemption, be obligated to pay such Excessive
Additional Amounts. Prior to the publication of any notice of redemption
pursuant to this provision, Jafra Distribution (Mexico), any successor to Jafra
Distribution (Mexico) or any Note Guarantor will deliver to the Trustee (a) a
certificate duly signed by an officer of Jafra Distribution (Mexico), such
successor or such Note Guarantor stating that Jafra Distribution (Mexico), such
successor or such Note Guarantor is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of Jafra Distribution (Mexico), such successor or such Note Guarantor so
to redeem have occurred and (b) a written opinion of Mexican legal counsel
reasonably acceptable to the Trustee to the effect that Jafra Distribution
(Mexico), such successor or such Note Guarantor has or will become obligated to
pay such Excessive Additional Amounts as a result of an amendment or change
referred to in this provision.
Section 1002. Applicability of Article. Redemption or purchase of
Notes as permitted by Section 1001 shall be made in accordance with this Article
10.
Section 1003. Election to Redeem; Notice to Trustee. In case of any
redemption at the election of the Issuers of less than all of the Notes, the
Issuers shall, at least 30 days prior to the Redemption Date initially fixed by
the Issuers (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee of such Redemption Date and of the principal amount of Notes
to be redeemed.
Section 1004. Selection by Trustee of Notes to Be Redeemed. In the
case of any partial redemption, selection of the Notes for redemption will be
made not more than 60 days prior to the Redemption Date by the Trustee on a pro
rata basis, by lot or by such other method as the Trustee in its sole discretion
shall deem to be fair and appropriate, although no Note of $1,000 in original
principal amount or less will be redeemed in part.
The Trustee shall promptly notify the Issuers in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. On and after the
Redemption Date, interest will cease to accrue on Notes or portions thereof
called for redemption.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Notes shall relate, in
the case of any Note redeemed or to be redeemed only in part, to the portion of
the principal of such Note that has been or is to be redeemed.
Section 1005. Notice of Redemption. Notice of redemption or purchase
as provided in Section 1001 shall be given by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Notes to be redeemed, at such Holder's address appearing in the
Note Register.
Any such notice shall state:
(1) the expected Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Notes are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the Notes to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Note, and that, unless the Issuers default in
making such redemption payment or the Paying Agent is prohibited from
making such payment pursuant to the terms of this Indenture, interest
thereon shall cease to accrue from and after said date, and
(5) the place where such Notes are to be surrendered for payment of
the Redemption Price.
In addition, if such redemption, purchase or notice is subject to satisfaction
of one or more conditions precedent, as permitted by Section 1001, such notice
shall describe each such condition, and if applicable, shall state that, in the
Issuers' discretion, the Redemption Date may be delayed until such time as any
or all such conditions shall be satisfied, or such redemption or purchase may
not occur and such notice may be rescinded in the event that any or all such
conditions shall not have been satisfied by the Redemption Date, or by the
Redemption Date as so delayed.
Notice of such redemption or purchase of Notes to be so redeemed or
purchased at the election of the Issuers shall be given by the Issuers or, at
the Issuers' request, by the Trustee in the name and at the several expense of
the Issuers.
The notice if mailed in the manner herein provided shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice by mail or any defect in
the notice to the Holder of any Note
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designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note.
Section 1006. Deposit of Redemption Price. On or prior to any
Redemption Date, the Issuers shall deposit with the Trustee or with a Paying
Agent (or, if either Issuer is acting as its own Paying Agent, such Issuer shall
segregate and hold in trust as provided in Section 403) an amount of money
sufficient to pay the Redemption Price of, and any accrued and unpaid interest
on, all the Notes or portions thereof which are to be redeemed on that date.
Section 1007. Notes Payable on Redemption Date. Notice of redemption
having been given as provided in this Article 10, the Notes so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified and from and after such date (unless either of the Issuers
shall default in the payment of the Redemption Price or the Paying Agent is
prohibited from paying the Redemption Price pursuant to the terms of this
Indenture) such Notes shall cease to bear interest. Upon surrender of such Notes
for redemption in accordance with such notice, such Notes shall be paid by the
Issuers at the Redemption Price. Installments of interest whose Interest Payment
Date is on or prior to the Redemption Date shall be payable to the Holders of
such Notes registered as such on the relevant Regular Record Dates according to
their terms and the provisions of Section 307.
On and after any Redemption Date, if money sufficient to pay the
Redemption Price of and any accrued and unpaid interest on Notes called for
redemption shall have been made available in accordance with Section 1006, the
Notes (or the portions thereof) called for redemption will cease to accrue
interest and the only right of the Holders of such Notes (or portions thereof)
will be to receive payment of the Redemption Price of and subject to the last
sentence of the preceding paragraph, any accrued and unpaid interest on such
Notes (or portions thereof) to the Redemption Date. If any Note (or portion
thereof) called for redemption shall not be so paid upon surrender thereof for
redemption, the principal (and premium, if any) shall, until paid, bear interest
from the Redemption Date at the rate borne by the Note (or portion thereof).
Section 1008. Notes Redeemed in Part. Any Note that is to be
redeemed only in part shall be surrendered at the Place of Payment (with, if the
Issuers or the Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Issuers and the Trustee duly executed
by, the Holder thereof or his attorney duly authorized in writing) and the
Issuers shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Note so surrendered.
In the event of any partial redemption (other than a redemption under
Section 1001(d)), the several obligation of each Issuer for each Note that
remains outstanding shall continue in the same proportion as the relative
proportions of the Jafra US Portion and the Jafra Distribution (Mexico) Portion,
respectively.
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ARTICLE XI
SATISFACTION AND DISCHARGE
Section 1101. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to any surviving rights
of registration of or transfer or exchange of Notes herein expressly provided
for), and the Trustee, on demand of and at the several expense of the Issuers,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Notes theretofore authenticated and delivered (other than
(i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 306, and (ii) Notes for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Issuers and thereafter repaid to the Issuers or
discharged from such trust, as provided in Section 403) have been
delivered to the Trustee cancelled or for cancellation; or
(B) all such Notes not theretofore delivered to the Trustee
cancelled or for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year,
or
(iii) are to be called for redemption within one year under
arrangements reasonably satisfactory to the Trustee for the giving
of notice of redemption by the Trustee in the name, and at the
several expense, of the Issuers,
(2) the Issuers have irrevocably deposited or caused to be deposited
with the Trustee an amount in United States dollars, U.S. Government
Obligations, or a combination thereof, sufficient to pay and discharge the
entire Indebtedness on such Notes not theretofore delivered to the Trustee
cancelled or for cancellation, for principal (and premium, if any) and
interest to the date of such deposit (in the case of Notes that have
become due and payable), or to the Stated Maturity or Redemption Date, as
the case may be;
(3) the Issuers have paid or caused to be paid all other sums then
payable hereunder by the Issuers; and
(4) the Issuers have delivered to the Trustee an Officer's
Certificate of the
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Issuers and an Opinion of Counsel each to the effect that all conditions
precedent provided for in this Section 1101 relating to the satisfaction
and discharge of this Indenture have been complied with, provided that any
such counsel may rely on any Officer's Certificate as to matters of fact
(including as to compliance with the foregoing clauses (1), (2) and (3)).
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of each Issuer to the Trustee under Section 707 and, if money
shall have been deposited with the Trustee pursuant to subclause (2) of this
Section 1101, the obligations of the Trustee under Section 1102, shall survive.
Section 1102. Application of Trust Money. Subject to the provisions
of the last paragraph of Section 403, all money deposited with the Trustee
pursuant to Section 1101 shall be held in trust and applied by it, in accordance
with the provisions of the Notes and this Indenture, to the payment, either
directly or through any Paying Agent (including either Issuer acting as its own
Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest on the Notes; but such money
need not be segregated from other funds except to the extent required by law.
ARTICLE XII
DEFEASANCE OR COVENANT DEFEASANCE
Section 1201. The Issuers' Option To Effect Defeasance or Covenant
Defeasance. The Issuers may, concurrently (and not separately) at their option,
at any time, elect to have terminated the obligations of the Issuers with
respect to Outstanding Notes and to have terminated the obligations of any or
all Note Guarantors, with respect to the Note Guarantees, in each case, as set
forth in this Article 12, and elect to have either Section 1202 or Section 1203
be applied to all of the Outstanding Notes (the "Defeased Notes"), upon
compliance with the conditions set forth below in Section 1204. Either Section
1202 or Section 1203 may be applied to the Defeased Notes to any Redemption Date
or the Stated Maturity of the Notes. Either option may be exercised to any
Redemption Date or to the Stated Maturity of the Notes.
Section 1202. Defeasance and Discharge. Upon the Issuers' exercise
under Section 1201 of the option applicable to this Section 1202, the Issuers
shall be deemed to have been released and discharged from their several
obligations with respect to the Defeased Notes on the date the relevant
conditions set forth in Section 1204 below are satisfied (hereinafter,
"Defeasance"). For this purpose, such Defeasance means that the Issuers shall be
deemed to have paid and discharged their respective Several Shares of the entire
indebtedness represented by the Defeased Notes, which shall thereafter be deemed
to be "Outstanding" only for the purposes of Section 1205 and the other Sections
of this Indenture referred to in clauses (a) and (b) below, and the Issuers and
each of the Note Guarantors shall be deemed to have satisfied all other
obligations under such Notes and this Indenture insofar as such Notes are
concerned (and the Trustee, at the several expense of the Issuers, shall execute
proper instruments acknowledging the same), except for the following, which
shall survive until otherwise
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terminated or discharged hereunder: (a) the rights of Holders of Defeased Notes
to receive, solely from the trust fund described in Section 1204 and as more
fully set forth in such Section, payments in respect of the principal of and
premium, if any, and interest on such Notes when such payments are due, (b) the
Issuers' obligations with respect to such Defeased Notes under Sections 304,
305, 306, 402, 403 and 404, (c) the rights, powers, trusts, duties and
immunities of the Trustee hereunder, including the Trustee's rights under
Section 707, and (d) this Article 12. Subject to compliance with this Article
12, the Issuers may, at their option and at any time, exercise their option
under this Section 1202 notwithstanding the prior exercise of their option under
Section 1203 with respect to the Notes.
Section 1203. Covenant Defeasance. Upon the Issuers' exercise under
Section 1201 of the option applicable to this Section 1203, (a) the Issuers and
the Note Guarantors shall be released from their respective obligations under
any covenant or provision contained in Section 405 and Sections 407 through 415
and the provisions of clauses (iii), (iv) and (v) of Section 501 shall not
apply, and (b) the occurrence of any event specified in clause (3) (with respect
to clauses (iii), (iv) and (v) of Section 501), (4) through (6) (with respect to
Section 405, Sections 407 through 415, inclusive, and any such covenants
provided pursuant to Section 901(5)), inclusive, (7), (8) or (9) (with respect
to Subsidiaries), or (10) of Section 601 shall be deemed not to be or result in
an Event of Default, in each case with respect to the Defeased Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes 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 or provisions, 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 Notes, the Company, the Issuers and the
Subsidiary Guarantors may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant or
provision, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or provision or by reason of any reference in any
such covenant or provision to any other provision herein or in any other
document and such omission to comply shall not constitute a Default or an Event
of Default under Section 601, but, except as specified above, the remainder of
this Indenture and such Outstanding Notes shall be unaffected thereby.
