EXHIBIT 4.1
EXECUTION COPY
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FAVORITE BRANDS INTERNATIONAL, INC.,
THE SUBSIDIARY GUARANTORS PARTIES HERETO,
AND
LASALLE NATIONAL BANK,
AS TRUSTEE
10 3/4% Senior Notes due 2006
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INDENTURE
Dated as of May 19, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
Definitions and Incorporation by Reference ............. 1
SECTION 1.1. Definitions .............................................. 1
SECTION 1.2. Other Definitions ........................................ 21
SECTION 1.3. Incorporation by Reference of Trust Indenture Act ........ 22
SECTION 1.4. Rules of Construction .................................... 23
ARTICLE II
The Securities ........................... 23
SECTION 2.1. Form, Dating ............................................. 23
SECTION 2.2. Execution and Authentication ............................. 31
SECTION 2.3. Registrar and Paying Agent ............................... 32
SECTION 2.4. Paying Agent To Hold Money in Trust ...................... 33
SECTION 2.5. Securityholder Lists ..................................... 33
SECTION 2.6. Transfer and Exchange .................................... 33
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors .......... 37
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S ....................... 38
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities .......... 39
SECTION 2.10. Outstanding Securities ................................... 40
SECTION 2.11. Temporary Securities ..................................... 41
SECTION 2.12. Cancellation ............................................. 41
SECTION 2.13. Payment of Interest; Defaulted Interest .................. 41
SECTION 2.14. Computation of Interest .................................. 42
SECTION 2.15. CUSIP Numbers ............................................ 43
ARTICLE III
Covenants ............................. 43
SECTION 3.1. Payment of Securities .................................... 43
SECTION 3.2. SEC Reports and Available Information .................... 43
SECTION 3.3. Limitation on Indebtedness ............................... 44
SECTION 3.4. Limitation on Restricted Payments ........................ 46
SECTION 3.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries .................................. 49
SECTION 3.6. Limitation on Sales of Assets and Subsidiary Stock ....... 50
SECTION 3.7. Limitation on Affiliate Transactions ..................... 53
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SECTION 3.8. Change of Control ........................................ 54
SECTION 3.9. Limitation on Dispositions of Capital Stock of Restricted
Subsidiaries ............................................. 57
SECTION 3.10. Limitation on Liens ...................................... 57
SECTION 3.11. Future Subsidiary Guarantors ............................. 57
SECTION 3.12. Limitation on Lines of Business .......................... 57
SECTION 3.13. Limitation on Sale/Leaseback Transactions ................ 57
SECTION 3.14. Maintenance of Office or Agency .......................... 58
SECTION 3.15. Corporate Existence ...................................... 58
SECTION 3.16. Payment of Taxes and Other Claims ........................ 59
SECTION 3.17. Compliance Certificate ................................... 59
SECTION 3.18. Further Instruments and Acts ............................. 59
ARTICLE IV
Successor Company ......................... 59
SECTION 4.1. Merger and Consolidation ................................. 59
ARTICLE V
Redemption of Securities ....................... 61
SECTION 5.1. Optional Redemption ...................................... 61
SECTION 5.2. Applicability of Article ................................. 61
SECTION 5.3. Election to Redeem; Notice to Trustee .................... 61
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed ........ 61
SECTION 5.5. Notice of Redemption ..................................... 62
SECTION 5.6. Deposit of Redemption Price .............................. 63
SECTION 5.7. Notes Payable on Redemption Date ......................... 63
SECTION 5.8. Securities Redeemed in Part .............................. 63
ARTICLE VI
Defaults and Remedies ....................... 64
SECTION 6.1. Events of Default ........................................ 64
SECTION 6.2. Acceleration ............................................. 66
SECTION 6.3. Other Remedies ........................................... 66
SECTION 6.4. Waiver of Past Defaults .................................. 67
SECTION 6.5. Control by Majority ...................................... 67
SECTION 6.6. Limitation on Suits ...................................... 67
SECTION 6.7. Rights of Holders to Receive Payment ..................... 68
SECTION 6.8. Collection Suit by Trustee ............................... 68
SECTION 6.9. Trustee May File Proofs of Claim ......................... 68
SECTION 6.10. Priorities ............................................... 68
SECTION 6.11. Undertaking for Costs .................................... 69
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ARTICLE VII
Trustee .............................. 69
SECTION 7.1. Duties of Trustee ........................................ 69
SECTION 7.2. Rights of Trustee ........................................ 71
SECTION 7.3. Individual Rights of Trustee ............................. 71
SECTION 7.4. Trustee's Disclaimer ..................................... 71
SECTION 7.5. Notice of Defaults ....................................... 71
SECTION 7.6. Reports by Trustee to Holders ............................ 72
SECTION 7.7. Compensation and Indemnity ............................... 72
SECTION 7.8. Replacement of Trustee ................................... 73
SECTION 7.9. Successor Trustee by Merger .............................. 73
SECTION 7.10. Eligibility; Disqualification ............................ 74
SECTION 7.11. Preferential Collection of Claims Against Company ........ 74
ARTICLE VIII
Discharge of Indenture; Defeasance ................. 74
SECTION 8.1. Discharge of Liability on Securities; Defeasance ......... 74
SECTION 8.2. Conditions to Defeasance ................................. 76
SECTION 8.3. Application of Trust Money ............................... 77
SECTION 8.4. Repayment to Company ..................................... 77
SECTION 8.5. Indemnity for U.S. Government Obligations ................ 77
SECTION 8.6. Reinstatement ............................................ 77
ARTICLE IX
Amendments ............................. 78
SECTION 9.1. Without Consent of Holders ............................... 78
SECTION 9.2. With Consent of Holders .................................. 79
SECTION 9.3. Compliance with Trust Indenture Act ...................... 79
SECTION 9.4. Revocation and Effect of Consents and Waivers ............ 80
SECTION 9.5. Notation on or Exchange of Securities .................... 80
SECTION 9.6. Trustee To Sign Amendments ............................... 80
ARTICLE X
Guarantee ............................. 80
SECTION 10.1. Guarantee ................................................ 80
SECTION 10.2. Limitation on Liability; Termination, Release and
Discharge ................................................ 82
SECTION 10.3. Right of Contribution .................................... 83
SECTION 10.4. No Subrogation ........................................... 83
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ARTICLE XI
Miscellaneous ........................... 84
SECTION 11.1. Trust Indenture Act Controls ............................. 84
SECTION 11.2. Notices .................................................. 84
SECTION 11.3. Communication by Holders with other Holders .............. 85
SECTION 11.4. Certificate and Opinion as to Conditions Precedent ....... 85
SECTION 11.5. Statements Required in Certificate or Opinion ............ 85
SECTION 11.6. When Securities Disregarded .............................. 85
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar ............. 86
SECTION 11.8. Legal Holidays ........................................... 86
SECTION 11.9. GOVERNING LAW ............................................ 86
SECTION 11.10. No Recourse Against Others ............................... 86
SECTION 11.11. Successors ............................................... 86
SECTION 11.12. Multiple Originals ....................................... 86
SECTION 11.13. Variable Provisions ...................................... 86
SECTION 11.14. Qualification of Indenture ............................... 86
SECTION 11.15. Table of Contents; Headings .............................. 87
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EXHIBIT A Form of the Initial Security
EXHIBIT B Form of the Exchange Security
EXHIBIT C Form of Subsidiary Guarantee
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CROSS-REFERENCE TABLE
TIA Indenture
Section Section
310(a)(1) ....................................................... 7.10
(a)(2) ....................................................... 7.10
(a)(3) ....................................................... N.A.
(a)(4) ....................................................... N.A.
(b) .......................................................... 7.8; 7.10
(c) .......................................................... N.A.
311(a) .......................................................... 7.11
(b) .......................................................... 7.11
(c) .......................................................... N.A.
312(a) .......................................................... 2.5
(b) .......................................................... 11.3
(c) .......................................................... 11.3
313(a) .......................................................... 7.6
(b)(1) ....................................................... N.A.
(b)(2) ....................................................... 7.6
(c) .......................................................... 7.6
(d) .......................................................... 7.6
314(a) .......................................................... 3.2; 11.2
(b) .......................................................... N.A.
(c)(1) ....................................................... 11.4
(c)(2) ....................................................... 11.4
(c)(3) ....................................................... N.A.
(d) .......................................................... N.A.
(e) .......................................................... 11.5
315(a) .......................................................... 7.1
(b) .......................................................... 7.5; 11.2
(c) .......................................................... 7.1
(d) .......................................................... 7.1
(e) .......................................................... 6.11
316(a)(last sentence) ........................................... 11.6
(a)(1)(A) .................................................... 6.5
(a)(1)(B) .................................................... 6.4
(a)(2) ....................................................... N.A.
(b) .......................................................... 6.7
317(a)(1) ....................................................... 6.8
(a)(2) ....................................................... 6.9
(b) .......................................................... 2.4
318(a) .......................................................... 11.1
N.A. means Not Applicable.
vi
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
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INDENTURE dated as of May 19, 1998, among FAVORITE BRANDS INTERNATIONAL,
INC., a Delaware corporation (the "Company"), THE SUBSIDIARY GUARANTORS (as
defined) and LaSalle National Bank, a national bank organized and existing under
the laws of the United States of America (the "Trustee") as Trustee.
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders of (i) the Company's 10 3/4% Senior
Notes due 2006 on the date hereof (the "Original Securities"), (ii) any
Subsequent Series Securities (as defined herein) that may be issued after the
Issue Date (all such securities in clause (i) and (ii) being referred to
collectively as "Initial Securities"), (iii) if and when issued in exchange for
Initial Securities as provided in the Registration Rights Agreement or a similar
agreement relating to Initial Securities (as hereinafter defined), the Company's
10 3/4% Senior Notes due 2006 (the "Exchange Securities") and (iv) if and when
issued as provided in the Registration Rights Agreement, the Private Exchange
Securities (as defined in the Registration Rights Agreement; together with
Initial Securities and Exchange Securities, the "Securities").
ARTICLE I
Definitions and Incorporation by Reference
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SECTION 1.1. Definitions.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) to be used by the Company or a Restricted
Subsidiary in a Related Business; (ii) the Capital Stock of a Person that
becomes a Restricted Subsidiary as a result of the acquisition of such Capital
Stock by the Company or a Restricted Subsidiary of the Company; or (iii) Capital
Stock constituting a minority interest in any Person that at such time is a
Restricted Subsidiary of the Company; provided, however, that, in the case of
clauses (ii) and (iii), such Restricted Subsidiary is primarily engaged in a
Related Business.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control.
"Asset Disposition" means any sale, lease (other than an operating lease
entered into in the ordinary course of business), transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of a
Subsidiary (other than directors' qualifying shares), property or other assets
(each referred to for the purposes of this definition as a "disposition") by the
Company or any of its Restricted Subsidiaries (including any disposition by
means of a merger, consolidation or similar transaction) other than (i) a
disposition by a Restricted Subsidiary to the Company or by the Company or a
Restricted Subsidiary to a Wholly-Owned
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Subsidiary (other than a Receivables Entity), (ii) the sale of Cash Equivalents
in the ordinary course of business, (iii) a disposition of inventory in the
ordinary course of business, (iv) a disposition of obsolete or worn out
equipment or equipment that is no longer useful in the conduct of the business
of the Company and its Restricted Subsidiaries, (v) transactions permitted under
Section 4.1 of this Indenture, (vi) for purposes of Section 3.6 of this
Indenture only, the making of a Permitted Investment or a disposition subject to
Section 3.4 of this Indenture, (vii) an issuance of Capital Stock by a
Restricted Subsidiary of the Company to the Company or to a Wholly-Owned
Subsidiary (other than a Receivables Entity), (viii) sales of accounts
receivable and related assets of the type specified in the definition of
"Qualified Receivables Transaction" to a Receivables Entity, (ix) the licensing
of intellectual property and (x) sales of assets in any fiscal year not to
exceed a fair market value of $1.0 million in the aggregate.
"Attributable Indebtedness" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded semi-annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).
"Average Life" means, as of the date of determination, with respect to any
Indebtedness or Preferred Stock, the quotient obtained by dividing (i) the sum
of the products of the numbers of years from the date of determination to the
dates of each successive scheduled principal payment of such Indebtedness or
redemption or similar payment with respect to such Preferred Stock multiplied by
the amount of such payment by (ii) the sum of all such payments.
"Bank Indebtedness" means any and all amounts, whether outstanding on the
Issue Date or thereafter Incurred, payable by the Company under or in respect of
a Senior Credit Agreement and any related notes, collateral documents, letters
of credit and guarantees and any Interest Rate Agreement entered into in
connection with a Senior Credit Agreement, including principal, premium, if any,
interest (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company at the rate specified
therein whether or not a claim for post filing interest is allowed in such
proceedings), fees, charges, expenses, reimbursement obligations, guarantees and
all other amounts payable thereunder or in respect thereof.
"Board of Directors" means, as to any Person, the board of directors of
such Person or any duly authorized committee thereof.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banking institutions are authorized or required by law to close
in New York City.
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"Capital Stock" of any Person means any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation will be the capitalized amount of such obligation at the time
any determination thereof is to be made in accordance with GAAP, and the Stated
Maturity thereof will be the date of the last payment of rent or any other
amount due under such lease prior to the first date such lease may be terminated
without penalty.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof, having maturities of not more than one year from the
date of acquisition; (ii) marketable general obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition thereof, having a credit
rating of "A" or better from either Standard & Poor's Ratings Group or ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
having maturities of not more than one year from the date of acquisition thereof
issued by any commercial bank having combined capital and surplus in excess of
$250 million; (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (i), (ii) and
(iii) entered into with any bank meeting the qualifications specified in clause
(iii) above; (v) commercial paper rated at the time of acquisition thereof at
least "A-1" or the equivalent thereof by Standard & Poor's Rating Group or "P-1"
or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating agencies cease publishing ratings of investments, and in either
case maturing within one year after the date of acquisition thereof; and (vi)
interests in any money market fund which invests solely in instruments of the
type specified in clauses (i) through (v) above.
"Closing Date" with respect to any Initial Securities, means the date on
which such Initial Securities are originally issued.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means Favorite Brands International, Inc. or a successor.
"Consolidated Coverage Ratio" means as of any date of determination with
respect to any Person, the ratio of (i) the aggregate amount of Consolidated
EBITDA of such Person for the period of the most recent four consecutive fiscal
quarters ending prior to the date of such determination for which internal
financial statements are in existence to (ii) Consolidated Interest Expense for
such four fiscal quarters; provided, however, that (1) if the Company or any
Restricted Subsidiary (x) has Incurred any Indebtedness since the beginning
4
of such period that remains outstanding on such date of determination or if the
transaction giving rise to the need to calculate the Consolidated Coverage Ratio
is an Incurrence of Indebtedness, Consolidated EBITDA and Consolidated Interest
Expense for such period will be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been Incurred on the
first day of such period (except that in making such computation, the amount of
Indebtedness under any revolving credit facility outstanding on the date of such
calculation will be computed based on (A) the average daily balance of such
Indebtedness during such four fiscal quarters or such shorter period for which
such facility was outstanding or (B) if such facility was created after the end
of such four fiscal quarters, the average daily balance of such Indebtedness
during the period from the date of creation of such facility to the date of such
calculation) and the discharge of any other Indebtedness repaid, repurchased,
defeased or otherwise discharged with the proceeds of such new Indebtedness as
if such discharge had occurred on the first day of such period, or (y) has
repaid, repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of the period that is no longer outstanding on such date of
determination or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio involves a discharge of Indebtedness (in each case
other than Indebtedness Incurred under any revolving credit facility unless such
Indebtedness has been permanently repaid and the related commitment terminated),
Consolidated EBITDA and Consolidated Interest Expense for such period will be
calculated after giving effect on a pro forma basis to such discharge of such
Indebtedness, including with the proceeds of such new Indebtedness, as if such
discharge had occurred on the first day of such period (2) if since the
beginning of such period the Company or any Restricted Subsidiary will have made
any Asset Disposition or if the transaction giving rise to the need to calculate
the Consolidated Coverage Ratio is an Asset Disposition, the Consolidated EBITDA
for such period will be reduced by an amount equal to the Consolidated EBITDA
(if positive) directly attributable to the assets which are the subject of such
Asset Disposition for such period or increased by an amount equal to the
Consolidated EBITDA (if negative) directly attributable thereto for such period
and Consolidated Interest Expense for such period will be reduced by an amount
equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Company or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Company and its continuing
Restricted Subsidiaries in connection with such Asset Disposition for such
period (or, if the Capital Stock of any Restricted Subsidiary is sold, the
Consolidated Interest Expense for such period directly attributable to the
Indebtedness of such Restricted Subsidiary to the extent the Company and its
continuing Restricted Subsidiaries are no longer liable for such Indebtedness
after such sale), (3) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) will have made an Investment in
any Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary
or is merged with or into the Company) or an acquisition of assets, including
any acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
an operating unit, division or line of business, Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated after giving
pro forma effect thereto (including the Incurrence of any Indebtedness) as if
such Investment or acquisition occurred on the first day of such period and (4)
if since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Company or any Restricted
Subsidiary since the beginning of
5
such period) will have made any Asset Disposition or any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) or (3) above if made by the Company or a Restricted Subsidiary during such
period, Consolidated EBITDA and Consolidated Interest Expense for such period
will be calculated after giving pro forma effect thereto as if such Asset
Disposition or Investment occurred on the first day of such period. For purposes
of this definition, whenever pro forma effect is to be given to an Investment or
acquisition of assets and the amount of income or earnings relating thereto and
the amount of Consolidated Interest Expense associated with any Indebtedness
Incurred in connection therewith, the pro forma calculations will be determined
in good faith by a responsible financial or accounting officer of the Company
(including giving pro forma effect to cost reductions that would be permitted by
the SEC to be reflected in pro forma financial statements included in a
registration statement filed by the SEC). If any Indebtedness bears a floating
rate of interest and is being given pro forma effect, the interest expense on
such Indebtedness will be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Interest Rate Agreement applicable to such Indebtedness if such
Interest Rate Agreement has a remaining term in excess of 12 months).
