EXHIBIT 4.1
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BRAZOS SPORTSWEAR, INC.,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
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INDENTURE
Dated as of July 2, 1997
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$100,000,000
10 1/2% Senior Notes Due 2007
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS............................................1
SECTION 1.2 OTHER DEFINITIONS.....................................25
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.....26
SECTION 1.4 RULES OF CONSTRUCTION.................................26
ARTICLE II
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY.......................................27
SECTION 2.2 FORM OF SECURITIES....................................27
ARTICLE III
THE SECURITIES
SECTION 3.1 TITLE AND TERMS.......................................28
SECTION 3.2 DENOMINATIONS.........................................28
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING........28
SECTION 3.4 TEMPORARY SECURITIES..................................30
SECTION 3.5 REGISTRATION OF TRANSFER AND EXCHANGE.................30
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES......31
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED........32
SECTION 3.8 PERSONS DEEMED OWNERS.................................33
SECTION 3.9 CANCELLATION..........................................33
SECTION 3.10 COMPUTATION OF INTEREST...............................34
SECTION 3.11 CUSIP NUMBERS.........................................34
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE...............34
SECTION 4.2 APPLICATION OF TRUST MONEY............................35
ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.....................................36
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT....37
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SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT
BY TRUSTEE............................................39
SECTION 5.4 TRUSTEE MAY FILE PROOF OF CLAIM.......................40
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES............................................41
SECTION 5.6 APPLICATION OF MONEY COLLECTED........................41
SECTION 5.7 LIMITATIONS ON SUITS..................................41
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, LIQUIDATED DAMAGES AND INTEREST.............42
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES....................42
SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE........................43
SECTION 5.11 DELAY OR OMISSION NOT WAIVER..........................43
SECTION 5.12 CONTROL BY HOLDERS....................................43
SECTION 5.13 WAIVER OF PAST DEFAULTS...............................43
SECTION 5.14 WAIVER OF STAY, EXTENSION OR USURY LAWS...............44
SECTION 5.15 UNDERTAKING FOR COSTS.................................44
ARTICLE VI
THE TRUSTEE
SECTION 6.1 DUTIES OF TRUSTEE.....................................44
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE.............................45
SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES............................................47
SECTION 6.4 MAY HOLD SECURITIES...................................47
SECTION 6.5 MONEY HELD IN TRUST...................................47
SECTION 6.6 COMPENSATION AND REIMBURSEMENT........................47
SECTION 6.7 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY...............48
SECTION 6.8 CONFLICTING INTERESTS.................................48
SECTION 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.....48
SECTION 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR................50
SECTION 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS...........................................50
SECTION 6.12 NOTICE OF DEFAULTS....................................51
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 HOLDERS' LISTS; HOLDER COMMUNICATIONS;
DISCLOSURES RESPECTING HOLDERS........................51
SECTION 7.2 REPORTS BY THE TRUSTEE................................51
SECTION 7.3 REPORTS BY THE COMPANY................................52
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS..53
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SECTION 8.2 SUCCESSOR SUBSTITUTED.................................54
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS....55
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.......56
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES..................57
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.....................57
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT...................57
SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES....57
SECTION 9.7 NOTICE OF SUPPLEMENTAL INDENTURES AND WAIVERS.........58
ARTICLE X
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM OR LIQUIDATED DAMAGES,
IF ANY, AND INTEREST..................................58
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.......................58
SECTION 10.3 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.......59
SECTION 10.4 CORPORATE EXISTENCE...................................60
SECTION 10.5 PAYMENT OF TAXES; MAINTENANCE OF PROPERTIES;
INSURANCE.............................................60
SECTION 10.6 LIMITATION ON SALE/LEASEBACK TRANSACTIONS.............61
SECTION 10.7 LIMITATION ON CONDUCT OF BUSINESS.....................61
SECTION 10.8 STATEMENT BY OFFICERS AS TO DEFAULT...................61
SECTION 10.9 PROVISION OF FINANCIAL INFORMATION....................62
SECTION 10.10 LIMITATION ON RESTRICTED PAYMENTS.....................62
SECTION 10.11 LIMITATION ON INDEBTEDNESS AND DISQUALIFIED CAPITAL
STOCK.................................................64
SECTION 10.12 LIMITATION ON ISSUANCES AND SALES OF
CAPITAL STOCK OF RESTRICTED SUBSIDIARIES..............64
SECTION 10.13 LIMITATION ON LIENS...................................65
SECTION 10.14 OFFER TO PURCHASE SECURITIES UPON CHANGE OF CONTROL...65
SECTION 10.15 LIMITATION ON ASSET SALES.............................67
SECTION 10.16 NET PROCEEDS OFFER....................................68
SECTION 10.17 LIMITATION ON TRANSACTIONS WITH AFFILIATES............70
SECTION 10.18 LIMITATION ON DIVIDEND AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES........70
SECTION 10.19 LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES.........71
SECTION 10.20 WAIVER OF CERTAIN COVENANTS...........................71
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ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 RIGHT OF REDEMPTION...................................71
SECTION 11.2 APPLICABILITY OF ARTICLE..............................72
SECTION 11.3 ELECTION TO REDEEM; NOTICE TO TRUSTEE.................72
SECTION 11.4 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.....73
SECTION 11.5 NOTICE OF REDEMPTION..................................73
SECTION 11.6 DEPOSIT OF REDEMPTION PRICE...........................74
SECTION 11.7 SECURITIES PAYABLE ON REDEMPTION DATE.................74
SECTION 11.8 SECURITIES REDEEMED IN PART...........................75
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE............................................75
SECTION 12.2 DEFEASANCE AND DISCHARGE..............................75
SECTION 12.3 COVENANT DEFEASANCE...................................76
SECTION 12.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.......76
SECTION 12.5 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS
TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS...78
SECTION 12.6 REINSTATEMENT.........................................79
ARTICLE XIII
SUBSIDIARY GUARANTEES
SECTION 13.1 UNCONDITIONAL GUARANTEE...............................79
SECTION 13.2 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.......81
SECTION 13.3 LIMITATION ON MERGER OR CONSOLIDATION.................81
SECTION 13.4 RELEASE OF SUBSIDIARY GUARANTORS......................82
SECTION 13.5 ADDITIONAL SUBSIDIARY GUARANTORS......................83
SECTION 13.6 LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY........83
SECTION 13.7 CONTRIBUTION..........................................84
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 COMPLIANCE CERTIFICATES AND OPINIONS..................84
SECTION 14.2 FORM OF DOCUMENTS DELIVERED TO TRUSTEE................85
SECTION 14.3 ACTS OF HOLDERS.......................................85
SECTION 14.4 NOTICES, ETC. TO TRUSTEE AND THE COMPANY..............86
SECTION 14.5 NOTICE TO HOLDERS; WAIVER.............................87
SECTION 14.6 EFFECT OF HEADINGS AND TABLE OF CONTENTS..............87
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SECTION 14.7 SUCCESSORS AND ASSIGNS................................87
SECTION 14.8 SEVERABILITY..........................................87
SECTION 14.9 BENEFITS OF INDENTURE.................................88
SECTION 14.10 GOVERNING LAW; TRUST INDENTURE ACT CONTROLS;
CONSENT TO JURISDICTION AND SERVICE.................88
SECTION 14.11 LEGAL HOLIDAYS........................................88
SECTION 14.12 NO RECOURSE AGAINST OTHERS............................89
SECTION 14.13 DUPLICATE ORIGINALS...................................89
SECTION 14.14 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.........89
Appendix A - Provisions Relating to Initial Securities, Private Exchange
Securities and Exchange Securities
Exhibit 1 to Appendix - Form of Initial Security
Exhibit 2 to Appendix - Form of Exchange/Private Exchange Security
Reconciliation and Tie between Trust Indenture Act of 1939, as amended,
and Indenture, dated as of July 2, 1997
Trust Indenture Indenture
Act Section Section
ss.310 (a)(1)............................................ 6.7
(a)(2)............................................ 6.7
(b)............................................... 6.7, 6.8, 6.9
ss.311 (a)............................................... 6.12
(b)............................................... 6.12
ss.312 .................................................. 7.1
ss.313 .................................................. 7.2
ss.314 (a)............................................... 7.3
(a)(4)............................................ 10.8(a)
(c)(1)............................................ 14.1
(c)(2)............................................ 14.1
(e)............................................... 14.1
ss.315 (a)............................................... 6.1
(b)............................................... 6.13
(c)............................................... 6.1
(d)............................................... 6.1
ss.316 (a) (last sentence)............................... 1.1 ("Outstanding")
(a)(1)(A)......................................... 5.2, 5.12
(a)(1)(B)......................................... 5.13
(b)............................................... 5.8
ss.317 (a)(1)............................................ 5.3
(a)(2)............................................ 5.4
(b)............................................... 10.3
ss.318 (a)............................................... 14.10(b)
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
THIS INDENTURE, dated as of July 2, 1997, is between BRAZOS SPORTSWEAR,
INC., a Delaware corporation (hereinafter called the "Company"), the Subsidiary
Guarantors parties hereto (the "Subsidiary Guarantors") and NORWEST BANK
MINNESOTA, NATIONAL ASSOCIATION (hereinafter called the "Trustee").
RECITALS OF THE COMPANY
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of the Company's 10 1/2% Senior
Notes Due 2007 (the "Initial Securities") and the debt securities, if and when
issued pursuant to a registered exchange for Initial Securities (the "Exchange
Securities"), and the debt securities, if and when issued pursuant to a private
exchange for Initial Securities (the "Private Exchange Securities," and together
with the Exchange Securities and the Initial Securities, the "Securities" and
each individually, a "Security").
All things necessary have been done on the part of the Company and the
Subsidiary Guarantors to make the Securities, when issued and executed by the
Company and the Subsidiary Guarantors and authenticated and delivered by the
Trustee as herein provided, the valid obligations of the Company and the
Subsidiary Guarantors, as the case may be, and to make this Indenture a valid
agreement of the Company and the Subsidiary Guarantors and the Trustee, in
accordance with their respective terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1 DEFINITIONS.
"Accounts Receivable" has the meaning specified for the term "accounts" in
Section 9-106 of the UCC.
"Acquired Indebtedness" means, with respect to any specified Person,
Indebtedness of any other Person (i) existing at the time that other Person
merges or consolidates with the specified Person or becomes a Restricted
Subsidiary of such specified Person, including Indebtedness incurred in
connection with, or in contemplation of, that other Person merging with or into
the specified Person or becoming a Restricted Subsidiary of the specified Person
or (ii) assumed by the specified Person in connection with an acquisition of
Properties from that other Person. A specified Person shall be deemed to incur
Indebtedness constituting its Acquired Indebtedness on the date (i) the
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obligor respecting that Indebtedness merges or consolidates with the specified
Person, (ii) the obligor of that Indebtedness becomes a Restricted Subsidiary of
that specified Person or (iii) the specified Person assumes that Indebtedness.
"Act", when used with respect to any Holder, has the meaning specified in
Section 14.3.
"Affiliate" means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the specified Person. For purposes of this definition: (i)
"control," when used with respect to any Person, means the power to direct the
management and policies of that 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; and
(ii) beneficial ownership at any time of 10% or more of the outstanding voting
common equity of a Person (including voting common equity subject to being
acquired pursuant to the exercise of options, warrants or other rights
exercisable within 60 days of that time) shall be deemed to constitute control
of that Person at that time.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any
Wholly Owned Restricted Subsidiary other than Brazos Sportswear Japan KK
(including, without limitation, by means of a Sale/Leaseback Transaction or a
merger or consolidation) (collectively, for purposes of this definition, a
"transfer"), directly or indirectly, in one transaction or a series of related
transactions, of (i) any Capital Stock, other than Junior Preferred Stock, of
any Restricted Subsidiary held by the Company or any other Restricted
Subsidiary, (ii) any unissued Capital Stock, other than Junior Preferred Stock,
of any Restricted Subsidiary or (iii) any other Properties of the Company or any
Restricted Subsidiary. Notwithstanding the preceding sentence, the following do
not constitute "Asset Sales": (i) transfers of cash, Cash Equivalents, Accounts
Receivable (including the sale of Accounts Receivable without recourse to the
Company or any Restricted Subsidiary pursuant to a bona fide factoring
arrangement with a Person not an Affiliate of the Company), inventories or other
Properties in the ordinary course of business and issuances of Qualified Capital
Stock of the Company; (ii) any transfer of Properties (including Capital Stock)
that is governed by, and made in accordance with, Article VIII; (iii) any
transfer of Properties if permitted under Section 10.10 hereof; (iv) transfers
of damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are either (a) no longer used or (b) no longer useful in
the business of the Company and the Restricted Subsidiaries; and (v) any
transfer that, but for this clause (v), would be an Asset Sale, if after giving
effect to the transfer, the aggregate Fair Market Value of the Properties
subject to that transfer and all related transfers so designated by the Company
does not exceed $500,000.
"Attributable Indebtedness" means, with respect to any particular lease
under which any Person is at the time liable, whether or not accounted for as a
Capitalized Lease Obligation, and at any date as of which the amount thereof is
to be determined, the present value of the total net amount of lease payments
required to be paid by such Person under the lease during the primary term
thereof, without giving effect to any renewals at the option of the lessee,
discounted from the
2
respective due dates thereof to the date of determination at a rate per annum
equal to the discount rate that would be applicable to a Capitalized Lease
Obligation with a like term in accordance with GAAP. As used in the preceding
sentence, the "net amount of lease payments" under any lease for any period
means the sum of lease, rental and other payments required to be paid with
respect to such period by the lessee thereunder, excluding any amounts required
to be paid by the lessee on account of maintenance and repairs, insurance, and
taxes, assessments or similar charges. If a lessee under any lease may terminate
that lease by paying a penalty, the "net amount of lease payments" under that
lease shall include the amount of that penalty, but shall exclude all lease
payments after the first date on which that lease may be so terminated.
"Authorized Newspaper" has the meaning specified in Section 10.3.
"Average Life" means, with respect to any Indebtedness, as at any date of
determination, the quotient obtained by dividing (i) the sum of the products of
(a) the number of years (and any portion thereof) from the date of determination
to the date or dates of each successive scheduled principal payment (including,
without limitation, any sinking fund or mandatory redemption payment
requirements) of that Indebtedness multiplied by (b) the amount of each such
principal payment by (ii) the sum of all such principal payments.
"Board of Directors" means, with respect to the Company, either the board
of directors of the Company or any duly authorized committee of such board of
directors, and, with respect to any Subsidiary, either the board of directors of
such Subsidiary or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the secretary
or an assistant secretary of the Company to have been duly adopted by its Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee, and with respect to a Subsidiary, a
copy of a resolution certified by the secretary or an assistant secretary of
such Subsidiary to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of that Person to pay lease payments, rent or other amounts under a
lease of (or other similar agreement conveying the right to use) any Property
(whether real, personal or mixed) that is required to be classified and
accounted for as a capital lease obligation under GAAP and, for purposes of this
Indenture, the amount of that obligation at any date shall be the capitalized
amount thereof at that date, as determined in accordance with GAAP.
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"Capital Stock" means, with respect to any Person, any and all shares,
interests, participation, rights or other equivalents in the equity interests
(however designated) in that Person, and any rights (other than debt securities
convertible into an equity interest), warrants or options exercisable or
exchangeable for or convertible into such an equity interest in that Person.
"Cash Equivalents" means (i) marketable obligations with a maturity of
180 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof, PROVIDED that
the full faith and credit of the United States of America is pledged in support
thereof; (ii) demand and time deposits and certificates of deposit or
acceptances with a maturity of 180 days or less of (a) Southwest Bank of Texas,
N.A., (b) any financial institution that is a member of the Federal Reserve
System and has combined capital and surplus and undivided profits of not less
than $500 million or any commercial bank that is organized under the laws of any
country that is a member of the Organization for Economic Cooperation and
Development and has total assets in excess of U.S. $500 million or its
equivalent in another currency or (c) any financial institution the deposits
with which are insured by the United States of America or any agency or
instrumentality thereof, PROVIDED that the amount of deposits, certificates of
deposit or acceptances pursuant to this clause (ii)(c) with any one institution
does not exceed the insured amount with that institution; (iii) commercial paper
(a) maturing no more than 180 days from the date of creation thereof issued by a
corporation that is not an Affiliate of the Company and is organized under the
laws of any state of the United States or the District of Columbia and (b) rated
at least A-1 by S&P or at least P-1 by Moody's; (iv) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clause (i) above of this definition entered into with any
commercial bank meeting the specifications of clause (ii) above of this
definition; and (v) investments in money market or other mutual funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (iv) above of this definition. For purposes of this
definition, the maturity of a security shall be determined when it is acquired
by the Company or a Restricted Subsidiary.
"Change of Control" means the occurrence of any event or series of events
(whether or not otherwise in compliance with the provisions of this Indenture)
by which: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) (other than the Principals) is or becomes the
beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of a majority of the total voting power of the total Voting Stock of
the Company; (ii) the Company consolidates with or merges into another Person or
any Person consolidates with, or merges into, the Company, pursuant to a
transaction in which the outstanding Voting Stock of the Company is changed into
or exchanged for cash, securities or other Property, other than any such
transaction pursuant to which (a) the outstanding Voting Stock of the Company is
changed into or exchanged for Voting Stock of the surviving or resulting Person
that is Qualified Capital Stock and (b) the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of the total voting power of the total Voting
Stock of the Company immediately prior to such transaction beneficially own,
directly or indirectly, not less than a majority of the voting power of the
total Voting Stock of the surviving or resulting Person immediately after such
transaction; (iii) the Company, either individually or in conjunction with one
or more Restricted Subsidiaries, sells, assigns, conveys,
4
transfers, leases or otherwise disposes of, or the Restricted Subsidiaries sell,
assign, convey, transfer, lease or otherwise dispose of, the Properties of the
Company and its Restricted Subsidiaries substantially as an entirety (either in
one transaction or a series of related transactions), including Capital Stock of
the Restricted Subsidiaries, to any Person or group of Persons that are
Affiliates of each other (in this clause (iii), the "transferee") (other than
the Company or a Wholly Owned Restricted Subsidiary), other than any such
transaction pursuant to which (a) the Properties of the Company and its
Restricted Subsidiaries substantially as an entirety are exchanged for Voting
Stock of the transferee and (b) the beneficial owners (as defined in Rule 13d-3
under the Exchange Act) of the total voting power of the total Voting Stock of
the Company immediately prior to such transaction beneficially own, directly or
indirectly, not less than a majority of the total voting power of the Voting
Stock of the transferee; (iv) during any consecutive two-year period (which
period need not be calendar years), individuals who at the beginning of that
period constituted the Board of Directors of the Company (together with any new
directors whose election by the Board of Directors of the Company or whose
nomination for election by the stockholders of the Company was approved by a
vote of two-thirds of the directors then still in office who were either
directors at the beginning of that period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (v) any
plan or proposal for liquidation or dissolution of the Company is approved by
the vote or other consent of the holders of Capital Stock of the Company that is
required by applicable law to effect that plan or proposal.
"Commission" or "SEC" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Stock" of any Person means Capital Stock of that Person that does
not rank prior, as to the payment of dividends or the distribution of assets on
any voluntary or involuntary liquidation, dissolution or winding up of that
Person, to shares of Capital Stock of any other class of that Person.
"Company" means Brazos Sportswear, Inc., a Delaware corporation, until a
successor corporation replaces it pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its chairman, its president, or any vice
president, and its treasurer or an assistant treasurer, controller, any
assistant controller, secretary or any assistant secretary, and delivered to the
Trustee.
"Consolidated Fixed Charge Coverage Ratio" means, with respect to any
period of four consecutive fiscal quarters of the Company (each such period of
four consecutive fiscal quarters, a "computation period"), the ratio of (i) the
sum of Consolidated Net Income, Consolidated Fixed
5
Charges, Consolidated Income Tax Expense and Consolidated Non-cash Charges of
the Company and the Restricted Subsidiaries, on a consolidated basis for that
computation period, all determined in accordance with GAAP, to (ii) Consolidated
Fixed Charges for that computation period. For purposes of this computation,
acquisitions or dispositions that have been made by the Company or any
Restricted Subsidiary, including through mergers or consolidations and including
any related financing transactions, during the computation period or subsequent
to the computation period but on or prior to the date of computation shall be
deemed to have occurred on the first day of the computation period and shall
give pro forma effect to such acquisitions or dispositions and any related
financing transactions with appropriate adjustments to the computation of
Consolidated Net Income, Consolidated Fixed Charges, Consolidated Income Tax
Expense and Consolidated Non-cash Charges. In each computation of the
Consolidated Fixed Charge Coverage Ratio, the computation shall be made as of
the date Indebtedness (other than Permitted Indebtedness) is proposed to be
incurred or Disqualified Capital Stock is proposed to be issued (the
"determination date") for the then most recent computation period for which
consolidated financial statements are then available (the "current period") on a
pro forma basis assuming that (i) the Indebtedness to be incurred or the
Disqualified Capital Stock to be issued (and all other Indebtedness incurred or
Disqualified Capital Stock issued after the first day of the current period
through and including the determination date), and (if applicable) the
application of the net proceeds therefrom (and from any other such Indebtedness
or Disqualified Capital Stock), including to refinance other Indebtedness, had
been incurred, issued or applied, as the case may be, on the first day of the
current period and, in the case of Acquired Indebtedness, on the assumption that
the related transaction (whether by means of purchase, merger or otherwise) also
had occurred on the first day of the current period with the appropriate
adjustments with respect to such acquisition being included in such pro forma
calculation and (ii) any acquisition or disposition by the Company or any
Restricted Subsidiary of any Properties outside the ordinary course of business
and any related financing transactions, or any repayment of any principal amount
of any Indebtedness of the Company or any Restricted Subsidiary, in either case
since the first day of the current period through and including the
determination date, had been consummated on the first day of the current period.
The Consolidated Fixed Charges representing interest on Indebtedness outstanding
on any determination date and assumed in accordance with the preceding sentence
to have been outstanding throughout the then current period will be computed as
follows: (i) if that Indebtedness bears interest only at a floating rate, that
floating rate as of the determination date shall be assumed to have been in
effect throughout that current period; (ii) if that Indebtedness bears interest,
at the option of the primary obligor, at either a floating rate or, for one or
more periods of varying durations, fixed rates, either that floating rate or, at
the option of the Company, that fixed rate for the longest period available to
the primary obligor, in each case as of the determination date, shall be assumed
to have been in effect throughout that current period; (iii) if that
Indebtedness is incurred under a revolving credit facility, the principal amount
of that Indebtedness assumed to have been outstanding throughout that current
period shall be the lesser of (a) the average daily outstanding principal
balance of that Indebtedness during that current period or such shorter period
as amounts have been available to be borrowed or reborrowed under that facility
or (b) the total revolving credit commitment under that facility as of the
determination date; and (iv) if (a) that Indebtedness bears interest at a
floating rate, (b) that floating rate is used pursuant to clause (i) or (ii) of
this sentence to determine the Consolidated Fixed Charges
6
attributable to that Indebtedness and (c) that interest is covered by agreements
relating to Interest Rate Protection Obligations, that interest, to the extent
so covered, shall be assumed to have accrued at the rate per annum resulting
after giving effect to the operation of those agreements.
"Consolidated Fixed Charges" means, for any period, without duplication,
(i) the sum of (a) the interest expense of the Company and the Restricted
Subsidiaries for that period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, any amortization of debt discount, the
net cost under Interest Rate Protection Obligations (including any amortization
of discounts), the interest portion of any deferred payment obligation
constituting Indebtedness, all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and all
accrued interest, in each case to the extent attributable to that period, (b) if
any Indebtedness of any Person (other than the Company or a Restricted
Subsidiary) is guaranteed by the Company or any Restricted Subsidiary during
that period, the aggregate amount of interest paid (to the extent not accrued in
a prior period) or accrued by such other Person during that period attributable
to any such Indebtedness, in each case to the extent required by GAAP to be
recognized during that period as an expense of the Company or any Restricted
Subsidiary, (c) the aggregate amount of the interest component of Capitalized
Lease Obligations paid (to the extent not accrued in a prior period), accrued or
scheduled to be paid or accrued by the Company and the Restricted Subsidiaries
during that period, and (d) the aggregate amount of dividends (except dividends
paid or payable in additional shares of Qualified Capital Stock) paid (to the
extent not accrued in a prior period) or accrued on Preferred Stock or
Disqualified Capital Stock of the Company and the Restricted Subsidiaries, to
the extent such Preferred Stock or Disqualified Capital Stock is owned by
Persons other than the Company or any Restricted Subsidiary, less (ii), to the
extent included in clause (i) above of this definition, amortization during that
period of (a) capitalized debt issuance costs of the Company and the Restricted
Subsidiaries and (b) original issue discount on the Premier Convertible Note.
"Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes (including state franchise taxes
accounted for as income taxes in accordance with GAAP) of the Company and the
Restricted Subsidiaries for the period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and the Restricted Subsidiaries for such period
as determined in accordance with GAAP, as adjusted by excluding (i) net
after-tax extraordinary gains or losses (less all fees and expenses relating
thereto) and after-tax (A) non-recurring pooling-of-interests or acquisition
related costs, income and expenses and (B) non-cash, non-recurring income and
expense, in each case to the extent including in consolidated net income (or
loss) for that period, (ii) net after-tax gains or losses (less all fees and
expenses relating thereto) attributable to Asset Sales, (iii) net income (or net
loss) of any Person (other than the Company or any Restricted Subsidiary) in
which the Company or any Restricted Subsidiary has an ownership interest, except
to the extent of the amount of dividends or other distributions actually paid to
the Company or any Restricted Subsidiary in cash or Property by such other
Person during that period (regardless of whether such dividends or
7
distributions are attributable to net income (or net loss) of such Person during
that period or during any prior period), (iv) net income (or net loss) of any
Person combined with the Company or any Restricted Subsidiary on a "pooling of
interests" basis attributable to any period prior to the date of combination,
and (v) net income of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that Restricted
Subsidiary to the Company or a Wholly Owned Restricted Subsidiary of its net
income is not at the date of determination permitted, directly or indirectly, by
operation of the terms of its charter or any agreement or instrument (other than
the Working Capital Agreement), judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
stockholders. For purposes of clause (iii) above of this definition, the amount
of any distribution of Property will be equal to the Fair Market Value of that
Property.