Section 1204. Conditions to Defeasance or Covenant Defeasance. The
following shall be the conditions to application of either Section 1202 or
Section 1203 to the Outstanding Notes:
(1) The Issuers shall have irrevocably deposited or caused to be
deposited with the Trustee in trust cash, in United States dollars, or
U.S. Government Obligations or a combination thereof, in amounts as will
be sufficient, in the opinion of a nationally recognized accounting or
investment banking firm expressed in a written certification thereof
delivered to the Trustee, to pay and discharge the principal of, and
premium, if any, and interest on the Defeased Notes on the Stated Maturity
or relevant Redemption Date in accordance with the terms of this Indenture
and the Notes;
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(2) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as Section 601(8) or
601(9) is concerned, at any time during the period ending on the
ninety-first day after the date of such deposit;
(3) Such deposit shall not result in a breach or violation of, or
constitute a Default or Event of Default under, this Indenture or any
other material agreement or instrument to which either Issuer or the
Company is a party or by which it is bound;
(4) In the case of an election under Section 1202, the Issuers shall
have delivered to the Trustee an Opinion of Counsel from Debevoise &
Xxxxxxxx or other counsel in the United States to the effect that (x) the
Company or the Issuers have received from, or there has been published by,
the Internal Revenue Service a ruling or (y) since the Issue Date, there
has been a change in the applicable Federal income tax law, in either case
to the effect that, and based thereon such opinion shall confirm to the
effect that, the Holders of the Outstanding Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such
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 Defeasance had not occurred;
(5) In the case of an election under Section 1203, the Issuers shall
have delivered to the Trustee an Opinion of Counsel from Debevoise &
Xxxxxxxx or other counsel in the United States to the effect that the
Holders of the Outstanding Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of such Covenant Defeasance
and will be subject to Federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such Covenant
Defeasance had not occurred; and
(6) The Issuers shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each to the effect that all
conditions precedent provided for in this Section 1204 relating to either
the Defeasance under Section 1202 or the Covenant Defeasance under Section
1203, as the case may be, have been complied with. In rendering such
Opinion of Counsel, counsel may rely on any Officer's Certificate as to
compliance with the foregoing clauses (1), (2) and (3) of this Section
1204 or as to any matters of fact.
From and after the time of any deposit pursuant to clause (1) of the
first paragraph of this Section 1204, the money or U.S. Government Obligations
so deposited shall not be subject to the rights of the holders of Senior
Indebtedness of the Issuers pursuant to the subordination provisions of Article
14 or Article 15.
Section 1205. 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 403, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee (or such other
Person that would qualify to act as successor trustee under Article 7,
collectively and solely for purposes of this Section 1205, Section 1412 and
Section 1512, the
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"Trustee") pursuant to Section 1204 in respect of the Defeased Notes shall be
held in trust and applied by the Trustee, in accordance with the provisions of
such Notes and this Indenture, to the payment, either directly or through any
Paying Agent (including either Issuer acting as its own Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Issuers shall pay and indemnify the Trustee and its agents and
hold them harmless against any tax, fee or other charge imposed on or assessed
against the U.S. Government Obligations deposited pursuant to Section 1204 or
the principal, premium, if any, and interest received in respect thereof, other
than any such tax, fee or other charge that by law is for the account of the
Holders of the Defeased Notes.
Anything in this Article 12 to the contrary notwithstanding, the
Trustee shall deliver to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 1204
hereof that, in the opinion of a nationally recognized accounting or investment
banking firm expressed in a written certification thereof to the Trustee, are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Defeasance or Covenant Defeasance. Subject to Article 7,
the Trustee shall not incur any liability to any Person by relying on such
opinion.
Section 1206. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with
Section 1202 or 1203, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the obligations of the Issuers and each of
the Note Guarantors under this Indenture, the Notes and the Note Guarantees
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1202 or 1203, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money and U.S. Government
Obligations in accordance with Section 1202 or 1203, as the case may be;
provided, however, that if either Issuer or any Note Guarantor makes any payment
of principal, premium, if any, or interest on any Note following the
reinstatement of its obligations, such Issuer or Note Guarantor, as the case may
be, shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money and U.S. Government Obligations held by the Trustee
or Paying Agent.
Section 1207. Repayment to Issuers. The Trustee shall pay to the
Issuers upon Company Request any money held by it for the payment of principal
or interest that remains unclaimed for two years. After payment to the Issuers,
Holders entitled to money must look to the Issuers for payment as general
creditors unless an applicable abandoned property law designates another Person
and all liability of the Trustee or Paying Agent with respect to such money
shall thereupon cease.
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ARTICLE XIII
NOTE GUARANTEES
Section 1301. Guarantees Generally. (a) Guarantee of the Company.
The Company, as primary obligor and not merely as surety, hereby irrevocably and
fully and unconditionally Guarantees, on a senior subordinated basis, the
punctual payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all monetary obligations of each Issuer under this Indenture and
the Notes, whether for principal of or interest on the Notes, expenses,
indemnification or otherwise (all such obligations of each Issuer being herein
called the "Guaranteed Note Obligations").
(b) Guarantee of Each Issuer. Jafra US, as primary obligor and not
merely as surety, hereby Guarantees, on a senior subordinated basis, the
punctual payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all Guaranteed Note Obligations of Jafra Distribution (Mexico)
under this Indenture and the Notes with respect to the Jafra Distribution
(Mexico) Portion. Jafra Distribution (Mexico), as primary obligor and not merely
as surety, hereby Guarantees, on a senior subordinated basis, the punctual
payment when due, whether at Stated Maturity, by acceleration or otherwise, of
all Guaranteed Note Obligations of Jafra US under this Indenture and the Notes
with respect to the Jafra US Portion. Proceedings or other actions to enforce
either such Note Guarantee of either Issuer may not be initiated or taken until
the earlier of (i) 30 days after written demand for payment has been made
thereunder by the Trustee or the Holders in accordance with the terms of this
Indenture and (ii) the occurrence of an event specified in Section 601(8) or
601(9) with respect to such Issuer.
(c) Guarantee of Each Subsidiary Guarantor. Any U.S. Subsidiary
Guarantor from time to time party hereto, as primary obligor and not merely as
surety, hereby jointly and severally, irrevocably and fully and unconditionally
Guarantees, on a senior subordinated basis, the punctual payment when due,
whether at Stated Maturity, by acceleration or otherwise, of all Guaranteed Note
Obligations of Jafra US under this Indenture and the Notes (all such Guaranteed
Note Obligations being herein called the "Guaranteed Jafra US Obligations").
Each Mexican Subsidiary Guarantor from time to time party hereto, as primary
obligor and not merely as surety, hereby jointly and severally, irrevocably and
fully and unconditionally Guarantees, on a senior subordinated basis, the
punctual payment when due, whether at Stated Maturity, by acceleration or
otherwise, of all Guaranteed Note Obligations of Jafra Distribution (Mexico)
under this Indenture and the Notes (all such Guaranteed Note Obligations being
herein called the "Guaranteed Jafra Distribution (Mexico) Obligations").
Any term or provision of this Indenture notwithstanding, each
Subsidiary Guarantee shall not exceed the maximum amount that can be guaranteed
by the applicable Subsidiary Guarantor without rendering the Subsidiary
Guarantee, as it relates to such Subsidiary Guarantor, voidable under applicable
law, including any applicable law relating to fraudulent conveyance or
fraudulent transfer or similar laws affecting the rights of creditors generally.
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(d) Further Agreements of Each Note Guarantor. (i) Each Note
Guarantor hereby agrees that (to the fullest extent permitted by law) its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of this Indenture, the Notes or the obligations of
the Issuers or any other Note Guarantor to the Holders or the Trustee hereunder
or thereunder, the absence of any action to enforce the same, any waiver or
consent by any Holder with respect to any provisions hereof or thereof, any
release of any other Note Guarantor, the recovery of any judgment against the
Issuers, any action to enforce the same, whether or not a notation concerning
its Note Guarantee is made on any particular Note, or any other circumstance
that might otherwise constitute a legal or equitable discharge or defense of a
guarantor.
(ii) Each Note Guarantor hereby waives (to the fullest extent
permitted by law) the benefit of diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuers, any right to require a proceeding first against
the Issuers, protest, notice and all demands whatsoever and covenants that
(except as otherwise provided in Section 1303) its Note Guarantee will not
be discharged except by complete performance of the obligations contained
in the Notes, this Indenture and this Note Guarantee. Such Note Guarantee
is a guarantee of payment and not of collection. Each Note Guarantor
further agrees (to the fullest extent permitted by law) that, as between
it, on the one hand, and the Holders of Notes and the Trustee, on the
other hand, subject to this Article 13 and Article 15, (1) the maturity of
the obligations guaranteed by its Note Guarantee may be accelerated as and
to the extent provided in Article 6 for the purposes of such Note
Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the obligations guaranteed by
such Note Guarantee, and (2) in the event of any acceleration of such
obligations as provided in Article 6, such obligations (whether or not due
and payable) shall forthwith become due and payable by such Note Guarantor
in accordance with the terms of this Section 1301 for the purpose of such
Note Guarantee. Neither the Trustee nor any other Person shall have any
obligation to enforce or exhaust any rights or remedies or to take any
other steps under any security for the Guaranteed Note Obligations or
against the Issuers or any other Person or any property of the Issuers or
any other Person before the Trustee is entitled to demand payment and
performance by any or all Note Guarantors of their obligations under their
respective Note Guarantees or under this Indenture.
(iii) Until terminated in accordance with Section 1303, each Note
Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the relevant Issuer
for liquidation or reorganization, should the relevant Issuer 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
relevant Issuer'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 Notes are, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee on such Notes, whether as a "voidable preference,"
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"fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes 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.
(e) Each Note Guarantor that makes a payment or distribution under
its Note Guarantee shall have the right to seek contribution from the relevant
non-paying Issuer or any non-paying Note Guarantor that has also Guaranteed the
relevant Guaranteed Note Obligations in respect of which such payment or
distribution is made, so long as the exercise of such right does not impair the
rights of the Holders under this Note Guarantee.
(f) Each Note Guarantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by this Indenture
and that its Note Guarantee, and the waiver set forth in Section 1305 is
knowingly made in contemplation of such benefits.