"Consolidated EBITDA" for any period means, without duplication, the
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Income
Taxes, (ii) Consolidated Interest Expense, (iii) consolidated depreciation
expense, (iv) consolidated amortization of intangibles and (v) other non-cash
charges reducing Consolidated Net Income (excluding any such non-cash charge to
the extent it represents an accrual of or reserve for cash charges in any future
period or amortization of a prepaid cash expense that was paid in a prior period
not included in the calculation). Notwithstanding the foregoing, clause (i) and
clauses (iii) through (v) relating to amounts of a Restricted Subsidiary of a
Person will be added to Consolidated Net Income to compute Consolidated EBITDA
of such Person only to the extent (and in the same proportion) that the net
income (loss) of such Subsidiary was included in calculating the Consolidated
Net Income of such Person and, to the extent the amounts set forth in clause (i)
and clauses (iii) through (v) are in excess of those necessary to offset a net
loss of such Restricted Subsidiary or if such Restricted Subsidiary has net
income for such period, only if a corresponding amount would be permitted at the
date of determination to be dividended to the Company by such Restricted
Subsidiary without prior approval (that has not been obtained), pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Restricted Subsidiary or its stockholders.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Company and its consolidated Restricted Subsidiaries, whether
paid or accrued plus, to the extent not included in such interest expense, (i)
interest expense attributable to Capitalized Lease Obligations and the interest
portion of rent expense associated with Attributable Indebtedness in respect of
the relevant lease giving rise thereto, determined as if such lease were a
capitalized lease in accordance with GAAP and the interest component of any
deferred payment obligations, (ii) amortization of debt discount and debt
issuance cost, (iii) capitalized interest and accrued interest, (iv) non-cash
interest expense, (v) commissions,
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discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing, (vi) interest actually paid by the Company or any
such Subsidiary under any Guarantee of Indebtedness or other obligation of any
other Person, (vii) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period, (viii) the
product of (a) all dividends paid in cash, Cash Equivalents or Indebtedness or
accrued during such period on any series of Disqualified Stock of such Person or
on Preferred Stock of its Restricted Subsidiaries payable to a party other than
the Company or a Wholly-Owned Subsidiary, times (b) a fraction, the numerator of
which is one and the denominator of which is one minus the then current combined
federal, state, provincial and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP and (ix) the cash contributions to any employee stock ownership plan
or similar trust to the extent such contributions are used by such plan or trust
to pay interest or fees to any Person (other than the Company) in connection
with Indebtedness Incurred by such plan or trust; provided, however, that there
will be excluded therefrom any such interest expense of any Unrestricted
Subsidiary to the extent the related Indebtedness is not Guaranteed or paid by
the Company or any Restricted Subsidiary. For purposes of the foregoing, total
interest expense will be determined after giving effect to any net payments made
or received by the Company and its Subsidiaries with respect to Interest Rate
Agreements.
"Consolidated Net Income" means, for any period, the net income (loss) of
the Company and its consolidated Restricted Subsidiaries, determined in
accordance with GAAP; provided, however, that there will not be included in such
Consolidated Net Income: (i) any net income (loss) of any Person if such Person
is not a Restricted Subsidiary, except that (A) subject to the limitations
contained in (iv) below, the Company's equity in the net income of any such
Person for such period will be included in such Consolidated Net Income up to
the aggregate amount of cash actually distributed by such Person during such
period to the Company or a Restricted Subsidiary as a dividend or other
distribution (subject, in the case of a dividend or other distribution to a
Restricted Subsidiary, to the limitations contained in clause (iii) below) and
(B) the Company's equity in a net loss of any such Person (other than an
Unrestricted Subsidiary) for such period will be included in determining such
Consolidated Net Income to the extent such loss has been funded with cash from
the Company or a Restricted Subsidiary; (ii) any net income (loss) of any Person
acquired by the Company or a Subsidiary in a pooling of interests transaction
for any period prior to the date of such acquisition; (iii) any net income of
any Restricted Subsidiary if such Subsidiary is subject to restrictions,
directly or indirectly, on the payment of dividends or the making of
distributions by such Restricted Subsidiary, directly or indirectly, to the
Company, except that (A) subject to the limitations contained in (iv) below the
Company's equity in the net income of any such Restricted Subsidiary for such
period will be included in such Consolidated Net Income up to the aggregate
amount of cash that could have been distributed by such Restricted Subsidiary
during such period to the Company or another Restricted Subsidiary as a dividend
(subject, in the case of a dividend to another Restricted Subsidiary, to the
limitation contained in this clause) and (B) the Company's equity in a net loss
of any such Restricted Subsidiary for such period will be included in
determining such Consolidated Net Income; (iv) any gain (loss) realized upon the
sale or other disposition of any property, plant or equipment of the Company or
its consolidated Restricted Subsidiaries (including pursuant to any
7
Sale/Leaseback Transaction) which is not sold or otherwise disposed of in the
ordinary course of business and any gain (loss) realized upon the sale or other
disposition of any Capital Stock of any Person; (v) any extraordinary gain or
loss; (vi) amortization of premiums, fees and expenses incurred on or prior to
the Issue Date in connection with the offering of the Securities and the Senior
Subordinated Notes and borrowings under the Senior Credit Agreement; and (vii)
the cumulative effect of a change in accounting principles.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" shall have the meaning set forth in Section 2.13.
"Definitive Securities" means certificated Securities, including
Institutional Accredited Investor Notes.
"Disqualified Stock" means, with respect to any Person, any Capital Stock
of such Person which by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable) or upon the happening of any
event (i) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise (other than in connection with a Change of Control or
Asset Sale), (ii) is convertible or exchangeable for Indebtedness or
Disqualified Stock (excluding Capital Stock which is convertible or exchangeable
solely at the option of the Company or a Restricted Subsidiary) or (iii) is
redeemable at the option of the holder thereof, in whole or in part, in each
case on or prior to the Stated Maturity of the Securities (other than in
connection with a Change of Control or Asset Sale), in each case on or prior to
the date that is 91 days after the date (x) on which the Securities mature or
(y) on which there are no Securities outstanding, provided, that only the
portion of Capital Stock which so matures or is mandatorily redeemable, is so
convertible or exchangeable or is so redeemable at the option of the holder
thereof prior to such Stated Maturity will be deemed to be Disqualified Stock;
provided further, that Capital Stock issued to any plan for the benefit of
employees of the Company or its Subsidiaries or by any such plan to such
employees shall not constitute Disqualified Stock solely because it may be
required to be purchased by the Company in order to satisfy applicable statutory
or regulatory obligations.
"Domestic Subsidiary" means any Restricted Subsidiary that is organized
under the laws of the United States of America or any state thereof or the
District of Columbia.
"DTC" means The Depository Trust Company, its nominees and their respective
successors and assigns, or such other depository institution hereinafter
appointed by the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
8
"Exchange Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"Excluded Contribution" means Net Cash Proceeds or Qualified Proceeds, in
each case, received by the Company from (a) contributions to its common equity
capital and (b) the sale (other than to a Subsidiary or to any Company or
Subsidiary management equity plan or stock option plan or any other management
or employee benefit plan or agreement) of Capital Stock (other than Disqualified
Stock) of the Company, in each case designated as Excluded Contributions
pursuant to an Officers' Certificate executed by the principal executive officer
and the principal financial officer of the Company on the date such capital
contributions are made or the date such Capital Stock is sold, as the case may
be, which are excluded from the calculation set forth in Section 3.4(a)(3).
"Fiscal Year" means a 52 or 53 week period ending on the last Saturday in
June.
"Foreign Subsidiary" means any Restricted Subsidiary that is not organized
under the laws of the United States of America or any state thereof or the
District of Columbia.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of this Indenture, including those set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as approved by a significant segment of the
accounting profession; provided, however, that all reports and other financial
information provided by the Company to the holders, the Trustee and/or the SEC
shall be prepared in accordance with GAAP, as in effect on the date of such
report or other financial information. All ratios and computations based on GAAP
contained in this Indenture shall be computed in conformity with GAAP.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise); provided, however, that the term "Guarantee" will not
include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
9
"Guarantor Subordinated Obligation" means, with respect to a Subsidiary
Guarantor, any Indebtedness of such Subsidiary Guarantor (whether outstanding on
the Issue Date or thereafter Incurred) which is expressly subordinate in right
of payment to the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee pursuant to a written agreement; including without limitation,
Guarantees in respect of the Senior Subordinated Notes.
"Hedging Obligations" of any Person means the obligations of such Person
pursuant to any Interest Rate Agreement or Currency Agreement.
"Holder" or "Securityholder" means the Person in whose name a Security is
registered in the Note Register.
"Holdings" means Favorite Brands International Holding Corp., a Delaware
corporation.
"Incur" means issue create, assume, Guarantee, incur or otherwise become,
contingently or otherwise, liable for; provided, however, that any Indebtedness
or Capital Stock of a Person existing at the time such Person becomes a
Restricted Subsidiary (whether by merger, consolidation, acquisition or
otherwise) will be deemed to be Incurred by such Restricted Subsidiary at the
time it becomes a Restricted Subsidiary; and the terms "Incurred" and
"Incurrence" have meanings correlative to the foregoing.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money; (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments; (iii) all obligations of
such Person in respect of letters of credit, bankers' acceptances or other
similar instruments (including reimbursement obligations with respect thereto);
(iv) all obligations of such Person to pay the deferred and unpaid purchase
price of property (except trade payables), which purchase price is due more than
six months after the date of placing such property in service or taking delivery
and title thereto; (v) all Capitalized Lease Obligations and all Attributable
Indebtedness of such Person; (vi) the amount of all obligations of such Person
with respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Subsidiary, any Preferred Stock (but
excluding, in each case, any accrued dividends); (vii) all Indebtedness of other
Persons secured by a Lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided, however, that the amount of
such Indebtedness will be the lesser of (A) the fair market value of such asset
at such date of determination and (B) the amount of such Indebtedness of such
other Persons; (viii) all Indebtedness of other Persons to the extent Guaranteed
by such Person; and (ix) to the extent not otherwise included in this
definition, net obligations of such Person under Currency Agreements and
Interest Rate Agreements (the amount of any such obligations to be equal at any
time to the termination value of such agreement or arrangement giving rise to
such obligation that would be payable by such Person at such time). The amount
of Indebtedness of any Person at any date will be the outstanding balance at
such date of all unconditional obligations as described above and the
10
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
In addition, "Indebtedness" of any Person shall include Indebtedness
described in the foregoing paragraph that would not appear as a liability on the
balance sheet of such Person if (1) such Indebtedness is the obligation of a
partnership or joint venture that is not a Restricted Subsidiary (a "Joint
Venture"), (2) such Person or a Restricted Subsidiary is a general partner of
the Joint Venture (a "General Partner") and (3) there is recourse, by contract
or operation of law, with respect to the payment of such Indebtedness to
property or assets of such Person or a Restricted Subsidiary of such Person; and
such Indebtedness shall be included in an amount not to exceed (x) the greater
of (A) the net assets of the General Partner and (B) the amount of such
obligations to the extent that there is recourse, by contract or operation of
law, to the property or assets of such Person or a Restricted Subsidiary of such
Person (other than the General Partner) or (y) if less than the amount
determined pursuant to clause (x) immediately above, the actual amount of such
Indebtedness that is recourse to such Person, if the Indebtedness is evidenced
by a writing and is for a determinable amount and the related interest expense
shall be included in Consolidated Interest Expense to the extent paid by the
Company or its Restricted Subsidiaries.
"Indenture" means this Indenture as amended or supplemented from time to
time.
"Independent Appraiser" means, with respect to any transaction or series of
related transactions, an independent, nationally recognized appraisal or
investment banking firm or other expert with experience in evaluating or
appraising the terms and conditions of such transaction or series of related
transactions.
"Initial Securities" has the meaning ascribed to it in the second
introductory paragraph of this Indenture.
"Interest Rate Agreement" means with respect to any Person any interest
rate protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Investment" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the form of any direct or
indirect advance, loan (other than advances to customers in the ordinary course
of business) or other extension of credit (including by way of Guarantee or
similar arrangement, but excluding any debt or extension of credit represented
by a bank deposit other than a time deposit) or capital contribution 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 of Capital Stock, Indebtedness or other similar instruments issued
by, such Person and all other items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP; provided that
(i) Hedging Obligations entered into in the ordinary course of
11
business and in compliance with this Indenture, (ii) endorsements of negotiable
instruments and documents in the ordinary course of business and (iii) an
acquisition of assets, Capital Stock or other securities by the Company for
consideration consisting exclusively of common equity securities of the Company
shall not be deemed to be an Investment. For purposes of Section 3.4, (i)
"Investment" will include the portion (proportionate to the Company's equity
interest in a Restricted Subsidiary to be designated as an Unrestricted
Subsidiary) of the fair market value of the net assets of such Restricted
Subsidiary of the Company at the time that such Restricted Subsidiary is
designated an Unrestricted Subsidiary; provided, however, that upon a
redesignation of such Subsidiary as a Restricted Subsidiary, the Company will be
deemed to continue to have a permanent "Investment" in an Unrestricted
Subsidiary in an amount (if positive) equal to (x) the Company's "Investment" in
such Subsidiary at the time of such redesignation less (y) the portion
(proportionate to the Company's equity interest in such Subsidiary) of the fair
market value of the net assets of such Subsidiary at the time that such
Subsidiary is so re-designated a Restricted Subsidiary; and (ii) any property
transferred to or from an Unrestricted Subsidiary will be valued at its fair
market value at the time of such transfer, in each case as determined in good
faith by the Board of Directors of the Company. If the Company or any Restricted
Subsidiary of the Company sells or otherwise disposes of any Capital Stock of
any Restricted Subsidiary of the Company such that, after giving effect to any
such sale or disposition, such entity is no longer a Subsidiary of the Company,
the Company shall be deemed to have made an Investment on the date of any such
sale or disposition equal to the fair market value of the Capital Stock of such
Subsidiary not sold or disposed of.
"Issue Date" means the date on which the Original Securities are originally
issued.
"Joint Venture" means (i) any corporation, association, or other business
entity (other than a partnership) of which no less than 25% and no more than 50%
of the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time of determination owned or
controlled, directly or indirectly, by the Company or one or more Restricted
Subsidiaries or a combination thereof or (ii) any partnership, joint venture,
limited liability company or similar entity of which (x) no less than 25% and no
more than 50% of the capital accounts, distribution rights, total equity and
voting interests or general or limited partnership interests, as applicable, are
owned or controlled, directly or indirectly, by the Company or one or more other
Restricted Subsidiaries or a combination thereof whether in the form of
membership, general, special or limited partnership interests or otherwise and
(y) the Company or any Restricted Subsidiary is a controlling general partner or
otherwise controls such entity, which in the case of each of clauses (i) and
(ii) is engaged in a Related Business.
"Legal Holiday" has the meaning ascribed to it in Section 11.8.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
12
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., and its successors.
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring person of Indebtedness or other obligations relating
to the properties or assets that are the subject of such Asset Disposition or
received in any other noncash form) therefrom, in each case net of (i) all
legal, accounting, investment banking, title and recording tax expenses,
commissions and other fees and expenses incurred, and all Federal, state,
provincial, foreign and local taxes required to be paid or accrued as a
liability under GAAP (after taking into account any available tax credits or
deductions and any tax sharing arrangements), as a consequence of such Asset
Disposition, (ii) all payments made on any Indebtedness which is secured by any
assets subject to such Asset Disposition, in accordance with the terms of any
Lien upon such assets, or which must by its terms, or in order to obtain a
necessary consent to such Asset Disposition, or by applicable law be repaid out
of the proceeds from such Asset Disposition, (iii) all distributions and other
payments required to be made to minority interest holders in Subsidiaries or
joint ventures as a result of such Asset Disposition and (iv) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such Asset Disposition and retained by the Company or any Restricted Subsidiary
after such Asset Disposition.
"Net Cash Proceeds", with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result of such issuance or sale (after taking into account any available tax
credits or deductions and any tax sharing arrangements).
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any Restricted Subsidiary (a) provides any guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as a guarantor or otherwise), (ii) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) any holder of any other Indebtedness of the Company or any
Restricted Subsidiary to declare a default under such other Indebtedness or
cause the payment thereof to be accelerated or payable prior to its stated
maturity and (iii) the explicit terms of which provide there is no recourse
against any of the assets of the Company or its Restricted Subsidiaries.
"Non-U.S. Person" means a person who is not a U.S person, as defined in
Regulation S.
"Note Register" means the register of Securities, maintained by the
Trustee, pursuant to Section 2.3.
13
"Obligations" has the meaning ascribed to it in Section 10.1.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by an
Officer and either an Assistant Treasurer or an Assistant Secretary of the
Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company or the Trustee.
"Original Securities" means the Company's 10 3/4% Senior Notes due 2006
originally issued on the Issue Date.
"Pari Passu Indebtedness" means Indebtedness that ranks pari passu in right
of payment to the Securities.
"Permitted Holders" means TPG Partners, L.P., TPG Parallel I L.P.,
InterWest Partners V, L.P., InterWest Investors V, L.P., Nassau Capital Partners
L.P., NAS Partners I, L.L.C. and ▇▇ ▇. ▇▇▇▇.