"Consolidated Net Worth" means, at any date, the consolidated
stockholders' equity of the Company less (without duplication) the amount of
that stockholders' equity attributable to Disqualified Capital Stock or treasury
stock of the Company and the Restricted Subsidiaries, as determined in
accordance with GAAP.
"Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization and other non-cash expenses of the Company
and the Restricted Subsidiaries that are deducted in computing Consolidated Net
Income for that period, all determined on a consolidated basis in accordance
with GAAP (excluding any such non-cash charge in the ordinary course of business
for which an accrual of or reserve for cash charges for any future period is
required).
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at Sixth & Marquette, Minneapolis, Minnesota.
"Currency Hedge Obligations" means, at any time as to any Person, the
obligations of that Person at that time incurred by it in the ordinary course of
its business pursuant to any foreign currency exchange agreement, option or
futures contract or other similar agreement or arrangement designed to protect
against or manage the exposure of that Person or any of its Subsidiaries to
fluctuations in foreign currency exchange rates.
"Default" means any event, act or condition that, after notice or passage
of time or both, would become an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7 hereof.
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
8
"Disinterested Director" means, with respect to any transaction or series
of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest (other than an interest arising solely from the beneficial
ownership of Capital Stock of the Company) in or with respect to that
transaction or series of transactions.
"Disqualified Capital Stock" of any specified Person means any Capital
Stock of the specified Person that, either by its terms, by the terms of any
security into which it is convertible or for which it is exchangeable or by
contract or otherwise is, or on the happening of an event or passage of time or
both would be, (i) required to be redeemed or repurchased (whether mandatorily
or at the option of the holder thereof), other than a redemption or repurchase
effected solely through the issuance of Qualified Capital Stock of the specified
Person, by the specified Person or any of its Subsidiaries or by the Company or
any Restricted Subsidiary prior to the final Stated Maturity of the Securities
or (ii) convertible into or exchangeable for any Indebtedness of the specified
Person or any of its Subsidiaries or of the Company or any Restricted Subsidiary
that has any Stated Maturity prior to the final Stated Maturity of the
Securities.
"Event of Default" has the meaning specified in Section 5.1 hereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor act thereto.
"Exchange Security" or "Exchange Securities" has the meaning specified in
the first recital of this Indenture.
"Existing Preferred Stock" means the Series B-1, Series B-2 and Series B-3
Preferred Stock of the Company issued and outstanding on the Issue Date in an
amount not to exceed the sum of (i) the aggregate liquidation amount of the
Series B-1, Series B-2 and Series B-3 Preferred Stock of the Company outstanding
on the Issue Date and (ii) the aggregate liquidation amount of additional Series
B-1, Series B-2 and Series B-3 Preferred Stock issued in lieu of the payment of
cash dividends thereon, PROVIDED that the rate at which dividends accrue shall
not exceed the rate accruing thereon on the Issue Date.
"Fair Market Value" means, with respect to a Property, the fair market
value of that Property as determined in good faith by the Board of Directors of
the Company and evidenced by a Board Resolution, which determination shall be
conclusive for purposes of this Indenture. Unless otherwise specified herein,
the Board of Directors shall be under no obligation to obtain any valuation or
assessment from any investment banking firm, appraiser or other third party.
"Federal Bankruptcy Code" means Title 11 of the United States Code, as
amended from time to time, and any successor statute thereto.
9
"GAAP" means generally accepted accounting principles, consistently
applied, that are set forth in (i) the opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants, (ii) the statements and pronouncements of the Financial Accounting
Standards Board or (iii) such other statements by such other entity as may be
approved by a significant segment of the accounting profession of the United
States of America.
"Global Security" has the meaning specified in Appendix A.
"Guarantee" or "guarantee" means, as applied to any Indebtedness, (i) a
guarantee (other than by endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of that Indebtedness and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
non-performance) of all or any part of that Indebtedness including, without
limiting the foregoing, the payment of amounts drawn down under letters of
credit. When used as a verb, "guarantee" has a corresponding meaning.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all liabilities of that Person, contingent or otherwise, for borrowed money or
for the deferred purchase price of Property or services (excluding any trade
accounts payable and other accrued current liabilities incurred in the ordinary
course of business of that Person) and all liabilities of that Person incurred
in connection with any letters of credit, bankers' acceptances or other similar
credit transactions or any agreement to purchase, redeem, exchange, convert or
otherwise acquire for value any Capital Stock of that Person, or any warrants,
rights or options to acquire that Capital Stock, outstanding on the Issue Date
or thereafter, or any obligations arising out of the sale of Accounts Receivable
of that Person if, and to the extent, any of the foregoing would appear as a
liability on a balance sheet of that Person prepared in accordance with GAAP,
(ii) all obligations of that Person evidenced by bonds, notes, debentures or
other similar instruments, if, and to the extent, any of the foregoing would
appear as a liability on a balance sheet of that Person prepared in accordance
with GAAP, (iii) all obligations of that Person created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by that Person (even if the rights and remedies of the seller or lender
under such agreement in the event of a default are limited to repossession or
sale of such Property), (iv) the Attributable Indebtedness of any Capitalized
Lease Obligation of that Person, (v) all obligations of the types described in
the preceding clauses of this definition and all dividends, the payment of which
is secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien upon Property
(including, without limitation, accounts and contract rights) owned by that
Person, even though that Person has not assumed or become liable for the payment
of such Indebtedness (the amount of such obligation being deemed to be the
lesser of the value of such Property or the amount of the obligation so
secured), (vi) all Guarantees by that Person of obligations of the types
referred to in clauses (i) through (v) of this definition, and (vii) the net
amount of obligations of that Person under or in respect of each agreement
evidencing Currency Hedge Obligations and Interest Rate Protection Obligations.
10
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Independent Financial Advisor" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is disinterested
and independent with respect to the Company and its Affiliates and, in the
reasonable judgment of the Board of Directors, is qualified to perform the task
for which it has been engaged.
"Insolvency or Liquidation Proceeding" means, with respect to any Person,
(a) an insolvency or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or similar case or proceeding in connection
therewith, relative to such Person or its creditors, as such, or its assets or
(b) any liquidation, dissolution or other winding-up proceeding of such Person,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy or (c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of such Person.
"Initial Security" or "Initial Securities" has the meaning specified in
the first recital to this Indenture.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Protection Obligations" means, with respect to any
specified Person, the obligations of the specified Person pursuant to any
arrangement with any other Person whereby, directly or indirectly, the specified
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by the specified Person calculated
by applying a fixed or a floating rate of interest on the same notional amount
and includes, without limitation, interest rate swaps, caps, floors, collars and
other similar agreements or arrangements designed to protect against or manage
the exposure of the specified Person or any of its Subsidiaries to fluctuations
in interest rates.
"Inventory" has the meaning specified in Section 9-109(4) of the UCC.
"Investment" means, with respect to any specified Person, any direct or
indirect advance, loan, guarantee of Indebtedness or other extension of credit
or capital contribution by the specified Person to (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), or any purchase or acquisition by the specified
Person of any Capital Stock, bonds, notes, debentures or other securities
(including derivatives) or evidences of Indebtedness issued by, any other
Person. If the Company designates a Restricted Subsidiary as an Unrestricted
Subsidiary, the Company shall be deemed to make at the effective time of that
designation an "Investment" in that Unrestricted Subsidiary in the amount equal
to the then Fair Market Value of that Unrestricted Subsidiary's net assets. The
following are not "Investments":
11
(i) extensions of trade credit or other advances to customers on commercially
reasonable terms in accordance with normal trade practices or otherwise in the
ordinary course of business; (ii) Interest Rate Protection Obligations and
Currency Hedge Obligations, but only to the extent that the same constitute
Permitted Indebtedness; and (iii) endorsements of negotiable instruments and
documents in the ordinary course of business.
"Issue Date" means the date the Initial Securities are initially issued,
or July 2, 1997.
"Junior Preferred Stock" means, with respect to any specified Person,
Preferred Stock of the specified Person (i) that (a) is issued after the Issue
Date as part of the purchase price to acquire assets or Capital Stock of another
Person, (b) is Qualified Capital Stock, (c) is expressly subordinated as to
payment to any Subsidiary Guarantee of the specified Person, (d) has no voting
rights except as otherwise provided by law or generally with respect to any
amendment of the instrument pursuant to which such Preferred Stock was issued
that would adversely alter the powers, preferences and rights associated with
such Preferred Stock and (e) if the Preferred Stock is issued by a Subsidiary of
the Company, the Preferred Stock is exchangeable at the option of the Company
into Qualified Capital Stock of the Company, and (ii) the dividends, if any, on
which are payable solely in kind by the issuance of additional shares of
Preferred Stock meeting the requirements of subclauses (i)(b) through (i)(e) of
this definition.
"Lien" means any mortgage, charge, pledge, lien (statutory or other),
security interest, hypothecation, assignment for security, claim or similar type
of encumbrance (including, without limitation, any agreement to give or grant
any lease, conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing) upon or with
respect to any Property of any kind. A Person will be deemed to own subject to a
Lien any Property that the Person has acquired or holds subject to the interest
of a vendor or lessor under any conditional sale agreement, capital lease or
other title retention agreement.
"Liquidated Damages" means all liquidated damages due and owing pursuant
to Section 6 of the Registration Rights Agreement.
"Major Transaction" means (i) the sale, transfer, lease or conveyance of
all or substantially all of the Properties of the Company or of the issued and
outstanding voting securities of the Company or (ii) the merger or consolidation
of the Company with or into any other corporation or entity in which the Company
is not the sole surviving corporation, other than a merger or consolidation in
which the holders of shares of Common Stock of the Company immediately preceding
the consolidation or merger receive, directly or indirectly, (a) 50% or more of
the Common Stock of the sole surviving or continuing corporation outstanding
immediately following the consummation of such merger or consolidation and (b)
securities representing 50% or more of the combined voting power of the Voting
Stock of the sole surviving or continuing corporation outstanding immediately
following the consummation of such merger or consolidation.
12
"Maturity" means, with respect to any Security, the date on which any
principal of that Security becomes due and payable as therein or in this
Indenture provided, whether at the Stated Maturity with respect to that
principal or on redemption, repurchase pursuant to a Change of Control Offer or
a Net Proceeds Offer, by declaration of acceleration or otherwise.
"Moody's" means Xxxxx'x Investors Service, Inc. and its successors.
"Net Available Proceeds" means, with respect to any Asset Sale, the
proceeds therefrom in the form of cash or Cash Equivalents, including payments
in respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants and investment banking firms) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of such Asset Sale
(after taking into account available tax credits or deductions and any tax
sharing arrangements), (iii) amounts required to be paid to any Person (other
than the Company or any Restricted Subsidiary) (a) owning a beneficial interest
in the Properties subject to the Asset Sale, (b) having a Lien on such
Properties or (c) requiring such payment as a condition to providing any consent
necessary to consummate the Asset Sale and (iv) appropriate amounts to be
provided by the Company or any Restricted Subsidiary, as the case may be, as a
reserve required in accordance with GAAP against any liabilities associated with
that Asset Sale and retained by the Company or any Restricted Subsidiary, as the
case may be, after that Asset Sale, including, without limitation, pensions and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
that Asset Sale, all as reflected in an Officers' Certificate; PROVIDED,
HOWEVER, that any amounts remaining after adjustments, revaluations or
liquidations of those reserves shall constitute Net Available Proceeds.
"Net Cash Proceeds" means, with respect to any issuance or sale of
Qualified Capital Stock or other securities, the cash proceeds of that issuance
or sale net of the fees of attorneys and accountants, fees, discounts or
commissions of underwriters and placement agents and brokerage, consultant and
other fees and expenses actually incurred in connection with such issuance or
sale and net of taxes paid or payable as a result thereof.
"Net Proceeds Offer" has the meaning specified in Section 10.16(a)(i).
"Non-Recourse Purchase Money Indebtedness" means Indebtedness of the
Company or any Restricted Subsidiary that is incurred to finance the purchase of
any assets of the Company or any Restricted Subsidiary within 90 days of such
purchase, as long as (i) the amount of that Indebtedness does not exceed 100% of
the purchase cost of such assets as initially recorded in the "property, plant
and equipment" account on a balance sheet of the Company or that Restricted
Subsidiary, as the case may be, in accordance with GAAP, (ii) that Indebtedness
is non-recourse to the Company or any of its Restricted Subsidiaries and all
their respective assets other than the assets so purchased and (iii) the
purchase of such assets is not part of an acquisition of any Person.
13
"Officers" means, with respect to any Person, the chief executive officer,
the president, any vice president, the chief financial officer, the chief
accounting officer and the treasurer of such Person.
"Officers' Certificate" means a certificate signed by two Officers or by
any Officer and an assistant treasurer, controller, assistant controller, the
secretary or an assistant secretary of the Company and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company including an employee of the Company, and who shall be
reasonably acceptable to the Trustee, which opinion may contain customary
qualifications and assumptions.
"Outstanding", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities, PROVIDED
that, if such Securities are to be redeemed, notice of such redemption has
been duly given pursuant to the Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in Sections 12.2 and
12.3 hereof, with respect to which the Company has effected legal
defeasance or covenant defeasance as provided in Article XII hereof; and
(iv) Securities which have been paid pursuant to Section 3.6 hereof
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands the Securities are valid obligations of the
Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, consent, notice or waiver hereunder, and for the
purpose of making the calculations required by TIA Section 313, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, consent, notice or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have been
14
pledged in good faith may be regarded as Outstanding if the pledgee establishes
to the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not the Company or any other obligor
upon the Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person (including the Company acting as Paying
Agent) authorized by the Company to pay the principal of and premium, if any,
interest or Liquidated Damages, if any, on any Securities on behalf of the
Company.
"Payment Restriction" means, with respect to any Restricted Subsidiary,
any encumbrance, restriction or limitation, whether by operation of the terms of
its charter or by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (i) that Restricted
Subsidiary to (a) pay dividends or make other distributions on its Capital Stock
or make payments on any obligation, liability or Indebtedness owed to the
Company or any other Restricted Subsidiary, (b) make loans or advances to the
Company or any other Restricted Subsidiary or (c) transfer any of its Properties
to the Company or any other Restricted Subsidiary or (ii) the Company or any
other Restricted Subsidiary to receive or retain any such dividends,
distributions or payments, loans or advances or transfer of Properties.
"Permitted Indebtedness" means any of the following:
(i) Indebtedness under Working Capital Agreements in an aggregate
principal amount at any time outstanding not to exceed the greater of (1)
$50,000,000 or (2) the sum of (A) 85% of the amount of the Accounts
Receivable of the Company and the Restricted Subsidiaries, and (B) 55% of
the amount of the Inventory of the Company and the Restricted Subsidiaries
(except that during the period April 1 through September 30 of each year,
65% of the amount of the Inventory of the Company and the Restricted
Subsidiaries shall be used), in each case as would be shown on a
consolidated balance sheet of the Company and the Restricted Subsidiaries
at that time prepared in accordance with GAAP;
(ii) Indebtedness under the Securities and the Subsidiary
Guarantees;
(iii) Indebtedness outstanding, or to be incurred pursuant to
commitments in effect, on the Issue Date after giving effect to the
issuance and sale of the Initial Securities and the application of the net
proceeds therefrom;
(iv) Indebtedness under Interest Rate Protection Obligations,
PROVIDED that (a) those Interest Rate Protection Obligations are related
to payment obligations on Permitted Indebtedness or Indebtedness otherwise
permitted by Section 10.11(a) and (b) the notional principal amount of
those Interest Rate Protection Obligations does not exceed the principal
amount of the Indebtedness to which those Interest Rate Protection
Obligations relate;
15
(v) Indebtedness under Currency Hedge Obligations, PROVIDED that (a)
those Currency Hedge Obligations are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by Section
10.11(a) or to the foreign currency cash flows reasonably expected to be
generated or required by the Company and the Restricted Subsidiaries, (b)
the notional principal amount of the Currency Hedge Obligations does not
exceed the principal amount of that Indebtedness and the amount of those
foreign currency cash flows to which those Currency Hedge Obligations
relate and (c) those Currency Hedge Obligations are entered into for the
purpose of limiting currency exchange rate risks in connection with
transactions entered into in the ordinary course of business;
(vi) Indebtedness of the Company to a Wholly Owned Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary to the Company or
to a Wholly Owned Restricted Subsidiary; PROVIDED, HOWEVER, that upon
either (a) the subsequent issuance (other than directors' qualifying
shares), sale, transfer or other disposition of any Capital Stock or any
other event that results in a Wholly Owned Restricted Subsidiary ceasing
to be a Wholly Owned Restricted Subsidiary or (b) the transfer or other
disposition of any such Indebtedness (except to the Company or a Wholly
Owned Restricted Subsidiary), the provisions of this clause (vi) will no
longer apply to such Indebtedness and such Indebtedness shall be deemed,
in each case, to be incurred and shall be treated as an incurrence for
purposes of Section 10.11(a) at the time the transfer or other disposition
occurred;
(vii) Guarantees of Permitted Indebtedness or Indebtedness incurred
in accordance with Section 10.11(a);
(viii)other Indebtedness in an aggregate principal amount at any
time outstanding not to exceed $10 million; and
(ix) any renewals, amendments, extensions, supplements,
modifications, deferrals, substitutions, refinancing or replacements
(each, for purposes of this clause (ix), a "refinancing") by the Company
or a Restricted Subsidiary of any Indebtedness incurred in accordance with
Section 10.11(a) or referred to above in clauses (ii) through (vii) of
this definition or this clause (ix), so long as (a) any such new
Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if the Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be
paid in connection with such refinancing pursuant to the terms of the
Indebtedness refinanced or the amount of any premium reasonably determined
by the Company or such Restricted Subsidiary as necessary to accomplish
such refinancing, plus the amount of expenses of the Company or such
Restricted Subsidiary incurred in connection with such refinancing, (b) in
the case of any refinancing of Indebtedness (including the Securities)
that is PARI PASSU with or subordinated in right of payment to the
Securities, then such new Indebtedness is PARI PASSU with or subordinated
in right of payment to the Securities at least to the same extent as the
16
Indebtedness being refinanced and (c) such new Indebtedness has an Average
Life equal to or longer than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity that is not earlier than the final
Stated Maturity of the Indebtedness being refinanced.
"Permitted Investments" means any of the following:
(i) Investments in Cash Equivalents;
(ii) an Investment or series of related Investments by the Company
or any Restricted Subsidiary in another Person, if as a result of that
Investment or series of related Investments (a) that other Person becomes
a Wholly Owned Restricted Subsidiary or (b) that other Person is merged or
consolidated with or into, or transfers or conveys its Properties
substantially as an entirety to, the Company or a Wholly Owned Restricted
Subsidiary;
(iii) Investments of Net Available Proceeds permitted by Section
10.15;
(iv) Investments consisting of loans and advances to employees,
officers and directors of the Company or any Restricted Subsidiary (a) for
travel, entertainment, relocation or other expenses in the ordinary course
of business or (b) representing the consideration for the issuance to such
employees, officers or directors of Common Stock of the Company;
(v) Investments consisting of loans and advances by the Company or
any Restricted Subsidiary to employees, officers and directors of the
Company or any Restricted Subsidiary in an aggregate principal amount at
any one time outstanding not exceeding $1,000,000 million;
(vi) Investments acquired by the Company or any Restricted
Subsidiary in the ordinary course of business (a) in exchange for any
other Investment or account receivable held by the Company or any
Restricted Subsidiary in connection with or as a result of a bankruptcy,
workout, reorganization or recapitalization of the issuer of such other
Investment or the obligor with respect to such account receivable or (b)
as a result of a foreclosure by the Company or any Restricted Subsidiary
with respect to any secured Investment or other transfer of title with
respect to any such secured Investment in default; or
(vii) Investments the payment for which consists exclusively of
Qualified Capital Stock, PROVIDED that any such Investment must be made in
accordance with the other requirements of the Indenture, including (a)
with respect to any Acquired Indebtedness relating to such an Investment,
Section 10.11(a) and (b) with respect to any Lien on properties or assets
acquired in connection with any such Investment, Section 10.13.
"Permitted Liens" means the following types of Liens:
17
(i) Liens existing as of the Issue Date;
(ii) Liens securing the Securities or the Subsidiary Guarantees;
(iii) Liens in favor of the Company or, with respect to a Restricted
Subsidiary, Liens in favor of another Restricted Subsidiary;
(iv) Liens securing Permitted Indebtedness of the Company and the
Restricted Subsidiaries of the type described in clause (i) of the
definition of Permitted Indebtedness, PROVIDED that (a) no such Lien will
extend to any property other than Accounts Receivable and Inventory and
the proceeds therefrom and (b) the Company or any Restricted Subsidiary
may grant a license to the holders of any such Permitted Indebtedness to
use trademark and other intellectual property owned by the Company or any
Restricted Subsidiary to enable such holder to dispose of Accounts
Receivable and Inventory following foreclosure;
(v) Liens securing Indebtedness that constitutes Permitted
Indebtedness of the type described in clause (ix) of the definition of
"Permitted Indebtedness" incurred as a refinancing of any Indebtedness
secured by Liens described in clause (i), (iv), (xi), (xii) or (xiii) of
this definition; PROVIDED, HOWEVER, that (a) if any Lien securing
Indebtedness being refinanced is subordinated or junior to any Lien
granted for the benefit of the Holders, then the Lien securing the new
Indebtedness shall be subordinated or junior to any Lien granted for the
benefit of the Holders at least to the same extent as the Lien securing
the Indebtedness being refinanced and (b) such Liens do not extend to or
cover any Property of the Company or any of its Restricted Subsidiaries
not securing the Indebtedness so refinanced;
(vi) Liens for taxes, assessments or governmental charges or claims
either (a) not delinquent or (b) contested in good faith by appropriate
proceedings and as to which the Company or a Restricted Subsidiary, as the
case may be, has set aside on its books such reserves, or has made such
other appropriate provision, if any, as is required by GAAP;
(vii) Liens of landlords, carriers, warehousemen, mechanics,
suppliers, materialmen, repairmen and other similar Liens incurred in the
ordinary course of business for sums not delinquent or being contested in
good faith, and as to which the Company or a Restricted Subsidiary, as the
case may be, has set aside on its books such reserves, or has made such
other appropriate provision, if any, as is required by GAAP;
(viii)Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, or to secure the payment or
performance of tenders, statutory or regulatory obligations, surety and
appeal bonds, bids, government contracts and leases, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
18
(ix) Liens securing any judgment not giving rise to a Default or
Event of Default and so long as any appropriate legal proceedings that may
have been duly initiated for the review of the judgment has not been
finally terminated or the period within which those proceedings may be
initiated has not expired;
(x) easements, rights-of-way, reservations, zoning and other
restrictions and other similar encumbrances not interfering in any
material respect with the ordinary conduct of business of the Company or
any Restricted Subsidiary;
(xi) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease or of a secured party under a purchase money
security interest; PROVIDED that (a) the Attributable Indebtedness or
Indebtedness related thereto constitutes Indebtedness permitted to be
incurred under the terms of this Indenture and (b) with respect to any
Capitalized Lease Obligation or purchase money security interest, such
Liens do not extend to any Property that is not leased Property subject to
such Capitalized Lease Obligation or Property acquired with the proceeds
of such purchase money Indebtedness, as the case may be;
(xii) Liens securing Non-Recourse Purchase Money Indebtedness;
PROVIDED, HOWEVER, that (a) the Non-Recourse Purchase Money Indebtedness
shall not be secured by any Property of the Company or any Restricted
Subsidiary other than the Property so acquired and any proceeds therefrom
and (b) the Lien securing such Non-Recourse Purchase Money Indebtedness
shall be created within 90 days of such acquisition;
(xiii)Liens securing Acquired Indebtedness incurred in accordance
with Section 10.11(a); PROVIDED that (a) such Liens secured such Acquired
Indebtedness at the time of and prior to the incurrence of such Acquired
Indebtedness by the Company or a Restricted Subsidiary and were not
granted in connection with, or in anticipation of, the incurrence of such
Acquired Indebtedness by the Company or a Restricted Subsidiary and (b)
such Liens do not extend to or cover any Property of the Company or of any
Restricted Subsidiary other than the Property that secured the Acquired
Indebtedness prior to the time such Indebtedness became Acquired
Indebtedness of the Company or a Restricted Subsidiary and are no more
favorable to the lienholders than those securing the Acquired Indebtedness
prior to the incurrence of such Acquired Indebtedness by the Company or a
Restricted Subsidiary;
(xiv) leases or subleases granted to others that do not interfere
with the ordinary conduct of business of the Company or any Restricted
Subsidiary;
(xv) rights of a common owner of any interest in Property held by
the Company or any Restricted Subsidiary and that common owner as tenants
in common or through other common ownership; and
19
(xvi) Liens or equitable encumbrances deemed to exist by reason of
(a) fraudulent conveyance or transfer laws or (b) negative pledge or other
agreements to refrain from giving Liens.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Security" has the meaning specified in Appendix A.