(g) Each Note Guarantor also hereby agrees to pay any and all
reasonable out-of-pocket expenses (including reasonable counsel fees and
expenses) incurred by the Trustee or the Holders in enforcing any rights under
its Note Guarantee.
Section 1302. Continuing Guarantees. Each Note Guarantee shall be a
continuing Guarantee and shall (i) remain in full force and effect until payment
in full of the principal amount of all outstanding Notes (whether by payment at
maturity, purchase, redemption, defeasance, retirement or other acquisition) and
all other relevant Guaranteed Note Obligations then due and owing, unless
earlier terminated as provided in Section 1303, (ii) be binding upon such Note
Guarantor and (iii) inure to the benefit of and be enforceable by the Trustee,
the Holders and their permitted successors, transferees and assigns.
Section 1303. Release of Note Guarantees. Notwithstanding the
provisions of Section 1302, Note Guarantees will be subject to termination and
discharge under the circumstances described in this Section 1303:
(1) The Company will automatically and unconditionally be released
from all obligations under its Note Guarantee, and such Note Guarantee
shall thereupon terminate and be discharged and of no further force or
effect, (i) with respect to the predecessor Company, as and when provided
in Section 502, (ii) pursuant to the terms of its Note Guarantee, (iii)
upon Defeasance or Covenant Defeasance of the relevant Issuer's
obligations, or satisfaction and discharge of this Indenture, as provided
in Article 11 or Article 12, and (iv) subject to Section 1301(d)(iii),
upon payment in full of the aggregate principal amount of all Notes then
outstanding for which the relevant Issuer is liable and all other
Guaranteed Note Obligations of such Issuer then due and owing.
(2) An Issuer will automatically and unconditionally be released
from all obligations under its Note Guarantee with respect to an Issuer or
the Issuers, as the case
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may be and such Note Guarantee shall thereupon terminate and be discharged
and of no further force or effect, (i) with respect to the relevant
predecessor Issuer, as and when provided in Section 502, (ii) pursuant to
the terms of its Note Guarantee, (iii) upon Defeasance or Covenant
Defeasance of the other Issuer's obligations, or satisfaction and
discharge of this Indenture, as provided in Article 11 or Article 12, and
(iv) subject to Section 1301(d)(iii), upon payment in full of the
aggregate principal amount of all Notes then outstanding for which the
other Issuer is liable and all other Guaranteed Note Obligations of the
other Issuer then due and owing.
(3) Any Subsidiary Guarantor will automatically and unconditionally
be released from all obligations under its Subsidiary Guarantee, and such
Subsidiary Guarantee shall thereupon terminate and be discharged and of no
further force or effect, (i) concurrently with any sale or disposition (by
merger or otherwise) of any Subsidiary Guarantor or any interest therein
in accordance with the terms of this Indenture (including Section 411) by
the Company or a Restricted Subsidiary, following which such Subsidiary
Guarantor (or the surviving Person in any such Merger, if applicable) is
not a Restricted Subsidiary of the Company, (ii) pursuant to the terms of
its Subsidiary Guarantee, (iii) at any time that such Subsidiary Guarantor
is released from all its obligations under all its Guarantees of payment
by the relevant Issuer of Indebtedness (other than Bank Indebtedness) of
such Issuer, (iv) upon the merger or consolidation of such Subsidiary
Guarantor with and into the Company, an Issuer or another Subsidiary
Guarantor that is the surviving Person in such merger or consolidation,
(v) upon Defeasance or Covenant Defeasance of the relevant Issuer's
obligations, or satisfaction and discharge of this Indenture, as provided
in Article 11 or Article 12, and (vi) subject to Section 1301(d)(iii),
upon payment in full of the aggregate principal amount of all Notes then
outstanding for which the relevant Issuer is liable and all other
Guaranteed Note Obligations of such Issuer then due and owing. Subject to
the foregoing, the Company will not permit any Subsidiary Guarantor to
consolidate or merge with or into any Restricted Subsidiary (or Person
that will become a Restricted Subsidiary as a result of such merger or
consolidation) that is not a Subsidiary Guarantor unless (x) such
Subsidiary Guarantor is the surviving Person or (y) such other Restricted
Subsidiary expressly assumes all the obligations of such Subsidiary
Guarantor under such Subsidiary Guarantor's Note Guarantee (if then
otherwise in effect) by executing and delivering to the Trustee a
supplemental indenture or one or more other documents or instruments in
form reasonably satisfactory to the Trustee.
Upon any such occurrence specified in this Section 1303, the Trustee shall
execute any documents reasonably required in order to evidence such release,
discharge and termination in respect of such Note Guarantee.
Section 1304. Agreement to Subordinate. Each Note Guarantee is, to
the extent and in the manner set forth in Article 15, subordinated and subject
in right of payment to the prior payment in full of all Senior Indebtedness of
the Note Guarantor giving such Note Guarantee and each Note Guarantee is made
subject to such provisions of this Indenture.
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Section 1305. Waiver of Subrogation. Each Note Guarantor hereby
irrevocably waives any claim or other rights that it may now or hereafter
acquire against either Issuer that arise from the existence, payment,
performance or enforcement of such Issuer's obligations under the Notes and this
Indenture or such Note Guarantor's obligations under its Note Guarantee and this
Indenture, including any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Holder of Notes against the Company, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, until this Indenture
is discharged and all of the Notes are discharged and paid in full. If any
amount shall be paid to any Note Guarantor in violation of the preceding
sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Note Guarantor for the benefit of, and
held in trust for the benefit of, the Holders of the Notes, and shall forthwith
be paid to the Trustee for the benefit of such Holders to be credited and
applied upon the Notes, whether matured or unmatured, in accordance with the
terms of this Indenture.
Section 1306. Notation Not Required. Neither the Issuers nor any
Note Guarantor shall be required to make a notation on the Notes to reflect any
Note Guarantee or any such release, termination or discharge thereof.
Section 1307. Successors and Assigns of Note Guarantors. All
covenants and agreements in this Indenture by each Note Guarantor shall bind its
respective successors and assigns, whether so expressed or not.
Section 1308. Execution and Delivery of Subsidiary Guarantees. (a)
The Company shall cause each Initial Mexican Subsidiary Guarantor, on the Issue
Date, to execute and deliver to the Trustee the First Supplemental Indenture
substantially in the form set forth in Exhibit D to this Indenture, providing
for its Subsidiary Guarantee.
(b) The Company shall cause each Restricted Subsidiary that is
required to become a Subsidiary Guarantor pursuant to Section 414, and each
Subsidiary of the Company that the Company causes to become a Subsidiary
Guarantor pursuant to Section 414, to promptly execute and deliver to the
Trustee a supplemental indenture substantially in the form set forth in Exhibit
E to this Indenture, or otherwise in form and substance reasonably satisfactory
to the Trustee, evidencing its Subsidiary Guarantee on substantially the terms
set forth in this Article 13. Concurrently therewith, the Company shall deliver
to the Trustee an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee to the effect that such supplemental indenture has
been duly authorized, executed and delivered by such Restricted Subsidiary and
that, subject to the applicable bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance, reorganization, moratorium and other laws now or
hereafter in effect affecting creditors' rights or remedies generally and the
general principles of equity (including standards of materiality, good faith,
fair dealing and reasonableness), whether considered in a proceeding at law or
at equity such supplemental indenture is a valid and binding agreement of such
Restricted Subsidiary, enforceable against such Restricted Subsidiary in
accordance with its terms.
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Section 1309. Notices. Notice to any Note Guarantor shall be
sufficient if addressed to such Note Guarantor care of the Company at the
address, place and manner provided in Section 109.
ARTICLE XIV
SUBORDINATION
Section 1401. Agreement To Subordinate. The Issuers agree, and each
Noteholder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 14, to the prior payment in full (when due) of all
existing and future Senior Indebtedness of the Issuers and that the
subordination is for the benefit of and enforceable by the holders of Senior
Indebtedness of the Issuers. The Notes shall in all respects rank pari passu
with all other Senior Subordinated Indebtedness of the Issuers and only
Indebtedness of the Issuers that is Senior Indebtedness shall rank senior to the
Notes in accordance with the provisions set forth herein. All provisions of this
Article 14 shall be subject to Section 1412.
Section 1402. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of an Issuer upon a total or partial liquidation
or dissolution or reorganization of or similar proceeding relating to such
Issuer or its property, or in a bankruptcy, insolvency, receivership or similar
proceeding relating to such Issuer or its property,
(i)the holders of Senior Indebtedness of such Issuer will be
entitled to receive payment in full of such Senior Indebtedness before the
Noteholders are entitled to receive any payment from such Issuer, and
(ii) until the Senior Indebtedness of such Issuer is paid in
full, any payment or distribution from such Issuer to which Noteholders
would be entitled but for this Article 14 will be made to holders of such
Senior Indebtedness as their interests may appear except that Noteholders
may receive shares of stock and any debt securities that are subordinated
to such Senior Indebtedness to at least the same extent as the Notes.
Section 1403. Default on Senior Indebtedness. Neither Issuer may pay
principal of, or premium (if any) or interest on, the Notes or make any deposit
pursuant to the provisions of Article 12 and may not otherwise purchase, redeem
or otherwise retire any Notes (collectively, "pay the Notes") if (i) any Senior
Indebtedness of such Issuer is not paid in full when and to the extent due or
(ii) any other default on Senior Indebtedness of such Issuer occurs and the
maturity of such Senior Indebtedness is accelerated in accordance with its terms
(either such event, a "Payment Default") unless, in either case, (x) the Payment
Default has been cured or waived and any such acceleration has been rescinded in
writing or (y) such Senior Indebtedness has been paid in full; provided,
however, an Issuer may pay the Notes without regard to the foregoing if such
Payment Default relates to Designated Senior Indebtedness and such Issuer and
the Trustee receive written notice approving such payment from the
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Representative for the Designated Senior Indebtedness with respect to which the
Payment Default has occurred and is continuing.