"Permitted Investment" means an Investment by the Company or any Restricted
Subsidiary in (i) the Company, a Restricted Subsidiary (other than a Receivables
Entity) or a Person which will, upon the making of such Investment, become a
Restricted Subsidiary (other than a Receivables Entity); provided, however, that
the primary business of such Restricted Subsidiary is a Related Business; (ii)
another Person if as a result of such Investment such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Company or a Restricted Subsidiary (other than a Receivables
Entity); provided, however, that such Person's primary business is a Related
Business; (iii) cash and Cash Equivalents; (iv) receivables owing to the Company
or any Restricted Subsidiary created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;
provided, however, that such trade terms may include such concessionary trade
terms as the Company or any such Restricted Subsidiary deems reasonable under
the circumstances; (v) payroll, travel and similar advances to cover matters
that are expected at the time of such advances ultimately to be treated as
expenses for accounting purposes and that are made in the ordinary course of
business; (vi) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary; (vii) stock, obligations or securities received in settlement of
debts created in the ordinary course of business and owing to the Company or any
Restricted Subsidiary or in satisfaction of judgments or pursuant to any plan of
reorganization or similar arrangement upon the bankruptcy or insolvency of a
debtor; (viii) Investments made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in compliance
with Section 3.6; (ix) Investments in existence on the Issue Date; (x)
Investments by the Company or any of its Restricted Subsidiaries in an aggregate
amount not to exceed $15.0 million outstanding at any one time (plus, to the
extent
14
not previously reinvested, any return of capital not previously realized made
pursuant to this clause (x)); (xi) Investments by the Company or a Restricted
Subsidiary in a Receivables Entity or any Investment by a Receivables Entity in
any other Person, in each case, in connection with a Qualified Receivables
Transaction, provided, that any Investment in any such Person is in the form of
a Purchase Money Note, or any equity interest or interests in accounts
receivable and related assets generated by the Company or a Restricted
Subsidiary and transferred to any Person in connection with a Qualified
Receivables Transaction or any such Person owning such accounts receivable; and
(xii) any Investment received as consideration in a transaction not constituting
an Asset Disposition by reason of the $1.0 million threshold contained in the
definition thereof.
"Permitted Liens" means, with respect to any Person, (a) pledges or
deposits by such Person under workmen's compensation laws, unemployment
insurance laws or similar legislation, or in connection with bids, tenders,
contracts (other than for the payment of Indebtedness) or leases to which such
Person is a party, or to secure public or statutory obligations of such Person
or deposits or cash or United States government bonds to secure surety or appeal
bonds to which such Person is a party, or for contested taxes or import or
custom duties or for the payment of rent, in each case Incurred in the ordinary
course of business; (b) Liens imposed by law, including carriers',
warehousemen's, mechanics' supplies, materialmen and repairmen Liens, in each
case for sums not yet due or being contested in good faith by appropriate
proceedings, if a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made in respect thereof; (c) Liens for taxes,
assessments or other governmental charges not yet subject to penalties for non-
payment or which are being contested in good faith by appropriate proceedings
provided reserves required pursuant to GAAP have been taken on the books of the
Company or its Restricted Subsidiaries, as the case may be; (d) Liens in favor
of issuers of surety or performance bonds or bankers' acceptance or letters of
credit issued pursuant to the request of and for the account of such Person in
the ordinary course of its business; provided, however, that such letters of
credit do not constitute Indebtedness; (e) encumbrances, easements or
reservations of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real properties or liens
incidental to the conduct of the business of such Person or to the ownership of
its properties which do not in the aggregate materially adversely affect the
value of said properties or materially impair their use in the operation of the
business of such Person; (f) Liens securing a Hedging Obligation, so long as the
related Indebtedness is, and is permitted to be under this Indenture, secured by
a Lien on the same property securing the Interest Rate Protection Agreement or
Currency Agreement, as the case may be; (g) leases and subleases of real
property which do not materially interfere with the ordinary conduct of the
business of the Company or any of its Restricted Subsidiaries; (h) judgment
Liens not giving rise to an Event of Default so long as such Lien is adequately
bonded and any appropriate legal proceedings which may have been duly initiated
for the review of such judgment have not been finally terminated or the period
within which such proceedings may be initiated has not expired; (i) Liens for
the purpose of securing the payment (or the refinancing of the payment) of all
or a part of the purchase price of, or Capitalized Lease Obligations with
respect to, assets or property acquired or constructed in the ordinary course of
business provided that (x) the aggregate principal amount of Indebtedness
secured by such
15
Liens is otherwise permitted to be Incurred under this Indenture and does not
exceed the cost of the assets or property so acquired or constructed and (y)
such Liens are created within 90 days of construction or acquisition of such
assets or property and do not encumber any other assets or property of the
Company or any Restricted Subsidiary other than such assets or property and
assets affixed or appurtenant thereto; (j) Liens arising solely by virtue of any
statutory or common law provision relating to banker's Liens, rights of set-off
or similar rights and remedies as to deposit accounts or other funds maintained
with a depository institution; provided that such deposit account is not a
pledged cash collateral account; (k) Liens arising from Uniform Commercial Code
financing statement filings regarding operating leases entered into by the
Company and its Restricted Subsidiaries in the ordinary course of business; (l)
Liens existing on the Issue Date; (m) Liens on property or shares of stock of a
Person at the time such Person becomes a Subsidiary; provided, however, that
such Liens are not created, Incurred or assumed in connection with, or in
contemplation of, such other Person becoming a Subsidiary; provided further,
however, that any such Lien may not extend to any other property owned by the
Company or any Restricted Subsidiary; (n) Liens on property at the time the
Company or a Subsidiary acquired the property, including any acquisition by
means of a merger or consolidation with or into the Company or any Restricted
Subsidiary; provided, however, that such Liens are not created, Incurred or
assumed in connection with, or in contemplation of, such acquisition; provided
further, however, that such Liens may not extend to any other property owned by
the Company or any Restricted Subsidiary; (o) Liens securing Indebtedness or
other obligations of a Subsidiary owing to the Company or a Wholly-Owned
Subsidiary (other than a Receivables Entity); (p) Liens securing the Securities
and Subsidiary Guarantees; (q) Liens securing Refinancing Indebtedness Incurred
to Refinance Indebtedness that was previously so secured, provided that (A) such
Liens are not materially less favorable to the Holders and are not materially
more favorable to the lienholders with respect to such Liens than the Liens in
respect of the Indebtedness being refinanced and (B) any such Lien is limited to
all or part of the same property or assets (plus improvements, accessions,
proceeds or dividends or distributions in respect thereof) that secured (or,
under the written arrangements under which the original Lien arose, could
secure) the obligations to which such Liens relate; (r) Liens on assets
transferred to a Receivables Entity or on assets of a Receivables Entity, in
either case incurred in connection with a Qualified Receivables Transaction; (s)
Liens securing Indebtedness and other obligations under a Senior Credit
Agreement and related Interest Rate Agreements and Liens on assets of Restricted
Subsidiaries securing Guarantees of Indebtedness and other obligations under a
Senior Credit Agreement permitted to be incurred under this Indenture; (t) Liens
arising out of consignment or similar arrangements for the sale of goods entered
into by the Company or any Restricted Subsidiary in the ordinary course of
business; and (u) Liens securing Indebtedness permitted to be incurred pursuant
to Section 3.3(b)(xi).
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company, government or any agency or political subdivision hereof or
any other entity.
16
"Preferred Stock", as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Private Exchange Securities" shall have the meaning set forth in the
Registration Rights Agreement or a similar agreement relating to Initial
Securities.
"Public Equity Offering" means a public offering for cash by either of the
Company or Holdings of its respective common stock, or options, warrants or
rights with respect to its common stock (other than public offerings on Forms S-
4 or S-8).
"Purchase Money Note" means a promissory note of a Receivables Entity
evidencing a line of credit, which may be irrevocable, from the Company or any
Restricted Subsidiary of the Company in connection with a Qualified Receivables
Transaction to a Receivables Entity, which note is repayable from cash available
to the Receivables Entity, other than amounts required to be established as
reserves pursuant to agreements, amounts paid to investors in respect of
interest, principal and other amounts owing to such investors and amounts owing
to such investors and amounts paid in connection with the purchase of newly
generated accounts receivable.
"QIB" means any "qualified institutional buyer" (as defined in Rule 144A
under the Securities Act).
"Qualified Proceeds" means any of the following or any combination of the
following: (i) cash, (ii) Cash Equivalents, (iii) long-term assets that are used
or useful in a Related Business and (iv) the Capital Stock of any Person engaged
primarily in a Related Business, if in connection with the receipt by the
Company or any Restricted Subsidiary of the Company of such Capital Stock (a)
such Person becomes a Wholly-Owned Subsidiary and Subsidiary Guarantor or (b)
such Person is merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into, the Company
or any Wholly-Owned Subsidiary that is a Subsidiary Guarantor.
"Qualified Receivables Transaction" means any transaction or series of
transactions that may be entered into by the Company or any of its Restricted
Subsidiaries pursuant to which the Company or any of its Restricted Subsidiaries
may sell, convey or otherwise transfer to (a) a Receivables Entity (in the case
of a transfer by the Company or any of its Restricted Subsidiaries) and (b) any
other Person (in the case of a transfer by a Receivables Entity), or may grant a
security interest in, any accounts receivable (whether now existing or arising
in the future) of the Company or any of its Restricted Subsidiaries, and any
assets related thereto including, without limitation, all collateral securing
such accounts receivable, all contracts and all guarantees or other obligations
in respect of such accounts receivable, the proceeds of such receivables and
other assets which are customarily transferred, or in respect of which security
interests are customarily granted, in connection with asset securitizations
involving accounts receivables.
17
"Receivables Entity" means a Wholly-Owned Subsidiary of the Company which
engages in no activities other than in connection with the financing of accounts
receivable and which is designated by the Board of Directors of the Company (as
provided below) as a Receivables Entity, (a) no portion of the Indebtedness or
any other obligations (contingent or otherwise) of which (i) is guaranteed by
the Company or any Restricted Subsidiary of the Company (excluding guarantees of
obligations (other than the principal of, and interest on, Indebtedness)
pursuant to Standard Securitization Undertakings), (ii) is recourse to or
obligates the Company or any Restricted Subsidiary of the Company in any way
other than pursuant to Standard Securitization Undertakings or (iii) subjects
any property or asset of the Company or any Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings, (b) with
which neither the Company nor any Restricted Subsidiary of the Company has any
material contract, agreement, arrangement or understanding (except in connection
with a Purchase Money Note or Qualified Receivables Transaction) other than on
terms no less favorable to the Company or such Restricted Subsidiary than those
that might be obtained at the time from Persons that are not Affiliates of the
Company, other than fees payable in the ordinary course of business in
connection with servicing accounts receivable, and (c) to which neither the
Company nor any Restricted Subsidiary of the Company has any obligation to
maintain or preserve such entity's financial condition or cause such entity to
achieve certain levels of operating results. Any such designation by the Board
of Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors of the
Company giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions.
"Redemption Date" means, with respect to any redemption of Securities, the
date of redemption with respect thereto.
"Refinancing Indebtedness" means Indebtedness that is Incurred to refund,
refinance, replace, renew, repay or extend (including pursuant to any defeasance
or discharge mechanism) (collectively, "refinance", "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on the
date of this Indenture or Incurred in compliance with this Indenture (including
Indebtedness of the Company that refinances Indebtedness of any Restricted
Subsidiary and Indebtedness of any Restricted Subsidiary that refinances
Indebtedness of a Subsidiary Guarantor or Indebtedness of any Foreign Subsidiary
that refinances Indebtedness of another Foreign Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness, provided, however, that
(i) the Refinancing Indebtedness has a Stated Maturity no earlier than the
Stated Maturity of the Indebtedness being refinanced, (ii) the Refinancing
Indebtedness has an Average Life at the time such Refinancing Indebtedness is
Incurred that is equal to or greater than the Average Life of the Indebtedness
being refinanced, (iii) such Refinancing Indebtedness is Incurred in an
aggregate principal amount (or if issued with original issue discount, an
aggregate issue price) that is equal to or less than the sum of the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding (plus, without duplication, accrued interest,
fees and expenses, including any premium and defeasance costs) of the
Indebtedness being refinanced and (iv) if the Indebtedness being extended,
refinanced, replaced, defeased or
18
refunded is subordinated in right of payment to the Securities, such Refinancing
Indebtedness is subordinated in right of payment to the Securities on terms at
least as favorable to the Holders as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
"Registered Exchange Offer" shall have the meaning set forth in the
Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement, dated May 19, 1998, among the Company, the Subsidiary Guarantors,
Chase Securities Inc. and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
"Related Business" means any business which is the same as, similar to or
reasonably related, ancillary or complementary to any of the businesses of the
Company and its Restricted Subsidiaries on the date of this Indenture.
"Related Party" with respect to any Permitted Holder means (A) any
controlling stockholder or a majority of (or more) owned Subsidiary of such
Permitted Holder or, in the case of an individual, any spouse or immediate
family member of such Permitted Holder, or (B) any trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding a majority (or more) controlling interest of
which consist of such Permitted Holder and/or such other Persons referred to in
the immediately preceding clause (A). Without limiting the generality of the
foregoing, each of TPG Advisors, Inc., TPG Advisors II, Inc. and SKC GenPar LLC
and their respective Affiliates shall be deemed Related Parties of the Permitted
Holders.
"Restricted Period" means the 40 consecutive days beginning on and
including the later of (A) the day on which the Initial Securities are offered
to persons other than distributors (as defined in Regulation S under the
Securities Act) and (B) the Issue Date.
"Restricted Securities Legend" means the Private Placement Legend set forth
in clause (A) of Section 2.1(c) or the Regulation S Legend set forth in clause
(B) of Section 2.1(c), as applicable.
"Restricted Subsidiary" means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Company or a Restricted Subsidiary
transfers such property to a Person and the Company or a Subsidiary leases it
from such Person.
"SEC" means the Securities and Exchange Commission.
"Secured Indebtedness" means any Indebtedness of the Company secured by a
Lien.
19
"Securities" means the collective reference to the Initial Securities,
Exchange Securities and Private Exchange Securities.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Custodian" means the custodian with respect to the Global
Security (as appointed by DTC), or any successor Person thereto and shall
initially be the Trustee.
"Senior Credit Agreement" means, with respect to the Company, one or more
debt facilities (including, without limitation, the Senior Secured Credit
Agreement to be entered into among the Company, The Chase Manhattan Bank, as
Administrative Agent, and the lenders parties thereto from time to time) or
commercial paper facilities with banks or other institutional lenders providing
for revolving credit loans, term loans, receivables financing (including through
the sale of receivables to such lenders or to special purpose entities formed to
borrow from such lenders against such receivables) or letters of credit, in each
case, as amended, restated, modified, renewed, refunded, replaced or refinanced
in whole or in part from time to time (and whether or not with the original
administrative agent and lenders or another administrative agent or agents or
other lenders).
"Senior Subordinated Notes" means obligations issued under the Amended and
Restated Senior Subordinated Note Agreement dated as of September 12, 1997, as
the same may be amended, supplemented or otherwise modified.
"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of the Company within the meaning of Rule 1-02 under Regulation S-X
promulgated by the SEC.
"Standard Securitization Undertakings" means representations, warranties,
covenants and indemnities entered into by the Company or any Subsidiary of the
Company which are reasonably customary in securitization of accounts receivable
transactions.
"Stated Maturity" means, with respect to any security, the date specified
in such security as the fixed date on which the payment of principal of such
security is due and payable, but shall not include any contingent obligations to
repay, redeem, or repurchase any such principal prior to the date originally
scheduled for the payment thereof.
"Subordinated Obligation" means any Indebtedness of the Company (whether
outstanding on the Issue Date or thereafter Incurred) which is subordinate or
junior in right of payment to the Securities pursuant to a written agreement,
including without limitation, Indebtedness in respect of the Senior Subordinated
Notes.
"Subsequent Series Securities" has the meaning ascribed to it in Section
2.2.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the
20
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
(i) such Person, (ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person. Unless otherwise specified
herein, each reference to a Subsidiary shall refer to a Subsidiary of the
Company.
"Subsidiary Guarantee" means, individually, any Guarantee of payment of the
Securities by a Subsidiary Guarantor pursuant to the terms of this Indenture,
and, collectively, all such Guarantees. Each such Subsidiary Guarantee by any
Restricted Subsidiary created or acquired by the Company after the Issue Date
(other than a Foreign Subsidiary or a Receivables Entity) will be in the form
set forth in Exhibit C of this Indenture.
"Subsidiary Guarantor" means each Subsidiary of the Company in existence on
the Issue Date and any Restricted Subsidiary created or acquired by the Company
after the Issue Date (in each case other than a Foreign Subsidiary or a
Receivables Entity).
"TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939 (15
U.S.C. (S)(S) 77aaa-77bbbb), as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a successor
replaces it and, thereafter, means the successor.
"Trust Officer" shall mean, when used with respect to the Trustee, any
officer within the corporate trust department of the Trustee, including any vice
president, assistant vice president, assistant secretary, assistant treasurer,
trust officer or any other officer of the Trustee who customarily performs
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject and who shall have direct responsibility for the administration of this
Indenture.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary or a Person becoming a Subsidiary through merger or consolidation or
Investment therein) to be an Unrestricted Subsidiary only if (a) such Subsidiary
does not own any Capital Stock of, or own or hold any Lien on any property of,
any other Subsidiary of the Company which is not a Subsidiary of the Subsidiary
to be so designated or otherwise an Unrestricted Subsidiary; (b) all the
Indebtedness of such Subsidiary and its Subsidiaries shall, at the date of
designation, and will at all times thereafter, consist of Non-Recourse Debt; (c)
the Company certifies that such designation complies with the limitations of
Section 3.4; (d) such Subsidiary, either alone or in the aggregate with all
other Unrestricted Subsidiaries, does not operate, directly or indirectly, all
or substantially all of the business of the Company and its Subsidiaries; (e)
such Subsidiary does not, directly or indirectly, own any Indebtedness of or
Capital Stock of, and has no investments in, the Company or any Restricted
Subsidiary; and (f) such Subsidiary is a Person
21
with respect to which neither the Company nor any of its Restricted Subsidiaries
has any direct or indirect obligation (1) to subscribe for additional Capital
Stock of such Person or (2) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified levels of operating
results. Any such designation by the Board of Directors of the Company shall be
evidenced to the Trustee by filing with the Trustee a resolution of the Board of
Directors of the Company giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
conditions. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be Incurred as of such date.
The Board of Directors of the Company may designate any Unrestricted Subsidiary
to be a Restricted Subsidiary; provided, that immediately after giving effect to
such designation, no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof and the Company could incur
at least $1.00 of additional Indebtedness under Section 3.3(a) on a pro forma
basis taking into account such designation.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Voting Stock" of a corporation means all classes of Capital Stock of such
corporation then outstanding and normally entitled to vote in the election of
directors.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Company, all
of the Capital Stock of which (other than directors' qualifying shares) is owned
by the Company or another Wholly-Owned Subsidiary.