"Predecessor Security" of any particular Security means every previous
Security, including any Security of a different series, evidencing all or a
portion of the same debt as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and delivered under
Section 3.6 hereof in exchange for a mutilated security or in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Security.
"Preferred Stock" means, with respect to any Person, any and all shares,
interests, participation or other equivalents (however designated) of that
Person's preferred or preference Capital Stock, whether outstanding on or after
the Issue Date, including, without limitation, all classes and series of
preferred or preference Capital Stock of that Person.
"Premier Acquisition" means the acquisition by the Company or any
Restricted Subsidiary of all the assets of Premier Sports Group, Inc., a
Colorado corporation.
"Premier Convertible Note" means the non-interest bearing, convertible
subordinated note in the original principal amount of $1,500,000 that will (i)
be issued in connection with the Premier Acquisition, (ii) have a seven year
term from its date of issuance, (iii) not have or permit any principal payments
or prepayments and (iv) be redeemable and convertible into, as of the Issue
Date, and payable only through the issuance of, 136,364 shares of the Company's
Common Stock.
"Principals" means, collectively, Equus II Incorporated, X. Xxxx Xxxxxx,
F. Xxxxxxx Xxxxxxxx and Xxxx X. Xxxxxxx.
"Private Exchange Security" or "Private Exchange Securities" has the
meaning specified in the first recital to the Indenture.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or assets, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person.
"Public Equity Offering" means an offer and sale of Common Stock of the
Company for cash pursuant to a registration statement that has been declared
effective by the SEC pursuant to the
20
Securities Act (other than a registration statement on Form S-8 or otherwise
relating to equity securities issuable under any employee benefit plan of the
Company).
"Qualified Capital Stock" of any Person means any and all Capital Stock of
that Person other than Disqualified Capital Stock of that Person.
"Redemption Date" when used with respect to any Security to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 2, 1997, by and among the Company, the Subsidiary Guarantors,
Xxxxxx, Read & Co. Inc. and SBC Warburg, Inc., as such agreement may be amended,
modified or supplemented from time to time.
"Regular Record Date" means, with respect to the interest payable on any
Interest Payment Date, the June 15 or December 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Related Business" means the businesses of the Company and the Restricted
Subsidiaries on the Issue Date and any business related, ancillary or
complementary to the business of the Company and the Restricted Subsidiaries on
that date.
"Related Business Investment" means any Investment by the Company or any
Restricted Subsidiary in any Related Business.
"Responsible Officer", when used with respect to the Trustee, means any
officer in the Corporate Trust Department of the Trustee, and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
to whom such matter is referred because of his knowledge of and familiarity with
the particular subject.
"Restricted Investment" means, with respect to any Person, any Investment
by such Person (other than a Permitted Investment) in (i) any Unrestricted
Subsidiary or (ii) any Person that is not a Wholly Owned Restricted Subsidiary
other than by reason of having outstanding Junior Preferred Stock.
"Restricted Payment" means, with respect to any Person:
(i) any declaration or payment of any dividend (other than a
dividend declared or paid by a Restricted Subsidiary to the Company or a
Wholly Owned Restricted Subsidiary), or any other distribution, with
respect to any shares of Capital Stock of that Person (other than
dividends or distributions payable solely in shares of Qualified Capital
21
Stock of that Person or in options, warrants or other rights to purchase
Qualified Capital Stock of that Person);
(ii) any purchase, redemption, retirement or other acquisition for
value of any Capital Stock of that Person (other than the redemption of
the Company's Series A-1 and Series A-2 Preferred Stock from proceeds of
the offering of the Initial Securities) or any other payment or
distribution made in respect thereof, either directly or indirectly (other
than any payment made solely in Qualified Capital Stock of that Person) by
that Person or any Subsidiary of that Person;
(iii) any principal payment on or repurchase, redemption, defeasance
or other acquisition or retirement for value, prior to any scheduled
principal payment, scheduled sinking fund payment or maturity, of any
subordinated indebtedness (including, with respect to the Company and any
Subsidiary Guarantor, Subordinated Indebtedness) of that Person by that
Person or any Subsidiary of that Person; or
(iv) any Restricted Investment.
"Restricted Subsidiary" means any Subsidiary of the Company, whether
existing on or after the Issue Date, unless that Subsidiary is an Unrestricted
Subsidiary or is designated as an Unrestricted Subsidiary in the manner
described below in this Section 1.1 in the definition of "Unrestricted
Subsidiary."
"S&P" means Standard and Poor's Ratings Group, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors.
"Sale/Leaseback Transaction" means any direct or indirect arrangement
pursuant to which Properties are sold or transferred by the Company or a
Restricted Subsidiary and are thereafter leased back from the purchaser or
transferee thereof by the Company or a Restricted Subsidiary.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor act thereto.
"Security" and "Securities" have the respective meanings specified in the
first recital of this Indenture and more particularly mean any of the Securities
authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5 hereof.
"Senior Management" means, with respect to the Company, the chairman of
the board of directors, the president, the chief operating officer, the chief
financial officer, the chief accounting officer, the treasurer, the controller
and any vice president of the Company.
22
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7 hereof.
"Stated Maturity" means, when used with respect to any Indebtedness or any
installment of interest thereon, the date specified in the instrument evidencing
or governing such Indebtedness as the fixed date on which the principal of that
Indebtedness or that installment of interest is due and payable.
"Subject Acquisitions" means, collectively, (i) the acquisition by the
Company or any Restricted Subsidiary of all the outstanding Capital Stock of
SolarCo, Inc., a Washington corporation and the parent of Morning Sun, Inc., a
Washington corporation, and (ii) the Premier Acquisition.
"Subordinated Indebtedness" means any Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Securities or Subsidiary Guarantees, respectively.
"Subsidiary" means, with respect to any specified Person, (i) a
corporation a majority of the voting power of whose Voting Stock is at the time,
directly or indirectly, owned by the specified Person, by one or more
Subsidiaries of the specified Person or by the specified Person and one or more
Subsidiaries thereof or (ii) any other Person (other than a corporation),
including, without limitation, a joint venture, in which the specified Person,
one or more Subsidiaries thereof or the specified Person and one or more
Subsidiaries thereof, directly or indirectly, at the date of determination
thereof, has or have at least a majority of the voting power of the Voting Stock
of that Person which is entitled to vote in the election of directors, managers
or trustees thereof (or other Persons performing similar functions).
"Subsidiary Guarantors" mean (i) all Subsidiaries of the Company existing
as of the Issue Date (other than Brazos Sportswear Japan KK and Stadium Apparel,
Inc. (which is in the process of dissolution)), including any Subsidiary
acquired pursuant to the Subject Acquisitions, and (ii) any other Subsidiary of
the Company that executes a Subsidiary Guarantee in accordance with the
provisions of this Indenture, and their respective successors and assigns.
"Subsidiary Guarantee" means the guarantee of the Subsidiary Guarantors as
provided herein.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended and in force at the date as of which this Indenture was executed until
such time as this Indenture is qualified under the TIA, and thereafter as in
effect on the date on which this Indenture is qualified under the TIA, except as
provided in Section 9.5 hereof.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this Indenture until a successor Trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
23
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination will be designated as an Unrestricted Subsidiary by
the Board of Directors as provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Company as an Unrestricted Subsidiary so long as: (i) neither the Company
nor any Restricted Subsidiary is directly or indirectly liable for the payment
of any Indebtedness of that Subsidiary; (ii) no default with respect to any
Indebtedness of that Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on that other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its Stated Maturity or require the
Company or any Restricted Subsidiary to repurchase or secure that other
Indebtedness; (iii) such designation as an Unrestricted Subsidiary would be
permitted under Section 10.10; (iv) that designation would not result in the
creation or imposition of any Lien on any of the properties or assets of the
Company or any Restricted Subsidiary (other than any Permitted Lien); and (v)
the Company could incur at least $1.00 of additional Indebtedness not
constituting Permitted Indebtedness in accordance with Section 10.11(a);
PROVIDED, HOWEVER, that with respect to clause (i) of this sentence, the Company
or a Restricted Subsidiary may be liable for the payment of Indebtedness of an
Unrestricted Subsidiary if (x) the liability constituted a Permitted Investment
or a Restricted Payment permitted under Section 10.10, in each case at the time
of incurrence, or (y) the liability would be a Permitted Investment at the time
of designation of that Subsidiary as an Unrestricted Subsidiary. Any such
designation by the Board of Directors must be evidenced to the Trustee by filing
a Board Resolution with the Trustee giving effect to that designation, together
with an Officers' Certificate stating that such designation complies with the
requirements of this Indenture. The Board of Directors may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation on a pro forma basis, (i) no Default or Event of
Default has occurred and is continuing, (ii) the Company could incur at least
$1.00 of additional Indebtedness not constituting Permitted Indebtedness in
accordance with Section 10.11(a) and (iii) if any of the Properties of the
Company or any Restricted Subsidiary would on such designation become subject to
any Lien (other than a Permitted Lien), the creation or imposition of that Lien
shall comply with Section 10.13.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Voting Stock" means, with respect to any specified Person, any class or
classes of Capital Stock of the specified Person pursuant to which the holders
thereof have the general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of the
specified Person (irrespective of whether or not, at the time, stock of any
other class or classes have, or might have, voting power by reason of the
happening of any contingency).
24
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary: (i)
all the outstanding shares of Capital Stock or other ownership interests in
which, other than any directors' qualifying shares mandated by applicable law,
are owned directly or indirectly by the Company; and (ii) if that Restricted
Subsidiary is organized in a foreign jurisdiction and is required by the
applicable laws and regulations of that jurisdiction to be partially owned by
the government of that jurisdiction or individual or corporate citizens of that
jurisdiction in order for that Restricted Subsidiary to transact business in
that jurisdiction, the Company, directly or indirectly, owns the remaining
Capital Stock or ownership interest in that Restricted Subsidiary and, by
contract or otherwise, controls the management and business of that Restricted
Subsidiary and derives the economic benefits of ownership of that Restricted
Subsidiary to substantially the same extent as if that Restricted Subsidiary
were a Wholly Owned Subsidiary of the type described in clause (i) of this
sentence.
"Working Capital Agreement" means, with respect to any specified Person,
(i) any agreement providing for the making of loans or advances on a revolving
basis, the issuance of letters of credit and/or the creation of bankers'
acceptances to fund the general working capital and other corporate requirements
of that Person and one or more of its Subsidiaries and (ii) any refinancings,
renewals, replacements, modification and extensions of any of the agreements
described in clause (i) of this sentence. Initially, "Working Capital Agreement"
means that certain Third Amended and Restated Loan and Security Agreement dated
as of July 1, 1997 among Brazos, Inc., a Texas corporation and a Wholly Owned
Restricted Subsidiary, and Morning Sun, Inc., a Washington corporation and,
following consummation of the Subject Acquisitions, a Wholly Owned Restricted
Subsidiary, Fleet Capital Corporation and BankBoston, N.A., formerly known as
The First National Bank of Boston.
SECTION 1.2 OTHER DEFINITIONS.
Defined
TERM IN SECTION
"Affiliate Transaction"............................... 10.17
"Affiliated Group" ................................... 8.1
"Change of Control Notice"............................ 10.14(c)
"Change of Control Offer"............................. 10.14(a)
"Change of Control Purchase Date"..................... 10.14(c)
"Change of Control Purchase Price".................... 10.14(a)
"Excess Proceeds"..................................... 10.15
"Net Proceeds Deficiency"............................. 10.16(a)
"Net Proceeds Payment Date"........................... 10.16(a)
"Offered Price"....................................... 10.16(a)
"Payment Amount"...................................... 10.16(a)
"Purchase Notice"..................................... 10.16(a)
25
"Surviving Entity".................................... 8.1
"Trigger Date"........................................ 10.16(a)
"U.S. Government Obligations"......................... 12.4(a)
SECTION 1.3 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities,
"indenture security holder" means a Holder,
"indenture to be qualified" means this Indenture,
"indenture trustee" or "institutional trustee" means the Trustee,
and
"obligor" on the indenture securities means the Company or any other
obligor on the Securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.
SECTION 1.4 RULES OF CONSTRUCTION.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP and all accounting
calculations will be determined in accordance with GAAP;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision;
(d) the masculine gender includes the feminine and the neuter;
26
(e) a "day" means a calendar day; and
(f) references to agreements and other instruments include
subsequent amendments and waivers but only to the extent not prohibited by
this Indenture.
ARTICLE II
SECURITY FORMS
SECTION 2.1 FORMS GENERALLY.
Securities offered and sold in reliance on Rule 144A and to
Institutional Accredited Investors shall be issued initially in the form of one
or more permanent Global Securities in registered form, substantially in the
form set forth in Exhibit 1 to Appendix A (each being herein called a "Global
Security"), deposited with the Trustee, as custodian for the Depository, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided, and shall bear the legend set forth in Exhibit 1 to Appendix A.
Subject to the limitation set forth in Section 3.1, the principal amounts of any
Global Securities may from time to time be increased or decreased by adjustments
made on the records of the Trustee, as custodian for the Depository, as
hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of certificated Securities in
registered form set forth in Exhibit 1 to Appendix A (the "Offshore Physical
Securities"). Securities offered and sold in reliance on any other exemption
from registration under the Securities Act other than as described in the
preceding paragraph shall be issued, and Securities offered and sold in reliance
on Rule 144A may be issued, in the form of certificated Securities in registered
form in substantially the form set forth in Exhibit 1 to Appendix A (the "U.S.
Physical Securities"). The Offshore Physical Securities and the U.S. Physical
Securities are sometimes collectively herein referred to as the "Physical
Securities".
SECTION 2.2 FORM OF SECURITIES.
The Initial Securities, the Subsidiary Guarantees endorsed thereon
and the Trustee's certificate of authentication thereon shall be substantially
in the form of Exhibit 1 to Appendix A, which is hereby incorporated in and
expressly made a part of this Indenture. The Exchange Securities and the Private
Exchange Securities, the Subsidiary Guarantees endorsed thereon and the
Trustee's certificate of authentication thereon shall be substantially in the
form of Exhibit 2 to Appendix A, which is hereby incorporated in and expressly
made a part of this Indenture. The Securities may have notations, legends or
endorsements (including notations relating to the Subsidiary Guarantees)
required by law, stock exchange rule, agreement to which the Company is subject,
if any, or usage (provided that any such notation, legend or endorsement is in a
form acceptable to the Company). Each Security shall be dated the date of its
authentication. The terms of the Securities set forth in Exhibits 1 and 2 of
Appendix A are part of the terms of this Indenture.
27
ARTICLE III
THE SECURITIES
SECTION 3.1 TITLE AND TERMS.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture for original issue is limited to
$100,000,000. The aggregate principal amount of Securities Outstanding at any
one time may not exceed such amount except as provided in Section 3.6 hereof.
The Initial Securities shall be known and designated as the "10 1/2%
Senior Notes Due 2007" of the Company. Their Stated Maturity shall be July 1,
2007, and they shall bear interest at the rate of 10 1/2% per annum from the
Issue Date, or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, payable semiannually in cash in arrears on
January 1 and July 1 in each year, commencing January 1, 1998, and at said
Stated Maturity, until the principal thereof is paid or duly provided for.
Principal of and premium, if any, interest and Liquidated Damages, if any,
on the Securities shall be payable (i) in same-day funds on or prior to the
payment dates with respect to those amounts in the case of Securities held of
record by the Depository and (ii) at the office of the Trustee in New York, New
York, in the case of Securities held of record by Holders other than the
Depository. The Company may, at its option, pay interest and Liquidated Damages,
if any, on Securities held of record by Holders other than the Depository by
check mailed to the addresses of the Persons entitled thereto as they appear in
the Security Register on the Regular Record Date for that interest.
The Securities shall be redeemable as provided in Article XI hereof.
The Securities shall be subject to defeasance at the option of the Company
as provided in Article XII hereof.
SECTION 3.2 DENOMINATIONS.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its chairman
of the board, its president or a vice president of the Company, under its
corporate seal reproduced thereon and attested by its secretary or an assistant
secretary of the Company. The signature of any of these officers on the
Securities may be manual or facsimile signatures of the present or any future
such authorized officer and may be imprinted or otherwise reproduced on the
Securities.
28
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time after the execution and delivery of this Indenture, the
Company may deliver Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with such Company
Order shall authenticate and deliver such Securities as provided in this
Indenture. Such Company Order shall specify the principal amount of the
Securities to be authenticated, the date on which the original issue of
Securities is to be authenticated, and applicable delivery instructions.
Each Security shall be dated the date of its authentication.
No Security or Subsidiary Guarantee endorsed thereon shall be entitled to
any benefit under this Indenture or be valid or obligatory for any purpose
unless there appears on such Security a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
and the Subsidiary Guarantees endorsed thereon have been duly authenticated and
delivered hereunder and that such Security is entitled to the benefits of this
Indenture.
In case the Company, pursuant to and in compliance with Article VIII
hereof, shall be consolidated or merged with or into any other Person or shall
sell, assign, convey, transfer, lease or otherwise dispose of its Properties
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company
shall have been merged, or the Person which shall have received a sale,
assignment, conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article VIII hereof, any of the Securities authenticated or delivered prior to
such sale, assignment, consolidation, merger, conveyance, transfer, lease or
other disposition may, from time to time, at the request of the successor Person
be exchanged for other Securities executed in the name of the successor Person
with such changes in phraseology and form as may be appropriate, but otherwise
in substance of like tenor as the Securities surrendered for such exchange and
of like principal amount; and the Trustee, upon Company Request of the successor
Person, shall authenticate and deliver Securities as specified in such request
for the purpose of such exchange. If Securities shall at any time be
authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
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SECTION 3.4 TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 10.2
hereof, without charge to the Holders. Upon surrender for cancellation of any
one or more temporary Securities, the Company and each Subsidiary Guarantor
shall execute and, upon Company Order, the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations and of like tenor and aggregate principal amount. Until
so exchanged, the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
SECTION 3.5 REGISTRATION OF TRANSFER AND EXCHANGE.
The Company shall cause to be kept a register (the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Securities and of transfers of Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. At all reasonable
times and during normal business hours, the Security Register shall be open to
inspection by the Trustee. The Trustee is hereby initially appointed as security
registrar (the "Security Registrar") for the purpose of registering Securities
and transfers of Securities as herein provided.
Subject to the provisions of this Section and Appendix A, upon surrender
for registration of transfer of any Security at the office or agency of the
Company designated pursuant to Section 10.2 hereof, the Company and each
Subsidiary Guarantor shall execute, and upon Company Order, the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities with the Subsidiary Guarantees endorsed
thereon of like tenor and of any authorized denomination and of a like aggregate
principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, be deemed to have agreed that transfers of beneficial interests
in such Global Security may be effected only through a book-entry system
maintained by the Depository (or its agent) and that ownership of a beneficial
interest in a Global Security shall be required to be reflected in a book-entry.
30
At the option of any Holder, Securities may be exchanged for other
Securities with the Subsidiary Guarantees endorsed thereon of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at the office or agency of the Company designated
pursuant to Section 10.2 hereof. Whenever any Securities are so surrendered for
exchange, the Company and each Subsidiary Guarantee shall execute and, upon
Company Order, the Trustee shall authenticate and deliver, the Securities with
the Subsidiary Guarantees endorsed thereon which the Holder making the exchange
is entitled to receive.
All Securities with the Subsidiary Guarantees endorsed thereon issued upon
any registration of transfer or exchange of Securities shall be the valid
obligations of the Company and each Subsidiary Guarantor, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Security Registrar) be
duly endorsed, or be accompanied by a written instrument of transfer or
exchange, in form satisfactory to the Company and the Security Registrar, duly
executed by the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer, exchange
or redemption of Securities, but the Company or the Trustee may require payment
of a sum sufficient to cover any tax or other governmental charge and any other
expenses, including the fees and expenses of the Trustee, payable in connection
therewith, other than exchanges pursuant to Section 3.4, 9.6 or 11.8 hereof not
involving any transfer.
Neither the Trustee, the Security Registrar nor the Company shall be
required (i) to issue, register the transfer of or exchange any Physical
Security during a period beginning at the opening of business 15 days before the
mailing of a notice of redemption of Securities selected for redemption under
Section 11.4 hereof and ending at the close of business on the day of that
mailing of the relevant notice of redemption or (ii) to register the transfer of
or exchange any Physical Security so selected for redemption in whole or in
part, except the unredeemed portion of any such Security being redeemed in part.
SECTION 3.6 MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
If (i) any mutilated Security is surrendered to the Trustee or (ii) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such Security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company and each Subsidiary Guarantor shall execute and upon Company Order the
Trustee shall authenticate and deliver, in exchange for any such mutilated
Security or in lieu of any such destroyed, lost or stolen Security, a new
Security with the Subsidiary Guarantees endorsed thereon of like tenor and of
like principal amount bearing a number not contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Every new Security issued and authenticated pursuant to this Section in
lieu of any mutilated, destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Company and the Subsidiary
Guarantors whether or not the mutilated, destroyed, lost or stolen Security
shall be at any time enforceable by anyone, and shall be entitled to all
benefits of this Indenture equally and proportionately with any and all other
Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose pursuant to Section 10.2
hereof.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the Regular Record Date by virtue of having been such
Holder, and such defaulted interest and (to the extent lawful) interest on such
defaulted interest at the rate borne by the Securities (such defaulted interest
and interest thereon herein collectively called "Defaulted Interest") may be
paid by the Company, at its election in each case, as provided in clause (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Holders in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security and the date of the proposed payment at least 60 days
prior to the date of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, and such money when deposited
shall be held in trust for the benefit of the Holders entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee
32
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date, and in the name and at the
expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be given to the
Holders entitled to such Defaulted Interest in the manner provided for in
Section 14.5 hereof, not less than 10 days prior to such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so given, such Defaulted Interest
shall be paid to the Holders in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8 PERSONS DEEMED OWNERS.
The Company, the Security Registrar, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and premium, if any, interest and Liquidated Damages, if any, on
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and none of the Company, the Subsidiary Guarantors, the
Security Registrar, the Trustee or any agent of the Company or the Trustee shall
be affected by notice to the contrary.
SECTION 3.9 CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and, upon Company Order, shall be promptly canceled
by it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall, upon Company Order, be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order or, if no such Company Order has been provided, in accordance with
the Trustee's
33
usual practice; PROVIDED, HOWEVER, that the Trustee shall not be required to
destroy canceled Securities.
SECTION 3.10 COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
SECTION 3.11 CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED, HOWEVER, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall upon Company Request cease to be of further effect
(except as to surviving rights of registration of transfer or exchange of
Securities, as expressly provided for in this Indenture) as to all Outstanding
Securities, and the Trustee, at the expense of the Company, shall, upon payment
of all amounts due the Trustee under Section 6.6 hereof, execute proper
instruments acknowledging satisfaction and discharge of this Indenture when
(a) either
(1) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been mutilated, destroyed, lost or stolen
and that have been replaced or paid as provided in Section 3.6 hereof and
(ii) Securities for whose payment money or United States governmental
obligations of the type described in clause (i) of the definition of Cash
Equivalents have been deposited in trust with the Trustee or any Paying
Agent or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust, as provided in Section 10.3
hereof) have been delivered to the Trustee for cancellation, or
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(2) all such Securities not theretofore delivered to the Trustee for
cancellation
(i) have become due and payable, or
(ii) will become due and payable at their final Stated
Maturity within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the serving of notice
of redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (2)(i), (2)(ii) or (2)(iii) above,
has irrevocably deposited or caused to be deposited with the Trustee funds
in an amount sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge the entire
Indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation, for principal of and premium, if any, interest and
Liquidated Damages, if any, on such Securities to the date of such deposit
(in the case of Securities that have become due and payable) or to the
final Stated Maturity or Redemption Date, as the case may be, together
with the Company Order irrevocably directing the Trustee to apply such
funds to the payment thereof at maturity or redemption, as the case may
be;
(b) the Company has paid or caused to be paid all other sums then due and
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
stating and an Opinion of Counsel opining, that all conditions precedent herein
relating to the satisfaction and discharge of this Indenture have been complied
with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.6 hereof and, if money
shall have been deposited with the Trustee pursuant to this Section, the
obligations of the Trustee under Section 4.2 hereof and the last paragraph of
Section 10.3 hereof and the Trustee's right under Article VI hereof shall
survive.
SECTION 4.2 APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 10.3 hereof,
all money deposited with the Trustee pursuant to Section 4.1 hereof shall be
held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
premium, if any, interest and Liquidated Damages, if any, for whose payment such
money has been deposited with the Trustee.
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ARTICLE V
REMEDIES
SECTION 5.1 EVENTS OF DEFAULT.