In addition, during the continuance of any default (other than a
Payment Default) with respect to any Designated Senior Indebtedness of an Issuer
pursuant to which the maturity thereof may be accelerated immediately without
further notice (except such notice as may be required to effect such
acceleration) or the expiration of any applicable grace period (a "Non-payment
Default"), such Issuer may not pay the Notes for the period specified as follows
(a "Payment Blockage Period"). The Payment Blockage Period shall commence upon
the receipt by the Trustee (with a copy to such Issuer) of written notice (a
"Blockage Notice") of such Non-payment Default from the Representative for such
Designated Senior Indebtedness specifying an election to effect a Payment
Blockage Period and shall end on the earliest to occur of the following events:
(i) 179 days shall have elapsed since such receipt of such Blockage Notice, (ii)
the Non-payment Default giving rise to such Blockage Notice is no longer
continuing (and no other Payment Default or Non-payment Default is then
continuing), (iii) such Designated Senior Indebtedness shall have been
discharged or repaid in full in cash or Cash Equivalents or (iv) such Payment
Blockage Period shall have been terminated by written notice to the Trustee and
such Issuer from the Person or Persons who gave such Blockage Notice. An Issuer
shall promptly resume payments on the Notes, including any missed payments,
after such Payment Blockage Period ends, unless the holders of such Designated
Senior Indebtedness or the Representative of such holders have accelerated the
maturity of such Designated Senior Indebtedness, or any Payment Default
otherwise exists. Not more than one Blockage Notice to the Issuers in the
aggregate may be given in any 360 consecutive day period, irrespective of the
number of defaults with respect to Designated Senior Indebtedness during such
period, except that if any Blockage Notice within such 360-day period is given
by or on behalf of any holders of Designated Senior Indebtedness other than Bank
Indebtedness, a Representative of holders of Bank Indebtedness may give another
Blockage Notice within such period. In no event may the total number of days
during which any Payment Blockage Period is in effect extend beyond 179 days
from the date of receipt by the Trustee of the relevant Blockage Notice, and
there must be a 181 consecutive day period during any 360 consecutive day period
during which no Payment Blockage Period is in effect.
Section 1404. Acceleration of Payment of Notes. If payment of the
Notes is accelerated because of an Event of Default, the Issuers or the Trustee
shall promptly notify the holders of the Designated Senior Indebtedness of the
Issuers (or the Representative of such holders) of the acceleration (provided in
the case of any such notice by the Trustee that the Trustee shall have received
Notice of such Designated Senior Indebtedness). If any Designated Senior
Indebtedness of an Issuer is outstanding, such acceleration will not be
effective with respect to such Issuer until the time specified in Section 602,
and such Issuer may not pay the Notes until five Business Days after such
holders or the Representative of each Designated Senior Indebtedness of such
Issuer receive notice of such acceleration and, thereafter, such Issuer may pay
the Notes only if this Article 14 otherwise permits payment at that time.
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Section 1405. When a Distribution Must Be Paid Over. If a
distribution from an Issuer is made to Holders that because of the provisions of
this Article 14 should not have been made to them, the Holders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness of such
Issuer and pay it over to them as their interests may appear.
Section 1406. Subrogation. After all Senior Indebtedness of an
Issuer is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness of such Issuer to
receive distributions applicable to such Senior Indebtedness. For purposes of
such subrogation, a distribution made under this Article 14 to holders of Senior
Indebtedness of an Issuer that otherwise would have been made to Holders is not,
as between such Issuer, its creditors other than the holders of such Senior
Indebtedness and Holders, a payment by such Issuer on such Senior Indebtedness,
it being understood that the provisions of this Article 14 are and are intended
solely for the purpose of defining the relative rights of the Holders, on the
one hand, and the holders of Senior Indebtedness of the Issuers, on the other
hand.
Section 1407. Relative Rights. This Article 14 defines the relative
rights of Holders and holders of Senior Indebtedness. Nothing in this Indenture
shall:
(i)impair, as between the Issuers and Holders, the obligation of
the Issuers which is absolute and unconditional, to pay principal of and
interest on the Notes in accordance with their terms; or
(ii) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to Holders.
Section 1408. Subordination May Not Be Impaired by Issuers. No right
of any holder of Senior Indebtedness of an Issuer to enforce the subordination
of the Indebtedness evidenced by the Notes shall be impaired by any act or
failure to act by either Issuer or by its failure to comply with this Indenture.
Section 1409. Rights of Trustee and Paying Agent. The Issuers shall
give prompt written notice to the Trustee of any fact known to the Issuers that
would prohibit the making of any payment to or by the Trustee in respect of the
Notes. Failure to give such notice shall not affect the subordination of the
Notes to Senior Indebtedness of the Issuers. Notwithstanding Section 1403, the
Trustee or Paying Agent may continue to make payments on the Notes and shall not
be charged with knowledge of the existence of facts that would prohibit the
making of any such payments unless, not less than two Business Days prior to the
date of such payment, a Trust Officer of the Trustee receives notice
satisfactory to it that such payments may not be made under this Article 14. The
Issuers, the Registrar or co-registrar, the Paying Agent, a Representative or a
holder of Senior Indebtedness may give the notice; provided, however, that, if
an issue of Senior Indebtedness has a Representative, only the Representative
may give the notice. The Trustee shall be entitled to rely on the delivery to it
of a written notice by a Person representing himself or itself to be a holder of
any Senior Indebtedness (or a Representative of
110
such holder) to establish that such notice has been given by a holder of such
Senior Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 14 with respect to any Senior Indebtedness that may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 14 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 707.
Section 1410. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
Section 1411. Article 14 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Notes by
reason of any provision in this Article 14 shall not be construed as preventing
the occurrence of a Default. Subject to Section 1404, nothing in this Article 14
shall have any effect on the right of the Holders or the Trustee to accelerate
the maturity of the Notes.
Section 1412. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 12 by the Trustee for
the payment of principal of and premium, if any, and interest on the Notes shall
not be subordinated to the prior payment of any Senior Indebtedness of the
Issuers or subject to the restrictions set forth in this Article 14, and none of
the Holders shall be obligated to pay over any such amount to either Issuer or
any holder of Senior Indebtedness of either Issuer or any other creditor of
either Issuer.
Section 1413. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 14, the Trustee and the Holders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 1402
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (iii) upon the Representatives for the holders of Senior Indebtedness
for the purpose of ascertaining the Persons entitled to participate in such
payment or distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Issuers, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 14. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 14, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and other facts pertinent to the rights of such
Person under this Article 14, and, if such evidence is not furnished, the
Trustee may defer any payment to such
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Person pending judicial determination as to the right of such Person to receive
such payment. The provisions of Sections 701 and 703 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 14.
Section 1414. Trustee To Effectuate Subordination. Each Holder by
accepting a Note authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination between the Holders and the holders of Senior Indebtedness of
the Issuers as provided in this Article 14 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 1415. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of the Issuers and shall not be liable to any
such holders if it shall mistakenly pay over or distribute to Holders or the
Issuers or any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 14 or otherwise. With
respect to the holders of Senior Indebtedness of the Issuers, the Trustee
undertakes to perform or to observe only such of its covenants or obligations as
are specifically set forth in this Article 14 or Article 15 and no implied
covenants or obligations with respect to holders of Senior Indebtedness of the
Issuers shall be read into this Indenture against the Trustee.
Section 1416. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
the Issuers, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Notes, to acquire and continue to hold, or to continue
to hold, such Senior Indebtedness and such holder of Senior Indebtedness shall
be deemed conclusively to have relied on such subordination provisions in
acquiring and continuing to hold, or in continuing to hold, such Senior
Indebtedness.
Section 1417. Trustee's Compensation Not Prejudiced. Nothing in this
Article 14 shall apply to amounts due to the Trustee pursuant to other Sections
of this Indenture.
ARTICLE XV
SUBORDINATION OF NOTE GUARANTEES
Section 1501. Agreement To Subordinate. Each Note Guarantor agrees,
and each Noteholder by accepting a Note agrees, that all payments pursuant to
such Note Guarantor's Note Guarantee made by or on behalf of such Note Guarantor
are subordinated in right of payment, to the extent and in the manner provided
in this Article 15, to the prior payment in full (when due) of all existing and
future Senior Indebtedness of such Note Guarantor and that the subordination is
for the benefit of and enforceable by the holders of Senior Indebtedness of such
Note Guarantor. Such Note Guarantee shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of such Note Guarantor and only
Indebtedness of such Note Guarantor that is Senior Indebtedness shall rank
senior to such Note Guarantee in accordance
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with the provisions set forth herein. All provisions of this Article 15 shall be
subject to Section 1512.
Section 1502. Liquidation, Dissolution, Bankruptcy. Upon any payment
or distribution of the assets of a Note Guarantor upon a total or partial
liquidation or dissolution or reorganization of or similar proceeding relating
to such Note Guarantor or its property, or in a bankruptcy, insolvency,
receivership or similar proceeding relating to such Note Guarantor or its
property,
(i)the holders of Senior Indebtedness of such Note Guarantor will
be entitled to receive payment in full of such Senior Indebtedness before
the Noteholders are entitled to receive any payment from such Note
Guarantor; and
(ii) until the Senior Indebtedness of such Note Guarantor is paid
in full, any payment or distribution from such Note Guarantor to which
Noteholders would be entitled but for this Article 15 will be made to
holders of such Senior Indebtedness as their interests may appear except
that Noteholders may receive shares of stock and any debt securities that
are subordinated to such Senior Indebtedness to at least the same extent
as the Note Guarantee of such Note Guarantor.
Section 1503. Default on Senior Indebtedness. No Note Guarantor may
make any payment pursuant to its Note Guarantee and may not otherwise purchase,
redeem or otherwise retire or defease any Notes (collectively, "pay its Note
Guarantee") if (i) any Senior Indebtedness of such Note Guarantor is not paid in
full when and to the extent due or (ii) any other default on Senior Indebtedness
of such Note Guarantor occurs and the maturity of such Senior Indebtedness is
accelerated in accordance with its terms (either such event, a "Guarantor
Payment Default") unless, in either case, (x) the Guarantor Payment Default has
been cured or waived and any such acceleration has been rescinded in writing or
(y) such Senior Indebtedness has been paid in full; provided, however, a Note
Guarantor may pay its Note Guarantee without regard to the foregoing if such
Guarantor Payment Default relates to Designated Senior Indebtedness and such
Note Guarantor and the Trustee receive written notice approving such payment
from the Representative for the Designated Senior Indebtedness with respect to
which the Guarantor Payment Default has occurred and is continuing.
In addition, no Note Guarantor may pay its Note Guarantee during the
continuance of a Payment Blockage Period after receipt by the Issuers and the
Trustee of a Blockage Notice under Section 1403. Notwithstanding the provisions
described in the immediately preceding sentence (but subject to the provisions
of the first paragraph of this Section 1503), a Note Guarantor shall promptly
resume payments, if any are required, pursuant to its Note Guarantee, including
any missed payments, after such Payment Blockage Period ends, unless the holders
of such Designated Senior Indebtedness or the Representative of such holders
have accelerated the maturity of such Designated Senior Indebtedness, or any
Payment Default otherwise exists.