SECTION 1.2. Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"..................... 3.7
"Agent Member".............................. 2.1(d)
"Authenticating Agent"...................... 2.2
"Bankruptcy Law"............................ 6.1
"Change of Control"......................... 3.8
"Change of Control Offer"................... 3.8
"Change of Control Payment"................. 3.8
"Change of Control Payment Date"............ 3.8
"Company Order"............................. 2.2
"covenant defeasance option"................ 8.1(b)
"Custodian"................................. 6.1
22
"Definitive Securities".................................. 2.1(e)
"Event of Default"....................................... 6.1
"Excess Proceeds"........................................ 3.6
"Exchange Global Note"................................... 2.1
"Global Securities"...................................... 2.1(a)
"IAI".................................................... 2.1
"Institutional Accredited Investor Note"................. 2.1
"Legal Defeasance Option"................................ 8.1(b)
"Offer".................................................. 3.6
"Offer Amount"........................................... 3.6
"Offer Period"........................................... 3.6
"Paying Agent"........................................... 2.3
"Private Placement Legend"............................... 2.1(c)
"Purchase Date".......................................... 3.6
"Registrar".............................................. 2.3
"Regulation S"........................................... 2.1(a)
"Regulation S Certificate"............................... 2.1
"Regulation S Global Note"............................... 2.1
"Regulation S Legend".................................... 2.1
"Regulation S Note"...................................... 2.1
"Regulation S Permanent Global Note"..................... 2.1
"Regulation S Temporary Global Note"..................... 2.1
"Release Date"........................................... 2.1
"Resale Restriction Termination Date".................... 2.6
"Restricted Payment"..................................... 3.4
"Rule 144A".............................................. 2.1(b)
"Rule 144A Global Note".................................. 2.1
"Rule 144A Note"......................................... 2.1
"Special Interest Payment Date".......................... 2.13
"Special Record Date".................................... 2.13
"Successor Company"...................................... 4.1
SECTION 1.3. Incorporation by Reference of Trust Indenture Act. This
Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
23
"obligor" on the indenture securities means the Company and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the
TIA, defined in the TIA by reference to another statute or defined by SEC rule
have the meanings assigned to them by such definitions.
SECTION 1.4. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) "including" means including without limitation;
(5) words in the singular include the plural and words in the plural
include the singular;
(6) unsecured Indebtedness shall not be deemed to be subordinate or
junior to Secured Indebtedness merely by virtue of its nature as unsecured
Indebtedness;
(7) the principal amount of any noninterest bearing or other discount
security at any date shall be the principal amount thereof that would be
shown on a balance sheet of the issuer dated such date prepared in
accordance with GAAP; and
(8) the principal amount of any Preferred Stock shall be (i) the
maximum liquidation value of such Preferred Stock or (ii) the maximum
mandatory redemption or mandatory repurchase price with respect to such
Preferred Stock, whichever is greater.
ARTICLE II
The Securities
--------------
SECTION 2.1. Form, Dating and Terms. (a) The Original Securities
are being offered and sold by the Company pursuant to a Purchase Agreement,
dated May 14, 1998, among the Company, the Subsidiary Guarantors, Chase
Securities Inc. and BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. The Original Securities
will be resold initially only to (A) qualified institutional buyers (as defined
in Rule 144A under the Securities Act ("Rule 144A")) in reliance on Rule 144A
("QIBs") and (B) Persons other than U.S. Persons (as defined in Regulation S
under the Securities Act ("Regulation S")) in reliance on Regulation S. Such
Original Securities may thereafter be transferred to among others, QIBs,
purchasers
24
in reliance on Regulation S and IAIs in accordance with Rule 501 of the
Securities Act in accordance with the procedure described herein.
Initial Securities offered and sold to qualified institutional buyers
in the United States of America in reliance on Rule 144A (the "Rule 144A Note")
will be issued on a Closing Date in the form of a permanent global Security,
without interest coupons, substantially in the form of Exhibit A, which is
hereby incorporated by reference and made a part of this Indenture, including
appropriate legends as set forth in Section 2.1(c) (the "Rule 144A Global
Note"), deposited with the Trustee, as custodian for DTC, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The Rule 144A
Global Note may be represented by more than one certificate, if so required by
DTC's rules regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Rule 144A Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Initial Securities offered and sold outside the United States of
America (the "Regulation S Note") in reliance on Regulation S will be issued on
a Closing Date in the form of a temporary global Security, without interest
coupons, substantially in the form set forth in Exhibit A, which is hereby
incorporated by reference and made a part of this Indenture, including
appropriate legends as set forth in Section 2.1(c) (a "Regulation S Temporary
Global Note"). Beneficial interests in a Regulation S Temporary Global Note
will be exchangeable for beneficial interests in a single permanent global
security (the "Regulation S Permanent Global Note", together with the Regulation
S Temporary Global Note, the "Regulation S Global Note") on or after the
expiration of the Restricted Period (the "Release Date") upon the receipt by the
Trustee or its agent of a certificate certifying that the Holder of the
beneficial interest in the Regulation S Temporary Global Note is a non-United
States Person within the meaning of Regulation S (a "Regulation S Certificate"),
substantially in the form set forth in Section 2.8. Upon receipt by the Trustee
or Paying Agent of a Regulation S Certificate, (i) with respect to the first
such Regulation S Certificate, the Company shall execute and upon receipt of a
Company Order for authentication, the Authenticating Agent (as defined in
Section 2.2) shall authenticate and deliver to the custodian, the applicable
Regulation S Permanent Global Note and (ii) with respect to the first and all
subsequent Regulation S Certificates, the custodian shall exchange on behalf of
the applicable beneficial owners the portion of the applicable Regulation S
Temporary Global Note covered by such Regulation S Certificates for a comparable
portion of the applicable Regulation S Permanent Global Note. Upon any exchange
of a portion of a Regulation S Temporary Global Note for a comparable portion of
a Regulation S Permanent Global Note, the custodian shall endorse on the
schedules affixed to each of such Regulation S Global Note (or on continuations
of such schedules affixed to each of such Regulation S Global Note and made
parts thereof) appropriate notations evidencing the date of transfer and (x)
with respect to the applicable Regulation S Temporary Global Note, a decrease in
the principal amount thereof equal to the amount covered by the applicable
certification and (y) with respect to the applicable Regulation S Permanent
Global Note, an increase in the principal amount thereof equal to the principal
amount of the decrease in the applicable Regulation S Temporary Global Note
pursuant to clause (x) above. The Regulation S Global Note will be deposited
with the
25
Trustee, as custodian for DTC, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The Regulation S Global Note may be
represented by more than one certificate, if so required by DTC's rules
regarding the maximum principal amount to be represented by a single
certificate. The aggregate principal amount of the Regulation S Global Note may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for DTC or its nominee, as hereinafter provided.
Initial Securities resold to institutional "accredited investors" (as
defined in Rules 501(a)(1), (2), (3) and (7) under the Securities Act) who are
not QIBs ("IAIs") in the United States of America will be issued in non-global,
fully registered form, without interest coupons, substantially in the form set
forth in Exhibit A, which is hereby incorporated by reference and made a part of
this Indenture, including appropriate legends as set forth in Section 2.1(c),
duly executed by the Company and authenticated by the Trustee as hereinafter
provided (each, an "Institutional Accredited Investor Note"). Upon such
issuance, the Trustee shall register such Institutional Accredited Investor Note
in the name of the beneficial owner or owners of such note (or the nominee of
such beneficial owner or owners) and deliver the certificates for such
Institutional Accredited Investor Notes to the respective beneficial owner or
owners. Upon transfer of such Institutional Accredited Investor Notes to a QIB
or to a Non-U.S. Person, such Institutional Accredited Investor Notes will,
unless the Rule 144A Global Note, in the case of a transfer to a QIB, or the
Regulation S Global Note, in the case of a transfer to a Non-U.S. Person, has
previously been exchanged for Definitive Securities pursuant to Section 2.1(e),
be exchanged for an interest in a Global Security pursuant to the provisions of
Section 2.6.
Exchange Securities exchanged for interests in the Rule 144A Note, the
Regulation S Note and the Institutional Accredited Investor Notes will be issued
in the form of a permanent global Security substantially in the form of Exhibit
B, which is hereby incorporated by reference and made a part of this Indenture,
deposited with the Trustee as hereinafter provided, including the appropriate
legend set forth in Section 2.1(c) (the "Exchange Global Note"). The Exchange
Global Note may be represented by more than one certificate, if so required by
DTC's rules regarding the maximum principal amount to be represented by a single
certificate.
The Rule 144A Global Note, the Regulation S Global Note and the
Exchange Global Note are sometimes collectively herein referred to as the
"Global Securities."
The principal of (and premium, if any) and interest on the Securities
shall be payable at the office or agency of the Company maintained for such
purpose in The City of New York, or at such other office or agency of the
Company as may be maintained for such purpose pursuant to Section 2.3; provided,
however, that, at the option of the Company, each installment of interest may be
paid by (i) check mailed to addresses of the Persons entitled thereto as such
addresses shall appear on the Note Register or (ii) wire transfer to an account
located in the United States maintained by the payee. Payments in respect of
Securities represented by a Global Note (including principal, premium and
interest) will be made by wire transfer of immediately available funds to the
accounts specified by DTC.
26
The Private Exchange Securities shall be in the form of Exhibit A.
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage, in addition to those set forth on Exhibits A and B
and in Section 2.1(c). The Company and the Trustee shall approve the forms of
the Securities and any notation, endorsement or legend on them. Each Security
shall be dated the date of its authentication. The terms of the Securities set
forth in Exhibit A and Exhibit B are part of the terms of this Indenture and, to
the extent applicable, the Company and the Trustee, by their execution and
delivery of this Indenture, expressly agree to be bound by such terms.
(b) Denominations. The Securities shall be issuable only in fully
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof.
(c) Restrictive Legends. Unless and until (i) an Initial Security is
sold under an effective registration statement or (ii) an Initial Security is
exchanged for an Exchange Security in connection with an effective registration
statement, in each case pursuant to the Registration Rights Agreement or a
similar agreement,
(A) the Rule 144A Global Note and the Institutional Accredited
Investor Notes shall bear the following legend (the "Private Placement Legend")
on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED,
PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES, ON ITS OWN
BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS PURCHASED
SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO
THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS
SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE COMPANY,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A
27
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT
OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE
MEANING OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING
A MINIMUM PRINCIPAL AMOUNT OF $250,000 OF SECURITIES, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D), (E) AND (F) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."; and
(B) the Regulation S Global Note shall bear the following legend (the
"Regulation S Legend") on the face thereof:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT IT IS NOT A U.S.
PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF A U.S. PERSON AND IS
ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
REGULATION S UNDER THE SECURITIES ACT ("REGULATION S"), (2) BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE")
WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE
OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO
THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER
28
THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES
THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S,
(E) TO AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS ACQUIRING THE
SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, IN EACH CASE IN A TRANSACTION INVOLVING A MINIMUM
PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES AND
NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT
TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM AND IN THE CASE OF THE FOREGOING CLAUSE (E), A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE.
THIS LEGEND WILL BE REMOVED AFTER 40 CONSECUTIVE DAYS BEGINNING ON AND
INCLUDING THE LATER OF (A) THE DAY ON WHICH THE SECURITIES ARE OFFERED TO
PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S) AND (B) THE
DATE OF THE CLOSING OF THE ORIGINAL OFFERING. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT."
(C) The Global Securities, whether or not an Initial Security, shall
bear the following legend on the face thereof:
"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 IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
29
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."
(D) The Regulation S Temporary Global Note shall also bear the
following legend on the face thereof:
THIS GLOBAL NOTE IS A TEMPORARY GLOBAL NOTE FOR PURPOSES OF REGULATION S
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"). NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY INTEREST HEREIN MAY BE
OFFERED, SOLD OR DELIVERED, EXCEPT AS PERMITTED UNDER THE INDENTURE
REFERRED TO BELOW.
NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO
RECEIVE PAYMENT OF PRINCIPAL OR INTEREST HEREON UNLESS THE REQUIRED
CERTIFICATIONS HAVE BEEN DELIVERED PURSUANT TO THE TERMS OF THE INDENTURE.
(E) Each Institutional Accredited Investor Note shall also bear the
following additional legend on the face thereof:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR
AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIED WITH THE
FOREGOING RESTRICTIONS.
(d) Book-Entry Provisions. (i) This Section 2.1(d) shall apply only
to Global Securities deposited with the Trustee, as custodian for DTC.
(ii) Each Global Security initially shall (x) be registered in the
name of DTC for such Global Security or the nominee of DTC, (y) be delivered to
the Trustee as custodian for DTC and (z) bear legends as set forth in Section
2.1(c).
(iii) Members of, or participants in, DTC ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by DTC or by the Trustee as the custodian of DTC or under such
Global Security, and DTC 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 DTC or impair, as between DTC and its Agent Members,
the
30
operation of customary practices of DTC governing the exercise of the rights of
a holder of a beneficial interest in any Global Security.
(iv) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (e) of this Section to
beneficial owners who are required to hold Definitive Securities or to IAIs who
shall hold certificated Institutional Accredited Investor Notes pursuant to
Section 2.1(a), the Securities Custodian shall reflect on its books and records
the date and a decrease in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interest in the Global
Security to be transferred, and the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Definitive Securities of like tenor and
amount.
(v) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (e) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and deliver, to
each beneficial owner identified by DTC in exchange for its beneficial interest
in such Global Security, an equal aggregate principal amount of Definitive
Securities of authorized denominations.
(vi) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(e) Definitive Securities. (i) Except as provided below, owners of
beneficial interests in Global Securities will not be entitled to receive
Definitive Securities. If required to do so pursuant to any applicable law or
regulation, beneficial owners may obtain Definitive Securities in exchange for
their beneficial interests in a Global Security upon written request in
accordance with DTC's and the Registrar's procedures. In addition, Definitive
Securities shall be transferred to all beneficial owners in exchange for their
beneficial interests in a Global Security if (a) DTC notifies the Company that
it is unwilling or unable to continue as depositary for such Global Security or
DTC ceases to be a clearing agency registered under the Exchange Act, at a time
when DTC is required to be so registered in order to act as depositary, and in
each case a successor depositary is not appointed by the Company within 90 days
of such notice or, (b) the Company executes and delivers to the Trustee and
Registrar an Officers' Certificate stating that such Global Security shall be so
exchangeable or (c) an Event of Default has occurred and is continuing and the
Registrar has received a request from DTC.
(ii) Any Definitive Security delivered in exchange for an interest in
a Global Security pursuant to Section 2.1(d)(iv) or (v) shall, except as
otherwise provided by Section 2.6(c), bear the applicable legend regarding
transfer restrictions applicable to the Definitive Security set forth in Section
2.1(c).
(iii) In connection with the exchange of a Definitive Security for a
beneficial interest in a Global Security pursuant to a transfer of an
Institutional Accredited Investor Note
31
to a QIB or a Non-U.S. Person, upon receipt by the Trustee of such Institutional
Accredited Investor Note, duly endorsed or accompanied by appropriate
instruments of transfer in accordance with Section 2.6(a), the Trustee shall
cancel such Institutional Accredited Investor Note and cause, or direct the
Securities Custodian to cause, in accordance with the standing instructions and
procedures existing between DTC and the Securities Custodian, the aggregate
principal amount of Securities represented by the Global Security to be
increased accordingly. If no Global Securities are then outstanding, the
Company shall issue and the Trustee shall authenticate, upon written order of
the Company in the form of an Officers' Certificate, a new Global Security in
the appropriate principal amount. The Trustee shall deliver copies of each
certification and instruction received by it to DTC and, upon receipt thereof,
the Securities Custodian shall reflect on its books and records the date and an
increase in the principal amount of such Global Security in an amount equal to
the principal amount of the Institutional Accredited Investor Note so
transferred to reflect the exchange of such Institutional Accredited Investor
Note for an interest in the Global Security.
(iv) In connection with the exchange of a portion of a Definitive
Security for a beneficial interest in a Global Security, the Trustee shall
cancel such Definitive Security, and the Company shall execute, and the Trustee
shall authenticate and deliver, to the transferring Holder a new Definitive
Security representing the principal amount not so transferred.
SECTION 2.2. Execution and Authentication. One Officer shall sign
the Securities for the Company by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office at the time the
Trustee authenticates the Security, the Security shall be valid nevertheless,
after giving effect to any exchange of Initial Securities for Exchange
Securities.
A Security shall not be valid until an authorized signatory of the
Trustee manually authenticates the Security. The signature of the Trustee on a
Security shall be conclusive evidence that such Security has been duly and
validly authenticated and issued under this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture, the Trustee shall authenticate and make available for delivery:
(1) Original Securities for original issue on the Issue Date in an aggregate
principal amount of $200.0 million, (2) Exchange Securities for issue only in a
Registered Exchange Offer pursuant to the Registration Rights Agreement, and
only in exchange for Initial Securities of an equal principal amount, and (3)
additional series of notes which may be offered subsequent to the Issue Date
(the "Subsequent Series Securities") in an aggregate principal amount not to
exceed $100,000,000, and, if applicable, the related exchange of Initial
Securities for Exchange Securities, in each case upon a written order of the
Company signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of the Company (the "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 or Exchange Securities. The
aggregate principal amount of notes which may be authenticated and delivered
under this Indenture is limited to $300.0 million outstanding, except for
Securities authenticated and
32
delivered upon registration or transfer of, or in exchange for, or in lieu of,
other Securities of the same class pursuant to Section 2.6, Section 2.9, Section
2.11, Section 5.8, Section 9.5 and except for transactions similar to the
Registered Exchange Offer. No Subsequent Series Securities may be authenticated
and delivered in an aggregate principal amount of less than $25,000,000. All
Securities issued on the Issue Date and all Subsequent Series Securities shall
be identical in all respects other than issue dates, the date from which
interest accrues and any changes relating thereto. Notwithstanding anything to
the contrary contained in this Indenture, all notes issued under this Indenture
shall vote and consent together on all matters as one class and no series of
notes will have the right to vote or consent as a separate class on any matter.