"Event of Default" wherever used herein, means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) any default in the payment of the principal of or premium, if
any, on any of the Securities when the same becomes due and payable,
whether such payment is due at Stated Maturity or on redemption,
repurchase pursuant to a Change of Control Offer or a Net Proceeds Offer,
acceleration or otherwise; or
(b) any default in the payment of any installment of interest or
Liquidated Damages, if any, on any Security, when it becomes due and
payable, and the continuance of that default for a period of 30 days; or
(c) any default in the performance or breach by the Company or any
Restricted Subsidiary of the provisions of Article VIII hereof or any
failure of the Company to make or consummate either a Change of Control
Offer or a Net Proceeds Offer in accordance with the provisions of Section
10.14 and 10.16, respectively; or
(d) any failure of the Company or any Subsidiary Guarantor to
perform or observe any other term, covenant or agreement applicable to it
and contained in the Securities or this Indenture (other than a default
specified in subparagraph (a), (b) or (c) above) or the Subsidiary
Guarantees, as the case may be, for a period of 30 days after written
notice of that failure is given (x) to the Company or the Subsidiary
Guarantor, as the case may be, by the Trustee or (y) to the Company or the
Subsidiary Guarantor, as the case may be, and the Trustee, by the Holders
of at least 25% in aggregate principal amount of the Securities then
Outstanding; or
(e) the occurrence and continuation beyond any applicable grace
period of any default in the payment of the principal of any Indebtedness
of the Company (other than the Securities) or any Restricted Subsidiary
for money borrowed when due at final Stated Maturity, or any other default
resulting in acceleration of any Indebtedness of the Company or any
Restricted Subsidiary for money borrowed, PROVIDED that the aggregate
principal amount of such Indebtedness exceeds $5.0 million; or
(f) one or more final judgments or orders rendered against the
Company or any Restricted Subsidiary that are unsatisfied and require the
payment in money, either
36
individually or in an aggregate amount, in excess of $5.0 million are not
paid, discharged or stayed for a period of 60 days; or
(g) the entry of a decree or order by a court having jurisdiction in
the premises (A) for relief in respect of the Company or any Restricted
Subsidiary in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or (B) adjudging the
Company or any Restricted Subsidiary bankrupt or insolvent, or approving a
petition seeking reorganization, arrangement, adjustment or composition of
the Company or any Restricted Subsidiary under the Federal Bankruptcy Code
or any applicable federal or state law, or appointing under any such law a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Restricted Subsidiary or of a
substantial part of its consolidated assets, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in effect
for a period of 60 consecutive days; or
(h) the commencement by the Company or any Restricted Subsidiary of
a voluntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state bankruptcy, insolvency, reorganization
or other similar law or any other case or proceeding to be adjudicated
bankrupt or insolvent, or the consent by the Company or any Restricted
Subsidiary to the entry of a decree or order for relief in respect thereof
in an involuntary case or proceeding under the Federal Bankruptcy Code or
any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by
the Company or any Restricted Subsidiary of a petition or consent seeking
reorganization or relief under any applicable federal or state law, or the
consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or other similar official)
of the Company or any Restricted Subsidiary or of any substantial part of
its consolidated assets, or the making by it of an assignment for the
benefit of creditors under any such law, or the admission by it in writing
of its inability to pay its debts generally as they become due or taking
of corporate action by the Company or any Restricted Subsidiary in
furtherance of any such action; or
(i) except as permitted hereunder and the Securities, the cessation
of the effectiveness of any Subsidiary Guarantee or the repudiation by any
Subsidiary Guarantor (or by any Person acting on behalf of any Subsidiary
Guarantor) of its obligations under its Subsidiary Guarantee.
SECTION 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 5.1(g) or (h) hereof) occurs and is continuing, the Trustee, by written
notice to the Company, or the Holders of
37
not less than 25% in aggregate principal amount of the Securities then
Outstanding, by written notice to the Company and to the Trustee, may, and the
Trustee on the request of the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities shall, by a notice in writing to
the Company, declare all unpaid principal of and premium, if any, accrued and
unpaid interest and Liquidated Damages, if any, on all the Securities to be due
and payable immediately, on which declaration all amounts payable in respect of
the Securities shall be immediately due and payable. If an Event of Default of
any type described in Section 5.1(g) or (h) hereof occurs, then the amounts
described above shall become and be immediately due and payable without any
declaration, notice or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made, but before
the Trustee obtains a judgment or decree for payment of the money due as
hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Securities Outstanding, by written notice to the Company
and the Trustee, may rescind and annul each such declaration and its
consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay,
(1) all overdue interest on all Outstanding Securities,
(2) all unpaid principal of and premium, if any, or Liquidated
Damages, if any, on any Outstanding Securities which have become due
otherwise than by such declaration of acceleration, including any
Securities required to have been purchased on a Change of Control
Date or a Net Proceeds Payment Date pursuant to a Change of Control
Offer or a Net Proceeds Offer, as applicable, and interest on such
unpaid principal at the rate borne by the Securities,
(3) to the extent that payment of such interest is lawful,
interest on overdue interest and overdue principal at the rate borne
by the Securities (without duplication of any amount paid or
deposited pursuant to clauses (1) and (2) above), and
(4) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
(b) the rescission would not conflict with any judgment or decree of
a court of competent jurisdiction as certified to the Trustee by the
Company in an Officer's Certificate and Opinion of Counsel; and
(c) all Events of Default, other than the non-payment of amounts of
principal of and premium, if any, interest or Liquidated Damages, if any,
on the Securities that have
38
become due solely because of that declaration, have been cured or waived
as provided in Section 5.13 hereof.
No such rescission shall affect any subsequent default or Event of Default
or impair any right consequent thereon.
Notwithstanding the foregoing, if an Event of Default specified in Section
5.1(e) hereof shall have occurred and be continuing, such Event of Default and
any consequential acceleration shall be automatically rescinded if the
Indebtedness that is the subject of such Event of Default has been repaid, or if
the default relating to such Indebtedness is waived or cured and if such
Indebtedness has been accelerated, then the holders thereof have rescinded their
declaration of acceleration in respect of such Indebtedness, and written notice
of such repayment, or cure or waiver and rescission, as the case may be, shall
have been given to the Trustee by the Company and countersigned by the holders
of such Indebtedness or a trustee, fiduciary or agent for such holders, within
30 days after any such acceleration in respect of the Securities, and so long as
such rescission of any such acceleration of the Securities does not conflict
with any judgment or decree as certified to the Trustee by the Company by an
Officers' Certificate and Opinion of Counsel.
SECTION 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
The Company covenants that if
(a) default is made in the payment of any installment of interest or
Liquidated Damages, if any, on any Security when such interest or
Liquidated Damages becomes due and payable and such default continues for
a period of 30 days, or
(b) default is made in the payment of the principal of or premium,
if any, on any Security at the Maturity thereof or with respect to any
Security required to have been purchased by the Company on the Change of
Control Purchase Date or the Net Proceeds Payment Date pursuant to a
Change of Control Offer or Net Proceeds Offer, as applicable,
then the Company will, upon the demand of the Trustee, pay to the Trustee for
the benefit of the Holders of such Securities, the whole amount then due and
payable on such Securities for principal and premium, if any, interest or
Liquidated Damages, if any, and interest on any overdue principal, premium, if
any, or Liquidated Damages, if any, and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by the Securities, and in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may
39
enforce the same against the Company or any other obligor upon the Securities
and collect the money adjudged or decreed to be payable in the manner provided
by law out of the Property of the Company or any other obligor upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4 TRUSTEE MAY FILE PROOF OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company, or any other obligor upon the
Securities, their creditors or the Property of the Company or of such other
obligor, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company or such other obligor for the payment of overdue principal, premium,
if any, Liquidated Damages, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim, to the extent permitted by law, for
the whole amount of principal and premium, if any, and interest or
Liquidated Damages, if any, owing and unpaid in respect of the Securities
and to file such other papers or documents and take any other actions
including participation as a full member of any creditor or other
committee as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceedings, and
(b) to collect and receive any money or other Property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due to it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee pursuant to Section 6.6 hereof.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
40
SECTION 5.5 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims arising under this Indenture or Securities
or Subsidiary Guarantees endorsed thereon may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name and as trustee of an express
trust, and any recovery of judgment shall, after provision for the payment of
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, be for the ratable benefit of the Holders of
the Securities in respect of which such judgment has been recovered.
SECTION 5.6 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in the case of the distribution of such money on account of principal or
premium, if any, interest or Liquidated Damages, if any, upon presentation of
the Securities and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: to the payment of all amounts due the Trustee pursuant to
Section 6.6 hereof;
SECOND: to the payment of the amounts then due and unpaid for
principal of and premium, if any, interest and Liquidated Damages, if any,
on the Securities in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal and premium, if any, interest and Liquidated Damages, if any,
respectively; and
THIRD: the balance, if any, to the Company.
SECTION 5.7 LIMITATIONS ON SUITS.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(a) that Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount
of the Outstanding Securities shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
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(c) that Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority or more in aggregate principal amount of the Outstanding
Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders. These
limitations shall not apply, however, to a suit instituted by any Holder to
enforce the payment of the principal of and premium, if any, interest or
Liquidated Damages, if any, on that Holder's Security on or after the respective
due dates expressed in that Security or in the Registration Rights Agreement.
SECTION 5.8 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM, LIQUIDATED DAMAGES AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article XII hereof) and
in such Security of the principal of and premium, if any, and (subject to
Section 3.7 hereof) interest and Liquidated Damages, if any, on such Security on
the respective Stated Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
SECTION 5.9 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Subsidiary Guarantors, the Trustee and the
Holders shall be restored severally and respectively to their former positions
hereunder and thereunder and all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
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SECTION 5.10 RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of Section
3.6 hereof, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 5.12 CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, PROVIDED that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture,
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(c) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders not joining
therein.
SECTION 5.13 WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any existing Default or Event of Default hereunder and its consequences,
except a Default or Event of Default
(a) in respect of the payment of the principal of or premium, if
any, interest or Liquidated Damages, if any, on any Security, or
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(b) in respect of a covenant or provision hereof that under Article
IX hereof cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected thereby.
Upon any such waiver, such Default or Event of Default shall cease to
exist for every purpose under this Indenture, but no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 5.14 WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and each Subsidiary Guarantor covenants (to the extent
that each may lawfully do so) that it will not at any time insist upon, plead or
in any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company from paying all
or any portion of the principal of and premium, if any, interest or Liquidated
Damages, if any, on the Securities as contemplated herein, or which may affect
the covenants or the performance of this Indenture; and (to the extent that it
may lawfully do so) each of the Company and each Subsidiary Guarantor hereby
expressly waives all benefit or advantage of any such law and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
SECTION 5.15 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the Trustee
or to any suit instituted by any Holders of more than 10% in principal amount of
the Outstanding Securities.
ARTICLE VI
THE TRUSTEE
SECTION 6.1 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
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(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, and shall be fully protected in so relying, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; PROVIDED, HOWEVER, in
the case of any such certificates or opinions which by any provision
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own wilful misconduct, except
that:
(i) this paragraph shall not limit the effect of Section 6.1(b);
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.12.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2 CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 6.1 hereof:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from action upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a
Board Resolution;
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(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may reasonably
see fit;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it in good faith to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; and
(i) the Trustee shall not be deemed to have notice or knowledge of
any matter unless a Responsible Officer has actual knowledge thereof or
unless written notice thereof is received by the Trustee at its Corporate
Trust Office and such notice references the Securities generally, the
Company and this Indenture.
The Trustee shall not be required to advance, expend or risk its own funds
or otherwise incur any financial liability in the performance of any of its
duties hereunder, or in the exercise of any of its rights or powers if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
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SECTION 6.3 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES.
The recitals contained herein and in the Securities, except for the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. The Trustee shall not be accountable for
the use or application by the Company of any Securities or the proceeds thereof.
SECTION 6.4 MAY HOLD SECURITIES.
The Trustee, any Paying Agent, any Security Registrar or any other agent
of the Company or of the Trustee, in its individual or any other capacity, may
become the owner or pledgee of Securities and, subject to TIA Sections 310(b)
and 311 in the case of the Trustee, may otherwise deal with the Company with the
same rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 6.5 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except as otherwise expressly provided in this Indenture or to the
extent required by law. The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.6 COMPENSATION AND REIMBURSEMENT.
The Company agrees:
(a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agent and counsel), except any such expense,
disbursement or advance as may be attributable to the Trustee's wilful
misconduct, negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without wilful misconduct,
negligence or bad faith on its part, (i) arising out of or in connection
with the acceptance or administration of this trust, including the costs
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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 or (ii) in connection with enforcing this indemnification
provision.
The obligations of the Company under this Section 6.6 to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture or any other termination under any Insolvency or
Liquidation Proceeding. As security for the performance of such obligations of
the Company, the Trustee shall have a claim and lien prior to the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for payment of principal of and premium, if any, interest or
Liquidated Damages, if any, on particular Securities. Such lien shall survive
the satisfaction and discharge of this Indenture or any other termination under
any Insolvency or Liquidation Proceeding.
When the Trustee incurs expenses or renders services after the occurrence
of an Event of Default specified in paragraph (g) or (h) of Section 5.1 of this
Indenture, such expenses and the compensation for such services are intended to
constitute expenses of administration under any Insolvency or Liquidation
Proceeding.
SECTION 6.7 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be eligible to
act as Trustee under TIA Section 310(a)(1) and shall have a combined capital and
surplus of at least $50,000,000. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of federal,
state, territorial or District of Columbia supervising or examining authority,
then for the purposes of this Section 6.7, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 6.8 CONFLICTING INTERESTS.
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act; PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities or certificates of interest or participation in other securities of
the Company are outstanding if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met.
SECTION 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10 hereof.
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(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 6.10 hereof shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 6.7 hereof
and shall fail to resign after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at least
six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee, or (ii) subject to TIA Section 315(e), any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of
not less than a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment,
become the successor Trustee and supersede the successor Trustee appointed by
the Company. If no successor Trustee shall have been so appointed by the Company
or the Holders and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee. The
evidence of such successorship may, but need not be, evidenced by a supplemental
indenture.
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(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to the Holders of
Securities in the manner provided for in Section 14.5 hereof. Each notice shall
include the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of all amounts due it under
Section 6.6 hereof, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all money and
other Property held by such retiring Trustee hereunder. Upon request of any such
successor Trustee, the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, PROVIDED such corporation shall be otherwise qualified and
eligible under this Article. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities;
and in case at that time any of the Securities shall not have been
authenticated, any successor Trustee may authenticate such Securities either in
the name of any predecessor hereunder or in the name of the successor Trustee;
and in all such cases such certificates shall have the full force which it is
anywhere in the Securities of like tenor or in this Indenture provided;
PROVIDED, HOWEVER, that the right to adopt the certificate of authentication of
any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger,
conversion or consolidation.
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SECTION 6.12 NOTICE OF DEFAULTS.
Within 90 days after the occurrence of any Default hereunder, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such Default hereunder, which a Responsible Officer of the Trustee has
actual knowledge of, unless such Default shall have been cured or waived;
PROVIDED, HOWEVER, that, except in the case of a Default in the payment of the
principal of or premium, if any, interest or Liquidated Damages, if any, on any
Security, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders; and
PROVIDED, FURTHER, that in the case of any Default under Section 5.1(b) or
5.1(d) no such notice to Holders shall be given until at least 30 days after the
occurrence thereof.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1 HOLDERS' LISTS; HOLDER COMMUNICATIONS; DISCLOSURES RESPECTING
HOLDERS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. Neither the Company nor the Trustee shall be under any
responsibility with regard to the accuracy of such list. If the Trustee is not
the Security Registrar, the Company shall furnish to the Trustee semi-annually
before each Regular Record Date, and at such other times as the Trustee may
reasonably request in writing, a list, in such form as the Trustee may
reasonably request, as of such date of the names and addresses of the Holders
then known to the Company. The Company and the Trustee shall also satisfy any
other requirements imposed upon each of them by TIA Section 312(a).
Holders may communicate pursuant to Section 312(b) of the TIA with other
Holders with respect to their rights under this Indenture or the Securities.
Every Holder of Securities, by receiving and holding the same, agrees with the
Company, the Security Registrar and the Trustee that none of the Company, the
Security Registrar or the Trustee, or any agent of any of them, shall be held
accountable by reason of the disclosure of any information as to the names and
addresses of the Holders in accordance with TIA Section 312, regardless of the
source from which such information was derived, that each of such Persons shall
have the protection of TIA Section 312(c) and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b).
SECTION 7.2 REPORTS BY THE TRUSTEE.
On or before May 15 of each year commencing with May 15, 1998, the Trustee
shall transmit by mail to all Holders, as their names and addresses appear in
the Security Register, a brief report
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in accordance with, and to the extent required under TIA Section 313(a). The
Trustee shall also comply with TIA Sections 313(b) and 313(c).
The Company shall promptly notify the Trustee in writing if the Securities
become listed on any stock exchange or automatic quotation system.
A copy of each Trustee's report, at the time of its mailing to Holders of
Securities, shall be mailed to the Company and filed with the Commission and
each stock exchange, if any, on which the Securities are listed.
SECTION 7.3 REPORTS BY THE COMPANY.
The Company shall:
(a) file with the Trustee, within 15 days after the date on which
the Company files or is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the
Commission may from time to time by rules and regulations prescribe) which
the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then the Company shall file with the Trustee such
information, documents or reports as required pursuant to Section 10.9
hereof;
(b) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as may
be required from time to time by such rules and regulations; and
(c) transmit by mail to all Holders, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information,
documents and reports (without exhibits except to the extent required by
TIA Section 313(c)) required to be filed by the Company pursuant to
paragraph (a) or (b) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
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ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1 COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not, in any single transaction or series of related
transactions, consolidate or merge with any other Person, or sell, assign,
convey, transfer, lease or otherwise dispose of the Properties of the Company
and the Restricted Subsidiaries on a consolidated basis substantially as an
entirety to any Person or group of Persons that are Affiliates of each other (an
"Affiliated Group"), and the Company will not permit any of the Restricted
Subsidiaries to enter into any such transaction or series of transactions, if,
in any event, such transaction or series of transactions, in the aggregate,
would result in the sale, assignment, conveyance, transfer, lease or other
disposition of the Properties of the Company and the Restricted Subsidiaries on
a consolidated basis substantially as an entirety to any other Person or
Affiliated Group, unless:
(i) either (a) if the transaction is a merger, the Company shall be
the surviving Person of that merger, or (b) the Person (if other than the
Company) formed by such consolidation or into which the Company is merged
or the Person or Affiliated Group that acquires the Properties of the
Company and the Restricted Subsidiaries on a consolidated basis
substantially as an entirety (any such surviving Person or acquiring
Person or member of an acquiring Affiliated Group being referred to in
this Article VIII as the "Surviving Entity") shall be a corporation
organized and existing under the laws of the United States of America, any
state thereof or the District of Columbia and expressly assumes by a
supplemental indenture to this Indenture executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the
Company or the Restricted Subsidiary, as the case may be, with respect to
the Securities and this Indenture, including, with respect to each
Restricted Subsidiary that is a Subsidiary Guarantor, the obligations
under the Subsidiary Guarantee of that Restricted Subsidiary, and, in any
case, this Indenture remains in full force and effect;
(ii) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any Indebtedness not previously an obligation of the Company or any
Restricted Subsidiary that becomes an obligation of the Company or any
Restricted Subsidiary in connection with or as a result of such
transaction or transactions as having been incurred at the time of such
transaction or transactions), no Default or Event of Default has occurred
and is continuing;
(iii) except in the case of the consolidation or merger of any
Restricted Subsidiary with or into the Company, immediately after giving
effect to such transaction or transactions on a pro forma basis, the
Consolidated Net Worth of the Company (or of the Surviving Entity if the
Company is not the continuing obligor under this Indenture) is at least
equal to the Consolidated Net Worth of the Company immediately before such
transaction or series of transactions;
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(iv) except in the case of the consolidation or merger of the
Company with or into a Restricted Subsidiary or any Restricted Subsidiary
with or into the Company or another Restricted Subsidiary, immediately
before and immediately after giving effect to such transaction or series
of transactions on a pro forma basis (assuming that the transaction or
series of transactions occurred on the first day of the most recent period
of four consecutive fiscal quarters of the Company prior to the
consummation of such transaction or series of transactions for which
consolidated financial statements of the Company are available, with the
appropriate adjustments with respect to the transaction or transactions
being included in such pro forma calculation), the Company (or the
Surviving Entity if the Company is not the continuing obligor under this
Indenture) could incur at least $1.00 of additional Indebtedness not
constituting Permitted Indebtedness in accordance with Section 10.11(a);
(v) if any of the Properties of the Company or any Restricted
Subsidiary would on such transaction or series of transactions become
subject to any Lien (other than a Permitted Lien), the creation and
imposition of that Lien complies with Section 10.13;
(vi) each Subsidiary Guarantor, unless it is the other party to the
transaction or series of transactions, confirms by amendment to its
Subsidiary Guarantee that its guarantee of the Securities will apply to
the obligations of the Company (or the Surviving Entity if the Company is
not the continuing obligor under this Indenture) under the Securities and
this Indenture; and
(vii) the Company (or the Surviving Entity if the Company is not the
continuing obligor under this Indenture) delivers to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such transaction
or series of transactions and any supplemental indenture in respect
thereof comply with the requirements of the Indenture and that all
conditions precedent in the Indenture relating to such transaction or
series of transactions have been satisfied.
SECTION 8.2 SUCCESSOR SUBSTITUTED.
When any consolidation or merger or any sale, assignment, lease,
conveyance, transfer or other disposition of the Properties of the Company and
its Restricted Subsidiaries on a consolidated basis substantially as an entirety
becomes effective in accordance with Section 8.1 in which the Company is not the
Surviving Entity, the Surviving Entity will succeed to, and be substituted for,
and may exercise every right and power of, the Company under this Indenture with
the same effect as if the Surviving Entity had been named as the Company in this
Indenture, and thereafter the Company (which term shall for this purpose mean
the Person named as the "Company" in the first paragraph of this Indenture or
any successor Person which shall theretofore become such in the manner described
in Section 8.1), except in the case of a lease, shall be discharged from all
obligations and covenants under this Indenture and the Securities and may be
liquidated and dissolved.
54
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holder, the Company, when authorized by a Board
Resolution, the Subsidiary Guarantors and the Trustee upon Company Request, at
any time and from time to time, may enter into one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company or
any Subsidiary Guarantor and the assumption by any such successor of the
covenants of the Company or any Subsidiary Guarantor, as the case may be,
contained herein and in the Securities or;
(b) to add to the covenants of the Company for the benefit of the
Holders or to surrender any right or power herein conferred upon the
Company; or
(c) to comply with any requirement of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(d) to secure the Securities pursuant to Section 10.13 or otherwise;
(e) to provide for uncertificated Securities in addition to or in
place of certificated Securities; or
(f) to reflect the release of any Subsidiary Guarantor from its
Subsidiary Guarantee pursuant to Section 13.4 or to add as a Subsidiary
Guarantor any Subsidiary of the Company pursuant to Section 13.5 in the
manner provided by this Indenture; or
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee pursuant to the requirements of Sections
6.9 and 6.10; or
(h) to cure any ambiguity or omission, to correct or supplement any
provision herein or in the Securities that may be defective or
inconsistent with any other provision herein or in the Securities, or to
make any other provisions with respect to matters or questions arising
under this Indenture; PROVIDED, HOWEVER, that no modification or amendment
described in this Clause (h) may adversely affect the interests of the
Holders in any material respect.
After an amendment under this Section becomes effective, the Company shall
mail to Holders of Securities a notice briefly describing such amendment. The
failure to give such notice
55
to all Holders of Securities, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION 9.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company and the Trustee, the Company, when authorized by a Board
Resolution, the Subsidiary Guarantors and the Trustee upon Company Request may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or alter the provisions with
respect to redemption of the Securities, or reduce the principal amount
thereof or the rate of interest, any premium, or any Liquidated Damages
thereon, or change the coin or currency in which principal of any Security
or premium, if any, interest or Liquidated Damages, if any, on any
Security is payable, or impair the right to institute suit for the
enforcement of any payment on or with respect to any Security; or
(b) reduce the percentage of aggregate principal amount of any of
the Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder or the consequences of a default
provided for in this Indenture; or
(c) modify any provisions of this Section or Section 5.13 or 10.20
hereof, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby or
the rights of any Holder to receive payments of principal of or premium,
if any, interest or Liquidated Damages, if any, on the Securities; or
(d) change the ranking of the Securities in a manner adverse to the
Holders or expressly subordinate in right of payment the Securities to any
other Indebtedness; or
(e) amend, change or modify the obligation of the Company to make
and consummate a Change of Control Offer if a Change of Control occurs or
to make and consummate a Net Proceeds Offer with respect to any Asset Sale
or modify any of the provisions or definitions in this Indenture insofar
as they relate thereto; or
(f) release any security that may have been granted in respect of
the Securities.
56
It shall not be necessary for any Act of the Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
After an amendment under this Section becomes effective, the Company shall
mail to Holders of Securities a notice briefly describing such amendment. The
failure to give such notice to all Holders of Securities, or any defect therein,
shall not impair or affect the validity of an amendment under this Section.
SECTION 9.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive
(subject to Section 6.1), and shall be fully protected relying upon, an
Officers' Certificate stating and an Opinion of Counsel opining that the
execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5 CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect, if
this Indenture shall then be qualified under the TIA.
SECTION 9.6 REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors of the Company, to any such supplemental indenture may be
prepared and executed by the Company and, upon Company Order, authenticated and
delivered by the Trustee in exchange for Outstanding Securities of like tenor
and in like principal amount.
57
SECTION 9.7 NOTICE OF SUPPLEMENTAL INDENTURES AND WAIVERS.
Promptly after (i) the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 9.2 hereof or (ii)
a waiver under Section 5.13 or 10.20 hereof becomes effective, the Company shall
give notice thereof to the Holders of each Outstanding Security affected, in the
manner provided for in Section 14.5, setting forth in general terms the
substance of such supplemental indenture or waiver as the case may be.
ARTICLE X
COVENANTS
SECTION 10.1 PAYMENT OF PRINCIPAL, PREMIUM OR LIQUIDATED DAMAGES, IF ANY,
AND INTEREST.
The Company covenants and agrees for the benefit of the Holders that it
will duly and punctually pay the principal of and premium, if any, interest or
Liquidated Damages, if any, on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY.