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In addition, during the continuance of any default (other than a
Guarantor Payment Default) with respect to any Designated Senior Indebtedness of
a Note Guarantor pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace period (a
"Guarantor Non-payment Default"), such Note Guarantor may not pay its Note
Guarantee for the period specified as follows (a "Guarantor Payment Blockage
Period"). The Guarantor Payment Blockage Period shall commence upon the receipt
by the Trustee (with copy to such Note Guarantor) of written notice (a
"Guarantor Blockage Notice") of such Guarantor Non-payment Default from the
Representative for such Designated Senior Indebtedness specifying an election to
effect a Guarantor Payment Blockage Period and shall end on the earliest to
occur of the following events: (i) 179 days shall have elapsed since such
receipt of such Guarantor Blockage Notice, (ii) the Guarantor Non-payment
Default giving rise to such Blockage Notice is no longer continuing (and no
other Guarantor Payment Default or Guarantor Non-payment Default is then
continuing), (iii) such Designated Senior Indebtedness shall have been
discharged or repaid in full in cash or Cash Equivalents or (iv) such Guarantor
Payment Blockage Period shall have been terminated by written notice to the
Trustee and such Note Guarantor from the Person or Persons who gave such
Guarantor Blockage Notice. A Note Guarantor may pay its Note Guarantee, after
such Guarantor Payment Blockage Period ends, unless the holders of such
Designated Senior Indebtedness or the Representative of such holders have
accelerated the maturity of such Designated Senior Indebtedness, or any
Guarantor Payment Default otherwise exists. Not more than one Guarantor Blockage
Notice to a Note Guarantor in the aggregate may be given in any 360 consecutive
day period, irrespective of the number of defaults with respect to Designated
Senior Indebtedness of such Note Guarantor during such period, except that if
any Guarantor Blockage Notice within such 360-day period is given by or on
behalf of any holders of Designated Senior Indebtedness of such Note Guarantor
other than Bank Indebtedness, a Representative of holders of Bank Indebtedness
that is Guaranteed by such Note Guarantor may give another Guarantor Blockage
Notice within such period. In no event may the total number of days during which
any Guarantor Payment Blockage Period is in effect extend beyond 179 days from
the date of receipt by the Trustee of the relevant Guarantor Blockage Notice,
and there must be a 181 consecutive day period during any 360 consecutive day
period during which no Guarantor Payment Blockage Period is in effect.
Section 1504. Acceleration of Payment of Notes. If payment of the
Notes is accelerated because of an Event of Default, the relevant Note Guarantor
or the Trustee shall promptly notify the holders of the Designated Senior
Indebtedness of such Note Guarantor (or the Representative of such holders) of
the acceleration (provided in the case of any such notice by the Trustee that
the Trustee shall have received Notice of such Designated Senior Indebtedness).
If any Designated Senior Indebtedness of a Note Guarantor is outstanding, any
demand for payment under such Note Guarantee will not be effective with respect
to such Note Guarantor, and such Note Guarantor may not pay its Note Guarantee,
until five Business Days after such holders or the Representative of each
Designated Senior Indebtedness of such Note Guarantor receive notice of such
demand and, thereafter, such Note Guarantor may pay its Note Guarantee only if
this Article 15 otherwise permits payment at that time. If a demand for
114
payment is made on a Note Guarantor pursuant to Article 13, the Trustee shall
promptly notify the holders of the Designated Senior Indebtedness of such Note
Guarantor (or their Representatives) of such demand.
Section 1505. When a Distribution Must Be Paid Over. If a
distribution from a Note Guarantor is made to Holders that because of the
provisions of this Article 15 should not have been made to them, the Holders who
receive the distribution shall hold it in trust for holders of Senior
Indebtedness and pay it over to them as their interests may appear.
Section 1506. Subrogation. After all Senior Indebtedness of a Note
Guarantor is paid in full and until the Notes are paid in full, Holders shall be
subrogated to the rights of holders of Senior Indebtedness of such Note
Guarantor to receive distributions applicable to such Senior Indebtedness. For
purposes of such subrogation, a distribution made under this Article 15 to
holders of Senior Indebtedness of a Note Guarantor that otherwise would have
been made to Holders is not, as between such Note Guarantor, its creditors other
than the holders of such Senior Indebtedness, and Holders, a payment by such
Note Guarantor on such Senior Indebtedness, it being understood that the
provisions of this Article 15 are and are intended solely for the purpose of
defining the relative rights of the Holders, on the one hand, and the holders of
Senior Indebtedness of Note Guarantors, on the other hand.
Section 1507. Relative Rights. This Article 15 defines the relative
rights of Holders and holders of Senior Indebtedness of each Note Guarantor.
Nothing in this Indenture shall:
(i)impair, as between a Note Guarantor and Holders, the
obligation of such Note Guarantor, which is absolute and unconditional, to
pay principal of and interest on the Notes in accordance with their terms;
or
(ii) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness of a Note Guarantor to receive distributions otherwise
payable to Holders.
Section 1508. Subordination May Not Be Impaired by Note Guarantors.
No right of any holder of Senior Indebtedness of a Note Guarantor to enforce the
subordination of the payments pursuant to its Note Guarantee shall be impaired
by any act or failure to act by such Note Guarantor or by its failure to comply
with this Indenture.
Section 1509. Rights of Trustee and Paying Agent. A Note Guarantor
shall give prompt written notice to the Trustee of any fact known to it that
would prohibit the making of any payment to or by the Trustee in respect of its
Note Guarantee. Failure to give such notice shall not affect the subordination
of the payments pursuant to its Note Guarantee to Senior Indebtedness of such
Note Guarantor. Notwithstanding Section 1503, the Trustee or Paying Agent may
continue to make payments pursuant to such Note Guarantee and shall not be
charged with knowledge of the existence of facts that would prohibit the making
of any such payments unless, not less than two Business Days prior to the date
of such payment, a Trust Officer of the
115
Trustee receives notice satisfactory to it that such payments may not be made
under this Article 15. The Issuers, a Note Guarantor, the Registrar or
co-registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness of a Note Guarantor may give the notice; provided, however, that,
if an issue of Senior Indebtedness of a Note Guarantor has a Representative,
only the Representative may give the notice. The Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
or itself to be a holder of any Senior Indebtedness of a Note Guarantor (or a
Representative of such holder) to establish that such notice has been given by a
holder of such Senior Indebtedness or Representative thereof.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness of a Note Guarantor with the same rights it would have if it were
not Trustee. The Registrar and co-registrar and the Paying Agent may do the same
with like rights. The Trustee shall be entitled to all the rights set forth in
this Article 15 with respect to any Senior Indebtedness of a Note Guarantor
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness of such Note Guarantor; and nothing in Article 7 shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
15 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 707.
Section 1510. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of a Note Guarantor, the distribution may be made and the notice given to their
Representative (if any).
Section 1511. Article 15 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to a Note Guarantee
by reason of any provision in this Article 15 shall not be construed as
preventing the occurrence of a Default. Nothing in this Article 15 shall have
any effect on the right of the Holders or the Trustee to accelerate the maturity
of the Notes or make a demand for payment on any Note Guarantor pursuant to
Article 13 or the relevant Note Guarantee.
Section 1512. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of U.S. Government Obligations held in trust under Article 12 by the Trustee for
the payment of principal, premium, if any, or interest on the Notes shall not be
subordinated to the prior payment of any Senior Indebtedness of any Note
Guarantor or subject to the restrictions set forth in this Article 15, and none
of the Holders shall be obligated to pay over any such amount to any Note
Guarantor or any holder of Senior Indebtedness of any Note Guarantor or any
other creditor of any Note Guarantor.
Section 1513. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 15, the Trustee and the Holders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 1502
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Holders or (iii) upon the Representatives for the holders of Senior Indebtedness
of any Note Guarantor for the purpose of
116
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Indebtedness and other Indebtedness of
such Note Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to
this Article 15. In the event that the Trustee determines, in good faith, that
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article 15, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and other facts pertinent to the
rights of such Person under this Article 15, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment. The
provisions of Sections 701 and 703 shall be applicable to all actions or
omissions of actions by the Trustee pursuant to this Article 15.
Section 1514. Trustee To Effectuate Subordination. Each Holder by
accepting a Note authorizes and directs the Trustee on such Holder's behalf to
take such action as may be necessary or appropriate to acknowledge or effectuate
the subordination between the Holders and the holders of Senior Indebtedness of
any Note Guarantor as provided in this Article 15 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
Section 1515. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness of any Note Guarantor and shall not be liable to
any such holders if it shall mistakenly pay over or distribute to Holders or the
Issuers or any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article 15 or otherwise. With
respect to the holders of Senior Indebtedness, the Trustee undertakes to perform
or to observe only such of its covenants or obligations as are specifically set
forth in this Article 15 and no implied covenants or obligations with respect to
holders of Senior Indebtedness of any Note Guarantor shall be read into this
Indenture against the Trustee.
Section 1516. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder by accepting a Note acknowledges and
agrees that the foregoing subordination provisions are, and are intended to be,
an inducement and a consideration to each holder of any Senior Indebtedness of
any Note Guarantor, whether such Senior Indebtedness was created or acquired
before or after the issuance of the Notes, to acquire and continue to hold, or
to continue to hold, such Senior Indebtedness and such holder of such Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Indebtedness.
Section 1517. Trustee's Compensation Not Prejudiced. Nothing in this
Article 15 shall apply to amounts due to the Trustee pursuant to other Sections
of this Indenture.
117
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.
JAFRA COSMETICS INTERNATIONAL, INC.,
as Issuer on a several, and not joint,
basis, and as Note Guarantor
By: /s/ Xxxxx X. Xxxxx, III
----------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
DISTRIBUIDORA COMERCIAL JAFRA, S.A. de
C.V., as Issuer on a several, and not
joint, basis, and as Note Guarantor
By: /s/ Xxxxx X. Xxxxx, III
----------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
JAFRA WORLDWIDE HOLDINGS (LUX) S.ar.l
as Note Guarantor
By: /s/ Xxxxx X. Xxxxx, III
----------------------------------------
Name: Xxxxx X. Xxxxx, III
Title: Executive Vice President
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ Xxxxxx X. Xxxx, Xx.
----------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Vice President
EXHIBIT A
Form of Note(1)
(FACE OF NOTE)
JAFRA COSMETICS INTERNATIONAL, INC.
and
DISTRIBUIDORA COMERCIAL JAFRA, S.A. de C.V.