The Trustee may appoint an agent (the "Authenticating Agent")
reasonably acceptable to the Company to authenticate the Securities. Unless
limited by the terms of such appointment, any such Authenticating Agent may
authenticate Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by the
Authenticating Agent.
In case the Company or any Subsidiary Guarantor, pursuant to Article
IV, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
any Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article IV, any of the Securities authenticated or delivered prior to such
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 Order of the successor Person, shall
authenticate and deliver Securities as specified in such order 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 2.2 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.
SECTION 2.3. Registrar and Paying Agent. The Company shall maintain
an office or agency where Securities may be presented for registration of
transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Company shall
cause each of the Registrar and the Paying Agent to maintain an office or agency
in the Borough of Manhattan, The City of New York. The Registrar shall keep a
register of the Securities and of their transfer and exchange (the "Note
Register"). The Company may have one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes any additional
paying agent.
33
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall
notify the Trustee of the name and address of each such agent. If the Company
fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and
shall be entitled to appropriate compensation therefor pursuant to Section 7.7.
The Company or any of its domestically incorporated Wholly-Owned Subsidiaries
may act as Paying Agent, Registrar, co-registrar or transfer agent.
The Company initially appoints the Trustee as Registrar and Paying
Agent for the Securities.
SECTION 2.4. Paying Agent To Hold Money in Trust. By at least 10:00
a.m (New York City time) on the date on which any principal of or interest on
any Security is due and payable, the Company shall deposit with the Paying Agent
a sum sufficient to pay such principal or interest when due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that such
Paying Agent shall hold in trust for the benefit of Securityholders or the
Trustee all money held by such Paying Agent for the payment of principal of or
interest on the Securities and shall notify the Trustee in writing of any
default by the Company or any Subsidiary Guarantor in making any such payment.
If the Company or a Subsidiary acts as Paying Agent, it shall segregate the
money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent (other than the Trustee) to pay
all money held by it to the Trustee and to account for any funds disbursed by
such Paying Agent. Upon complying with this Section, the Paying Agent (if other
than the Company or a Subsidiary) shall have no further liability for the money
delivered to the Trustee. Upon any bankruptcy, reorganization or similar
proceeding with respect to the Company, the Trustee shall serve as Paying Agent
for the Securities.
SECTION 2.5. Securityholder Lists. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, or to the extent otherwise required under the TIA, the Company shall
furnish to the Trustee, in writing at least seven Business Days before each
interest payment date and at such other times as the Trustee may request in
writing, a list in such form and as of such date as the Trustee may reasonably
require of the names and addresses of Securityholders.
SECTION 2.6. Transfer and Exchange.
(a) The following provisions shall apply with respect to any proposed
transfer of a Rule 144A Note or an Institutional Accredited Investor Note prior
to the date which is two years after the later of the date of its original issue
and the last date on which the Company or any affiliate of the Company was the
owner of such Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date"):
34
(i) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a QIB shall be
made upon the representation of the transferee in the form of an assignment
on the reverse of the certificate that it is purchasing the 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, 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 its
foregoing representations in order to claim the exemption from registration
provided by Rule 144A;
(ii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to an IAI shall
be made upon receipt by the Trustee or its agent of a certificate
substantially in the form set forth in Section 2.7 from the proposed
transferee and, if requested by the Company or the Trustee, the delivery of
an opinion of counsel, certification and/or other information satisfactory
to each of them; and
(iii) a transfer of a Rule 144A Note or an Institutional
Accredited Investor Note or a beneficial interest therein to a Non-U.S.
Person shall be made upon receipt by the Trustee or its agent of a
certificate substantially in the form set forth in Section 2.8 from the
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them.
(b) The following provisions shall apply with respect to any proposed
transfer of a Regulation S Note prior to the expiration of the Restricted
Period:
(i) a transfer of a Regulation S Note or a beneficial interest
therein to a QIB shall be made upon the representation of the transferee,
in the form of assignment on the reverse of the certificate, that it is
purchasing the 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, 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 its foregoing representations in order to claim
the exemption from registration provided by Rule 144A;
(ii) a transfer of a Regulation S Note or a beneficial interest
therein to an IAI shall be made upon receipt by the Trustee or its agent of
a certificate substantially in the form set forth in Section 2.7 from the
proposed transferee and, if requested by the Company or the Trustee, the
delivery of an opinion of counsel, certification and/or other information
satisfactory to each of them; and
35
(iii) a transfer of a Regulation S Note or a beneficial interest
therein to a Non-U.S. Person shall be made upon receipt by the Trustee or
its agent of a certificate substantially in the form set forth in Section
2.8 hereof from the proposed transferee and, if requested by the Company or
the Trustee, receipt by the Trustee or its agent of an opinion of counsel,
certification and/or other information satisfactory to each of them.
After the expiration of the Restricted Period, interests in the
Regulation S Note may be transferred without requiring certification set forth
in Section 2.7, Section 2.8 or any additional certification.
(c) Restricted Securities Legend. Upon the transfer, exchange or
replacement of Securities not bearing a Restricted Securities Legend, the
Registrar shall deliver Securities that do not bear a Restricted Securities
Legend. Upon the transfer, exchange or replacement of Securities bearing a
Restricted Securities Legend, the Registrar shall deliver only Securities that
bear a Restricted Securities Legend unless there is delivered to the Registrar
an Opinion of Counsel to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
provisions of the Securities Act.
(d) The Company shall deliver to the Trustee an Officer's Certificate
setting forth the Resale Restriction Termination Date and the Restricted Period.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.1 or this Section 2.6.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
(e) Obligations with Respect to Transfers and Exchanges of
Securities.
(i) To permit registrations of transfers and exchanges, the
Company shall, subject to the other terms and conditions of this Article
II, execute and the Trustee shall authenticate Definitive Securities and
Global Securities at the Registrar's or co-registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax, assessments, or similar
governmental charge payable in connec tion therewith (other than any such
transfer taxes, assessments or similar governmental charges payable upon
exchange or transfer pursuant to Sections 3.6, 3.8 or 9.5).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of any Security for a period beginning
(1) 15 days before the mailing of a notice of an offer to repurchase or
redeem Securities and ending at the close of business on the day of such
mailing or (2) 15 days before an interest payment date and ending on such
interest payment date.
36
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the Registrar or
any co-registrar may deem and treat the person in whose name a Security is
registered as the absolute owner of such Security for the purpose of
receiving payment of principal of and interest on such Security and for all
other purposes whatsoever, whether or not such Security is overdue, and
none of the Company, the Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) Any Definitive Security (including any Institutional Accredited
Investor Note) delivered in exchange for an interest in a Global Security
pursuant to Section 2.1(d) shall, except as otherwise provided by Section
2.6(c), bear the applicable legend regarding transfer restrictions
applicable to the Definitive Security set forth in Section 2.1(c).
(vi) 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.
(f) No Obligation of the Trustee. (i) The Trustee shall have no
responsibility or obligation to any beneficial owner of a Global Security, a
member of, or a participant in, DTC or other Person with respect to the accuracy
of the records of DTC or its nominee or of any participant or member thereof,
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 DTC) of any notice (including any notice of redemption) or the payment of
any amount or delivery of any Securities (or other security or property) under
or with respect to such Securities. All notices and communications to be given
to the Holders and all payments to be made to Holders in respect of the
Securities shall be given or made only to or upon the order of the registered
Holders (which shall be DTC or its nominee in the case of a Global Security).
The rights of beneficial owners in any Global Security shall be exercised only
through DTC subject to the applicable rules and procedures of DTC. The Trustee
may rely and shall be fully protected in relying upon information furnished by
DTC with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Security (including any transfers between or among Depositary
participants, members or beneficial owners in any Global Security) other than to
require delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by, the terms
of this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
37
SECTION 2.7. Form of Certificate to be Delivered in Connection with
Transfers to Institutional Accredited Investors.
[Date]
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services Division
Dear Sirs:
This certificate is delivered to request a transfer of $
principal amount of the 10 3/4% Senior Notes due 2006 (the "Securities") of
Favorite Brands International, Inc. (the "Company").
Upon transfer, the Securities would be registered in the name of the
new beneficial owner as follows:
Name: ___________________________________
Address: ________________________________
Taxpayer ID Number: _____________________
The undersigned represents and warrants to you that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended (the
"Securities Act")) purchasing for our own account or for the account of such an
institutional "accredited investor" at least $250,000 principal amount of the
Securities, and we are acquiring the Securities not with a view to, or for offer
or sale in connection with, any distribution in violation of the Securities Act.
We have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risk of our investment in the Securities
and we invest in or purchase securities similar to the Securities in the normal
course of our business. We and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
2. We understand that the Securities have not been registered under
the Securities Act and, unless so registered, may not be sold except as
permitted in the following sentence. We agree on our own behalf and on behalf
of any investor account for which we are purchasing Securities to offer, sell or
otherwise transfer such Securities prior to the date which is two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Securities (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a) to the
Company, (b) pursuant to a registration statement which has been declared
effective under the Securities
38
Act, (c) in a transaction complying with the requirements of Rule 144A under the
Securities Act, to a person we reasonably believe is a qualified institutional
buyer under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB and to whom notice is given that the transfer is being made in
reliance on Rule 144A, (d) pursuant to offers and sales that occur outside the
United States within the meaning of Regulation S under the Securities Act, (e)
to an institutional "accredited investor" within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act that is purchasing for its own account
or for the account of such an institutional "accredited investor," in each case
in a minimum principal amount of Securities of $250,000 or (f) pursuant to any
other available exemption from the registration requirements of the Securities
Act, subject in each of the foregoing cases to any requirement of law that the
disposition of our property or the property of such investor account or accounts
be at all times within our or their control and in compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Securities is proposed to be made pursuant to clause (e)
above prior to the Resale Restriction Termination Date, the transferor shall
deliver a letter from the transferee substantially in the form of this letter to
the Company and the Trustee, which shall provide, among other things, that the
transferee is an institutional "accredited investor" (within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act) and that it is acquiring
such Securities for investment purposes and not for distribution in violation of
the Securities Act. Each purchaser acknowledges that the Company and the
Trustee reserve the right prior to any offer, sale or other transfer prior to
the Resale Termination Date of the Securities pursuant to clauses (d), (e) or
(f) above to require the delivery of an opinion of counsel, certifications
and/or other information satisfactory to the Company and the Trustee.
TRANSFEREE:_____________________
BY______________________________
Signature Medallion Guaranteed
SECTION 2.8. Form of Certificate to be Delivered in Connection with
Transfers Pursuant to Regulation S.
[Date]
LaSalle National Bank
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▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services Division
Re: Favorite Brands International, Inc.
10 3/4% Senior Notes due 2006 (the "Securities")
------------------------------------------------
Ladies and Gentlemen:
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In connection with our proposed sale of $________ aggregate principal
amount of the Securities, we confirm that such sale has been effected pursuant
to and in accordance with Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(a) the offer of the Securities was not made to a person in the United
States;
(b) either (i) at the time the buy order was originated, the
transferee was outside the United States or we and any person acting on our
behalf reasonably believed that the transferee was outside the United
States or (ii) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre-
arranged with a buyer in the United States;
(c) no directed selling efforts have been made in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
In addition, if the sale is made during a restricted period and the
provisions of Rule 903(c)(3) or Rule 904(c)(1) of Regulation S are applicable
thereto, we confirm that such sale has been made in accordance with the
applicable provisions of Rule 903(c)(3) or Rule 904(c)(1), as the case may be.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:____________________________
_______________________________
Authorized Signature Signature Medallion Guaranteed
SECTION 2.9. Mutilated, Destroyed, Lost or Stolen Securities. If a
mutilated Security is surrendered to the Registrar or if the Holder of a
Security claims that the Security has been lost, destroyed or wrongfully taken,
the Company shall issue and the Trustee shall authenticate a replacement
Security if the requirements of Section 8-405 of the Uniform
40
Commercial Code are met and the Holder satisfies any other reasonable
requirements of the Trustee. If required by the Trustee or the Company, such
Holder shall furnish an indemnity bond sufficient in the judgment of the Company
and the Trustee to protect the Company, the Trustee, the Paying Agent, the
Registrar and any co-registrar from any loss which any of them may suffer if a
Security is replaced, and, in the absence of notice to the Company, any
Subsidiary Guarantor or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon Company Order the
Trustee shall authenticate and make available for delivery, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and principal amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) in connection
therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor (if
applicable) and any other obligor upon the Securities, 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 2.10. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered to it for cancellation and those described in this
Section as not outstanding. A Security ceases to be outstanding in the event
the Company or a Subsidiary of the Company holds the Security, provided,
however, that (i) for purposes of determining which are outstanding for consent
or voting purposes hereunder, Securities shall cease to be outstanding in the
event the Company or an Affiliate of the Company holds the Security and (ii) in
determining whether the Trustee shall be protected in making a determination
whether the holders of the requisite principal amount of outstanding Securities
are present at a meeting of holders of Securities for quorum purposes or have
consented to or voted in favor of any request, demand, authorization, direction,
notice, consent, waiver, amendment or modification hereunder, or relying upon
any such quorum, consent or vote, only Securities which the Trustee actually
knows to be held by the Company or an Affiliate of the Company shall not be
considered outstanding.
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If a Security is replaced pursuant to Section 2.9, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.
If the Paying Agent segregates and holds in trust, in accordance with
this Indenture, on a redemption date or maturity date money sufficient to pay
all principal and interest payable on that date with respect to the Securities
(or portions thereof) to be redeemed or maturing, as the case may be, and the
Paying Agent is not prohibited from paying such money to the Securityholders on
that date pursuant to the terms of this Indenture, then on and after that date
such Securities (or portions thereof) cease to be outstanding and interest on
them ceases to accrue.
SECTION 2.11. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form
of Definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate Definitive Securities. After
the preparation of Definitive Securities, the temporary Securities shall be
exchangeable for Definitive Securities upon surrender of the temporary
Securities at any office or agency maintained by the Company for that purpose
and such exchange shall be without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities, the Company shall execute,
and the Trustee shall authenticate and make available for delivery in exchange
therefor, one or more Definitive Securities representing an equal principal
amount of Securities. Until so exchanged, the Holder of temporary Securities
shall in all respects be entitled to the same benefits under this Indenture as a
holder of Definitive Securities. At the end of the Restricted Period, the
Regulation S Temporary Global Note will be exchangeable for the Regulation S
Permanent Global Note as set forth in Section 2.1(a).
SECTION 2.12. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
return to the Company all Securities surrendered for registration of transfer,
exchange, payment or cancellation. The Company may not issue new Securities to
replace Securities it has paid or delivered to the Trustee for cancellation for
any reason other than in connection with a transfer or exchange.
SECTION 2.13. Payment of Interest; Defaulted Interest. 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 2.3.
Any interest on any Security which is payable, but is not paid when
the same becomes due and payable and such nonpayment continues for a period of
30 days shall forthwith cease to be payable to the Holder on the regular record
date by virtue of having
42
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") shall 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 Persons in whose names the Securities (or their respective
predecessor Securities) are registered at the close of business on a
Special Record Date (as defined below) 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 (not less than 30 days after such
notice) of the proposed payment (the "Special Interest Payment Date"), and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a record date (the "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 Special Interest Payment Date and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special
Record Date, and in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date and Special Interest Payment Date therefor to be given in the
manner provided for in Section 11.2, 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 and Special Interest Payment Date
therefor having been so given, such Defaulted Interest shall be paid on the
Special Interest Payment Date to the Persons 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 2.14. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
43
SECTION 2.15. 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 CUSIP
numbers.
In the event that the Company shall issue and the Trustee shall
authenticate any Subsequent Series Securities pursuant to Section 2.2, the
Company shall use its best efforts to obtain the same CUSIP number for such
Subsequent Series Securities as is printed on the Securities outstanding at such
time; provided, however, that if any series of Subsequent Series Securities is
determined, pursuant to an Opinion of Counsel, to be a different class of
security than the Securities outstanding at such time for federal income tax
purposes, the Company may obtain a CUSIP number for such series of Subsequent
Series Securities that is different from the CUSIP number printed on the
Securities then outstanding.
ARTICLE III
Covenants
---------
SECTION 3.1. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due and the Trustee or the Paying Agent, as the case
may be, is not prohibited from paying such money to the Securityholders on that
date pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.
Notwithstanding anything to the contrary contained in this Indenture,
the Company may, to the extent it is required to do so by law, deduct or
withhold income or other similar taxes imposed by the United States of America
from principal or interest payments hereunder.
SECTION 3.2. SEC Reports and Available Information. Notwithstanding
that the Company may not be subject to the reporting requirements of Section
13(a) or 15(d) of the Exchange Act, to the extent permitted by the Exchange Act,
the Company will file with the SEC, and provide, within 15 days after the
Company is required to file the same with the SEC, the Trustee and the holders
of Securities with the annual reports and the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC
44
may, by rules and regulations prescribe), that are specified in Sections 13 and
15(d) of the Exchange Act. In the event that the Company is not permitted to
file such reports, documents and information with the SEC pursuant to the
Exchange Act, the Company will nevertheless deliver such Exchange Act
information to the Trustee and the holders of the Securities as if the Company
were subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act; provided that with respect to the periods ended March 28, 1998 and
June 27, 1998, in lieu of Exchange Act information the Company will be permitted
to provide to the Trustee and Holders the information and reports required to be
delivered to the holders of the Senior Subordinated Notes and in the same time
period as required therein. In addition, for so long as any of the Securities
remain outstanding the Company shall make available to any prospective purchaser
of the Securities or beneficial owner of the Securities in connection with any
sale thereof the information required by Rule 144A(d)(4) under the Securities
Act. The Company shall also comply with the other provisions of TIA (S) 314(a).