The Company shall maintain an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Company in respect of the Securities and this Indenture may be served. The
Corporate Trust Office shall be such office or agency of the Company, unless the
Company shall designate and maintain some other office or agency for one or more
of such purposes. The Company shall give prompt written notice to the Trustee of
any change in the location of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the aforementioned office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind any such designation. Further,
if at any time there shall be no such office or agency in The City of New York
where the Securities may be presented or surrendered for payment, the Company
shall forthwith designate and maintain such an office or agency in The City of
New York, in order that the Securities shall at all times be payable in The City
of New York. The Company will give prompt written notice to the Trustee of any
such designation or rescission and any change in the location of any such other
office or agency.
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SECTION 10.3 MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it shall, on
or before 12:00 noon, New York City time, on each due date of the principal of
and premium, if any, interest or Liquidated Damages, if any, on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and premium, if any, interest or
Liquidated Damages, if any, so becoming due until such sum shall be paid to such
Persons or otherwise disposed of as herein provided and will promptly notify the
Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Securities, it will on or before 12:00 noon, New York City time, on each due
date of the principal of and premium, if any, interest or Liquidated Damages, if
any, on any Securities, deposit with a Paying Agent immediately available funds
sufficient to pay the principal and premium, if any, interest or Liquidated
Damages, if any, so becoming due, such funds to be held in trust for the benefit
of the Persons entitled to such principal, premium, Liquidated Damages or
interest, and (unless such Paying Agent is the Trustee) the Company shall
promptly notify the Trustee of such action or any failure so to act.
The Company shall cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of and
premium, if any, interest or Liquidated Damages, if any, on Securities in trust
for the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal and
premium, if any, interest or Liquidated Damages, if any; and
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of and premium, if any, interest or
Liquidated Damages, if any, on any Security and remaining
59
unclaimed for two years after such principal and premium, if any, interest or
Liquidated Damages, if any, has become due and payable shall be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Security shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York (an "Authorized Newspaper"), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 10.4 CORPORATE EXISTENCE.
Except as expressly permitted by Article VIII hereof, Section 10.15 hereof
or other provisions of this Indenture, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect the corporate
existence, rights (charter and statutory) and franchises of the Company and each
Restricted Subsidiary; PROVIDED, HOWEVER, that the Company shall not be required
to preserve any such existence of its Restricted Subsidiaries, rights or
franchises, if the Board of Directors of the Company shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole, and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 10.5 PAYMENT OF TAXES; MAINTENANCE OF PROPERTIES; INSURANCE.
The Company shall or, as applicable, shall cause its Restricted
Subsidiaries to, pay or discharge or cause to be paid or discharged, before the
same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Restricted
Subsidiary or upon the income, profits or Property of the Company or any
Restricted Subsidiary and (b) all lawful material claims for labor, materials
and supplies, which, if unpaid, might by law become a Lien upon the Property of
the Company or any Restricted Subsidiary; PROVIDED, HOWEVER, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and for which
appropriate provision has been made in accordance with GAAP.
The Company shall or, as applicable, shall cause its Restricted
Subsidiaries to, cause all material Properties owned by the Company or any
Restricted Subsidiary and used or held for use in the conduct of its business or
the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order (ordinary wear and tear excepted), all as in
the judgment of the Company or such Restricted Subsidiary may be necessary so
that its business may
60
be properly and advantageously conducted at all times; PROVIDED, HOWEVER, that
nothing in this Section shall prevent the Company or any Restricted Subsidiary
from discontinuing the maintenance of any such Properties if such discontinuance
is, in the judgment of the Company or such Restricted Subsidiary, as the case
may be, desirable in the conduct of the business of the Company or such
Restricted Subsidiary and not disadvantageous in any material respect to the
Holders. Notwithstanding the foregoing, nothing contained in this Section 10.5
shall limit or impair in any way the right of the Company and its Restricted
Subsidiaries to sell, divest and otherwise to engage in transactions that are
otherwise permitted by this Indenture.
The Company shall at all times keep all of its, and cause its Restricted
Subsidiaries to keep their, Properties which are of an insurable nature insured
with insurers, believed by the Company to be responsible, against loss or damage
to the extent that property of similar character and in a similar location is
usually so insured by corporations similarly situated and owning like
Properties.
The Company or any Restricted Subsidiary may adopt such other plan or
method of protection, in lieu of or supplemental to insurance with insurers,
whether by the establishment of an insurance fund or reserve to be held and
applied to make good losses from casualties, or otherwise, conforming to the
systems of self-insurance maintained by similarly situated corporations, as may
be determined by the Board of Directors of the Company or such Restricted
Subsidiary.
SECTION 10.6 LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into, assume, guarantee or otherwise become liable
with respect to any Sale/Leaseback Transaction unless (i) the Company or that
Restricted Subsidiary, as the case may be, would be permitted to incur
Indebtedness not constituting Permitted Indebtedness in accordance with Section
10.11(a) in an amount equal to the Attributable Indebtedness arising from the
Sale/Leaseback Transaction, (ii) the Company or the Restricted Subsidiary
receives proceeds from the Sale/Leaseback Transaction at least equal to the Fair
Market Value of the Property subject thereto, (iii) the Company applies an
amount in cash equal to the Net Available Proceeds of the Sale/Leaseback
Transaction in accordance with the provisions of Section 10.15 hereof as if the
Sale/Leaseback Transaction were an Asset Sale and (iv) the Sale/Leaseback
Transaction would not result in a violation of Section 10.13.
SECTION 10.7 LIMITATION ON CONDUCT OF BUSINESS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
engage in the conduct of any business other than any Related Business.
SECTION 10.8 STATEMENT BY OFFICERS AS TO DEFAULT.
(a) The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company and within 45 days of the end of each of
the first, second and third quarters of
61
each fiscal year of the Company, a written certificate signed by a principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Company and its Restricted
Subsidiaries during the preceding fiscal quarter or fiscal year, as applicable,
has been made under the supervision of the signing Person with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture, and further stating, as to each such Person
signing such certificate, that to the best of such Person's knowledge the
Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and no Default or Event of Default has occurred and
is continuing (or, if a Default or Event of Default shall have occurred to
either such Person's knowledge, describing all such Defaults or Events of
Default of which such Person may have knowledge and what action the Company is
taking or proposes to take with respect thereto). Such written statement shall
comply with TIA Section 314(a)(4). For purposes of this Section 10.8(a), such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture.
(b) The Company shall, so long as any Security is Outstanding, deliver to
the Trustee, within 30 days after Senior Management becomes aware of any Default
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company proposes to take with respect thereto.
SECTION 10.9 PROVISION OF FINANCIAL INFORMATION.
The Company shall file on a timely basis with the SEC, to the extent the
SEC accepts such filings and whether or not the Company has a class of
securities registered under the Exchange Act, the annual reports, quarterly
reports and other documents that the Company would be required to file if it
were subject to Section 13 or 15(d) of the Exchange Act. The Company also shall
(i) file with the Trustee (with exhibits), and provide to each Holder (without
exhibits), without cost to that Holder, copies of such reports and documents
within 15 days after the date on which the Company files such reports and
documents with the SEC or the date on which the Company would be required to
file such reports and documents if the Company were subject to Section 13 or
15(d) of the Exchange Act and (ii) if filing such reports and documents with the
SEC is not accepted by the SEC or is prohibited under the Exchange Act, to
supply at its cost copies of such reports and documents (including any exhibits
thereto) to any Holder of Securities promptly on its written request given in
accordance with Section 14.4 hereof. For so long as the Securities remain
outstanding, the Company shall also furnish to the Holders and beneficial
holders of Securities and to prospective purchasers of Securities designated by
the Holders of Transfer Restricted Securities (as defined in the Registration
Rights Agreement) and to broker-dealers, on their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
SECTION 10.10 LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, make any Restricted Payment unless, at the time of and
after giving effect to the proposed
62
Restricted Payment: (i) no Default or Event of Default has occurred and is
continuing; (ii) the Company and its Restricted Subsidiaries would be permitted
to incur at least $1.00 of additional Indebtedness not constituting Permitted
Indebtedness in accordance with Section 10.11(a) hereof; and (iii) the amount of
that Restricted Payment, when added to the aggregate amount of all other
Restricted Payments made after the Issue Date, does not exceed the sum (without
duplication) of the following:
(a) 50% of the Consolidated Net Income (or, if Consolidated Net
Income is a loss, minus 100% of such loss) accrued on a cumulative basis
during the period beginning on July 1, 1997 and ending on the last day of
the Company's last fiscal quarter for which quarterly or annual
consolidated financial statements are available next preceding the date of
payment of the proposed Restricted Payment;
(b) the aggregate Net Cash Proceeds received by the Company after
the Issue Date from the issuance or sale (other than to any Restricted
Subsidiary) of shares of Qualified Capital Stock of the Company or any
options, warrants or rights to purchase shares of Qualified Capital Stock
of the Company; and
(c) to the extent that any Restricted Investment that was made after
the Issue Date is sold for cash or otherwise liquidated or repaid for
cash, the cash proceeds of that sale, liquidation or repayment received by
the Company or any Restricted Subsidiary net of the fees and expenses
actually incurred in connection with such sale, liquidation or repayment
and net of taxes paid or payable as a result thereof.
The foregoing provisions (ii) and (iii) of this Section 10.10 will not
prohibit: (i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration the payment would have
complied with the provisions of this Indenture; (ii) the redemption, repurchase,
retirement or other acquisition of any Capital Stock of the Company in exchange
for, or out of the proceeds of, the substantially concurrent sale (other than to
any Restricted Subsidiary) of Qualified Capital Stock of the Company; (iii) the
defeasance, redemption, repurchase or other retirement of Subordinated
Indebtedness in exchange for, or out of the proceeds of, the substantially
concurrent issue and sale of (a) Subordinated Indebtedness so long as the new
Subordinated Indebtedness has (1) an Average Life equal to or longer than the
Average Life of the Subordinated Indebtedness being defeased, redeemed,
repurchased or otherwise retired and (2) terms of subordination no less
favorable to the Holders of the Securities than those applicable to the
Subordinated Indebtedness being defeased, redeemed, repurchased or otherwise
retired or (b) Qualified Capital Stock of the Company (other than to any
Restricted Subsidiary); (iv) the repurchase, redemption or other acquisition or
retirement for value of any Capital Stock held by any member of the Company's or
any Restricted Subsidiary's management pursuant to any management equity
subscription agreement, employment agreement, stock option agreement or other
compensation agreement in an amount not to exceed in the aggregate $500,000 in
any fiscal year of the Company; (v) the making of one or more Related Business
Investments that are Restricted Investments in an aggregate amount not in excess
of $10,000,000; or (vi) subject to the condition precedent that the Company has
first
63
satisfied all its obligations set forth in Section 10.14, the redemption of any
then outstanding shares of Existing Preferred Stock upon the occurrence of a
Major Transaction.
Any Investment made by the Company or any Restricted Subsidiary in a
Restricted Subsidiary that is redesignated from a Restricted Subsidiary to an
Unrestricted Subsidiary shall be subject to this Section 10.10 and shall be
treated as a Restricted Payment (to the extent not previously included as a
Restricted Payment) made on the day of redesignation in an amount equal to the
greater of (i) the Fair Market Value of the Capital Stock of such redesignated
Subsidiary held by the Company and its Restricted Subsidiaries on that date, and
(ii) the amount of the Investments determined in accordance with GAAP made by
the Company and its Restricted Subsidiaries in that redesignated Subsidiary.
The amounts referred to in clauses (i), (ii), (iii), (iv), (v) or (vi) of
the second immediately preceding paragraph and the Investment amount determined
pursuant to the immediately preceding paragraph shall be included as Restricted
Payments in any computation made pursuant to clause (iii) of the third preceding
paragraph.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted by and complies with this Indenture and setting
forth in reasonable detail the basis on which the required calculations were
computed, which calculations will be based upon the Company's latest
consolidated available financial statements.
SECTION 10.11 LIMITATION ON INDEBTEDNESS AND DISQUALIFIED CAPITAL STOCK.
(a) The Company shall not, and shall not permit any Restricted Subsidiary
to, (a) create, incur, assume, guarantee or in any manner become directly or
indirectly liable for the payment of (collectively, "incur") any Indebtedness
(including any Acquired Indebtedness, but excluding any Permitted Indebtedness),
or (b) issue any Disqualified Capital Stock, unless, on a pro forma basis after
giving effect to that incurrence or issuance and the application of the net
proceeds therefrom, the Company's Consolidated Fixed Charge Coverage Ratio for
the four most recent consecutive fiscal quarters of the Company prior to the
date of the proposed incurrence or issuance for which consolidated financial
statements of the Company and its Restricted Subsidiaries are available would be
at least 2.0 to 1.0.
(b) [Intentionally omitted]
SECTION 10.12 LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF
RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not permit any Restricted Subsidiary to
(i) issue or sell or otherwise dispose of any Capital Stock of any Restricted
Subsidiary (other than to the Company or a Wholly Owned Restricted Subsidiary)
other than Junior Preferred Stock or (ii) permit any Person
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other than the Company or a Wholly Owned Restricted Subsidiary to own any
Capital Stock of any Restricted Subsidiary other than Junior Preferred Stock,
except, in the case of clause (i) or (ii), to the extent permitted by and in
accordance with the definition of "Wholly Owned Restricted Subsidiary" set forth
in Section 1.1. The sale of all the Capital Stock of any Restricted Subsidiary
is permitted by this Section 10.12 but is subject to the limitations set forth
in Section 10.15.
SECTION 10.13 LIMITATION ON LIENS.
The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, assume, affirm or suffer to exist or
become effective any Lien of any kind, EXCEPT for Permitted Liens, upon any of
their respective Properties, whether now owned or acquired after the Issue Date,
or upon any income, profits or proceeds therefrom, or assign or otherwise convey
any right to receive income or profits therefrom, unless prior to, or
contemporaneously therewith, the Securities are equally and ratably secured with
(or prior to) the obligation or liability secured by that Lien; PROVIDED,
HOWEVER, that if a Lien is granted to secure Indebtedness and that Indebtedness
is expressly subordinated to the Securities, the Lien securing that Indebtedness
shall be expressly subordinated and junior to the Lien securing the Securities,
with the same relative priority as such Indebtedness has with respect to the
Securities.
SECTION 10.14 OFFER TO PURCHASE SECURITIES UPON CHANGE OF CONTROL.
(a) If a Change of Control occurs, the Company shall make an offer to
purchase (a "Change of Control Offer") all the then Outstanding Securities, in
whole or in part, from the Holders of such Securities in integral multiples of
$1,000, at a purchase price (the "Change of Control Purchase Price") equal to
101% of the principal amount of such Securities, together with accrued and
unpaid interest thereon, if any, and Liquidated Damages, if any, to the Change
of Control Purchase Date (as defined below), in accordance with the procedures
set forth in paragraphs (b), (c) and (d) of this Section. The Company shall,
subject to the provisions described below, purchase all Securities validly
tendered pursuant to the Change of Control Offer and not withdrawn. The Company
will not be required to make a Change of Control Offer following the occurrence
of a Change of Control if another Person (i) makes the Change of Control Offer
(A) at the same purchase price, (B) at the same time and (C) otherwise in
substantial compliance with the requirements applicable to a Change of Control
Offer to be made by the Company and (ii) purchases all Securities validly
tendered and not withdrawn under that Person's Change of Control Offer.
(b) The Company shall keep the Change of Control Offer open for at least
20 Business Days and until the close of business on the fifth Business Day prior
to the Change of Control Purchase Date (as defined below).
(c) Not later than the 30th day after a Change of Control occurs, the
Company shall give to the Trustee in the manner provided in Section 14.4 and
each Holder of the Securities in the manner provided in Section 14.5, a notice
(the "Change of Control Notice") governing the terms of the Change of Control
Offer and stating:
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(1) that a Change in Control has occurred and that such Holder has
the right to require the Company to repurchase such Holder's Securities,
or portion thereof, at the Change of Control Purchase Price;
(2) any information regarding such Change of Control required to be
furnished pursuant to Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder;
(3) a purchase date (the "Change of Control Purchase Date") which
shall be on a Business Day not more than 60 nor less than 30 days
following the date such notice is mailed;
(4) that any Security, or portion thereof, not validly tendered or
accepted for payment will continue to accrue interest;
(5) that unless the Company defaults in depositing money with the
Paying Agent in accordance with the last paragraph of clause (d) of this
Section 10.14, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Purchase Date;
and
(6) the instructions a Holder must follow in order to have his
Securities repurchased in accordance with paragraph (d) of this Section.
(d) Holders electing to have Securities purchased must surrender such
Securities to the Paying Agent at the address specified in the Change of Control
Notice at least five Business Days prior to the Change of Control Purchase Date.
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than three Business Days prior to the Change of Control
Purchase Date, a telegram, telex, facsimile transmission or letter setting forth
the name of the Holder, the certificate number(s) (in the case of Physical
Securities) and principal amount of the Securities delivered for purchase by the
Holder as to which his election is to be withdrawn and a statement that such
Holder is withdrawing his election to have such Securities purchased. Holders
whose Securities are purchased only in part will be issued new Securities of
like tenor and equal in principal amount to the unpurchased portion for the
Securities surrendered.
On or prior to the Change of Control Purchase Date, the Company shall (i)
accept for payment Securities or portions thereof validly tendered pursuant to
the Change of Control Offer, (ii) irrevocably deposit with the Paying Agent
money sufficient to pay the purchase price of all Securities or portions thereof
so tendered, and (iii) deliver or cause to be delivered to the Trustee the
Securities so accepted. The Paying Agent shall promptly mail or deliver to
Holders of the Securities so tendered payment in an amount equal to the Change
of Control Purchase Price for the Securities, and the Company shall execute and,
upon Company Order, the Trustee shall authenticate and mail or make available
for delivery to such Holders a new Security of like tenor and equal in principal
66
amount to any unpurchased portion of the Security which any such Holder did not
surrender for purchase. The Company shall announce the results of a Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date. For purposes of this Section 10.14, the Trustee shall act as the Paying
Agent.
(e) The Company shall comply with Rule 14e-1 under the Exchange Act and
any other securities laws and regulations thereunder to the extent such laws and
regulations are applicable, if a Change of Control occurs and the Company is
required to purchase Securities as described in this Section 10.14.
SECTION 10.15 LIMITATION ON ASSET SALES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
consummate any Asset Sale unless (i) the Company or the Restricted Subsidiary,
as the case may be, receives consideration at the time of the Asset Sale at
least equal to the fair market value of the assets and properties sold or
otherwise disposed of pursuant to the Asset Sale (as determined by the Board of
Directors, whose determination in good faith shall be conclusive and evidenced
by a Board Resolution), (ii) at least 75% of the consideration received by the
Company or the Restricted Subsidiary, as the case may be, in respect of the
Asset Sale consists of cash or Cash Equivalents and (iii) the Company delivers
to the Trustee an Officers' Certificate certifying that the Asset Sale complies
with clauses (i) and (ii) of this sentence. The amount (without duplication) of
any Indebtedness (other than Subordinated Indebtedness) of the Company or any
Restricted Subsidiary that is expressly assumed by the transferee in an Asset
Sale and with respect to which the Company or the Restricted Subsidiary, as the
case may be, is unconditionally released by the holder of that Indebtedness
shall be deemed (i) to be cash or Cash Equivalents for purposes of clause (ii)
of the preceding sentence and (ii) to constitute a repayment of, and a permanent
reduction in, the amount of that Indebtedness for purposes of the second
following paragraph. If at any time any non-cash consideration received by the
Company or any Restricted Subsidiary, as the case may be, in connection with any
Asset Sale is converted into or sold or otherwise disposed of for cash (other
than interest received with respect to any such non-cash consideration) or Cash
Equivalents, then such conversion or disposition shall constitute an Asset Sale
and the Net Available Proceeds therefrom shall be applied in accordance with
this covenant. A transfer of assets by the Company to a Wholly Owned Restricted
Subsidiary or by a Restricted Subsidiary to the Company or to a Wholly Owned
Restricted Subsidiary will not constitute an Asset Sale, and a transfer of
assets that constitutes a Restricted Investment and that is permitted under
Section 10.10 will not constitute an Asset Sale.
If substantially all (but not all) the property and assets of the Company
and its Restricted Subsidiaries are transferred as an entirety to a Person in a
transaction permitted under Article VIII, the successor corporation shall be
deemed to have sold the properties and assets of the Company and its
Subsidiaries not so transferred for purposes of this Section 10.15 (other than
the provision described in clause (ii) of the first sentence of the immediately
preceding paragraph) and must comply with the provisions of this Section 10.15
with respect to that deemed sale as if it were an
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Asset Sale. In addition, the Fair Market Value of the Properties of the Company
or its Subsidiaries deemed to be sold shall be deemed to be Net Available
Proceeds for purposes of this Section 10.15.
If the Company or any Restricted Subsidiary consummates an Asset Sale, the
Company or any Restricted Subsidiary, as the case may be, may either, no later
than 365 days after that Asset Sale, (i) apply all or any of the Net Available
Proceeds therefrom to repay Indebtedness (other than Subordinated Indebtedness)
of the Company or any Restricted Subsidiary, PROVIDED, in each case, that the
related loan commitment (if any) is thereby permanently reduced by the amount of
the Indebtedness so repaid or (ii) invest all or any part of the Net Available
Proceeds therefrom in Properties that replace the Properties that were the
subject of the Asset Sale or in other Properties that will be used in the
business of the Company and the Restricted Subsidiaries. The amount of the Net
Available Proceeds not applied or invested as provided in this paragraph shall
constitute "Excess Proceeds."
SECTION 10.16 NET PROCEEDS OFFER.
(a) On the date when the aggregate amount of Excess Proceeds from one or
more Asset Sales equals or exceeds $5,000,000 (the "Trigger Date"), the Company
shall make an offer to purchase, from all Holders of the then Outstanding
Securities, an aggregate principal amount of Securities equal to such Excess
Proceeds as follows:
(i) Not later than the 30th date following the Trigger Date, the
Company shall give to the Trustee in the manner provided in Section 14.4
hereof and each Holder of the Securities in the manner provided in Section
14.5 hereof, a notice (a "Purchase Notice") offering to purchase (a "Net
Proceeds Offer") from all Holders of the Securities the maximum aggregate
principal amount (expressed as a multiple of $1,000) of Securities that
may be purchased out of the amount (the "Payment Amount") of such Excess
Proceeds;
(ii) The offer price for the Securities shall be payable in cash in
an amount equal to 100% of the principal amount of the Securities tendered
pursuant to a Net Proceeds Offer, together with accrued and unpaid
interest thereon, if any, and Liquidated Damages, if any, to the date that
Net Proceeds Offer is consummated (the "Offered Price"), in accordance
with the procedures set forth in paragraph (b) of this Section. To the
extent that the aggregate Offered Price of the Securities tendered
pursuant to a Net Proceeds Offer is less than the Payment Amount relating
thereto (such shortfall constituting a "Net Proceeds Deficiency"), subject
to the limitations of Section 10.10 hereof the Company may use any or all
of such Net Proceeds Deficiency for general corporate purposes;
(iii) If the aggregate Offered Price of Securities validly tendered
and not withdrawn by Holders thereof exceeds the Payment Amount, the
Trustee will select the Securities to be purchased on a PRO RATA basis in
accordance with the relative aggregate principal amounts of Securities so
tendered and not withdrawn. When a Net Proceeds Offer is completed, the
amount of Excess Proceeds shall be zero.
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(iv) The Purchase Notice shall set forth a purchase date (the "Net
Proceeds Payment Date"), which shall be on a Business Day no earlier than
30 days nor later than 60 days from the Trigger Date. The Purchase Notice
shall also state (i) that a Trigger Date with respect to one or more Asset
Sales has occurred and that such Holder has the right to require the
Company to repurchase such Holder's Securities at the Offered Price,
subject to the limitations described in the foregoing paragraph (iii),
(ii) any information regarding such Net Proceeds Offer required to be
furnished under the Exchange Act and any other securities laws and
regulations thereunder, (iii) that any Security, or portion thereof, not
tendered or accepted for payment will continue to accrue interest, (iv)
that, unless the Company defaults in depositing money with the Paying
Agent in accordance with the last paragraph of clause (b) of this Section
10.15, or payment is otherwise prevented, any Security, or portion
thereof, accepted for payment pursuant to the Net Proceeds Offer shall
cease to accrue interest after the Net Proceeds Payment Date, and (v) the
instructions a Holder must follow in order to have his Securities
repurchased in accordance with paragraph (b) of this Section.
(b) Holders electing to have Securities purchased will be required to
surrender such Securities to the Paying Agent at the address specified in the
Purchase Notice at least five Business Days prior to the Net Proceeds Payment
Date. Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than three Business Days prior to the Net Proceeds Payment
Date, a telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the certificate number(s) (in the case of Physical Securities)
and principal amount of the Securities delivered for purchase by the Holder as
to which his election is to be withdrawn and a statement that such Holder is
withdrawing his election to have such Securities purchased. Holders whose
Securities are purchased only in part will be issued new Securities of like
tenor and equal in principal amount to the unpurchased portion of the Securities
surrendered.