10 3/4% Senior Subordinated Notes Due 2011
CUSIP No. [o](2)[o](3)
No. $
Each of Jafra Cosmetics International, Inc., a corporation duly
organized and existing under the laws of the State of Delaware ("Jafra US"), and
Distribuidora Comercial Jafra, S.A. de C.V., a corporation organized under the
laws of Mexico ("Jafra Distribution (Mexico)", and together with Jafra US, the
"Issuers", such term to include any Successor of either (as such term is defined
in the Indenture referred to hereinafter), for value received, hereby severally,
but not jointly, promises to pay to , or registered
assigns, its several share in the proportion set forth below (with respect to
each Issuer, such relative proportion, a "Several Share") of the aggregate
principal sum of $ ([ ] United States Dollars) [(or
such lesser or greater amount as shall be outstanding hereunder from time to
time in accordance with Sections 312 and 313 of the Indenture referred to on the
reverse hereof)](4) (the "Principal Amount") on May 15, 2011; provided that
Jafra US shall be severally liable for only 40% of the Principal Amount (the
"Jafra US Portion") and Jafra Distribution (Mexico) shall be severally liable
for only 60% of the Principal Amount (the "Jafra Distribution (Mexico) Portion",
and each of the Jafra US Portion and the Jafra Distribution (Mexico) Portion, a
"Portion"). Each Issuer hereby severally, but not jointly, promises to pay
interest on its respective Portion, semi-annually on May 15 and November 15 in
each year, commencing November 15, 2003, at the rate of 10 3/4% per annum
[(subject to adjustment as provided below)](5) [, except that interest accrued
on this Note for periods prior to the date on which the Initial Note was
surrendered in exchange for this Note will accrue at the rate or rates borne by
such Initial Note from time to time during such periods](6), until the Principal
Amount is paid or made available for payment. [Interest on this Note will accrue
from the most recent date to which interest on this Note or any of its
Predecessor Notes has been paid or duly provided for or, if no interest has been
paid, from the Issue Date.](7) [Interest on this Note will accrue from the most
recent date to which interest on this Note or any of its Predecessor Notes has
been paid or duly
-------------
1 Insert any applicable legends from Article 2.
2 Include only for Initial Note.
3 Include only for Exchange Note.
4 Include only if the Note is issued in global form.
5 Include only for Initial Note.
6 Include only for Exchange Note.
7 Include only for Original Notes
1
provided for or, if no such interest has been paid, from [ , ](8).](9)
Interest on the Notes shall be computed on the basis of a 360-day year of twelve
30-day months. 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 Note (or one or more Predecessor Notes) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 1 or November 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 will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Note (or one or more Predecessor Notes) is registered
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 Notes not more than 15 days nor less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Notes
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
[The Holder of this Note is entitled to the benefits of the
Registration Rights Agreement, dated May 20, 2003, among the Issuers, Credit
Suisse First Boston LLC, Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and
the Note Guarantors named therein (the "Registration Rights Agreement"). Until
(i) the date on which this Note has been exchanged for a freely transferable
Exchange Security (as defined in the Registration Rights Agreement) in the
Registered Exchange Offer (as defined in the Registration Rights Agreement),
(ii) the date on which this Note has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement (as defined in the Registration Rights Agreement), or (iii) the date
on which this Note is distributed to the public pursuant to Rule 144 of the
Securities Act or is saleable pursuant to Rule 144(k) under the Securities Act
(or otherwise is eligible for resale pursuant to Rule 144 (or any successor
provision) under the Securities Act without volume restriction, if any): From
and including the date on which a Registration Default (as defined below) shall
occur to but excluding the date on which such Registration Default has been
cured, additional interest will accrue on this Note at the rate of (a) prior to
the 91st day of such period (for so long as such period is continuing), 0.25%
per annum and (b) thereafter (so long as such period is continuing), 0.50% per
annum. Any such additional interest shall not exceed such respective rates for
such respective periods, and shall not in any event exceed 0.50% per annum in
the aggregate, regardless of the number of Registration Defaults that shall have
occurred and be continuing. Any such additional interest shall be paid in the
same manner and on the same dates as interest payments in respect of this Note.
Following the cure of all Registration Defaults, the accrual of such additional
interest will cease. All Registration Defaults shall be deemed cured upon
consummation of the Exchange Offer. For purposes of the foregoing, each of the
following events, as more particularly defined in the Registration Rights
Agreement, is a "Registration Default": (i) neither the Exchange Offer
Registration Statement (as defined in the Registration Rights Agreement) nor a
Shelf Registration Statement has been
-------------
8 Insert first date of issuance of Additional Note and its Predecessor
Notes.
9 Include only for Additional Notes (and Exchange Notes issued in the
exchange therefor).
2
filed with the SEC on or before the 195th day after the Issue Date (or if such
day is not a business day, the first business day thereafter); (ii) the
Registered Exchange Offer is not consummated on or before the 255th day after
the Issue Date (or if such day is not a business day, the first business day
thereafter); (iii) if a Shelf Registration Statement is required to be filed
under the Registration Rights Agreement, (A) the Shelf Registration Statement is
not declared effective by the SEC on or before the 285th day after the Issue
Date (or if such day is not a business day, the first business day thereafter)
(or, in the case of a Shelf Registration Statement required to be filed in
response to any change in applicable interpretations of the staff of the SEC, if
later, on or before the 90th day after publication of such change) or (B) after
such Shelf Registration Statement is declared effective and during the time the
Company and the Issuers are required to use their reasonable best efforts to
keep the Shelf Registration Statement in effect, the Company and the Issuers
shall have suspended and be continuing to suspend the availability of the Shelf
Registration Statement, for more than 30 days in the aggregate in any
consecutive twelve-month period.](10) (11)
Payment of the principal of (and premium, if any) and interest on
this Note will be made at the office or agency of the Issuers maintained for
that purpose in The Borough of Manhattan, The City of New York; provided,
however, that at the option of the Issuers payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Note Register.
Reference is hereby made to the further provisions of this Note 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 executed by
the Trustee referred to on the reverse hereof by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-------------
10 Include only for Initial Note when required by the Registration Rights
Agreement.
11 For an Initial Additional Note, add any similar provision, if any, as may
be agreed by the Issuers with respect to additional interest on such
Initial Additional Note.
3
IN WITNESS WHEREOF, each of the Issuers has caused this instrument to
be duly executed.
JAFRA COSMETICS INTERNATIONAL, INC.
By
----------------------------------------
Name:
Title:
DISTRIBUIDORA COMERCIAL JAFRA, S.A. de C.V.
By
----------------------------------------
Name:
Title:
4
This is one of the Notes referred to in the within-mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION
As Trustee
By
----------------------------------------
Authorized Officer
Dated:
5
(REVERSE OF NOTE)
This Note is one of the duly authorized issue of 10 3/4% Senior
Subordinated Notes Due 2011 of the Issuers (herein called the "Notes"), issued
under an Indenture, dated as of May 20, 2003 (herein called the "Indenture,"
which term shall have the meanings assigned to it in such instrument), among the
Issuers, Jafra Worldwide Holdings (Lux) S.ar.l. and the other Note Guarantors
from time to time parties thereto, as Note Guarantors, and U.S. Bank National
Association, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Issuers, any other obligor upon this
Note, the Trustee and the Holders of the Notes and of the terms upon which the
Notes are, and are to be, authenticated and delivered. The terms of the Notes
include those stated in the Indenture and those made a part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended, as in effect from time
to time (the "TIA"). The Notes are subject to all such terms, and Holders are
referred to the Indenture and the TIA for a statement of such terms. Additional
Notes may be issued under the Indenture which may vote as a class with the Notes
and otherwise be treated as Notes for purposes of the Indenture.
All terms used in this Note that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Note is entitled to the benefits of the certain senior
subordinated Note Guarantees of the Note Guarantors and may hereafter be
entitled to certain other senior subordinated Note Guarantees made for the
benefit of the Holders. Reference is made to Article Thirteen of the Indenture
and to the Note Guarantees for terms relating to such Note Guarantees, including
the release, termination and discharge thereof. Neither the Issuers nor any Note
Guarantor shall be required to make any notation on this Note to reflect any
Note Guarantee or any such release, termination or discharge.
The Notes are subordinated to Senior Indebtedness of the Issuers, as
defined in the Indenture, and the Note Guarantees are subordinated to Senior
Indebtedness of the relevant Note Guarantor, as defined in the Indenture. To the
extent provided in the Indenture, Senior Indebtedness must be paid before the
Notes or the relevant Note Guarantee may be paid. The Issuers and the Note
Guarantors agree, and each Noteholder by accepting a Note agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give it effect and appoints the Trustee as attorney-in-fact for such
purposes.
The Notes will be redeemable, at the Issuers' option, in whole or in
part, and from time to time on and after May 15, 2007 and prior to maturity;
provided, however, that any such optional redemption may only be effected
concurrently by both of the Issuers on a pro rata basis as between their
respective Portions, based on the relative proportions of the Jafra US Portion
and the Jafra Distribution (Mexico) Portion. Such redemption may be made upon
notice mailed by first-class mail to each Holder's registered address in
6
accordance with the Indenture. Any such redemption and notice may, in the
Issuers' discretion, be subject to the satisfaction of one or more conditions
precedent. The Notes will be so redeemable at the following Redemption Prices
(expressed as a percentage of principal amount), plus accrued interest, if any,
to the relevant Redemption Date (subject to the right of Holders of record on
the relevant Regular Record Date to receive interest due on the relevant
Interest Payment Date), if redeemed during the 12-month period commencing on May
15 of the years set forth below:
REDEMPTION
PERIOD PRICE
------ -----
2007............................. 105.375%
2008............................. 102.688%
2009 and thereafter.............. 100.000%
In addition, at any time and from time to time prior to May 15, 2006, the
Issuers at their option may concurrently redeem the Notes, on a pro rata basis
as between their respective Portions (based on the relative proportions of the
Jafra US Portion and the Jafra Distribution (Mexico) Portion), in an aggregate
principal amount equal to up to 35% of the original aggregate principal amount
of the Notes (including the principal amount of any Additional Notes), with
funds in an aggregate amount not exceeding the aggregate cash proceeds of one or
more Equity Offerings, at a Redemption Price (expressed as a percentage of
principal amount thereof) of 110.750% plus accrued interest, if any, to the
Redemption Date (subject to the right of Holders of record on the relevant
Record Date to receive interest due on the relevant Interest Payment Date);
provided, however, that an aggregate principal amount of the Notes equal to at
least 65% of the original aggregate principal amount of the Notes (including the
principal amount of any Additional Notes) must remain outstanding after each
such redemption. The Issuers may make such redemption upon notice mailed by
first-class mail to each Holder's registered address in accordance with the
Indenture (but in no event more than 180 days after the completion of the
related Equity Offering). Any such notice may be given prior to the completion
of the related Equity Offering, and any such redemption or notice may, at the
Issuers' discretion, be subject to the satisfaction of one or more conditions
precedent, including the completion of the related Equity Offering.