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 3.3. Limitation on Indebtedness. (a) The Company will not,
and will not permit any of its Restricted Subsidiaries to, Incur any
Indebtedness; provided, however, that the Company and the Subsidiary Guarantors
may Incur Indebtedness if on the date thereof the Consolidated Coverage Ratio
for the Company and its Restricted Subsidiaries for the Company's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date on which such Indebtedness is Incurred
(A) is at least 2.00 to 1.00 and (B) no Default or Event of Default will have
occurred or be continuing or would occur as a consequence thereof.
(b) Notwithstanding the foregoing paragraph (a) the Company and its
Restricted Subsidiaries may Incur the following Indebtedness: (i) Indebtedness
Incurred pursuant to a Senior Credit Agreement together with amounts outstanding
under Qualified Receivables Transactions in an aggregate amount up to $250.0
million less the aggregate principal amount of all scheduled principal
repayments unless refinanced on the date of such repayment under this clause (i)
and all mandatory prepayments of principal in excess of $25.0 million in the
aggregate from the proceeds of Asset Sales permanently reducing the commitments
thereunder; (ii) the Subsidiary Guarantees and Guarantees of Indebtedness by the
Subsidiary Guarantors Incurred in accordance with the provisions of this
Indenture; provided that in the event such Indebtedness that is being Guaranteed
is subordinated in right of payment to any other Indebtedness, the related
Guarantee shall be subordinated in right of payment to the Subsidiary Guarantee;
(iii) Indebtedness of the Company owing to and held by any Wholly-Owned
Subsidiary (other than a Receivables Entity) or Indebtedness of a Restricted
Subsidiary owing to and held by the Company or any Wholly-Owned Subsidiary
(other than a Receivables Entity); provided, however, (x) if the Company is the
obligor on such Indebtedness, such Indebtedness is expressly subordinated to the
prior payment in full in cash of all obligations with respect to the Securities
and (y)(A) any subsequent issuance or transfer of Capital Stock that results in
any such Indebtedness being beneficially held by a
45
Person other than the Company or a Wholly-Owned Subsidiary (other than a
Receivables Entity) of the Company and (B) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Wholly-Owned
Subsidiary (other than a Receivables Entity) of the Company shall be deemed, in
each case, to constitute an Incurrence of such Indebtedness by the Company or
such Subsidiary, as the case may be; (iv) Indebtedness represented by (x) the
Securities, (y) any Indebtedness (other than the Indebtedness described in
clauses (i), (ii) and (iii)) outstanding on the Issue Date, including the Senior
Subordinated Notes and the related Guarantees and (z) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this clause
(iv) or clause (v) or Incurred pursuant to paragraph (a) above; (v) Indebtedness
of a Restricted Subsidiary Incurred and outstanding on the date on which such
Restricted Subsidiary was acquired by the Company (other than Indebtedness
Incurred (A) to provide all or any portion of the funds utilized to consummate
the transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Restricted Subsidiary or was otherwise acquired
by the Company or (B) otherwise in connection with, or in contemplation of, such
acquisition) in an aggregate principal amount not to exceed $20.0 million at any
time outstanding or, with respect to Indebtedness under this clause (v) in
excess thereof, only in the event that at the time such Restricted Subsidiary is
acquired by the Company, the Company would have been able to Incur $1.00 of
additional Indebtedness pursuant to paragraph (a) above after giving effect to
the Incurrence of such Indebtedness pursuant to this clause (v); (vi)
Indebtedness under Currency Agreements and Interest Rate Agreements; provided,
however, that in the case of Currency Agreements, such Currency Agreements are
related to business transactions of the Company or its Restricted Subsidiaries
entered into in the ordinary course of business or in the case of Currency
Agreements and Interest Rate Agreements such Currency Agreements and Interest
Rate Agreements are entered into for bona fide hedging purposes of the Company
or its Restricted Subsidiaries (as determined in good faith by the Board of
Directors or senior management of the Company) and substantially correspond in
terms of notional amount, duration, currencies and interest rates, as
applicable, to Indebtedness of the Company or its Restricted Subsidiaries
Incurred without violation of this Indenture; (vii) the incurrence by the
Company or any of its Restricted Subsidiaries of Indebtedness represented by
Capitalized Lease Obligations, mortgage financings or purchase money obligations
with respect to assets other than Capital Stock or other Investments, in each
case Incurred for the purpose of financing all or any part of the purchase price
or cost of construction or improvements of property used in the business of the
Company or such Restricted Subsidiary, in an aggregate principal amount not to
exceed $10.0 million at any time outstanding; (viii) Indebtedness Incurred in
respect of workers' compensation claims, self-insurance obligations,
performance, surety and similar bonds and completion guarantees provided by the
Company or a Restricted Subsidiary in the ordinary course of business; (ix)
Indebtedness arising from agreements of the Company or a Restricted Subsidiary
providing for indemnification, adjustment of purchase price or similar
obligations, in each case, Incurred or assumed in connection with the
disposition of any business, assets or Capital Stock of a Restricted Subsidiary,
provided that the maximum aggregate liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually received by the
Company and its Restricted Subsidiaries in connection with such disposition; (x)
Indebtedness arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business,
46
provided, however, that such Indebtedness is extinguished within five business
days of Incurrence; and (xi) Indebtedness (other than Indebtedness described in
clauses (i)--(x)) in an aggregate outstanding principal amount which, when taken
together with the principal amount of all other Indebtedness Incurred pursuant
to this clause (xi) and then outstanding, will not exceed $35.0 million (which
may be of any ranking).
(c) The Company will not Incur any Indebtedness under Section 3.3(b)
if the proceeds thereof are used, directly or indirectly, to refinance any
Subordinated Obligations of the Company unless such Indebtedness will be
subordinated to the Securities to at least the same extent as such Subordinated
Obligations. No Subsidiary Guarantor will incur any Indebtedness under Section
3.3(b) if the proceeds thereof are used, directly or indirectly, to refinance
any Guarantor Subordinated Obligations of such Subsidiary Guarantor unless such
Indebtedness will be subordinated to the obligations of such Subsidiary
Guarantor under its Subsidiary Guarantee to at least the same extent as such
Guarantor Subordinated Obligations. No Restricted Subsidiary will Incur any
Indebtedness under Section 3.3(b) to refinance Indebtedness of the Company.
(d) For purposes of determining compliance with, and the outstanding
principal amount of, any particular Indebtedness Incurred pursuant to and in
compliance with, this Section 3.3, the Company, in its sole discretion, will
classify such item of Indebtedness on the date of Incurrence and only be
required to include the amount and type of such Indebtedness in one of such
clauses; and (ii) the amount of Indebtedness issued at a price that is less than
the principal amount thereof will be equal to the amount of the liability in
respect thereof determined in accordance with GAAP. If Indebtedness is issued at
less than the principal amount thereof, the amount of such Indebtedness for
purposes of the above limitations shall equal the amount of the liability as
determined in accordance with GAAP. Accrual of interest, the accretion of
accreted value and the payment of interest in the form of additional
Indebtedness will not be deemed to be an incurrence of Indebtedness for purposes
of this covenant.
(e) The Company will not permit any Unrestricted Subsidiary to Incur
any Indebtedness other than Non-Recourse Debt; provided, however, if any such
Indebtedness ceases to be Non-Recourse Debt, such event will be deemed to
constitute an incurrence of Indebtedness by the Company or a Restricted
Subsidiary.
SECTION 3.4. Limitation on Restricted Payments. (a) The Company will
not, and will not permit any of its Restricted Subsidiaries, directly or
indirectly, to (i) declare or pay any dividend or make any distribution on or in
respect of its Capital Stock (including any payment in connection with any
merger or consolidation involving the Company or any of its Restricted
Subsidiaries) except (A) dividends or distributions payable in its Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock and (B) dividends or distributions payable to the
Company or a Restricted Subsidiary of the Company (and if such Restricted
Subsidiary is not a Wholly-Owned Subsidiary, to its other holders of Capital
Stock on a pro rata basis), (ii) purchase, redeem, retire or otherwise acquire
for value any Capital Stock of the Company held by Persons other than a
Restricted Subsidiary of the Company or any Capital Stock of a Restricted
Subsidiary of the Company
47
held by any Affiliate of the Company, other than the Company or another
Restricted Subsidiary (in either case, other than to the extent such repurchase,
redemption, retirement or other acquisition constitutes a Permitted Investment
or other than in exchange for its Capital Stock (other than Disqualified
Stock)), (iii) purchase, repurchase, redeem, defease or otherwise acquire or
retire for value, prior to scheduled maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased in
anticipation of satisfying a sinking fund obligation, principal installment or
final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition) or (iv) make any Investment (other than a Permitted
Investment) in any Person (any such dividend, distribution, purchase,
redemption, repurchase, defeasance, other acquisition, retirement or Investment
being herein referred to in clauses (i) through (iv) as a "Restricted Payment"),
if at the time the Company or such Restricted Subsidiary makes such Restricted
Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom); or
(2) the Company is not able to incur an additional $1.00 of
Indebtedness pursuant to Section 3.3(a); or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments declared or made subsequent to the Issue Date would
exceed the sum of: (A) 50% of the Consolidated Net Income for the period
(treated as one accounting period) from the beginning of the first full
fiscal quarter commencing after the Issue Date to the end of the most
recent fiscal quarter ending prior to the date of such Restricted Payment
as to which internal financial statements are available (or, in case such
Consolidated Net Income is a deficit, minus 100% of such deficit); (B) the
aggregate Net Cash Proceeds received by the Company from the issue or sale
of its Capital Stock (other than Disqualified Stock) or other capital
contributions subsequent to the Issue Date (other than Net Cash Proceeds
received from (x) an issuance or sale of such Capital Stock to a Subsidiary
of the Company or an employee stock ownership plan or similar trust to the
extent such sale to an employee stock ownership plan or similar trust is
financed by loans from or guaranteed by the Company or any Restricted
Subsidiary unless such loans have been repaid with cash on or prior to the
date of determination and (y) the sale of Capital Stock of Holdings to
employees or management of the Company or any Subsidiary which are
contributed to the Company after the Issue Date to the extent such amounts
have been applied to make Restricted Payments in accordance with clause (v)
of the next succeeding paragraph); (C) the amount by which Indebtedness of
the Company is reduced on the Company's balance sheet upon the conversion
or exchange (other than by a Subsidiary of the Company) subsequent to the
Issue Date of any Indebtedness of the Company convertible or exchangeable
for Capital Stock (other than Disqualified Stock) of the Company (less the
amount of any cash, or other property, distributed by the Company upon such
conversion or exchange); and (D) the amount equal to the net reduction in
Restricted Investments made by the Company or any of its Restricted
Subsidiaries in any Person resulting from (i) repurchases or redemptions of
such Restricted Investments by such
48
Person, proceeds realized upon the sale of such Restricted Investment,
repayments of loans or advances or other transfers of assets (including by
way of dividend or distribution) by such Person to the Company or any
Restricted Subsidiary of the Company or (ii) the redesignation of
Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case
as provided in the definition of "Investment") not to exceed, in the case
of any Unrestricted Subsidiary, the amount of Investments previously made
by the Company or any Restricted Subsidiary in such Unrestricted
Subsidiary, which amount in each case under this clause (D) was included in
the calculation of the amount of Restricted Payments; provided, however,
that no amount will be included under this clause (D) to the extent it is
already included in Consolidated Net Income.
(b) The provisions of Section 3.4(a) will not prohibit: (i) any
purchase or redemption of Capital Stock or Subordinated Obligations of the
Company made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Company (other than Disqualified Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan or similar trust to the extent such sale to an employee stock
ownership plan or similar trust is financed by loans from or guaranteed by the
Company or any Restricted Subsidiary unless such loans have been repaid with
cash on or prior to the date of determination); provided, however, that (A) such
purchase or redemption will be excluded in subsequent calculations of the amount
of Restricted Payments and (B) the Net Cash Proceeds from such sale will be
excluded from clause (3)(B) of paragraph (a); (ii) any purchase or redemption of
Subordinated Obligations of the Company made by exchange for, or out of the
proceeds of the sale of, Subordinated Obligations of the Company that qualifies
as Refinancing Indebtedness; provided, however, that such purchase or redemption
will be excluded in subsequent calculations of the amount of Restricted
Payments; (iii) so long as no Default or Event of Default has occurred and is
continuing, any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under Section 3.6; provided, however,
that such purchase or redemption will be excluded in subsequent calculations of
the amount of Restricted Payments; (iv) dividends paid within 60 days after the
date of declaration if at such date of declaration such dividend would have
complied with this provision; provided, however, that such dividends will be
included in subsequent calculations of the amount of Restricted Payments; (v) so
long as no Default or Event of Default has occurred and is continuing, cash
dividends to Holdings for the purpose of, and in amounts equal to, amounts
required to permit Holdings (A) to redeem or repurchase Capital Stock of
Holdings from existing or former employees or management of the Company or
Holdings or any Subsidiary of the Company or their assigns, estates or heirs, in
each case in connection with the repurchase provisions under employee stock
option or stock purchase agreements or other agreements to compensate management
employees; provided that the aggregate of such redemptions or repurchases
pursuant to this clause will not exceed (x) in any calendar year $5.0 million in
the aggregate (with unused amounts in any calendar year being carried over to
succeeding calendar years) and (y) $12.5 million in the aggregate; provided,
further that such amount in the aggregate may be increased by an amount not to
exceed the cash proceeds from the sale of Capital Stock of Holdings which is
contributed to the common equity of the Company to employees or management after
the Issue Date (to the extent the cash proceeds of such transactions have not
otherwise been
49
applied to the payment of Restricted Payments by virtue of the preceding
paragraph (a), less the amount of Restricted Payments made pursuant to this
proviso) in the aggregate; provided, however, that such dividends will be
included in the calculation of the amount of Restricted Payments, and (B) to
make loans or advances to employees or directors of the Company or Holdings or
any Subsidiary of the Company the proceeds of which are used to purchase Capital
Stock of Holdings or the Company, in an aggregate amount not in excess of $2.0
million at any one time outstanding; provided, however, that such dividends will
be included in the calculation of the amount of Restricted Payments; (vi) cash
dividends or loans to Holdings in amounts equal to (A) the amounts required for
Holdings to pay any Federal, state or local income taxes to the extent that such
income taxes are attributable to the income of the Company and its Subsidiaries
and (B) the amounts required for Holdings to pay costs and expenses Incurred by
Holdings in its capacity as a holding company or for services rendered by
Holdings on behalf of the Company in an amount per annum not to exceed $500,000;
provided, however, that such dividends will be excluded from the calculation of
the amount of Restricted Payments; (vii) repurchases of Capital Stock deemed to
occur upon the exercise of stock options if such Capital Stock represents a
portion of the exercise price hereof; provided, however, that such repurchases
will be excluded from the calculation of the amount of Restricted Payments;
(viii) so long as no Default or Event of Default has occurred and is continuing,
the declaration and payment of dividends to holders of any class or series of
Disqualified Stock of the Company issued in accordance with the terms of this
Indenture; provided, however, that the payment of such dividends will be
excluded from the calculation of the amount of Restricted Payments; and (ix)
Investments in Joint Ventures and Unrestricted Subsidiaries that are made with
Excluded Contributions.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of such Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors whose resolution with respect thereto shall be delivered
to the Trustee, such determination to be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if such fair market value is estimated to exceed $10.0 million. Not
later than the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment is
permitted and setting forth the basis upon which the calculations required by
Section 3.4 were computed, together with a copy of any fairness opinion or
appraisal required by this Indenture.
SECTION 3.5. Limitation on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any
Restricted Subsidiary to, create or otherwise cause or permit to exist or become
effective any consensual encumbrance or consensual restriction on the ability of
any Restricted Subsidiary to (i) pay dividends or make any other distributions
on its Capital Stock or pay any Indebtedness or other obligations owed to the
Company or any Restricted Subsidiary, (ii) make any loans or advances to the
Company or any Restricted Subsidiary or (iii) transfer any of its property or
assets to the Company or any Restricted Subsidiary, except (a) any encumbrance
or restriction pursuant to an agreement in effect at or entered into on the date
of this Indenture (including, without
50
limitation, this Indenture and the Senior Credit Agreement in effect on the date
hereof); (b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness Incurred by a
Restricted Subsidiary on or prior to the date on which such Restricted
Subsidiary was acquired by the Company (other than Indebtedness Incurred as
consideration in, or to provide all or any portion of the funds utilized to
consummate, the transaction or series of related transactions pursuant to which
such Restricted Subsidiary became a Restricted Subsidiary or was acquired by the
Company or in contemplation thereof) and outstanding on such date; (c) any
encumbrance or restriction with respect to a Restricted Subsidiary pursuant to
an agreement effecting a refinancing of Indebtedness Incurred pursuant to an
agreement referred to in clause (a) or (b) of this Section 3.5 or this clause
(c) or contained in any amendment to an agreement referred to in clause (a) or
(b) of this Section 3.5 or this clause (c); provided, however, that the
encumbrances and restrictions with respect to such Restricted Subsidiary
contained in any such agreement or amendment are no less favorable in any
material respect to the Holders of the Securities than encumbrances and
restrictions contained in such agreements referred to in clauses (a) and (b);
(d) in the case of clause (iii) above, any encumbrance or restriction (A) that
restricts in a customary manner the subletting, assignment or transfer of any
property or asset that is subject to a lease, license or similar contract, or
the assignment or transfer of any such lease, license or other contract, (B)
contained in mortgages, pledges or other security agreements securing
Indebtedness of a Restricted Subsidiary to the extent such encumbrance or
restrictions restrict the transfer of the property subject to such mortgages,
pledges or other security agreements; provided that such mortgage, pledge or
other security agreement is permitted under this Indenture or (C) pursuant to
customary provisions restricting dispositions of real property interests set
forth in any reciprocal easement agreements of the Company or any Restricted
Subsidiary; (e) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired; (f) any Purchase Money Note or other
Indebtedness or contractual requirements Incurred with respect to a Qualified
Receivables Transaction relating exclusively to a Receivables Entity that, in
the good faith determination of the Board of Directors, are necessary to effect
such Qualified Receivables Transaction; (g) any restriction with respect to a
Restricted Subsidiary (or any of its property or assets) imposed pursuant to an
agreement entered into for the direct or indirect sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary (or
the property or assets that are subject to such restriction) pending the closing
of such sale or disposition; and (h) encumbrances or restrictions arising or
existing by reason of applicable law or any applicable rule, regulation or
order.