On or prior to the Net Proceeds Payment Date, the Company shall (i) accept
for payment Securities or portions thereof validly tendered pursuant to a Net
Proceeds Offer in an aggregate principal amount equal to the Payment Amount or
such lesser amount of Securities as has been tendered, (ii) irrevocably deposit
with the Paying Agent money sufficient to pay the purchase price of all
Securities or portions thereof so tendered in an aggregate principal amount
equal to the Payment Amount or such lesser amount and (iii) deliver or cause to
be delivered to the Trustee the Securities so accepted. The Paying Agent shall
promptly mail or deliver to Holders of the Securities so accepted payment in an
amount equal to the purchase price, and the Company shall execute and the
Trustee shall authenticate and mail or make available for delivery to such
Holders a new Security of like tenor and equal in principal amount to any
unpurchased portion of the Security which any such Holder did not surrender for
purchase. Any Securities not so accepted will be promptly mailed or delivered to
the Holder thereof. The Company shall announce the results of a Net Proceeds
Offer on or as soon as practicable after the Net Proceeds Payment Date. For
purposes of this Section 10.16, the Trustee shall act as the Paying Agent.
(c) The Company shall not, and shall not permit any Restricted Subsidiary
to, enter into or suffer to exist any agreement that would place any restriction
of any kind (other than pursuant to
69
law or regulation) on the ability of the Company to make a Net Proceeds Offer
following any Asset Sale. The Company shall comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder, if
applicable, if an Asset Sale occurs and the Company is required to purchase
Securities as described in this Section 10.16.
SECTION 10.17 LIMITATION ON TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall not permit any Restricted Subsidiary to,
enter into, renew or extend any contract or agreement relating to the sale,
purchase or lease of assets (other than Capital Stock of the Company), property
or services from or to any Affiliate of the Company (each of the foregoing, an
"Affiliate Transaction") (i) on terms less favorable to the Company or the
Restricted Subsidiary, as the case may be, than would be available in a
comparable transaction with a Person not an Affiliate of the Company or (ii) on
terms that are not fair from a financial point of view to the Company or the
Restricted Subsidiary, as the case may be, in the event no comparable
transaction with a Person not an Affiliate of the Company is available;
PROVIDED, that the Company shall not, and shall not permit any Restricted
Subsidiary to, enter into, renew or extend any Affiliate Transaction or series
of related Affiliate Transactions involving aggregate payments, value,
remuneration or other consideration in excess of $1.0 million after the Issue
Date unless the prior approval thereof by the Board of Directors (including a
majority of the Disinterested Directors) has been obtained and the Company
delivers to the Trustee an Officers' Certificate (i) certifying that the
Affiliate Transaction or series of related Affiliate Transactions complies with
the foregoing restriction and (ii) if the Affiliate Transaction or series of
related Affiliate Transactions involves aggregate payments, value, remuneration
or other consideration in excess of $5.0 million after the Issue Date, to which
is attached a copy of a written opinion of an Independent Financial Advisor
specializing or having a speciality in the type and subject matter of the
transaction or series of related transactions at issue, to the effect that such
transaction or series of related transactions is fair from a financial point of
view to the Company or the Restricted Subsidiary, as the case may be; PROVIDED,
HOWEVER, that the foregoing restriction will not apply to: (i) transactions
between or among (a) the Company and one or more Wholly Owned Restricted
Subsidiaries or (b) Wholly Owned Restricted Subsidiaries; (ii) transactions
between the Company or any Restricted Subsidiary and any qualified employee
stock ownership plan established for the benefit of the Company's employees, or
the establishment or maintenance of any such plan; (iii) reasonable director,
officer and employee compensation and other benefit, and indemnification,
arrangements approved by the Board of Directors; or (iv) transactions permitted
by Section 10.10.
SECTION 10.18 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.
The Company shall not, and shall not cause or permit any Restricted
Subsidiary to, directly or indirectly, create or otherwise cause or suffer to
exist or allow to become effective any consensual Payment Restriction with
respect to any Restricted Subsidiary, except for any such Payment Restriction
existing under or by reason of (i) applicable law, (ii) customary non-assignment
provisions in leases or other contracts entered into in the ordinary course of
business and consistent
70
with past practices, (iii) purchase money obligations for property acquired in
the ordinary course of business that impose restrictions on the property so
acquired, (iv) customary restrictions imposed on the transfer of copyrighted or
patented materials, (v) the entering into of a contract for the sale or other
disposition of assets, directly or indirectly, so long as such restrictions do
not extend to assets that are not subject to such sale or other disposition,
(vi) the terms of any agreement evidencing any Indebtedness of Restricted
Subsidiaries that was permitted by this Indenture to be incurred that only
restrict the transfer of the assets purchased with the proceeds of such
Indebtedness, (vii) the terms of the Working Capital Agreement in effect on the
Issue Date and any similar Payment Restriction under any similar revolving
credit facility or any replacement thereof, PROVIDED that such similar Payment
Restriction is no more restrictive than the Payment Restriction in effect on the
Issue Date and (viii) the terms of any agreement evidencing any Acquired
Indebtedness that was permitted by this Indenture to be incurred, PROVIDED that
such Payment Restriction only applies to assets that were subject to such
restrictions prior to the acquisition of such assets by the Company or any
Restricted Subsidiary.
SECTION 10.19 LIMITATION ON PREFERRED STOCK OF SUBSIDIARIES.
The Company will not permit any Restricted Subsidiary to issue any
Preferred Stock (other than to the Company or to a Wholly Owned Restricted
Subsidiary) or permit any Person (other than the Company or a Wholly Owned
Subsidiary) to own any Preferred Stock of any Restricted Subsidiary other than
Junior Preferred Stock.
SECTION 10.20 WAIVER OF CERTAIN COVENANTS.
The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 10.5 through 10.13, Section 10.15
and Sections 10.17 through 10.19 hereof if, before or after the time for such
compliance, the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities, by Act of such Holders, waive such compliance in
such instance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 RIGHT OF REDEMPTION.
The Company may, at its option, redeem the Securities in whole or from
time to time in part, on or after July 1, 2002, on not less than 30 nor more
than 60 days' notice to each Holder of Securities to be redeemed, subject to the
conditions and at the redemption prices (expressed as
71
percentages of principal amount) set forth below, if redeemed during the
twelve-month period beginning on July 1 of the year indicated below:
Redemption
YEAR PRICE
---- ----------
2002...................................... 105.250%
2003........................................... 103.500%
2004........................................... 101.750%
2005 and thereafter............................ 100.000%
together in the case of any such redemption with accrued and unpaid interest
thereon and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), all as provided herein.
Notwithstanding the foregoing, at any time on or prior to July 1, 2000,
the Company may redeem up to 35% of the aggregate principal amount of Securities
originally issued on not less than 30 nor more than 60 days' notice to each
Holder of Securities to be redeemed, from the Net Cash Proceeds of a Public
Equity Offering, at a redemption price equal to 110.5% of the principal amount
thereof, together with accrued and unpaid interest thereon and Liquidated
Damages, if any, to the Redemption Date, PROVIDED that (i) at least $65,000,000
aggregate principal amount of Securities originally issued remains Outstanding
immediately after that redemption and (ii) the Company effects that redemption
within 60 days after the Public Equity Offering closes.
SECTION 11.2 APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
SECTION 11.3 ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant to Section
11.1 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Securities to be redeemed and shall deliver to the
Trustee such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 11.4. Any election to redeem
Securities shall be revocable until the Company gives a notice of redemption
pursuant to Section 11.5 to the Holders of Securities to be redeemed.
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SECTION 11.4 SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed, the Trustee shall, not
less than 30 days nor more than 60 days prior to the Redemption Date, select the
particular Securities to be redeemed from the Outstanding Securities not
previously called for redemption, pro rata, by lot or by any other method as the
Trustee shall deem fair and appropriate and which may provide for the selection
for redemption of portions of the principal of Securities; PROVIDED, HOWEVER,
that any such partial redemption shall be in integral multiples of $1,000.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs of this Section 11.4 shall
not apply with respect to any redemption affecting only a Global Security,
whether such Global Security is to be redeemed in whole or in part. In the case
of any such redemption in part, the unredeemed portion of the principal amount
of the Global Security shall be in an authorized denomination.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
SECTION 11.5 NOTICE OF REDEMPTION.
Notice of redemption shall be given in the manner provided for in Section
15.5 hereof not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Securities to be redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) in the case of a partial redemption of Physical Securities, the
identification of the particular Securities to be redeemed, and, if any
Global Security or Physical Security is to be redeemed in part, the
portion of the principal amount thereof to be redeemed;
(d) that on the Redemption Date the Redemption Price (together with
accrued and unpaid interest and Liquidated Damages, if any, to the
Redemption Date payable as provided in Section 11.7 hereof) will become
due and payable upon each such Security, or the portion thereof, to be
redeemed, and that, unless the Company shall default in the payment of the
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Redemption Price and any applicable accrued and unpaid interest or
Liquidated Damages, if any, interest thereon will cease to accrue on and
after said date; and
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, which shall be the office or agency
of the Company maintained for such purpose pursuant to Section 10.2
hereof.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company. Failure to give such
notice by mailing to any Holder of Securities or any defect therein shall not
affect the validity of any proceedings for the redemption of other Securities.
SECTION 11.6 DEPOSIT OF REDEMPTION PRICE.
On or before 12:00 noon, New York City time, on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3 hereof) immediately available funds in an amount
sufficient to pay the Redemption Price of, and accrued and unpaid interest and
Liquidated Damages, if any, on, all the Securities which are to be redeemed on
such Redemption Date.
SECTION 11.7 SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued and unpaid interest
and Liquidated Damages, if any, to the Redemption Date), and from and after such
date (unless the Company shall default in the payment of the Redemption Price
and accrued and unpaid interest and Liquidated Damages, if any) such Securities
shall cease to bear interest. Upon surrender of any such Security for redemption
in accordance with said notice, such Security shall be paid by the Company at
the Redemption Price, together with accrued and unpaid interest and Liquidated
Damages, if any, to the Redemption Date; PROVIDED, HOWEVER, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Regular
Record Dates according to their terms and the provisions of Section 3.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal of and premium, if any, and Liquidated
Damages, if any, shall, until paid, bear interest from the Redemption Date at
the rate borne by the Securities.
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SECTION 11.8 SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed only in part shall be surrendered at
the office or agency of the Company maintained for such purpose pursuant to
Section 10.2 hereof (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and, upon
Company Order, the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, of like tenor and in aggregate
principal amount equal to and in exchange for the unredeemed portion of the
principal amount of the Security so surrendered.
ARTICLE XII
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 12.1 COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution at any time, with
respect to the Securities, elect to have either Section 12.2 or Section 12.3
hereof be applied to all Outstanding Securities upon compliance with the
conditions set forth below in this Article XII.
SECTION 12.2 DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 12.1 hereof of the option
applicable to this Section 12.2, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to all
Outstanding Securities on and after the date the conditions set forth in Section
12.4 hereof are satisfied (hereinafter, "legal defeasance"). For this purpose,
such legal defeasance means that the Company shall be deemed (i) to have paid
and discharged its obligations under the Outstanding Securities, PROVIDED,
HOWEVER, that the Securities shall continue to be deemed to be "Outstanding" for
purposes of Section 12.5 hereof and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and (ii) to have satisfied all its
other obligations with respect to such Securities and this Indenture (and the
Trustee, at the expense and direction of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Outstanding Securities to receive, solely from the trust fund
described in Section 12.4 hereof and as more fully set forth in such Section,
payments in respect of the principal of and premium, if any, interest and
Liquidated Damages, if any, on their Outstanding Securities when those payments
are due (or at such time as the Securities would be subject to redemption at the
option of the Company in accordance with this Indenture), (B) the Company's
obligations under Section 3.3, 3.4, 3.5, 3.6, 5.8, 6.6, 6.9, 6.10, 10.2 and
10.3, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, and (D) the Company's obligations under this Article XII. Subject to
compliance with
75
this Article XII, the Company may exercise its option under this Section 12.2
notwithstanding the prior exercise of its option under Section 12.3 hereof with
respect to the Securities.
SECTION 12.3 COVENANT DEFEASANCE.
Upon the Company's exercise under Section 12.1 hereof of the option
applicable to this Section 12.3, (i) the Company shall be released from its
obligations under clauses (iii), (iv) and (v) under Section 8.1, any covenant in
Sections 10.5 through 10.19 and any covenant in Article XIII, (ii) the
Subsidiary Guarantors shall be released from the Subsidiary Guarantees and (iii)
the occurrence of any event specified in Sections 5.1(c), 5.1(d) (with respect
to clauses (iii), (iv) and (v) under Section 8.1, Sections 10.5 through 10.19),
5.1(e), 5.1(f), 5.1(g) (with respect to any Restricted Subsidiary) and 5.1(h)
(with respect to any Restricted Subsidiary) shall be deemed not to be or result
in an Event of Default, in each case with respect to the Outstanding Securities
on and after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), and the Securities shall thereafter be deemed not to be
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to the Outstanding Securities, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Article or Section (to the extent so specified in the case of Sections
5.1(d), 5.1(g) and 5.1(h) hereof), whether directly or indirectly, by reason of
any reference elsewhere herein to any such Article or Section or by reason of
any reference in any such Article or Section to any other provision herein or in
any other document, but, EXCEPT as specified above, the remainder of this
Indenture and such Securities shall not be affected thereby.
SECTION 12.4 CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
12.2 or Section 12.3 hereof to the Outstanding Securities:
(a) The Company shall irrevocably deposit or cause to be deposited
with the Trustee (or another trustee satisfying the requirements of
Section 6.7 hereof who shall agree to comply with the provisions of this
Article XII applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (A)
cash in United States dollars in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and interest
in respect thereof in accordance with their terms will provide, not later
than one day before the due date of any payment, money in an amount, or
(C) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay and discharge, and
which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, the principal of and premium, if any, interest and
Liquidated Damages, if any, on the Outstanding Securities on the Stated
Maturity thereof (or
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Redemption Date, if applicable), PROVIDED that the Trustee shall have been
irrevocably instructed by a Company Order to apply such money or the
proceeds of such U.S. Government Obligations to said payments with respect
to the Securities. Before such a deposit, the Company may give to the
Trustee, in accordance with Section 11.3 hereof, a notice of its election
to redeem all of the Outstanding Securities at a future date in accordance
with Article XI hereof, which notice shall be irrevocable. Such
irrevocable redemption notice, if given, shall be given effect in applying
the foregoing. For this purpose, "U.S. Government Obligations" means
securities that are (x) direct obligations of the United States of America
for the timely payment of which its full faith and credit is pledged or
(y) obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of the United States of America the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on
any such U.S. Government Obligation held by such custodian for the account
of the holder of such depository receipt, PROVIDED that (except as
required by law) such custodian is not authorized to make any deduction
from the amount payable to the holder of such depository receipt from any
amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S.
Government Obligation evidenced by such depository receipt.
(b) The Company must deliver to the Trustee an Opinion of Counsel to
the effect that the Holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result
of such legal defeasance or covenant defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such legal defeasance or covenant
defeasance had not occurred (in the case of legal defeasance, this Opinion
of Counsel must refer to and be based on a published ruling of the
Internal Revenue Service or a change in applicable federal income tax
laws).
(c) No Default or Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit or,
insofar as Sections 5.1(g) and 5.1(h) are concerned, at any time during
the period ending on the 91st day after the date of such deposit.
(d) Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company.
(e) Such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a default under, any other
material agreement or instrument to
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which the Company or any Restricted Subsidiary is a party or by which the
Company or any Restricted Subsidiary is bound, as evidenced to the Trustee
in an Officers' Certificate delivered to the Trustee concurrently with
such deposit.
(f) The Company shall have delivered to the Trustee an Opinion of
Counsel experienced in bankruptcy matters to the effect that the use of
the trust funds to pay the principal of and premium, if any, interest and
Liquidated Damages, if any, on the Outstanding Securities would not be
avoidable as a preferential payment under Section 547 of the Federal
Bankruptcy Code (or any similar provision then in force) or recoverable
under Section 550 of the Federal Bankruptcy Code (or any similar provision
then in force) in the event the Company became a debtor in a proceeding
commenced thereunder.
(g) The Company shall have delivered to the Trustee an Officer's
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders of the Outstanding Securities over other
creditors of the Company with the intent of defeating, hindering, delaying
or defrauding creditors of the Company or others.
(h) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, satisfactory to the Trustee, each
stating that all conditions precedent under this Indenture to either the
legal defeasance under Section 12.2 hereof or the covenant defeasance
under Section 12.3, as the case may be, have been complied with.
SECTION 12.5 DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 10.3 hereof,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively for
purposes of this Section 12.5, the "Trustee") pursuant to Section 12.4 hereof in
respect of the Outstanding Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any Paying Agent (other
than the Company acting as its own Paying Agent) as the Trustee may determine,
to the Holders of such Securities of all sums due and to become due thereon in
respect of principal and premium, if any, interest and Liquidated Damages, if
any, but such money need not be segregated from other funds EXCEPT to the extent
required by law.
The Company shall pay and indemnify the Trustee against all taxes, fees or
other charges imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 12.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.
Anything in this Article XII to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 12.4
hereof which, in the opinion of a nationally
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recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, are in EXCESS of the amount
thereof which would then be required to be deposited to effect an equivalent
legal defeasance or covenant defeasance, as applicable, in accordance with this
Article.
SECTION 12.6 REINSTATEMENT.
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 12.5 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 12.2 or 12.3 hereof, as the case may be, until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with Section 12.5 hereof; PROVIDED, HOWEVER, that if the Company makes any
payment of principal of or premium, if any, interest or Liquidated Damages, if
any, on any Security following the reinstatement of its obligations, the Company
shall be subrogated to the rights of the Holders of such Securities to receive
such payment from the money held by the Trustee or Paying Agent.
ARTICLE XIII
SUBSIDIARY GUARANTEES
SECTION 13.1 UNCONDITIONAL GUARANTEE.
Each Subsidiary Guarantor hereby jointly and severally unconditionally
Guarantees to each Holder of a Security authenticated and delivered by the
Trustee, and to the Trustee on behalf of such Holder, the full and punctual
payment of the principal of and premium, if any, interest and Liquidated
Damages, if any, on such Security when and as the same shall become due and
payable, whether at the Stated Maturity, by acceleration, call for redemption,
purchase or otherwise, in accordance with the terms of such Security and of this
Indenture. In case of the failure of the Company punctually to make any such
payment, each Subsidiary Guarantor hereby jointly and severally agrees to pay or
cause such payment to be made punctually when and as the same shall become due
and payable, whether at the Stated Maturity, by acceleration, call for
redemption, purchase or otherwise, and as if such payment were made by the
Company.
Each Subsidiary Guarantor hereby jointly and severally agrees that its
obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of such Security or this Indenture, the absence of
any action to enforce the same, any exchange, release or non-perfection of any
Lien on any collateral for, or any release or amendment or waiver of any term of
any other Guarantee of all or any of the Securities, or any consent to departure
from any requirement of any other Guarantee of all or any of the Securities, the
election by the Trustee or any of the Holders in any proceeding under Chapter 11
of the Federal Bankruptcy Code, or the application of Section 1111(b)(2) of the
Federal Bankruptcy Code, any borrowing or grant of a security interest by
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the Company, as debtor-in-possession, under Section 364 of the Federal
Bankruptcy Code, the disallowance, under Section 502 of the Federal Bankruptcy
Code, of all or any portion of the claims of the Trustee or any of the Holders
for payment of any of the Securities (including, without limitation, any
interest, Liquidated Damages or premium thereon), any waiver or consent by the
Holder of such Security or by the Trustee with respect to any provisions thereof
or of this Indenture or with respect to the provisions of this Article XIII as
they apply to any other Subsidiary Guarantor, the obtaining of any judgment
against the Company or any action to enforce the same or any other circumstances
which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Subsidiary Guarantor hereby waives the benefits of diligence,
presentment, demand of payment, any requirement that the Trustee or any of the
Holders protect, secure, perfect or insure any security interest in or other
Lien on any property subject thereto or exhaust any right or take any action
against the Company or any other Person, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest or notice with respect to such
Security or the Indebtedness evidenced thereby and all demands whatsoever, and
covenants that its Subsidiary Guarantee will not be discharged in respect of
such Security except by complete performance of the obligations contained in
such Security and in such Subsidiary Guarantee. Each Subsidiary Guarantor hereby
agrees that, in the event of a default in payment of principal of or premium, if
any, interest or Liquidated Damages, if any, on such Security, whether at their
Stated Maturity, by acceleration, call for redemption, purchase or otherwise,
legal proceedings may be instituted by the Trustee on behalf of, or by, the
Holder of such Security, subject to the terms and conditions set forth in this
Indenture, directly against all or any of the Subsidiary Guarantors to enforce
their respective Subsidiary Guarantees without first proceeding against the
Company. Each Subsidiary Guarantor agrees that if, after the occurrence and
during the continuance of an Event of Default, the Trustee or any of the Holders
are prevented by applicable law from exercising their respective rights to
accelerate the maturity of the Securities, to collect interest on the
Securities, or to enforce or exercise any other right or remedy with respect to
the Securities, such Subsidiary Guarantor agrees to pay to the Trustee for the
account of the Holders, upon demand therefor, the amount that would otherwise
have been due and payable had such rights and remedies been permitted to be
exercised by the Trustee or any of the Holders.
Each Subsidiary Guarantor shall be subrogated to all rights of the Holders
of the Securities against the Company in respect of any amounts paid by that
Subsidiary Guarantor on account of such Securities pursuant to the provisions of
its Subsidiary Guarantee of this Indenture; PROVIDED, HOWEVER, that no
Subsidiary Guarantor shall be entitled to enforce or to receive any payments
arising out of, or based upon, such right of subrogation until the principal of
and premium, if any, interest and Liquidated Damages, if any, on all Securities
issued hereunder shall have been paid in full.
Each Subsidiary Guarantee shall remain in full force and effect and
continue to be effective if any petition is filed by or against the Company for
liquidation or reorganization, if the Company becomes insolvent or makes an
assignment for the benefit of creditors or if a receiver or trustee is appointed
for all or any significant part of the Company's assets, and shall, to the
fullest extent permitted by law, continue to be effective or be reinstated, as
the case may be, if at any time payment and performance of the Securities is,
pursuant to applicable law, rescinded or reduced in amount, or
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must otherwise be restored or returned by an obligee on the Securities whether
as a "voidable preference," "fraudulent transfer," or otherwise, all as though
such payment or performance has not been made. If any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Securities shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
The Subsidiary Guarantors shall have the right to seek contribution from
any non-paying Subsidiary Guarantor so long as the exercise of such right does
not impair the rights of the Holders under the Subsidiary Guarantees or under
this Article XIII in accordance with Section 13.7.
The obligations of each Subsidiary Guarantor to the Holders and to the
Trustee pursuant to its Subsidiary Guarantee and this Indenture constitute
senior unsecured obligations of that Subsidiary Guarantor.
SECTION 13.2 EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEES.
The Subsidiary Guarantee to be endorsed on the Securities is set forth in
Appendix A. Each Subsidiary Guarantor hereby agrees to execute its Subsidiary
Guarantee, in a form established pursuant to Appendix A, to be endorsed on each
Security authenticated and delivered by the Trustee.
The Subsidiary Guarantee shall be executed on behalf of each respective
Subsidiary Guarantor by any one of such Subsidiary Guarantor's Officers,
attested by its secretary or assistant secretary. The signature of any or all of
these Officers on the Subsidiary Guarantee may be manual or facsimile.
A Subsidiary Guarantee bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of a Subsidiary Guarantor
shall bind such Subsidiary Guarantor, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of the Security on which such Subsidiary Guarantee is endorsed or did
not hold such offices at the date of such Subsidiary Guarantee.
The delivery of any Security by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Subsidiary Guarantee
endorsed thereon on behalf of the Subsidiary Guarantors. Each Subsidiary
Guarantor hereby jointly and severally agrees that its Subsidiary Guarantee set
forth in Section 13.1 shall remain in full force and effect notwithstanding any
failure to endorse a Subsidiary Guarantee on any Security.
SECTION 13.3 LIMITATION ON MERGER OR CONSOLIDATION.
No Subsidiary Guarantor (in this Section 13.3, the "Subject Subsidiary
Guarantor") may consolidate with or merge with or into (whether or not the
Subject Subsidiary Guarantor is the surviving Person) another Person (other than
the Company or another Subsidiary Guarantor), whether or not affiliated with the
Subject Subsidiary Guarantor, unless: (i) either (a) the survivor is
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not a Subsidiary Guarantor following that consolidation or merger and the
consolidation or merger satisfies the provisions of Section 10.15 or (b) the
survivor is a Subsidiary Guarantor and the surviving Subsidiary Guarantor could
make the Investment in the Person that consolidated or merged with it in
accordance with Section 10.10; or (ii)(a) the Person formed by or surviving any
such consolidation or merger (if other than the Subject Subsidiary Guarantor)
assumes all the obligations of the Subject Subsidiary Guarantor under the
Securities and the Indenture pursuant to a supplemental indenture, in form and
substance satisfactory to the Trustee; (b) immediately after giving effect to
such transaction, no Default or Event of Default exists; and (c) immediately
after giving effect to such transaction as if the same had occurred at the
beginning of the most recently ended period of four consecutive fiscal quarters
of the Company for which consolidated financial statements of the Company and
its Restricted Subsidiaries are available, the Company and the Restricted
Subsidiaries could incur at least $1.00 of additional Indebtedness not
constituting Permitted Indebtedness in accordance with Section 10.11(a).
Except as set forth in Articles VIII and X hereof, nothing contained in
this Indenture or in any of the Securities shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale or conveyance of the Property of a
Subsidiary Guarantor as an entirety or substantially as an entirety to the
Company or another Subsidiary Guarantor.
SECTION 13.4 RELEASE OF SUBSIDIARY GUARANTORS.