The Jafra Distribution (Mexico) Portion of the Notes may be redeemed, at
the option of Jafra Distribution (Mexico), at any time as a whole but not in
part, on not less than 30 nor more than 60 days' notice in accordance with the
Indenture at a Redemption Price equal to 100% of the principal amount thereof,
plus accrued and unpaid interest (if any) to the date of redemption (subject to
the right of Holders of record on the relevant Record Date to receive interest
due on the relevant Interest Payment Date), in the event Jafra Distribution
(Mexico), any successor to Jafra Distribution (Mexico) or any current or future
Note Guarantor of such Jafra Distribution (Mexico) Portion has become or would
become obligated to pay, on the next date on which any amount would be payable
with respect to the Notes, and such obligation cannot be avoided by such
Person's taking reasonable
7
measures available to it, any Additional Amounts in excess of Additional Amounts
that Jafra Distribution (Mexico), such successor or such Note Guarantor would be
required to pay if payments by Jafra Distribution (Mexico), such successor or
such Note Guarantor were subject to a 4.9% Mexican withholding tax as a result
of a change in or an amendment to applicable treaties or laws (including any
regulations promulgated thereunder) of Mexico (or any political subdivision or
taxing authority thereof or therein), or any change in or amendment to any
official position regarding the application or interpretation of such treaties,
laws or regulations, which change or amendment is announced or becomes effective
on or after May 2, 2003 ("Excessive Additional Amounts"); provided, however,
that no such notice of redemption may be given earlier than 60 days prior to the
earliest date on which Jafra Distribution (Mexico), such successor or such Note
Guarantor would, but for such redemption, be obligated to pay such Excessive
Additional Amounts. Prior to the publication of any notice of redemption
pursuant to this provision, Jafra Distribution (Mexico), any successor to Jafra
Distribution (Mexico) or any Note Guarantor will deliver to the Trustee (a) a
certificate duly signed by an officer of Jafra Distribution (Mexico), such
successor or such Note Guarantor stating that Jafra Distribution (Mexico), such
successor or such Note Guarantor is entitled to effect such redemption and
setting forth a statement of facts showing that the conditions precedent to the
right of Jafra Distribution (Mexico), such successor or such Note Guarantor so
to redeem have occurred and (b) a written opinion of Mexican legal counsel
reasonably acceptable to the Trustee to the effect that Jafra Distribution
(Mexico), such successor or such Note Guarantor has or will become obligated to
pay such Excessive Additional Amounts as a result of an amendment or change
referred to in this provision.
In the event of any partial redemption (other than a redemption
described in the immediately preceding paragraph), the several obligation of
each Issuer for each Note that remains outstanding shall continue in the same
proportion as the relative proportions of the Jafra US Portion and the Jafra
Distribution (Mexico) Portion, respectively.
The Indenture provides that, upon the occurrence of a Change of
Control, each Holder will have the right to require that the Issuers repurchase,
on a several basis in proportion to each Issuer's Several Share in respect of
the Notes, all or any part of such Holder's Notes at a repurchase price in cash
equal to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of such repurchase; provided, however, that the
Issuers shall not be obligated to purchase Notes in the event they have
exercised their right to redeem all the Notes as described above.
The Notes will not be entitled to the benefit of a sinking fund.
The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note or certain restrictive covenants and certain
Events of Default with respect to this Note, in each case upon compliance with
certain conditions set forth in the Indenture.
8
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuers and the rights of the Holders of the Notes to be affected under the
Indenture at any time by the Issuers and the Trustee with the consent of the
Holders of at least a majority in principal amount of the Notes at the time
Outstanding to be affected. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Notes at the
time Outstanding, on behalf of the Holders of all Notes, to waive compliance by
the Issuers with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Note shall be conclusive and binding upon such Holder and upon
all future Holders of this Note and of any Note 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 Note.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Notes, the Holders of not less than 25% in principal amount of the Notes at the
time Outstanding shall have made written request to the Trustee to pursue such
remedy in respect of such Event of Default as Trustee and offered the Trustee
reasonable security or indemnity, and the Trustee shall not have received from
the Holders of a majority in principal amount of Notes at the time Outstanding a
direction inconsistent with such request, and shall have failed to institute any
such proceeding, for 60 days after receipt of such notice, request and offer of
security or indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Note for the enforcement of any payment of principal hereof
or any premium or interest hereon on or after the respective due dates expressed
herein.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the several obligation of each Issuer,
which is absolute and unconditional, to pay its Several Share of the principal
of and any premium and interest on this Note 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 Note is registrable in the Note
Register, upon surrender of this Note for registration of transfer at the office
or agency of the Issuers in a Place of Payment, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Issuers and the
Note Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Notes of like tenor, of
authorized
9
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Notes are
exchangeable for a like aggregate principal amount of Notes of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration, transfer or
exchange, but the Issuers may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration or transfer,
the Company, the Issuers, any other obligor in respect of this Note, the Trustee
and any agent of the Company, the Issuers, such other obligor or the Trustee may
treat the Person in whose name this Note is registered as the owner hereof for
all purposes, whether or not this Note be overdue, and none of the Company, the
Issuers, or any other obligor upon this Note, the Trustee nor any such agent
shall be affected by notice to the contrary.
No director, officer, employee, incorporator or stockholder of the
Company, the Issuers, any Note Guarantor or any Subsidiary of any thereof shall
have any liability for any obligation of the Company, the Issuers or any Note
Guarantor under the Indenture, the Notes or any Note Guarantee, or for any claim
based on, in respect of, or by reason of, any such obligation or its creation.
Each Holder, by accepting this Note, hereby waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
THE INDENTURE, THIS NOTE AND THE NOTE GUARANTEES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE SAME
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE TRUSTEE, THE ISSUERS, ANY
OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE
HOLDERS, AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR
STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE NOTES AND
THE NOTE GUARANTEES.
10
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned holder hereby sell(s) assign(s)
and transfer(s) unto
--------------------------------------------------------------------------------
Insert Taxpayer Identification No.
--------------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of
assignee)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
--------------------------------------------------------------------------------
attorney to transfer such Note on the books of the Issuers with full power of
substitution in the premises.
[Check One]
[ ](a) this Note is being transferred in compliance with the exemption from
registration under the Securities Act of 1933, as amended, provided
by Rule 144A thereunder.
or
[ ](b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Trustee or other Note
Registrar shall not be obligated to register this Note in the name of any Person
other than the Holder hereof unless and until the conditions to any such
transfer of registration set forth herein and in Section 313 of the Indenture
shall have been satisfied.](12)
Date:
-----------------
----------------------
-------------
12 Include only for an Initial Note or an Initial Additional Note, in
accordance with the Indenture.
11
----------------------------------------
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
Signature Guarantee:
--------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
12
[TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act 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
Issuers as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:
------------------ -------------------------
NOTICE: To be executed by an
executive officer](13)
-------------
13 Include only for an Initial Note or an Initial Additional Note, in
accordance with the Indenture.
13
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to have this Note purchased by the Issuers pursuant to
Section 411 or 415 of the Indenture, check the box: [ ].
If you wish to have a portion of this Note purchased by the Issuers
pursuant to Section 411 or 415 of the Indenture, state the amount (in principal
amount) below:
$
----------------
Date:
------------------------------
Your Signature:
----------------------------------
(Sign exactly as your name appears on the other side of this Note)
Signature Guarantee:
-------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Note Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
14
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
The following increases or decreases in this Global Note have been
made:
Date of Amount of Amount of Principal Signature of
Exchange decreases in increases in amount authorized
Principal Principal of this Global officer of
Amount of this Amount of Note following Trustee or
Global Note this Global such decreases Notes
Note or increases Custodian
15
EXHIBIT B
Form of Certificate of Beneficial Ownership
On or after June 30, 2003
U.S. BANK NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Department
Re: Jafra Cosmetics International, Inc. and Distribuidora Comercial
Jafra, S.A. de C.V., (together, the "Issuers")
10 3/4% Senior Subordinated Notes due 2011 (the "Notes")
Ladies and Gentlemen:
This letter relates to $ principal amount of Notes
represented by the offshore [temporary] global note certificate (the "Offshore
[Temporary] Global Note"). Pursuant to Section 313(3) of the Indenture dated as
of May 20, 2003 relating to the Notes (the "Indenture"), we hereby certify that
(1) we are the beneficial owner of such principal amount of Notes represented by
the Offshore [Temporary] Global Note and (2) we are either (i) a Non-U.S. Person
to whom the Notes could be transferred in accordance with Rule 904 of Regulation
S ("Regulation S") promulgated under the Securities Act of 1933, as amended (the
"Act") or (ii) a U.S. Person who purchased securities in a transaction that did
not require registration under the Act.
You, the Issuers and counsel for the Issuers are entitled to rely upon
this letter and are irrevocably authorized to produce this letter or a copy
hereof to any interested party in any administrative or legal proceedings or
official inquiry with respect to the matters covered hereby. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:
Authorized Signature
1
EXHIBIT C
Form of Regulation S Certificate
Regulation S Certificate
U.S. BANK NATIONAL ASSOCIATION
000 Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Corporate Trust Department
Re: Jafra Cosmetics International, Inc. and Distribuidora Comercial
Jafra, S.A. de C.V., (together, the "Issuers")
10 3/4% Senior Subordinated Notes due 2011 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S ("Regulation S") under the Securities Act of 1933,
as amended (the "Securities Act"), and accordingly, we hereby certify as
follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is
acting is excluded from the definition of "U.S. person" pursuant to Rule
902(k) of Regulation S under the circumstances described in Rule 902(h)(3)
of Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer
was outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b)
the transaction was executed in, on or through the facilities of a
designated offshore securities market, and neither we nor any person
acting on our behalf knows that the transaction was pre-arranged with a
buyer in the United States.
3. No directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(a)(2) or Rule 904(a)(2)
of Regulation S, as applicable.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the Notes, and the proposed
transfer takes place before end of the distribution compliance period
under Regulation S, or we are an officer or
1
director of either of the Issuers or a distributor, we certify that the
proposed transfer is being made in accordance with the provisions of Rules
903 and 904 of Regulation S.
6. If the proposed transfer takes place before the end of the
distribution compliance period under Regulation S, the beneficial interest
in the Notes so transferred will be held immediately thereafter through
Euroclear (as defined in such Indenture) or Clearstream (as defined in
such Indenture).
7. We have advised the transferee of the transfer restrictions
applicable to the Notes.
You, the Issuers and counsel for the Issuers are entitled to rely
upon this Certificate and are irrevocably authorized to produce this Certificate
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby. Terms
used in this certificate have the meanings set forth in Regulation S.