SECTION 3.6. Limitation on Sales of Assets and Subsidiary Stock. (a)
The Company will not, and will not permit any of its Restricted Subsidiaries to,
make any Asset Disposition unless (i) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Disposition at least equal to
the fair market value, as determined in good faith by the Board of Directors
(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition, (ii) at least 75% of the consideration
thereof received by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents or Qualified Proceeds; provided that the aggregate fair
market value of Qualified Proceeds (other than cash or Cash Equivalents) which
may be received in consideration for
51
Asset Dispositions pursuant to this clause (ii) shall not exceed $7.5 million
after the Issue Date, and (iii) an amount equal to 100% of the Net Available
Cash from such Asset Disposition is applied by the Company (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent the Company or any
Restricted Subsidiary, as the case may be, elects (or is required by the terms
of any Indebtedness), to prepay, repay or purchase Indebtedness (other than
Subordinated Obligations) or Indebtedness (other than any Preferred Stock or any
Guarantor Subordinated Obligation) of a Wholly-Owned Subsidiary that is a
Subsidiary Guarantor (in each case other than Indebtedness owed to the Company
or an Affiliate of the Company) within one year from the later of the date of
such Asset Disposition or the receipt of such Net Available Cash; (B) second, to
the extent of the balance of such Net Available Cash after application in
accordance with clause (A), at the Company's election to invest in Additional
Assets within one year from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; (C) third, to the extent of the balance
of such Net Available Cash after application and in accordance with clauses (A)
and (B) (the "Excess Proceeds"), to make an offer to purchase the Securities and
other Pari Passu Indebtedness outstanding with similar provisions requiring the
Company to make an offer to purchase such Pari Passu Indebtedness with the
proceeds from any Asset Disposition ("Pari Passu Notes") at 100% of the
principal amount thereof (or 100% of the accreted value of such Pari Passu Notes
so tendered if such Pari Passu Notes were issued at a discount) plus accrued and
unpaid interest, if any, to the date of purchase; and (D) fourth, to the extent
of the balance of the Excess Proceeds, after application in accordance with
clause (C), to fund other corporate purposes not prohibited by this Indenture;
provided, however, that, in connection with any prepayment, repayment or
purchase of Indebtedness pursuant to clause (A) above, the Company or such
Restricted Subsidiary will retire such Indebtedness and will cause the related
loan commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Pending the final application
of any such Net Available Cash, the Company or its Restricted Subsidiaries may
temporarily reduce Indebtedness or otherwise invest such Net Available Cash in
any manner that is not prohibited by this Indenture. Upon completion of such
Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.
Notwithstanding the foregoing provisions, the Company and its Restricted
Subsidiaries will not be required to apply any Net Available Cash in accordance
herewith except to the extent that the aggregate Net Available Cash from all
Asset Dispositions which have not been applied in accordance with this covenant
exceed $5.0 million.
For the purposes of this Section 3.6, the following will be deemed to
be cash: (x) the assumption by the transferee of Indebtedness (other than
Subordinated Obligations) of the Company or Indebtedness (other than Guarantor
Subordinated Obligations) of any Restricted Subsidiary of the Company and the
release of the Company or such Restricted Subsidiary from all liability on such
Indebtedness in connection with such Asset Disposition (in which case the
Company will, without further action, be deemed to have applied such assumed
Indebtedness in accordance with clause (A) of the preceding paragraph) and (y)
securities, notes or other obligations received by the Company or any Restricted
Subsidiary of the Company from the transferee that are promptly converted by the
Company or such Restricted Subsidiary into cash.
52
(b) In the event of an Asset Disposition that requires the purchase of
Securities pursuant to clause (iii)(C) of paragraph (a) of this Section 3.6, the
Company will be required to apply such Excess Proceeds to the repayment of the
Securities and any Pari Passu Notes as follows: (A) the Company will make an
offer to purchase (an "Offer") within ten days of such time from all Holders in
accordance with the procedures set forth in this Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Note Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Securities and the denominator of which is
the sum of the outstanding principal amount of the Securities and the
outstanding principal amount (or accreted value, as the case may be) of the Pari
Passu Notes at a purchase price of 100% of the principal amount thereof plus
accrued and unpaid interest, if any, to the date of purchase and (B) the Company
will make an offer to purchase any Pari Passu Notes (a "Pari Passu Offer") in an
amount equal to the excess of the Excess Proceeds over the Note Amount in
accordance with the documentation governing such Pari Passu Notes with respect
to the Pari Passu Offer. If the aggregate purchase price of the Securities and
Pari Passu Notes tendered pursuant to the Offer and the Pari Passu Offer is less
than the Excess Proceeds, the remaining Excess Proceeds will be available to the
Company for use in accordance with clause (iii)(D) of paragraph (a) of this
Section 3.6. If the aggregate principal amount of Securities surrendered by
Holders thereof exceeds the Note Amount, the Trustee shall select the Securities
to be purchased on a pro rata basis. The Company will not be required to make an
Offer for Securities pursuant to this Section 3.6 if the Excess Proceeds
available therefor are less than $10.0 million (which lesser amounts will be
carried forward for purposes of determining whether an Offer is required with
respect to the Excess Proceeds from any subsequent Asset Disposition).
(c) (1) Promptly, and in any event within 10 days after the Company
is required to make an Offer, the Company will deliver to the Trustee and send,
by first-class mail to each Holder, a written notice stating that the Holder may
elect to have his Securities purchased by the Company either in whole or in part
(subject to prorating as hereinafter described in the event the Offer is
oversubscribed) in integral multiples of $1,000 of principal amount, at the
applicable purchase price. The notice shall specify a purchase date not less
than 30 days nor more than 60 days after the date of such notice (the "Purchase
Date").
(2) Not later than the date upon which such written notice of an
Offer is delivered to the Trustee and the Holders, the Company will deliver to
the Trustee an Officers' Certificate setting forth (i) the amount of the Offer
(the "Offer Amount"), (ii) the allocation of the Net Available Cash from the
Asset Dispositions as a result of which such Offer is being made and (iii) the
compliance of such allocation with the provisions of Section 3.6(a). Upon the
expiration of the period (the "Offer Period") for which the Offer remains open,
the Company shall deliver to the Trustee for cancellation the Securities or
portions thereof which have been properly tendered to and are to be accepted by
the Company. The Trustee shall, on the Purchase Date, mail or deliver payment
to each tendering Holder in the amount of the purchase price of the Securities
tendered by such Holder to the extent such funds are available to the Trustee.
53
(3) Holders electing to have a Security purchased will be required to
surrender the Security, with an appropriate form entitled "Option of Holder to
Elect Purchase" duly completed, to the Company at the address specified in the
notice prior to the expiration of the Offer Period. Each Holder will be
entitled to withdraw its election if the Trustee or the Company receives, not
later than one Business Day prior to the expiration of the Offer Period, a
facsimile transmission or overnight mail from such Holder setting forth the name
of such Holder, the principal amount of the Security or Securities which were
delivered for purchase by such Holder and a statement that such Holder is
withdrawing his election to have such Security or Securities purchased. If at
the expiration of the Offer Period the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Company shall select the
Securities to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Securities in denominations of
$1,000, or integral multiples thereof, shall be purchased). Holders whose
Securities are purchased only in part will be issued new Securities equal in
principal amount to the unpurchased portion of the Securities surrendered.
(d) The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section 3.6, the Company will
comply with the applicable securities laws and regulations and will not be
deemed to have breached its obligations under this Indenture by virtue thereof.
SECTION 3.7. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or conduct any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
Affiliate of the Company (an "Affiliate Transaction") unless: (i) the terms of
such Affiliate Transaction are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than those that could be obtained in
a comparable transaction at the time of such transaction in arm's-length
dealings with a Person who is not such an Affiliate; (ii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $5.0 million,
the terms of such transaction have been approved by a majority of the members of
the Board of Directors of the Company and by a majority of the members of such
Board having no personal stake in such transaction, if any (and such majority or
majorities, as the case may be, determines that such Affiliate Transaction
satisfies the criteria in (i) above); and (iii) in the event such Affiliate
Transaction involves an aggregate amount in excess of $10.0 million, the Company
has received an opinion to the Holders that such Affiliate Transaction is fair
from a financial point of view issued by an independent accounting, appraisal or
investment banking firm of nationally recognized standing.
(b) The foregoing paragraph (a) will not apply to (i) any Restricted
Payment (other than Restricted Investments) permitted to be made pursuant to
Section 3.4, (ii) any issuance of securities, or other payments, awards or
grants in cash, securities or otherwise pursuant to, or the funding of,
employment arrangements, stock options and stock ownership plans and other
reasonable fees, compensation, benefits and indemnities paid or entered into
54
by the Company or its Restricted Subsidiaries in the ordinary course of business
to or with consultants or with the officers, directors or employees of Holdings
or the Company and its Restricted Subsidiaries, (iii) loans or advances to
employees in the ordinary course of business of Holdings or the Company or any
of its Restricted Subsidiaries, (iv) any transaction between the Company and a
Restricted Subsidiary (other than a Receivables Entity) or between Restricted
Subsidiaries (other than a Receivables Entity), (v) transactions with suppliers
or other purchasers for the sale or purchase of goods in the ordinary course of
business and otherwise in accordance with the terms of this Indenture which are
fair to the Company and its Restricted Subsidiaries, in the good faith
determination of the Board of Directors of the Company or the senior management
of the Company and are on terms at least as favorable as might reasonably have
been obtained at such time from an unaffiliated party, (vi) the issuance of
Capital Stock (other than Disqualified Stock) of the Company to any Permitted
Holder or any Related Party, (vii) any agreement in effect on the Issue Date,
(viii) sales or other transfers or dispositions of accounts receivable and other
related assets customarily transferred in an asset securitization transaction
involving accounts receivable to a Receivables Entity in a Qualified Receivables
Transaction, and acquisitions of Permitted Investments in connection with a
Qualified Receivables Transaction and (ix) the purchase by the Company or any of
its Restricted Subsidiaries of any assets from any of their respective
Affiliates (previously purchased by such Affiliate from a Person that is not an
Affiliate) if the amount paid therefor does not exceed the sum of (x) the amount
paid by such Affiliate for such asset, plus (y) recourse liabilities Incurred by
such Affiliate in connection with such asset, plus (z) the cost of funds to such
Affiliate in connection with the purchase of such asset.
SECTION 3.8. Change of Control.
Upon the occurrence of any of the following events (each a "Change of
Control"), unless the Company shall have exercised its right to redeem the
Securities as described in Section 5.1, each Holder will have the right to
require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Securities at a purchase price in
cash equal to 101% of the principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (subject to the right of Holders of
record on the relevant record date to receive interest due on the relevant
interest payment date) (the "Change of Control Payment"):
(i) (A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), other than one or more Permitted Holders or
their Related Parties, is or becomes the beneficial owner (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of
more than 40% of the total voting power of the Voting Stock of the Company
or Holdings (or its successor by merger, consolidation or purchase of all
or substantially all of its assets) (for the purposes of this clause, such
person shall be deemed to beneficially own any Voting Stock of the Company
or Holdings held by an entity, if such person "beneficially owns" (as
defined above), directly or indirectly, more than 40% of the voting power
of the Voting Stock of such entity); and (B) the Permitted Holders or their
Related Parties "beneficially own" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act), directly or
55
indirectly, in the aggregate a lesser percentage of the total voting power
of the Voting Stock of the Company or Holdings (or its successor by merger,
consolidation or purchase of all or substantially all of its assets) than
such other person and do not have the right or ability by voting power,
contract or otherwise to elect or designate for election a majority of the
board of directors of the Company or Holdings or such successor (for the
purposes of this clause, such other person shall be deemed to beneficially
own any Voting Stock of a specified entity held by an entity, if such other
person "beneficially owns," directly or indirectly, more than 40% of the
voting power of the Voting Stock of such entity and the Permitted Holders
or their Related Parties "beneficially own," directly or indirectly, in the
aggregate a lesser percentage of the voting power of the Voting Stock of
such entity and do not have the right or ability by voting power, contract
or otherwise to elect or designate for election a majority of the board of
directors of such entity); or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company or Holdings (together with any new directors whose election by such
Board of Directors or whose nomination for election by the shareholders of
the Company or Holdings, as the case may be, was approved by a vote of at
least a majority of the directors of the Company or Holdings then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved or is a
designee of the Permitted Holders or their Related Parties or was nominated
or elected by such Permitted Holders or their Related Parties or any of
their designees) cease for any reason to constitute a majority of the Board
of Directors of the Company or Holdings then in office; provided, however,
that this clause (ii) shall not apply to the Board of Directors of the
Company so long as the Company is a wholly-owned Subsidiary of Holdings; or
(iii) the sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole to any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
other than a Permitted Holder or their Related Parties; or
(iv) the adoption by the stockholders of the Company of a plan or
proposal for the liquidation or dissolution of the Company; or
(v) the occurrence of a change of control as defined in the indenture
relating to the Senior Subordinated Notes.
Within 30 days following any Change of Control, unless the Company has
mailed a redemption notice with respect to all the outstanding Securities in
connection with such Change of Control as described in Section 5.1, the Company
shall mail a notice to each Holder with a copy to the Trustee stating: (i) that
a Change of Control has occurred and that such Holder has the right to require
the Company pursuant to this Section 3.8 to purchase such Holder's Securities
(the "Change of Control Offer") at a purchase price in cash equal to
56
101% of the principal amount thereof plus accrued and unpaid interest, if any,
to the date of purchase (subject to the right of Holders of record on a record
date to receive interest on the relevant interest payment date); (ii) the
repurchase date (which shall be no earlier than 30 days nor later than 60 days
from the date such notice is mailed); (iii) that any Security not tendered shall
continue to accrue interest, if any; (iv) that, unless the Company defaults in
the payment of principal or interest, all Securities accepted for payment
pursuant to the Change of Control Offer shall cease to accrue interest, if any,
after the Change of Control Payment Date; (v) that Holders electing to have any
Securities purchased pursuant to a Change of Control Offer shall be required to
surrender the Securities to the Paying Agent at the address specified in the
notice prior to the close of business on the third Business Day preceding the
date of purchase for the Change of Control Payment Date; (vi) that Holders shall
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Securities
delivered for purchase, and a statement that such Holder is withdrawing his
election to have the Securities purchased; and (vii) that Holders whose
Securities are being purchased only in part shall be issued new Securities equal
in principal amount to the unpurchased portion of the Securities surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof.
On a Business Day that is no earlier than 30 days nor later than 60
days from the date that the Company mails or causes to be mailed notice of the
Change of Control to the holders (the "Change of Control Payment Date"), the
Company shall, to the extent lawful, (i) accept for payment all Securities or
portions thereof properly tendered pursuant to the Change of Control Offer, (ii)
deposit with the Paying Agent an amount equal to the Change of Control Payment
in respect of all the Securities or portions thereof so tendered and (iii)
deliver or cause to be delivered to the Trustee the Securities so accepted
together with an Officers' Certificate stating the aggregate principal amount of
such Securities or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of the Securities so tendered the
Change of Control Payment for such Securities, and the Trustee shall promptly
authenticate and mail (or cause to be transferred by book-entry) to each Holder
a new Security equal in principal amount to any unpurchased portion of the
Securities surrendered, if any; provided that each such new Security shall be in
a principal amount of $1,000 or an integral multiple thereof. The Company shall
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
The Company will not be required to make a Change of Control Offer
upon a Change of Control if a third party makes the Change of Control Offer in
the manner, at the times and otherwise in compliance with the requirements set
forth in this Section 3.8 applicable to a Change of Control Offer made by the
Company and purchases all Securities validly tendered and not withdrawn under
such Change of Control Offer.
The Company will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section 3.8. To the extent that the
57
provisions of any securities laws or regulations conflict with provisions of
this Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
SECTION 3.9. Limitation on Dispositions of Capital Stock of
Restricted Subsidiaries. The Company will not sell any shares of Capital Stock
of a Restricted Subsidiary, and will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock except:
(i) to the Company or a Wholly-Owned Subsidiary (other than a Receivables
Entity); or (ii) in compliance with Section 3.6 if, immediately after giving
effect to such issuance or sale, such Restricted Subsidiary would continue to be
a Restricted Subsidiary or if, immediately after giving effect to such issuance
or sale, such Restricted Subsidiary would no longer be a Restricted Subsidiary,
the Investment of the Company in such Person after giving effect to such
issuance or sale would have been permitted to be made under Section 3.4 as if
made on the date of such issuance or sale. Notwithstanding the foregoing, the
Company may sell all the Capital Stock of a Subsidiary as long as the Company is
in compliance with the terms of Section 3.6.
SECTION 3.10. Limitation on Liens. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly,
create, incur or suffer to exist any Lien (other than Permitted Liens) upon any
of its property or assets (including Capital Stock), whether owned on the date
of this Indenture or thereafter acquired, securing any Indebtedness, unless
contemporaneously therewith effective provision is made to secure the
Indebtedness due under this Indenture and the Securities or, in respect of Liens
on any Restricted Subsidiary's property or assets, any Subsidiary Guarantee of
such Restricted Subsidiary, equally and ratably with (or prior to in the case of
Liens with respect to Subordinated Obligations or Guarantor Subordinated
Obligations, as the case may be) the Indebtedness secured by such Lien for so
long as such Indebtedness is so secured.
SECTION 3.11. Future Subsidiary Guarantors. After the Issue Date,
the Company will cause each Restricted Subsidiary (other than a Foreign
Subsidiary or a Receivables Entity) created or acquired by the Company to
execute and deliver to the Trustee a Subsidiary Guarantee pursuant to which such
Restricted Subsidiary will unconditionally Guarantee, on a joint and several
basis with the other Subsidiary Guarantors, the full and prompt payment of the
principal of, premium, if any, and interest on the Securities on a senior basis
and become a party to this Indenture as a Subsidiary Guarantor for all purposes
of the Indenture.