(a) In the event of a sale or other disposition of all the properties and
assets of any Subsidiary Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all the Capital Stock of any
Subsidiary Guarantor, in each case subject to and as permitted by the terms of
this Indenture, including, without limitation, Sections 8.1, 10.15 and 13.3, and
upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such consolidation, merger, sale or other
disposition was made in accordance with Section 13.3 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
that Subsidiary Guarantor (in the event of a sale of or other disposition, by
way of such a merger, consolidation or otherwise, of all the Capital Stock of
that Subsidiary Guarantor) or the corporation acquiring the properties and
assets (in the event of a sale or other disposition of the properties and assets
of that Subsidiary Guarantor substantially as an entirety) from its obligations
under its Subsidiary Guarantees endorsed on the Securities and under this
Article XIII PROVIDED that the Net Available Proceeds of such sale or other
disposition are applied in accordance with the provisions of this Indenture
including Sections 10.15 and 10.16. Any Subsidiary Guarantor not released from
its obligations under its Subsidiary Guarantees endorsed on the Securities and
under this Article XIII shall remain liable for the full amount of principal of
and premium, if any, interest and Liquidated Damages, if any, on the Securities
and for the other obligations of a Subsidiary Guarantor under its Subsidiary
Guarantees endorsed on the Securities and under this Article XIII.
(b) Concurrently with the legal defeasance of the Securities under Section
12.2 hereof or the covenant defeasance of the Securities under Section 12.3
hereof, the Subsidiary Guarantors
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shall be released from all of their obligations under their Subsidiary
Guarantees endorsed on the Securities and under this Article XIII.
(c) Upon the redesignation by the Company of a Subsidiary Guarantor from a
Restricted Subsidiary to an Unrestricted Subsidiary in compliance with the
provisions of this Indenture, such Subsidiary may, at its option, cease to be a
Subsidiary Guarantor and shall be released from all of the obligations of a
Subsidiary Guarantor under its Subsidiary Guarantees endorsed on the Securities
and under this Article XIII, which release shall be evidenced by a supplemental
indenture executed by the Company, the Subsidiary Guarantors and the Trustee.
SECTION 13.5 ADDITIONAL SUBSIDIARY GUARANTORS.
The Company or any Restricted Subsidiary may cause any of their respective
Subsidiaries to become a Subsidiary Guarantor with respect to the Securities. If
the Company or any Restricted Subsidiary or any of their respective Subsidiaries
shall, in compliance with the covenants in Article X, after the date of this
Indenture, (i) transfer or cause to be transferred, any Property to any
Subsidiary that is not a Subsidiary Guarantor (other than an Unrestricted
Subsidiary) or (ii) make any Investment in any Subsidiary that is not a
Subsidiary Guarantor (other than an Unrestricted Subsidiary), then the Company
or that Restricted Subsidiary shall cause that Subsidiary to execute a
Subsidiary Guarantee and deliver an Opinion of Counsel, in accordance with the
terms of this Indenture unless the Board of Directors has duly designated that
Subsidiary as an Unrestricted Subsidiary. Any such Subsidiary shall become a
Subsidiary Guarantor by executing and delivering to the Trustee (a) a
supplemental indenture, in form and substance satisfactory to, and executed by,
the Trustee and executed by the Company, which subjects such Subsidiary to the
provisions of this Indenture as a Subsidiary Guarantor and (b) an Opinion of
Counsel to the effect that such supplemental indenture has been duly authorized
and executed by such Subsidiary and constitutes the legal, valid, binding and
enforceable obligation of such Subsidiary (subject to such customary exceptions
concerning creditors' rights and equitable principles).
SECTION 13.6 LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor, and by its acceptance hereof each Holder,
hereby confirms that it is the intention of all such parties that the Guarantee
by that Subsidiary Guarantor pursuant to its Subsidiary Guarantee not constitute
a fraudulent transfer or conveyance for purposes of the Federal Bankruptcy Code,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar Federal or state law. To effectuate the foregoing intention, the
Holders and such Subsidiary Guarantor hereby irrevocably agree that the
obligations of such Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount that, after giving effect to all other contingent
and fixed liabilities of such Subsidiary Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to Section 13.7, result in the obligations
of that Subsidiary Guarantor under its Subsidiary Guarantee not constituting
such a fraudulent transfer or conveyance under federal or state law.
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SECTION 13.7 CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Subsidiary Guarantee, and so long as
the exercise of such right does not impair the rights of the Holders under the
Subsidiary Guarantees or under this Article XIII, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a PRO RATA amount, based on the net assets of each Subsidiary
Guarantor (including the Funding Subsidiary Guarantor), determined in accordance
with GAAP, subject to Section 13.6, for all payments, damages and expenses
incurred by that Funding Subsidiary Guarantor in discharging the Company's
obligations with respect to the Securities or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act or this Indenture. Each such certificate and each such opinion
shall be in the form of an Officers' Certificate or an Opinion of Counsel, as
applicable, and shall comply with the requirements of this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope for the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such Person, such
Person has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such Person,
such condition or covenant has been complied with.
84
The certificates and opinions provided pursuant to this Section 14.1 and
the statements required by this Section 14.1 shall comply in all respects with
TIA Sections 314(c) and (e).
SECTION 14.2 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar as it
relates to legal matters, upon an opinion of counsel, UNLESS such Officer knows,
or in the exercise of reasonable care should know, that the opinion with respect
to the matters upon which his certificate or opinion is based is erroneous. Any
such Opinion of Counsel may be based, insofar as it relates to factual matters,
upon an Officers' Certificate, unless such counsel knows that the certificate
with respect to such matters is erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 14.3 ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agents duly appointed in writing;
and, EXCEPT as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Trustee and the Company,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. In each
situation in which such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of authority. The fact and date of the
85
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership, principal amount and serial numbers of Securities held
by any Person, and the date of holding the same, shall be provided by the
Security Register.
(d) If the Company shall solicit from the Holders of Securities any
request, demand, authorization, direction, notice, consent, waiver or other Act,
the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of business on such record date shall be deemed to be
Holders for the purpose of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date, PROVIDED that no such authorization, agreement or consent by
the Holders on such record date shall be deemed effective UNLESS it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 14.4 NOTICES, ETC. TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice, consent, waiver or
other Act of Holders or other document provided or permitted by this Indenture
to be made upon, given or furnished to or filed with,
(1) the Trustee by any Holder or the Company shall be sufficient for
every purpose hereunder if made, given, furnished or filed in writing (in
the English language) and delivered in person or mailed by certified or
registered mail (return receipt requested) to the Trustee at its Corporate
Trust Office; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (UNLESS otherwise herein expressly provided)
if in writing (in the English
86
language) and delivered in person or mailed by certified or registered
mail (return receipt requested) to the Company, addressed to it at the
Company's offices located at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000,
Attention: Chief Financial Officer, or at any other address otherwise
furnished in writing to the Trustee by the Company.
SECTION 14.5 NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice of any event to Holders by the
Company, the Trustee or any Paying Agent, such notice shall be sufficiently
given (UNLESS otherwise herein expressly provided) if in writing (in the English
language) and mailed, first-class postage prepaid, to each Holder affected by
such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice mailed to a Holder in the manner herein
prescribed shall be conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of publication of any Authorized
Newspaper, or by reason of any other cause, it shall be impossible to make
publication of any notice in an Authorized Newspaper or Authorized Newspapers as
required by this Indenture, then such method of publication or notification as
shall be made with the approval of the Trustee shall constitute a sufficient
publication of such notice.
SECTION 14.6 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 14.7 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not. All agreements of the
Trustee in this Indenture shall bind its successor.
SECTION 14.8 SEVERABILITY.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any
87
way be affected or impaired thereby, and a Holder shall have no claim therefor
against any party hereto.
SECTION 14.9 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person (other than the parties thereto, any Paying Agent, any
Securities Registrar and their successors hereunder and the Holders) any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 14.10 GOVERNING LAW; TRUST INDENTURE ACT CONTROLS; CONSENT TO
JURISDICTION AND SERVICE.
(a) THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW. THE COMPANY AND EACH SUBSIDIARY GUARANTOR
IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF
NEW YORK, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
INDENTURE, OR THE SECURITIES, OR ANY SUBSIDIARY GUARANTEE AND FOR ACTIONS
BROUGHT UNDER FEDERAL OR STATE SECURITIES LAWS WITH RESPECT TO THE SECURITIES,
AND THE COMPANY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED BY ANY SUCH COURT.
(b) This Indenture is subject to the provisions of the Trust Indenture Act
that are required to be part of this Indenture and shall, to the extent
applicable, be governed by such provisions. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by operation of Section 318(c) of the Trust Indenture Act, or conflicts
with any provision (an "incorporated provision") required by or deemed to be
included in this Indenture by operation of such Trust Indenture Act section,
such imposed duties or incorporated provisions shall control.
(c) Each of the Company and the Subsidiary Guarantors shall appoint CT
Corporation as their agent upon which process may be served in any action or
proceeding with respect to this Indenture, the Securities or the Subsidiary
Guarantees.
SECTION 14.11 LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity or Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal, interest, premium, if any, and Liquidated Damages, if any,
need not be made on such date, but may be made on the next succeeding Business
88
Day with the same force and effect as if made on the Interest Payment Date,
Redemption Date or at the Stated Maturity or Maturity; PROVIDED, HOWEVER, that
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date, Stated Maturity or Maturity, as the case may be.
SECTION 14.12 NO RECOURSE AGAINST OTHERS.
A director, officer, employee, stockholder, incorporator or Affiliate, as
such, past, present or future, of the Company shall not have any personal
liability under the Securities or this Indenture by reason of his or its status
as a director, officer employee, stockholder, incorporator or Affiliate or any
liability for any obligations of the Company under the Securities or this
Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Holder, by accepting any of the Securities,
waives and releases all such lability to the extent permitted by applicable law.
SECTION 14.13 DUPLICATE ORIGINALS.
The parties may sign any number of copies or counterparts of this
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.
SECTION 14.14 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company. Any such indenture, loan or debt agreement may
not be used to interpret this Indenture.
89
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
ISSUER:
BRAZOS SPORTSWEAR, INC.
By: /S/ F. XXXXXXX XXXXXXXX
Name: F. Xxxxxxx Xxxxxxxx
Title: Vice President
SUBSIDIARY GUARANTORS:
BRAZOS, INC.
By: /S/ F. XXXXXXX XXXXXXXX
Name: F. Xxxxxxx Xxxxxxxx
Title: Vice President
BRAZOS EMBROIDERY, INC.
By: /S/ F. XXXXXXX XXXXXXXX
Name: F. Xxxxxxx Xxxxxxxx
Title: Secretary
S-1
MORNING SUN, INC., formerly known as
SolarCo, Inc., successor in interest to
Morning Sun, Inc.
By: /s/ XXXXXXX X. XXXX
Name: Xxxxxxx X. Xxxx
Title: Chairman Of The Board
TRUSTEE:
NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee
By: /s/ XXXXXX X. XXXXXXXXX
Name: Xxxxxx X. Xxxxxxxxx
Title:Assistant Vice President
S-2
APPENDIX A
FOR OFFERINGS TO QUALIFIED INSTITUTIONAL BUYERS PURSUANT TO
RULE 144A, INSTITUTIONAL "ACCREDITED INVESTORS" (AS DEFINED
IN RULE 501(a) (1), (2), (3) OR (7)) AND TO CERTAIN PERSONS IN
OFFSHORE TRANSACTIONS IN RELIANCE ON REGULATION S.
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions.
1.1. Definitions.
For the purposes of this APPENDIX A the following terms shall have the
meanings indicated below:
"Depository" means The Depository Trust Company, its nominees and their
respective successors.
"Exchange Offer" means the offer by the Company, pursuant to the
Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act.
"Initial Purchasers" means Xxxxxx, Read & Co. Inc. and SBC Warburg, Inc.
"Physical Security" means a certificated Initial Security bearing the
restricted securities legend set forth in Section 2.3(d) of this APPENDIX A.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
the Initial Purchasers, in exchange for the Initial Securities held by the
Initial Purchasers as part of their initial distribution, a like aggregate
principal amount of Private Exchange Securities.
"Purchase Agreement" means the Purchase Agreement dated June 26, 1997,
between the Company, the Subsidiary Guarantors and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
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"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of July 2, 1997, by and among the Company, the Subsidiary Guarantors
and the Initial Purchasers, as such agreement may be amended, modified or
supplemented from time to time.
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement issued by
the Company, in connection with the offer and sale of Initial Securities or
Private Exchange Securities, pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Physical Securities and Global
Securities that bear or are required to bear the legend set forth in Section
2.3(d) of this APPENDIX A.
1.2. Other Definitions.
Defined in
Appendix
TERM A SECTION
"Agent Members".................................. 2.1 (b)
"Global Security"................................ 2.1 (a)
"Regulation S"................................... 2.1 (c)
"Rule 144A"...................................... 2.1 (a)
Terms used herein without definition have the meanings ascribed to them in
the Indenture.
2. The Securities.
2.1. Form and Dating.
The Initial Securities are being offered and sold by the Company pursuant
to the Purchase Agreement.
(a) Global Securities. Initial Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or to an IAI, in
each case as provided in the Purchase Agreement, shall be issued initially in
the form of one or more permanent global Securities in definitive, fully
registered form without interest coupons with the global securities legend and
restricted securities legend set forth in EXHIBIT 1 hereto (each, a "Global
Security"), which shall be deposited on behalf of the Initial Purchasers with
Norwest Bank Minnesota, National Association, at its New York office, as
custodian for the Depository (or with such other custodian as the Depository may
direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and duly endorsed by each Subsidiary
Guarantor and authenticated
-2-
by the Trustee as provided in the Indenture. The aggregate principal amount of
the Global Securities may from time to time be increased or decreased by
adjustments made on the records of the Trustee and the Depository or its nominee
as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.1(b) and pursuant to a Company Order, authenticate and deliver
initially one or more Global Securities that (a) shall be registered in the name
of the Depository for such Global Security or Global Securities or the nominee
of such Depository and (b) shall be delivered by the Trustee to such Depository
or pursuant to such Depository's instructions or held by Norwest Bank Minnesota,
National Association, as custodian for the Depository.
Members of, or participants in, the Depository ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depository or the custodian of the Depository or by the
Trustee under such Global Security, and the Depository may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute
owner of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any agent of
the Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or impair, as between
the Depository and its Agent Members, the operation of customary practices of
such Depository governing the exercise of the rights of a holder of a beneficial
interest in any Global Security.
(c) Physical Securities. Except as provided in this Section 2.1 or Section
2.3 or 2.4 of APPENDIX A, owners of beneficial interests in Global Securities
will not be entitled to receive physical delivery of certificated Securities.
Purchasers of Initial Securities who purchase Initial Securities sold in
reliance on Regulation S under the Securities Act ("Regulation S") will receive
Physical Securities; PROVIDED, HOWEVER, that upon transfer of such Physical
Securities to a QIB or to an IAI, such Physical Securities will, unless the
Global Security has previously been exchanged, be exchanged for an interest in a
Global Security pursuant to the provisions of Section 2.3 of this APPENDIX A.
2.2. Authentication. The Trustee shall authenticate and deliver: (1)
Initial Securities for original issue in an aggregate principal amount of
$100,000,000 and (2) Exchange Securities or Private Exchange Securities for
issue only in an Exchange Offer or a Private Exchange, respectively, pursuant to
the Registration Rights Agreement, for a like principal amount, in each case,
upon a Company Order. Such Company Order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and whether the Securities are to be Initial
Securities, Exchange Securities or Private Exchange Securities. The aggregate
principal amount of Securities outstanding at any time may not exceed
$100,000,000, except as provided in Section 3.6 of the Indenture.
-3-
2.3. Transfer and Exchange. (a) Transfer and Exchange of Physical
Securities. When Physical Securities are presented to the Security Registrar or
a co-registrar with a request:
(x) to register the transfer of such Physical Securities; or
(y) to exchange such Physical Securities for an equal principal
amount of Physical Securities of other authorized denominations,
the Security Registrar or co-registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such transaction are
met; PROVIDED, HOWEVER, that the Physical Securities surrendered for transfer or
exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Security
Registrar or co-registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing; and
(ii) are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act, pursuant to Section
2.3(b) of this APPENDIX A or pursuant to clause (A), (B) or (C) below, and
are accompanied by the following additional information and documents, as
applicable:
(A) if such Physical Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth on the reverse of the Security); or
(B) if such Physical Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Physical Securities are being transferred to an
IAI or pursuant to Rule 144, Rule 904 or another available exemption
from registration, (i) a certification to that effect (in the form
set forth on the reverse of the Security) and (ii) if the Company or
Security Registrar so requests, an Opinion of Counsel or other
evidence reasonably satisfactory to them as to the compliance with
the restrictions set forth in the legend set forth in Section
2.3(d)(i) of this APPENDIX A.
(b) Restrictions on Transfer of a Physical Security for a Beneficial
Interest in a Global Security. A Physical Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Physical Security
duly endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
-4-
(i) certification, in the form set forth on the reverse of the
Security, that such Physical Security is being transferred (A) to a QIB in
accordance with Rule 144A or (B) to an IAI; and
(ii) written instructions directing the Trustee to make, or to
direct the Securities Custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the Securities represented by the Global
Security, such instructions to contain information regarding the
Depository account to be credited with such increase,
then the Trustee shall cancel such Physical Security and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Custodian, the
aggregate principal amount of Securities represented by the Global Security to
be increased by the aggregate principal amount of the Physical Security to be
exchanged and shall credit or cause to be credited to the account of the Person
specified in such instructions a beneficial interest in the Global Security
equal to the principal amount of the Physical Security so canceled. If no Global
Securities are then Outstanding, the Company shall issue and the Trustee shall
authenticate, upon the Company Order, a new Global Security in the appropriate
principal amount.
(c) Transfer and Exchange of Global Securities.
(i) The transfer and exchange of Global Securities or beneficial
interests therein shall be effected through the Depository, in accordance
with this Indenture (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Depository therefor. A
transferor of a beneficial interest in a Global Security shall deliver to
the Security Registrar a written order given in accordance with the
Depository's procedure containing information regarding the participant
account of the Depository to be credited with a beneficial interest in the
Global Security. The Security Registrar shall, in accordance with such
instructions, instruct the Depository to credit to the account of the
Person specified in such instructions a beneficial interest in the Global
Security and to debit the account of the Person making the transfer the
beneficial interest in the Global Security being transferred.
(ii) Notwithstanding any other provisions of this APPENDIX A (other
than the provisions set forth in Section 2.4 of this APPENDIX A), a Global
Security may not be transferred as a whole except by the Depository to a
nominee of the Depository or by a nominee of the Depository to the
Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository.
(iii) In the event that a Global Security is exchanged for
Securities in definitive registered form pursuant to Section 2.4 of this
APPENDIX A prior to the consummation of an Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such
-5-
Securities, such Securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 2.3 (including the certification requirements set forth on the
reverse of the Initial Securities intended to ensure that such transfers
comply with the respective exemption from registration afforded under the
Act) and such other procedures as may from time to time be adopted by the
Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Security certificate evidencing the Global Securities and the
Physical Securities (and all Securities issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the following
form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT."
"THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED
STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904
UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), BUT ONLY IN THE CASE OF A TRANSFER THAT IS
EFFECTED BY THE DELIVERY TO THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED
IN ITS NAME (OR ITS NOMINEE'S NAME) IN THE BOOKS MAINTAINED BY THE REGISTRAR,
AND SUBJECT TO THE RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE TRANSFEROR
AND AN OPINION OF COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY
-0-
XXXXX XX XXX XXXXXX XXXXXX OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE."
Each Physical Security will also bear the following additional legend:
"IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS
SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER
COMPLIES WITH THE FOREGOING RESTRICTIONS."
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Physical Security, the Security Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a Physical
Security that does not bear the legend set forth above and rescind
any restriction on the sale or transfer of such Transfer Restricted
Security; and
(B) in the case of any Transfer Restricted Security that is
represented by a Global Security, the Security Registrar shall
permit the Holder thereof to exchange such Transfer Restricted
Security for a Physical Security that does not bear the legend set
forth above and rescind any restriction on the sale or transfer of
such Transfer Restricted Security;
in either case, if the Holder certifies in writing to the Security Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Initial
Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Securities or such Private Exchange Securities will cease to
apply, the requirements requiring any such Initial Securities or such
Private Exchange Securities issued to certain Holders be issued in global
form will cease to apply, and an Initial Securities or Private Exchange
Securities in certificated or global form without legends will be
available to the transferee of the Holder of such Initial Securities or
Private Exchange Securities upon exchange of such transferring Holder's
certificated Initial Securities or Private Exchange Securities. Upon the
occurrence of any of the circumstances described in
-7-
this paragraph, the Company will deliver a Company Order instructing the
Trustee to issue Securities without legends.
(iv) Upon the consummation of an Exchange Offer with respect to the
Initial Securities pursuant to which certain Holders of such Initial
Securities are offered Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
cease to apply and certificated Initial Securities with the restricted
securities legend set forth in EXHIBIT 1 hereto will be available to
Holders of such Initial Securities that do not exchange their Initial
Securities, and Exchange Securities in certificated or global form will be
available to Holders that exchange such Initial Securities in such
Exchange Offer. Upon the occurrence of any of the circumstances described
in this paragraph, the Company will deliver a Company Order instructing
the Trustee to issue Exchange Securities without legends.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which certain Holders of such Initial
Securities are offered Private Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be issued in global form
will still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in EXHIBIT 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(e) Cancellation or Adjustment of Global Security. At such time as all
beneficial interests in a Global Security have either been exchanged for
certificated or Physical Securities, redeemed, repurchased or canceled, such
Global Security shall be returned to the Depository for cancellation or retained
and canceled by the Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Security is exchanged for certificated or
Physical Securities, redeemed, repurchased or canceled, the principal amount of
Securities represented by such Global Security shall be reduced and an
adjustment shall be made on the books and records of the Trustee (if it is then
the Securities Custodian for such Global Security) with respect to such Global
Security, by the Trustee or the Securities Custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of Securities.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and, upon Company Order, the Trustee shall authenticate
certificated Securities, Physical Securities and Global Securities.
(ii) No service charge shall be made for any registration of
transfer or exchange, but the Company or the Trustee may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge and any other expenses, including the fees and
expenses of the Trustee, payable in connection therewith (other than any
such
-8-
transfer taxes, assessments or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.5 and 10.14).
(iii) The Security Registrar or co-registrar shall not be required
to register the transfer or exchange of (a) any Physical Security selected
for redemption in whole or in part pursuant to Article 3 of the Indenture,
except the unredeemed portion of any Physical Security being redeemed in
part, or (b) any Physical Security for a period beginning 15 Business Days
before the mailing of a notice of an offer to repurchase or redeem
Securities.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Security
Registrar or any co-registrar may deem and treat the person in whose name
a Security is registered as the absolute owner of such Security for the
purpose of receiving payment of principal of and interest, premium, if
any, and Liquidated Damages, if any, on such Security and for all other
purposes whatsoever, whether or not such Security is overdue, and none of
the Company, the Trustee, the Paying Agent, the Security Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Securities issued upon any transfer or exchange pursuant to
the terms of this Indenture shall evidence the same debt and shall be
entitled to the same benefits under this Indenture as the Securities
surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any
beneficial owner of a Global Security, an Agent Member, or a participant
in the Depository or other Person with respect to the accuracy of the
records of the Depository or its nominee or of any participant or an Agent
Member, with respect to any ownership interest in the Securities or with
respect to the delivery to any participant, member, beneficial owner or
other Person (other than the Depository) of any notice (including any
notice of redemption) or the payment of any amount, under or with respect
to such Securities. All notices and communications to be given to the
Holder and all payments to be made to Holders under the Securities shall
be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global
Security). The rights of beneficial owners in any Global Security shall be
exercised only through the Depository subject to the applicable rules and
procedures of the Depository. The Trustee may rely and shall be fully
protected in relying upon information furnished by the Depository with
respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under the Indenture or under applicable law with respect to any
transfer of any interest in any security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation
-9-
or evidence as are expressly required by, and to do so if and when
expressly required by, the terms of the Indenture, and to examine the same
to determine substantial compliance as to form with the express
requirements hereof.
2.4. Certificated Securities.
(a) A Global Security deposited with the Depository or with the Trustee as
custodian for the Depository pursuant to Section 2.1 of this APPENDIX A shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 of this APPENDIX A and (i) the Depository
notifies the Company that it is unwilling or unable to continue as Depository
for such Global Security or if at any time such Depository ceases to be a
"clearing agency" registered under the Exchange Act and a successor depository
is not appointed by the Company within 90 days of such notice, (ii) an Event of
Default has occurred and is continuing or (iii) the Company, in its sole
discretion, notifies the Trustee in writing that it elects to cause the issuance
of certificated Securities under this Indenture.
(b) Any Global Security that is transferable to the beneficial owners
thereof pursuant to this Section 2.4 shall be surrendered by the Depository to
the Trustee to be so transferred, in whole or from time to time in part, without
charge, and, upon Company Order, the Trustee shall authenticate and deliver,
upon such transfer of each portion of such Global Security, an equal aggregate
principal amount of certificated Initial Securities of authorized denominations.
Any portion of a Global Security transferred pursuant to this Section shall be
executed, authenticated and delivered only in denominations of $1,000 and any
integral multiple thereof and registered in such cases as the Depository shall
direct. Any certificated Initial Security delivered in exchange for an interest
in the Global Security shall, except as otherwise provided by Section 2.3(d) of
this APPENDIX A, bear the restricted securities legend set forth in EXHIBIT 1
hereto.