Very truly yours,
[NAME OF SELLER]
By:
-----------------------------------
Name:
Title:
Address:
Date of this Certificate: __________________ ___, 200___
2
EXHIBIT D
Form of First Supplemental Indenture
FIRST SUPPLEMENTAL INDENTURE dated as of May 20, 2003 (this
"Supplemental Indenture"), among Jafra Cosmetics International, S.A. de C.V.,
Distribuidora Venus, S.A. de C.V., Dirsamex, S.A. de C.V., Serviday, S.A. de
C.V., Cosmeticos y Fragancias, S.A. de C.V., JafraFin S.A. de C.V. and Jafra
Cosmetics, S.A. de C.V., each a corporation organized under the laws of Mexico,
(each an "Initial Mexican Subsidiary Guarantor" and, collectively, the "Initial
Mexican Subsidiary Guarantors"), Jafra Cosmetics International, Inc., a
corporation duly organized and existing under the laws of the State of Delaware,
and Distribuidora Comercial Jafra, S.A. de C.V., a corporation organized under
the laws of Mexico (together with their respective successors and assigns, the
"Issuers"), and each other existing Note Guarantor under the Indenture referred
to below (the "Existing Guarantors"), and U.S. Bank National Association, as
Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Issuers, the Existing Guarantors and the Trustee have
heretofore become parties to an Indenture, dated as of May 20, 2003 (as amended,
supplemented, waived or otherwise modified, the "Indenture"), providing for the
issuance of 10 3/4% Senior Subordinated Notes Due 2011 of the Issuers (the
"Notes");
WHEREAS, Section 1308 of the Indenture provides that the Issuers are
required to or may cause certain Subsidiary Guarantors to execute and deliver to
the Trustee a supplemental indenture pursuant to which such Subsidiary
Guarantors shall guarantee their relevant parent Issuer's obligations under the
Notes pursuant to a Note Guarantee on the terms and conditions set forth herein
and in Article Thirteen of the Indenture;
WHEREAS, each Subsidiary Guarantor hereto desires to enter into such
supplemental indenture for good and valuable consideration, including but not
limited to substantial economic benefit in that the financial performance and
condition of such Subsidiary Guarantor is dependent on the financial performance
and condition of the relevant Issuer, the obligations hereunder of which such
Subsidiary Guarantor has guaranteed, and on such Subsidiary Guarantor's access
to working capital through such Issuer's access to revolving credit borrowings
under the Senior Credit Agreement; and
WHEREAS, pursuant to Section 901 of the Indenture, the parties
hereto are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Initial Mexican Subsidiary Guarantors, the Issuers, the Existing Guarantors and
the Trustee mutually covenant and agree for the benefit of the Holders of the
Notes as follows:
1
1. Defined Terms. As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recitals hereto are used herein
as therein defined. The words "herein," "hereof" and "hereby" and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.
2. Agreement to Guarantee. Each Initial Mexican Subsidiary Guarantor
hereby agrees, jointly and severally with all other Initial Mexican Subsidiary
Guarantors, fully and unconditionally, to guarantee, on a senior subordinated
basis, the Guaranteed Jafra Distribution (Mexico) Obligations under the
Indenture and the Notes on the terms and subject to the conditions set forth in
Article Thirteen of the Indenture and to be bound by (and shall be entitled to
the benefits of) all other applicable provisions of the Indenture as a Note
Guarantor. The Note Guarantee of each Initial Mexican Subsidiary Guarantor is
subject to the subordination provisions of the Indenture.
3. Termination, Release and Discharge. Each Initial Mexican
Subsidiary Guarantor's Note Guarantee shall terminate and be of no further force
or effect, and such Initial Mexican Subsidiary Guarantor shall be released and
discharged from all obligations in respect of such Note Guarantee, as and when
provided in Section 1303 of the Indenture.
4. Parties. Nothing in this Supplemental Indenture is intended or
shall be construed to give any Person, other than the Holders and the Trustee,
any legal or equitable right, remedy or claim under or in respect of each Note
Guarantor's Note Guarantee hereunder or any provision contained herein or in
Article Thirteen of the Indenture.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE SAME
ARE NOT MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE TRUSTEE, THE ISSUERS, ANY
OTHER OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE
HOLDERS AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR
STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
6. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. The Trustee makes
no representation or warranty as to the validity or sufficiency of this
Supplemental Indenture or as to the accuracy of the recitals to this
Supplemental Indenture.
2
7. Counterparts. The parties hereto may sign one or more copies of
this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement.
8. Headings. The section headings herein are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
JAFRA COSMETICS INTERNATIONAL, S.A.
de C.V., as Initial Mexican
Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
DISTRIBUIDORA VENUS, S.A. de C.V., as
Initial Mexican Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
DIRSAMEX, S.A. de C.V., as Initial
Mexican Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
SERVIDAY, S.A. de C.V., as Initial
Mexican Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
4
COSMETICOS Y FRAGANCIAS, S.A. de
C.V., as Initial Mexican Subsidiary
Guarantor
By:
---------------------------------
Name:
Title:
JAFRA COSMETICS, S.A. de C.V., as
Initial Mexican Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
JAFRA COSMETICS INTERNATIONAL, INC.,
as Issuer on a several, and not
joint, basis and as an Existing
Guarantor
By:
---------------------------------
Name:
Title:
DISTRIBUIDORA COMERCIAL JAFRA, S.A.
de C.V., as Issuer on a several, and
not joint, basis and as an Existing
Guarantor
By:
---------------------------------
Name:
Title:
JAFRA WORLDWIDE HOLDINGS (Lux),
S.AR.L., as an Existing Guarantor
By:
---------------------------------
Name:
Title:
5
JAFRAFIN, S.A. DE C.V., as Initial
Mexican Subsidiary Guarantor
By:
---------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
---------------------------------
Name:
Title:
6
EXHIBIT E
Form of Supplemental Indenture in Respect of Note Guarantee
SUPPLEMENTAL INDENTURE, dated as of [ ] (this "Supplemental
Indenture"), among [name of [Mexican][U.S.](14) Guarantor] (the "[Mexican][U.S.]
Subsidiary Guarantor"), Jafra Cosmetics International, Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and
Distribuidora Comercial Jafra, S.A. de C.V., a corporation organized under the
laws of Mexico (together with their respective successors and assigns, the
"Issuers"), and each other then existing Note Guarantor under the Indenture
referred to below (the "Existing Guarantors"), and U.S. Bank National
Association, as Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Issuers, any Existing Guarantors and the Trustee have
heretofore become parties to an Indenture, dated as of May 20, 2003 (as amended,
supplemented, waived or otherwise modified, the "Indenture"), providing for the
issuance of 10 3/4% Senior Subordinated Notes Due 2011 of the Issuers (the
"Notes");
WHEREAS, Section 1308 of the Indenture provides that the Issuers are
required to cause the [Mexican][U.S.] Subsidiary Guarantors to execute and
deliver to the Trustee a supplemental indenture pursuant to which the
[Mexican][U.S.] Subsidiary Guarantors shall guarantee their relevant parent
Issuer's Guaranteed Note Obligations under the Notes pursuant to a Note
Guarantee on the terms and conditions set forth herein and in Article Thirteen
of the Indenture;
WHEREAS, each [Mexican][U.S.] Subsidiary Guarantor desires to enter
into such supplemental indenture for good and valuable consideration, including
substantial economic benefit in that the financial performance and condition of
such Note Guarantor is dependent on the financial performance and condition of
the relevant Issuer, the obligations hereunder of which such Note Guarantor has
guaranteed, and on such Note Guarantor's access to working capital through such
Issuer's access to revolving credit borrowings under the Senior Credit
Agreement; and
WHEREAS, pursuant to Section 901 of the Indenture, the parties
hereto are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Holder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
[Mexican] [U.S.] Subsidiary Guarantors, the Issuers, the Existing Guarantors and
the Trustee mutually covenant and agree for the benefit of the Holders of the
Notes as follows:
-------------
14 Insert as appropriate.
1
1. Defined Terms. As used in this Supplemental Indenture, terms
defined in the Indenture or in the preamble or recital hereto are used herein as
therein defined. The words "herein," "hereof" and "hereby" and other words of
similar import used in this Supplemental Indenture refer to this Supplemental
Indenture as a whole and not to any particular section hereof.
2. Agreement to Guarantee. [The] [Each] [Mexican][U.S.] Subsidiary
Guarantor hereby agrees, jointly and severally with [all] [any] other
[Mexican][U.S.] Subsidiary Guarantors and fully and unconditionally, to
guarantee the Guaranteed [Jafra Distribution (Mexico)] [Jafra US] Obligations
under the Indenture and the Notes on the terms and subject to the conditions set
forth in Article Thirteen of the Indenture and to be bound by (and shall be
entitled to the benefits of) all other applicable provisions of the Indenture as
a Note Guarantor. The Note Guarantee of each [Mexican] [U.S.] Subsidiary
Guarantor is subject to the subordination provisions of the Indenture.
3. Termination, Release and Discharge. [The] [Each] [Mexican][U.S.]
Subsidiary Guarantor's Note Guarantee shall terminate and be of no further force
or effect, and [the] [each] [Mexican][U.S.] Subsidiary Guarantor shall be
released and discharged from all obligations in respect of such Note Guarantee,
as and when provided in Section 1303 of the Indenture.
4. Parties. Nothing in this Supplemental Indenture is intended or
shall be construed to give any Person, other than the Holders and the Trustee,
any legal or equitable right, remedy or claim under or in respect of [the]
[each] [Mexican][U.S.] Subsidiary Guarantor's Note Guarantee or any provision
contained herein or in Article Thirteen of the Indenture.
5. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PRINCIPLES OF CONFLICT OF LAWS TO THE EXTENT THAT THE SAME
ARE MANDATORILY APPLICABLE BY STATUTE AND THE APPLICATION OF THE LAW OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY. THE TRUSTEE, THE ISSUERS, ANY OTHER
OBLIGOR IN RESPECT OF THE NOTES AND (BY THEIR ACCEPTANCE OF THE NOTES) THE
HOLDERS AGREE TO SUBMIT TO THE JURISDICTION OF ANY UNITED STATES FEDERAL OR
STATE COURT LOCATED IN THE BOROUGH OF MANHATTAN, IN THE CITY OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS SUPPLEMENTAL INDENTURE.
6. Ratification of Indenture; Supplemental Indentures Part of
Indenture. Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This Supplemental Indenture shall form a
part of the Indenture for all purposes, and every Holder of Notes heretofore or
hereafter authenticated and delivered shall be bound hereby. The
2
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture or as to the accuracy of the recitals to this
Supplemental Indenture.
7. Counterparts. The parties hereto may sign one or more copies of
this Supplemental Indenture in counterparts, all of which together shall
constitute one and the same agreement.
8. Headings. The section headings herein are for convenience of
reference only and shall not be deemed to alter or affect the meaning or
interpretation of any provisions hereof.
3
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NAME OF NOTE GUARANTOR], as
[Mexican][U.S.] Subsidiary Guarantor
By:
-------------------------------------------
Name:
Title:
JAFRA COSMETICS INTERNATIONAL, INC.,
as Issuer on a several, and not
joint, basis, and as an Existing
Guarantor
By:
----------------------------------------
Name:
Title:
DISTRIBUIDORA COMERCIAL JAFRA, S.A.
de C.V., as Issuer on a several, and
not joint, basis and as an Existing
Guarantor
By:
----------------------------------------
Name:
Title:
[NAMES OF EXISTING GUARANTORS], as
Existing Guarantor
By:
----------------------------------------
Name:
Title:
4
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
----------------------------------------
Name:
Title:
5