(c) Subject to the provisions of Section 2.4(b) of this APPENDIX A, the
registered Holder of a Global Security may grant proxies and otherwise authorize
any Person, including Agent Members and Persons that may hold interests through
Agent Members, to take any action which a Holder is entitled to take under the
Indenture or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 2.4(a)(i) of this APPENDIX A, (ii) or (iii), the Company will promptly
make available to the Trustee a reasonable supply of certificated Securities in
definitive, fully registered form without interest coupons.
-10-
EXHIBIT 1
to
APPENDIX A
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE
SECURITIES ACT."
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
ONLY (1)(a) TO A PERSON WHO THE SELLER
-1-
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d)
IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), BUT ONLY IN THE CASE OF A TRANSFER THAT IS EFFECTED BY THE DELIVERY
TO THE TRANSFEREE OF DEFINITIVE SECURITIES REGISTERED IN ITS NAME (OR ITS
NOMINEE'S NAME) IN THE BOOKS MAINTAINED BY THE REGISTRAR, AND SUBJECT TO THE
RECEIPT BY THE REGISTRAR OF A CERTIFICATION OF THE TRANSFEROR AND AN OPINION OF
COUNSEL TO THE EFFECT THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES
ACT, (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (A) ABOVE.
[IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH
THE FOREGOING RESTRICTIONS.] (1)
----------
(1) Include if a Physical Security.
-2-
GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND LIQUIDATED DAMAGES, IF ANY, BY CERTAIN SUBSIDIARIES OF
BRAZOS SPORTSWEAR, INC.
CUSIP No._________________ $____________
No. _______________________
BRAZOS SPORTSWEAR, INC.
10 1/2% Senior Note Due 2007
Brazos Sportswear, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
____________ or registered assigns the principal sum of _________ Dollars on
July 1, 2007, at the office or agency of the Company referred to below, and to
pay interest thereon, commencing on January 1, 1998 and continuing semiannually
thereafter, on January 1 and July 1 in each year, accruing from July 2, 1997, or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for, at the rate of 10 1/2% per annum, until the principal hereof
is paid or duly provided for, and (to the extent lawful) to pay on demand
interest on any overdue interest at the rate borne by the Securities from the
date on which such overdue interest becomes payable to the date payment of such
interest has been made or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered on the Security Register
at the close of business on the Regular Record Date for such interest, which
shall be the June 15 or December 15 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and such Defaulted Interest, and (to the
extent lawful) interest on such Defaulted Interest at the rate borne by the
Securities, may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered on the Security Register at the close
of business on a Special Record Date for the payment of such Defaulted Interest
to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
Principal of and premium, if any, interest and Liquidated Damages, if any,
on the Securities shall be payable (i) in same-day funds on or prior to the
payment dates with respect to those amounts in the case of Securities held of
record by the Depository and (ii) at the office of the Trustee in New York, New
York, in the case of Securities held of record by Holders other than the
Depository. The Company may, at its option, pay interest and Liquidated Damages,
if any, on Securities held of
-3-
record by Holders other than the Depository by check mailed to the addresses of
the Persons entitled thereto as they appear in the Security Register on the
Regular Record Date therefor.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
BRAZOS SPORTSWEAR, INC.
By:_____________________________
Name: __________________________
Title: _______________________
Attest:
--------------------------------
Assistant Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:_________________ NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
By: _________________________________
Authorized Signatory
-4-
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
This Security is one of a duly authorized issue of securities of the
Company designated as its 10 1/2% Senior Notes Due 2007 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $100,000,000 which may be issued
under an indenture (herein called the "Indenture"; capitalized terms used herein
and not defined herein shall have the respective meanings set forth in the
Indenture) dated as of July 2, 1997 between the Company, the Subsidiary
Guarantors and Norwest Bank Minnesota, National Association (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Company may, at its option, redeem the Securities in whole or from
time to time in part, on or after July 1, 2002, on not less than 30 nor more
than 60 days' notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below, if redeemed during the
twelve-month period beginning on July 1 of the year indicated below:
Redemption
Year Price
---- ----------
2002........................................... 105.250%
2003........................................... 103.500%
2004........................................... 101.750%
2005 and thereafter............................ 100%
together in the case of any such redemption with accrued and unpaid interest
thereon and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), all as provided herein.
Notwithstanding the foregoing, at any time on or prior to July 1, 2000,
the Company may redeem up to 35% of the aggregate principal amount of Securities
originally issued on not less than 30 nor more than 60 days' notice to each
Holder of Securities to be redeemed, from the Net Cash Proceeds of a Public
Equity Offering, at a Redemption Price equal to 110.5% of the principal amount
thereof, together with accrued and unpaid interest thereon and Liquidated
Damages, if any, to the Redemption Date, PROVIDED that (i) at least $65,000,000
aggregate principal amount of Securities originally issued remains Outstanding
immediately after that redemption and (ii) the Company effects that redemption
within 60 days after the Public Equity Offering closes.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to Holders
of such Securities, or one or more
-5-
Predecessor Securities, of record at the close of business on the relevant
Record Date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the Redemption Date. In the event of
redemption or purchase of this Security in part only, a new Security or
Securities for the unredeemed or unpurchased portion hereof shall be issued in
the name of the Holder hereof upon the cancellation hereof.
The Securities do not have the benefit of any mandatory redemption or
sinking fund obligations.
If a Change of Control of the Company occurs, and subject to certain
conditions and limitations provided in the Indenture, the Company will be
obligated to make an offer to purchase, on a Business Day not more than 60 or
less than 30 days following the occurrence of a Change of Control of the
Company, all the then Outstanding Securities at a purchase price equal to 101%
of the principal amount thereof, together with accrued and unpaid interest
thereon, if any, and Liquidated Damages, if any, to the Change of Control
Purchase Date, all as provided in the Indenture.
In the event of Asset Sales, under certain circumstances, the Company will
be obligated to make a Net Proceeds Offer to purchase all or a specified portion
of each Holder's Securities at a purchase price equal to 100% of the principal
amount of the Securities, together with accrued and unpaid interest thereon, if
any, and Liquidated Damages, if any, to the Net Proceeds Payment Date, all as
provided in the Indenture.
As set forth in the Indenture, an Event of Default is generally (i) any
default in the payment of principal of or premium, if any, on any of the
Securities, whether at maturity, redemption or otherwise (including pursuant to
a Change of Control Offer or a Net Proceeds Offer); (ii) any default for 30 days
in payment of interest or Liquidated Damages, if any, on any of the Securities;
(iii) any default in the performance or breach of agreements relating to
mergers, consolidations and sales of assets substantially as an entirety or the
failure to make or consummate either a Change of Control Offer or a Net Proceeds
Offer; (iv) any failure of the Company or any Subsidiary Guarantor for 30 days
after written notice to comply with any other covenants in the Indenture or the
Securities or its Subsidiary Guarantee, as the case may be; (v) certain payment
defaults under, and the acceleration prior to the maturity of, certain
Indebtedness of the Company or any Restricted Subsidiary in an aggregate
principal amount in excess of $5,000,000; (vi) certain final judgments or orders
against the Company or any Restricted Subsidiary in an aggregate amount of more
than $5,000,000 not paid, discharged or stayed for a period of 60 days; (vii)
certain events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary; and (viii) except as permitted by the Indenture and
hereby, cessation of the effectiveness of any Subsidiary Guarantee or any
repudiation thereof. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, except that (a) in the case of an Event of
Default arising from certain events of bankruptcy, insolvency or reorganization
of the Company or any
-6-
Restricted Subsidiary, the principal amount of the Securities will become due
and payable immediately without further action or notice, and (b) in the case of
an Event of Default which relates to certain payment defaults or acceleration
with respect to certain Indebtedness, any such Event of Default and any
consequential acceleration of the Securities will be automatically rescinded if
any such Indebtedness is repaid or if the default relating to such Indebtedness
is cured or waived and, if the holders thereof have accelerated such
Indebtedness, then such holders have rescinded their declaration of
acceleration. No Holder may pursue any remedy under the Indenture unless the
Trustee shall have failed to act after notice from such Holder of an Event of
Default and written request by Holders of at least 25% in aggregate principal
amount of the Outstanding Securities, and the offer to the Trustee of indemnity
reasonably satisfactory to it; however, such provision does not affect the right
to xxx for enforcement of any overdue payment on a Security by the Holder
thereof. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Outstanding Securities may direct the Trustee in its
exercise of any trust or power under the Indenture. The Trustee may withhold
from Holders notice of any continuing default (except default in payment of
principal, premium, interest or Liquidated Damages) if it determines in good
faith that withholding the notice is in the interest of the Holders. The Company
is required to file annual and quarterly reports with the Trustee as to the
absence or existence of defaults.
The Indenture contains provisions for (i) defeasance at any time of the
entire indebtedness of the Company on this Security and (ii) discharge from
certain covenants and Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security. Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to effect or maintain
the qualification of the Indenture under the Trust Indenture Act to make certain
specified changes, to cure any ambiguity or omission, correct or supplement any
provision that may be defective or inconsistent with any other provision and to
make certain other changes that do not adversely affect the interests of the
Holders in any material respect.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the
-7-
principal of and premium, if any, interest and Liquidated Damages, if any, on
this Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses, including the fees and expenses of the Trustee, payable in connection
therewith.
A director, officer, employee, incorporator, stockholder or Affiliate of
the Company, as such, past, present or future shall not have any personal
liability under this Security or any other Security or the Indenture by reason
of his or its status as such director, officer, employee, incorporator,
stockholder or Affiliate, or any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of,
or by reason of such obligations or their creation. Each Holder, by accepting
this Security, waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of this Security.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000, Attention: Secretary (or such other address as the Company may have
furnished in writing to the Trustee).
-8-
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including without
limitation the obligations of the Holders with respect to a registration and
indemnification of the Company to the extent provided therein.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities, and reliance may be placed only on the other identifying information
printed hereon.
Interest on this Security shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
-9-
[FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE]
The Subsidiary Guarantors, referred to in this Security upon which this
notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor person under the Indenture, have
unconditionally guaranteed, jointly and severally, on a senior basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") (i) the due and punctual payment of the principal of and
premium, if any, and interest on the Securities, whether at Stated Maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal of and premium, if any, and interest, if any, on the
Securities, the payment of Liquidated Damages on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms set forth in Article XIII of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Securities
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth, and are senior obligations of each such Subsidiary
Guarantor to the extent and in the manner provided, in Article XIII of the
Indenture, and may be released or limited under certain circumstances. Reference
is hereby made to such Indenture for the precise terms of the Subsidiary
Guarantee therein made.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication of the Securities upon which this
Subsidiary Guarantee is endorsed shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized signatories.
-10-
SUBSIDIARY GUARANTORS:
BRAZOS, INC.
By:_________________________________
Name:____________________________
Title:___________________________
BRAZOS EMBROIDERY, INC.
By:_________________________________
Name:____________________________
Title:___________________________
MORNING SUN, INC., formerly known as
SolarCo, Inc., successor in interest
to Morning Sun, Inc.
By:_________________________________
Name:____________________________
Title:___________________________
-11-
ASSIGNMENT FORM
To assign this Security fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's Soc. Sec. or tax I.D. No.)
and irrevocably appoint ______________ agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: _____________________ Your Signature: _________________________________
------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) [ ] to the Company; or
(2) [ ] pursuant to an effective registration statement under the Securities
Act of 1933, as amended; or
(3) [ ] inside the United States to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act of 1933, as amended)
that purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that such transfer is
being made in reliance on Rule 144A, in each case pursuant to and in
compliance with Rule 144A under the Securities Act of 1933, as
amended; or
(4) [ ] to an institutional "accredited investor" (within the meanings of
subparagraphs (a)(1), (2), (3) or (7) of Rule 501 under the
Securities Act of 1933, as amended);
-12-
(5) [ ] outside the United States in an offshore transaction within the
meaning of Regulation S under the Securities Act in compliance with
Rule 904 under the Securities Act of 1933, as amended;
(6) [ ] pursuant to Rule 144 under the Securities Act of 1933, as amended;
or
(7) [ ] pursuant to another available exemption from registration provided
under the Securities Act of 1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Securities evidenced by this certificate in the name of any person other
than the registered holder thereof; provided, however, that if box (4), (5), (6)
or (7) is checked, the Trustee may require, prior to registering any such
transfer of the Securities, such legal opinions, certifications and other
information as the Company has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, as
amended.
------------------------------------
Signature
Signature Guarantee:
--------------------------------- ------------------------------------
(Signature must be guaranteed) Signature
------------------------------------------------------------------------------
TO BE COMPLETED BY PURCHASER IF BOX (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned for ongoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:_____________________ _____________________________________________
NOTE: To be executed by an executive officer
-13-
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in this Global Security have been
made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Exchange Principal Amount of this Principal Amount of this Global Security following officer of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
-14-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.14 or 10.16 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 10.14 or 10.16 of the Indenture, state the amount in
principal amount: $_____________.
Date:_______________ Your
Signature:__________________________
(Sign exactly as your name appears
on the other side of this Security.)
Signature Guarantee:____________________________________________________________
(Signature must be guaranteed)
-15-
EXHIBIT 2
to
Appendix A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE
EXCHANGE SECURITY]
GUARANTEED AS TO PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, INTEREST
AND LIQUIDATED DAMAGES, IF ANY, BY CERTAIN SUBSIDIARIES
OF BRAZOS SPORTSWEAR, INC.
[*]
[**]
CUSIP No. _______________
No. _____________________ $______________
BRAZOS SPORTSWEAR, INC.
10 1/2% Senior Note Due 2007
Brazos Sportswear, Inc., a Delaware corporation (herein called the
"Company," which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
___________________ or registered assigns the principal sum of ________________
Dollars on July 1, 2007, at the office or agency of the Company referred to
below, and to pay interest thereon, commencing on January 1, 1998 and continuing
semiannually thereafter, on January 1 and July 1 in each year, accruing from
July 2, 1997, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate of 10 1/2% per annum, until the
principal hereof is paid or duly provided for, and (to the extent lawful) to pay
on demand interest on any overdue interest at the rate borne by the Securities
from the date on which
--------
* If the Security is to be issued in global form, add the Global
Securities Legend from EXHIBIT 1 to APPENDIX A and the attachment from such
EXHIBIT 1 captioned "TO BE ATTACHED TO GLOBAL SECURITIES - SCHEDULE OF INCREASES
OR DECREASES IN GLOBAL SECURITY".
** If the Security is a Private Exchange Security issued in a Private
Exchange to an Initial Purchaser holding an unsold portion of its initial
allotment, add the Restricted Securities Legend from EXHIBIT 1 to APPENDIX A and
replace the Assignment Form included in this EXHIBIT 2 with the Assignment Form
included in such EXHIBIT 1.
-1-
such overdue interest becomes payable to the date payment of such interest has
been made or duly provided for. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in such
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered on the Security Register at the close of
business on the Regular Record Date for such interest, which shall be the June
15 or December 15 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date, and such Defaulted Interest, and (to the extent lawful)
interest on such Defaulted Interest at the rate borne by the Securities, may be
paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered on the Security Register at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
Principal of and premium, if any, interest and Liquidated Damages, if any,
on the Securities shall be payable (i) in same-day funds on or prior to the
payment dates with respect to those amounts in the case of Securities held of
record by the Depository and (ii) at the office of the Trustee in New York, New
York, in the case of Securities held of record by Holders other than the
Depository. The Company may, at its option, pay interest and Liquidated Damages,
if any, on Securities held of record by Holders other than the Depository by
check mailed to the addresses of the Persons entitled thereto as they appear in
the Security Register on the Regular Record Date for that interest.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
-2-
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
BRAZOS SPORTSWEAR, INC.
By:__________________________________
Name:__________________________
Title:_________________________
Attest:
----------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within mentioned
Indenture.
Dated:___________________ NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
TRUSTEE
By:_________________________________
Authorized Signatory
-3-
[FORM OF REVERSE SIDE OF EXCHANGE
OR PRIVATE EXCHANGE SECURITY]
This Security is one of a duly authorized issue of securities of the
Company designated as its 10 1/2% Senior Notes Due 2007 (herein called the
"Securities"), limited (except as otherwise provided in the Indenture referred
to below) in aggregate principal amount to $100,000,000 which may be issued
under an indenture (herein called the "Indenture"; capitalized terms used herein
and not defined herein shall have the respective meanings set forth in the
Indenture) dated as of July 2, 1997 between the Company, the Subsidiary
Guarantors and Norwest Bank Minnesota, National Association (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties,
obligations and immunities thereunder of the Company, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered.
The Company may, at its option, redeem the Securities in whole or from
time to time in part, on or after July 1, 2002, on not less than 30 nor more
than 60 days' notice at the following Redemption Prices (expressed as
percentages of principal amount) set forth below, if redeemed during the
twelve-month period beginning on July 1 of the year indicated below:
Redemption
Year Price
---- ----------
2002...................................... 105.250%
2003........................................... 103.500%
2004........................................... 101.750%
2005 and thereafter............................ 100%
together in the case of any such redemption with accrued and unpaid interest
thereon and Liquidated Damages, if any, to the applicable Redemption Date
(subject to the right of Holders of record on the relevant Regular Record Date
to receive interest due on an Interest Payment Date that is on or prior to such
Redemption Date), all as provided herein.
Notwithstanding the foregoing, at any time on or prior to July 1, 2000,
the Company may redeem up to 35% of the aggregate principal amount of Securities
originally issued on not less than 30 nor more than 60 days' notice to each
Holder of Securities to be redeemed, from the Net Cash Proceeds of a Public
Equity Offering, at a Redemption Price equal to 110.5% of the principal amount
thereof, together with accrued and unpaid interest thereon and Liquidated
Damages, if any, to the Redemption Date, PROVIDED that (i) at least $65,000,000
aggregate principal amount of Securities originally issued remains Outstanding
immediately after that redemption and (ii) the Company effects that redemption
within 60 days after the Public Equity Offering closes.
-4-
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to Holders
of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant Record Date referred to on the face hereof.
Securities (or portions thereof) for whose redemption and payment provision is
made in accordance with the Indenture shall cease to bear interest from and
after the Redemption Date. In the event of redemption or purchase of this
Security in part only, a new Security or Securities for the unredeemed or
unpurchased portion hereof shall be issued in the name of the Holder hereof upon
the cancellation hereof.
The Securities do not have the benefit of any mandatory redemption or
sinking fund obligations.
If a Change of Control of the Company occurs, and subject to certain
conditions and limitations provided in the Indenture, the Company will be
obligated to make an offer to purchase, on a Business Day not more than 60 or
less than 30 days following the occurrence of a Change of Control of the
Company, all the then Outstanding Securities at a purchase price equal to 101%
of the principal amount thereof, together with accrued and unpaid interest, if
any, to the Change of Control Purchase Date, all as provided in the Indenture.
In the event of Asset Sales, under certain circumstances, the Company will
be obligated to make a Net Proceeds Offer to purchase all or a specified portion
of each Holder's Securities at a purchase price equal to 100% of the principal
amount of the Securities, together with accrued and unpaid interest, if any, to
the Net Proceeds Payment Date.
As set forth in the Indenture, an Event of Default is generally (i) any
default in the payment of principal of or premium, if any, on any of the
Securities, whether at maturity, redemption or otherwise (including pursuant to
a Change of Control Offer or a Net Proceeds Offer); (ii) any default for 30 days
in payment of interest or Liquidated Damages, if any, on any of the Securities;
(iii) any default in the performance or breach of agreements relating to
mergers, consolidations and sales of assets substantially as an entirety or the
failure to make or consummate either a Change of Control Offer or a Net Proceeds
Offer; (iv) any failure of the Company or any Subsidiary Guarantor for 30 days
after written notice to comply with any other covenants in the Indenture or the
Securities or its Subsidiary Guarantee, as the case may be; (v) certain payment
defaults under, and the acceleration prior to the maturity of, certain
Indebtedness of the Company or any Restricted Subsidiary in an aggregate
principal amount in excess of $5,000,000; (vi) certain final judgments or orders
against the Company or any Subsidiary in an aggregate amount of more than
$5,000,000 not paid, discharged or stayed for a period of 60 days; (vii) certain
events of bankruptcy, insolvency or reorganization of the Company or any
Restricted Subsidiary; and (viii) except as permitted by the Indenture and
hereby, cessation of the effectiveness of any Subsidiary Guarantee or any
repudiation thereof. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities may declare the principal amount of all the Securities to
be due and payable immediately, except that (a) in the case of an Event of
Default arising from certain events of bankruptcy, insolvency or reorganization
of the Company or any
-5-
Restricted Subsidiary, the principal amount of the Securities will become due
and payable immediately without further action or notice, and (b) in the case of
an Event of Default which relates to certain payment defaults or acceleration
with respect to certain Indebtedness, any such Event of Default and any
consequential acceleration of the Securities will be automatically rescinded if
any such Indebtedness is repaid or if the default relating to such Indebtedness
is cured or waived and, if the holders thereof have accelerated such
Indebtedness, then such holders have rescinded their declaration of
acceleration. No Holder may pursue any remedy under the Indenture unless the
Trustee shall have failed to act after notice from such Holder of an Event of
Default and written request by Holders of at least 25% in aggregate principal
amount of the Outstanding Securities, and the offer to the Trustee of indemnity
reasonably satisfactory to it; however, such provision does not affect the right
to xxx for enforcement of any overdue payment on a Security by the Holder
thereof. Subject to certain limitations, Holders of a majority in aggregate
principal amount of the Outstanding Securities may direct the Trustee in its
exercise of any trust or power under the Indenture. The Trustee may withhold
from Holders notice of any continuing default (except default in payment of
principal, premium, interest or Liquidated Damages) if it determines in good
faith that withholding the notice is in the interest of the Holders. The Company
is required to file annual and quarterly reports with the Trustee as to the
absence or existence of defaults.
The Indenture contains provisions for (i) defeasance at any time of the
entire indebtedness of the Company on this Security and (ii) discharge from
certain covenants and Defaults and Events of Default, upon compliance by the
Company with certain conditions set forth therein, which provisions apply to
this Security.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof whether or not notation of such consent or waiver is made upon
this Security. Without the consent of any Holder, the Company and the Trustee
may amend or supplement the Indenture or the Securities to effect or maintain
the qualification of the Indenture under the Trust Indenture Act to make certain
specified changes, to cure any ambiguity or omission, correct or supplement any
provision that may be defective or inconsistent with any other provision and to
make certain other changes that do not adversely affect the interests of the
Holders in any material respect.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the
-6-
principal of and premium, if any, interest and Liquidated Damages, if any, on
this Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registerable on the Security
Register of the Company, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained for such purpose duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company or the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge and any other
expenses, including the fees and expenses of the Trustee, payable in connection
therewith.
A director, officer, employee, incorporator, stockholder or Affiliate of
the Company, as such, past, present or future shall not have any personal
liability under this Security or any other Security or the Indenture by reason
of his or its status as such director, officer, employee, incorporator,
stockholder or Affiliate, or any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of,
or by reason of such obligations or their creation. Each Holder, by accepting
this Security, waives and releases all such liability. Such waiver and release
are part of the consideration for the issuance of this Security.
Prior to the time of due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security is overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
00000, Attention: Secretary (or such other address as the Company may have
furnished in writing to the Trustee).
-7-
Each Holder of a Security, by acceptance hereof, acknowledges and agrees
to the provisions of the Registration Rights Agreement, including without
limitation the obligations of the Holders with respect to a registration and
indemnification of the Company to the extent provided therein.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities, and reliance may be placed only on the other identifying information
printed hereon.
Interest on this Security shall be computed on the basis of a 360-day year
comprised of twelve 30-day months.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
-8-
[FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE]
The Subsidiary Guarantors, referred to in this Security upon which this
notation is endorsed and each hereinafter referred to as a "Subsidiary
Guarantor," which term includes any successor person under the Indenture, have
unconditionally guaranteed, jointly and severally, on a senior basis (such
guarantee by each Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee") (i) the due and punctual payment of the principal of and
premium, if any, and interest on the Securities, whether at Stated Maturity, by
acceleration or otherwise, the due and punctual payment of interest on the
overdue principal of and premium, if any, and interest, if any, on the
Securities, the payment of Liquidated Damages on the Securities, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms set forth in Article XIII of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, the same will be promptly paid in
full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.
The obligations of each Subsidiary Guarantor to the Holders of Securities
and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are
expressly set forth, and are senior obligations of each such Subsidiary
Guarantor to the extent and in the manner provided, in Article XIII of the
Indenture, and may be released or limited under certain circumstances. Reference
is hereby made to such Indenture for the precise terms of the Subsidiary
Guarantee therein made.
The Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication of the Security upon which this
Subsidiary Guarantee is endorsed shall have been executed by the Trustee under
the Indenture by the manual signature of one of its authorized signatories.
-9-
SUBSIDIARY GUARANTORS:
BRAZOS, INC.
By: ______________________________________
Name:_______________________________
Title:________________________________
BRAZOS EMBROIDERY, INC.
By: ______________________________________
Name:_______________________________
Title:______________________________
MORNING SUN, INC., formerly known as
SolarCo, Inc., successor in interest to
Morning Sun, Inc.
By: ______________________________________
Name:_______________________________
Title:______________________________
-10-
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's Soc. Sec. or tax I.D. No.)
and irrevocably appoint _________________________ agent to transfer this
Security on the books of the Company. The agent may substitute another to act
for him.
------------------------------------------------------------------------------
Date:__________________ Your Signature:__________________________________
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
-11-
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.14 or 10.16 of the Indenture, check the box:
[ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 10.14 or 10.16 of the Indenture, state the amount:
$_____________________________
Date:_____________________ Your Signature:__________________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee:___________________________________________________________
-12-