SECTION 3.12. Limitation on Lines of Business. The Company will not,
nor will it permit any Restricted Subsidiary to, engage in any line of business
other than a Related Business.
SECTION 3.13. Limitation on Sale/Leaseback Transactions. The Company
will not, and will not permit any of its Restricted Subsidiaries to, enter into
any Sale/Leaseback Transaction unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such
Sale/Leaseback Transaction at least equal to the fair market value (as evidenced
by a resolution of the Board of Directors delivered to
58
the Trustee) of the property subject to such transaction; (ii) the Company or
such Restricted Subsidiary with respect thereto is permitted to Incur
Indebtedness in an amount equal to the Attributable Indebtedness in respect of
such Sale/Leaseback Transaction pursuant to Section 3.3; (iii) the Company or
such Restricted Subsidiary is permitted to create a Lien on the property subject
to such Sale/Leaseback Transaction without securing the Securities by the
covenant described under Section 3.10; and (iv) the Sale/Leaseback Transaction
is treated as an Asset Disposition and all of the conditions of this Indenture
described under Section 3.6 (including the provisions concerning the application
of Net Available Cash) are satisfied with respect to such Sale/Leaseback
Transaction, treating all of the consideration received in such Sale/Leaseback
Transaction as Net Available Cash for purposes of such covenant.
SECTION 3.14. Maintenance of Office or Agency.
The Company will maintain in The City of New York, an office or agency
where the Securities may be presented or surrendered for payment, where, if
applicable, the 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 principal corporate trust
office (the "Corporate Trust Office") of the Trustee shall be such office or
agency of the Company, unless the Company shall designate and maintain some
other office or agency for one or more of such purposes. The Company will give
prompt written notice to the Trustee of any change in the location of any such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust 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 (in or outside of The City of New York) where the Securities
may be presented or surrendered for any or all such purposes and may from time
to time rescind any such designation; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain an office or agency in The City of New York for such
purposes. The Company 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.
SECTION 3.15. Corporate Existence.
Subject to Article IV and Section 10.2, the Company will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and that of each Restricted Subsidiary and the corporate
rights (charter and statutory) licenses and franchises of the Company and each
Restricted Subsidiary; provided, however, that the Company shall not be required
to preserve any such existence (except the Company), right, license or franchise
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
each of its Restricted Subsidiaries, taken as a whole, and that the loss thereof
is not, and will
59
not be, disadvantageous in any material respect to the Holders, and provided,
further, the Company may merge in accordance with Sections 4.1 and 10.2.
SECTION 3.16. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (ii)
all lawful claims for labor, materials and supplies, which, if unpaid, might by
law become a material liability or 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 reserves, if
necessary (in the good faith judgment of management of the Company), are being
maintained in accordance with GAAP or where the failure to effect such payment
will not be disadvantageous to the Holders.
SECTION 3.17. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each Fiscal Year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default or Event of Default and whether or not the signers know
of any Default or Event of Default that occurred during such period. If they
do, the certificate shall describe the Default or Event of Default, its status
and what action the Company is taking or proposes to take with respect thereto.
The Company also shall comply with TIA (S) 314(a)(4).
SECTION 3.18. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
ARTICLE IV
Successor Company
SECTION 4.1. Merger and Consolidation. The Company shall not
consolidate with or merge with or into, or convey, transfer or lease all or
substantially all its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person (the "Successor
Company") shall be a corporation, partnership, trust, limited liability
company or other similar entity organized and existing under the laws of
the United States of America, any State thereof or the District of Columbia
and the Successor Company (if not the Company) shall expressly assume, by
supplemental indenture, executed and delivered
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to the Trustee, in form satisfactory to the Trustee, all the obligations of
the Company under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction, the
Successor Company would be able to Incur at least an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 3.3 of this Indenture;
(iv) each Subsidiary Guarantor, unless it is the other party to the
transactions described above, in which case clause (i) and Section 10.2
shall apply, shall have by supplemental indenture confirmed that its
Subsidiary Guarantee shall apply for such Person's obligations in respect
of this Indenture and the Securities; and
(v) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture, if any,
comply with this Indenture.
For purposes of this Section 4.1, the sale, lease, conveyance,
assignment, transfer, or other disposition of all or substantially all of the
properties and assets of one or more Subsidiaries of the Company, which
properties and assets, if held by the Company instead of such Subsidiaries,
would constitute all or substantially all of the properties and assets of the
Company on a consolidated basis, shall be deemed to be the transfer of all or
substantially all of the properties and assets of the Company.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, but, in the
case of a lease of all or substantially all its assets, the Company will not be
released from the obligation to pay the principal of and interest on the
Securities. Solely for the purpose of computing amounts described in clause
3(A) of Section 3.4(a), the Successor Company shall only be deemed to have
succeeded and be substituted for the Company with respect to periods subsequent
to the effective time of such merger, consolidation, combination or transfer of
assets.
Notwithstanding clause (iii) of the first sentence of this Section
4.1, (x) any Restricted Subsidiary of the Company (other than a Receivables
Entity) may consolidate with, merge into or transfer all or part of its
properties and assets to the Company, (y) the Company may consolidate with or
merge into a wholly owned subsidiary of Holdings created exclusively for the
purpose of holding the Capital Stock of the Company and (z) the Company may
merge with an Affiliate incorporated solely for the purpose of reincorporating
the Company in another jurisdiction to realize tax or other benefits.
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ARTICLE V
Redemption of Securities
SECTION 5.1. Optional Redemption. The Securities may be redeemed, as
a whole or from time to time in part, subject to the conditions and at the
redemption prices specified in the form of Securities set forth in Exhibits A
and B hereto, which are hereby incorporated by reference and made a part of this
Indenture, together with accrued and unpaid interest to the Redemption Date.
SECTION 5.2. 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 5.3. Election to Redeem; Notice to Trustee. The election of
the Company to redeem any Securities pursuant to Section 5.1 shall be evidenced
by a Board Resolution. In case of any redemption at the election of the
Company, the Company shall, upon not less than 30 and not more than 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 5.4.
SECTION 5.4. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities are to be redeemed at any time pursuant to an
optional redemption, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee, from the
outstanding Securities not previously called for redemption, in compliance with
the requirements of the principal securities exchange, if any, on which such
Securities are listed, or, if such Securities are not so listed, on a pro rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate (and in such manner as complies with applicable legal requirements)
and which may provide for the selection for redemption of portions of the
principal of the Securities; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Security not redeemed to
less than $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.
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.
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SECTION 5.5. Notice of Redemption. Notice of redemption shall be
given in the manner provided for in Section 11.2 not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of Securities to be
redeemed. The Trustee shall give notice of redemption in the Company's name and
at the Company's expense; provided, however, that the Company shall deliver to
the Trustee, at least 45 days prior to the Redemption Date, an Officers'
Certificate requesting that the Trustee give such notice and setting forth the
information to be stated in such notice as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the redemption price and the amount of accrued interest to
the Redemption Date payable as provided in Section 5.7, if any,
(3) if less than all outstanding Securities are to be redeemed,
the identification of the particular Securities (or portion thereof) to be
redeemed, as well as the aggregate principal amount of Securities to be
redeemed and the aggregate principal amount of Securities to be outstanding
after such partial redemption,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the Holder will receive,
without charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the redemption price (and
accrued interest, if any, to the Redemption Date payable as provided in
Section 5.7) will become due and payable upon each such Security, or the
portion thereof, to be redeemed, and, unless the Company defaults in making
the redemption payment, that interest on Securities called for redemption
(or the portion thereof) will cease to accrue on and after said date,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price and accrued interest, if
any,
(7) the name and address of the Paying Agent,
(8) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to
the accuracy or correctness of the CUSIP number, if any, listed in such
notice or printed on the Securities, and
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(10) the paragraph of the Securities pursuant to which the
Securities are to be redeemed.
SECTION 5.6. Deposit of Redemption Price. Prior to 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 2.4) an amount of money sufficient to pay the redemption
price of, and accrued interest on, all the Securities which are to be redeemed
on that date.
SECTION 5.7. Notes 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 interest, if any, to the Redemption Date), and
from and after such date (unless the Company shall default in the payment of the
Redemption Price and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for redemption in accordance with
said notice, such Security shall be paid by the Company at the redemption price,
together with accrued interest, if any, to the Redemption Date (subject to the
rights of Holders of record on the relevant record date to receive interest due
on the relevant interest payment date).
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 5.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at the office or agency of the
Company maintained for such purpose pursuant to Section 3.14 (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 the Trustee shall authenticate and make
available for delivery to the Holder of such Security at the expense of the
Company, a new Security or Securities, of any authorized denomination as
requested by such Holder, in an aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered, provided, that each such new Security will be in a principal amount
of $1,000 or integral multiple thereof.
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ARTICLE VI
Defaults and Remedies
SECTION 6.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in any payment of interest on any Security
when the same becomes due and payable, and such default continues for a
period of 30 days;
(2) the Company defaults in the payment of the principal or premium,
if any, of any Security when the same becomes due and payable at its Stated
Maturity, upon optional redemption, upon required repurchase, upon
declaration or otherwise;
(3) the Company or any Subsidiary Guarantor fails to comply with
Article IV or Section 10.2 of this Indenture;
(4) the Company fails to comply with any of Sections 3.2, 3.3, 3.4,
3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.15, and 3.16 (in
each case other than a failure to repurchase Securities when required
pursuant to Sections 3.6 or 3.8, which failure shall constitute an Event of
Default under Section 6.1(2)) and such failure continues for 30 days after
the notice specified below;
(5) the Company defaults in the performance of or a breach by the
Company of any other covenant or agreement in this Indenture or under the
Securities (other than those referred to in (1), (2), (3) or (4) above) and
such default continues for 60 days after the notice specified below;
(6) there is a default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries), other than Indebtedness
owed to the Company or a Wholly-Owned Subsidiary, whether such Indebtedness
or guarantee now exists, or is created after the date of this Indenture,
which default (a) is caused by a failure to pay principal of or premium, if
any, on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness unless being contested in good faith by
appropriate proceedings ("Payment Default") or (b) results in the
acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness under which there has been
a Payment Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more or its foreign currency equivalent at the
time;
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(7) the Company or any Significant Subsidiary or a group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Subsidiaries),
would constitute a Significant Subsidiary, pursuant to or within the
meaning of any Bankruptcy Law (as defined below):
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian (as defined
below) of it or for any substantial part of its property; or
(D) makes a general assignment for the benefit of its creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case;
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for any substantial part of its property; or
(C) orders the winding up or liquidation of the Company or any
Significant Subsidiary;
or any similar relief is granted under any foreign laws and the order,
decree or relief remains unstayed and in effect for 60 days;
(9) the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Subsidiaries) would constitute
a Significant Subsidiary fails to pay final judgments aggregating in excess
of $5.0 million or its foreign currency equivalent at the time (net of any
amounts with respect to which a reputable and creditworthy insurance
company has acknowledged liability in writing), which judgments are not
paid, discharged or stayed for a period of 60 days; or
(10) any Subsidiary Guarantee ceases to be in full force and effect
(except as contemplated by the terms hereof), or any Subsidiary Guarantee
is declared in a judicial proceeding to be null and void, or any Subsidiary
Guarantor denies or disaffirms its obligations under the terms of this
Indenture or its Subsidiary Guarantee.
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The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
The term "Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.
Notwithstanding the foregoing, a Default under clause (4) or (5) of
this Section 6.1 will not constitute an Event of Default until the Trustee or
the Holders of more than 25% in principal amount of the outstanding Securities
notify the Company of the Default and the Company does not cure such Default
within the time specified in said clause (4) or (5) after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Default or Event of Default under clauses (3), (4), (5), (6), (9) or (10) of
this Section 6.1.
SECTION 6.2. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.1(7) or (8)) occurs and is continuing,
the Trustee by notice to the Company, or the Holders of at least 25% in
outstanding principal amount of the Securities by notice to the Company and the
Trustee, may, and the Trustee at the request of such Holders shall, declare the
principal of, premium, if any, and accrued but unpaid interest, on all the
Securities to be due and payable. Upon such a declaration, such principal,
premium, if any, and accrued and unpaid interest shall be immediately due and
payable. In the event of a declaration of acceleration because an Event of
Default set forth in Section 6.1(6) above has occurred and is continuing, such
declaration of acceleration shall be automatically rescinded and annulled if the
event of default or payment default triggering such Event of Default pursuant to
Section 6.1(6) shall be remedied or cured by the Company and/or the relevant
Restricted Subsidiary or the holders of the relevant Indebtedness have rescinded
the declaration of acceleration in respect of such Indebtedness within 20 days
after the declaration of acceleration with respect thereto and if (i) the
annulment of the acceleration of the Securities would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, other than the nonpayment of principal, premium or interest
on the Securities that has become due solely because of such acceleration, have
been cured or waived. If an Event of Default specified in Section 6.1(7) or (8)
occurs, the principal of, premium and accrued and unpaid interest on all the
Securities will become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holders. No such
rescission shall affect any subsequent Default or Event of Default or impair any
right consequent thereto.
SECTION 6.3. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal
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of (or premium, if any) or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 6.4. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive, by their
consent (including, without limitation consents obtained in connection with a
purchase of, or tender offer or exchange offer for, Securities), an existing
Default or Event of Default and its consequences except (i) a Default or Event
of Default in the payment of the principal of or interest on a Security or (ii)
a Default or Event of Default in respect of a provision that under Section 9.2
cannot be amended without the consent of each Securityholder affected. When a
Default or Event of Default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other Default or Event of Default or impair
any consequent right.
SECTION 6.5. Control by Majority. The Holders of a majority in
principal amount of the Securities may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Sections 7.1 and 7.2, that the Trustee determines is unduly
prejudicial to the rights of other Securityholders or would involve the Trustee
in personal liability; provided, however, that the Trustee may take any other
action deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be entitled
to indemnification satisfactory to it in its sole discretion against all losses
and expenses caused by taking or not taking such action.
SECTION 6.6. Limitation on Suits. Subject to Section 6.7, a
Securityholder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
(2) the Holders of at least 25% in outstanding principal amount of
the Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable security
or indemnity against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of security or indemnity; and
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(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction that, in the opinion of the Trustee, is
inconsistent with such request during such 60-day period.
Subject to certain restrictions, the Holders of a majority in
principal amount of the outstanding Securities are given the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or of exercising any trust or power conferred on the Trustee. The
Trustee, however, may refuse to follow any direction that conflicts with law or
this Indenture or that the Trustee determines is unduly prejudicial to the
rights of any other Holder or that would involve the Trustee in personal
liability. Prior to taking any action under this Indenture, the Trustee shall be
entitled to indemnification satisfactory to it in its sole discretion against
all losses and expenses caused by taking or not taking such action.
SECTION 6.7. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture (including, without limitation, Section
6.6), the right of any Holder to receive payment of principal of, premium (if
any) or interest on the Securities held by such Holder, on or after the
respective due dates expressed in the Securities, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
SECTION 6.8. Collection Suit by Trustee. If an Event of Default
specified in Section 6.1(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.7.
SECTION 6.9. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its Subsidiaries or
its or their respective creditors or properties and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder to
make payments to the Trustee and, in the event that the Trustee shall consent to
the making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.7.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article VI, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.7;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, and interest, ratably, without
preference or priority of any
69
kind, according to the amounts due and payable on the Securities for
principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a
suit by Holders of more than 10% in outstanding principal amount of the
Securities.
ARTICLE VII
Trustee
SECTION 7.1. 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 such Person's own affairs; provided that if an Event of
Default occurs and is continuing, the Trustee will be under no obligation to
exercise any of the rights or powers under this Indenture at the request or
direction of any of the Holders unless such Holders have offered to the Trustee
reasonable indemnity or security against loss, liability or expense.
(b) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
in the case of any such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the Trustee, the
Trustee shall examine such certificates and opinions to determine
70
whether or not they conform to the requirements of this Indenture (but need
not confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(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:
(1) this paragraph does not limit the effect of paragraph (b) of this
Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.5.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
(f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.
(g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(h) 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 and to the provisions of the TIA.
(i) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(j) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses (including
reasonable attorneys' fees and expenses) and liabilities that might be incurred
by it in compliance with such request or direction.
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SECTION 7.2. Rights of Trustee. Subject to Section 7.1, (a) The
Trustee may rely on any document reasonably believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an Opinion of Counsel. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on an
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Securities shall be full and complete authorization and
protection from liability in respect to any action taken, omitted or suffered by
it hereunder in good faith and in accordance with the advice or opinion of such
counsel.
SECTION 7.3. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.
SECTION 7.4. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in this Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.
SECTION 7.5. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if a Trust Officer has actual knowledge thereof,
the Trustee shall mail to each Securityholder notice of the Default or Event of
Default within 90 days after it occurs. Except in the case of a Default or Event
of Default in payment of principal of, premium (if any), or interest on any
Security (including payments pursuant to the optional redemption or required
repurchase provisions of such Security, if any), the Trustee may withhold the
notice if and so long as its board of directors, a committee of its board of
directors or a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
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SECTION 7.6. Reports by Trustee to Holders. As promptly as
practicable after each June 30 beginning with the June 30 following the date of
this Indenture, and in any event prior to August 31 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of such June 30 that
complies with TIA (S) 313(a). The Trustee also shall comply with TIA (S) 313(b).
The Trustee shall also transmit by mail all reports required by TIA (S) 313(c).
A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION 7.7. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder as the Company and the Trustee shall from time
to time agree in writing. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, costs of preparing and
reviewing reports, certificates and other documents, costs of preparation and
mailing of notices to Securityholders and reasonable costs of counsel retained
by the Trustee in connection with the delivery of an Opinion of Counsel or
otherwise, in addition to the compensation for its services. Such expenses shall
include the reasonable compensation and expenses, disbursements and advances of
the Trustee's agents, counsel, accountants and experts. The Company shall
indemnify the Trustee against any and all loss, liability or expense (including
reasonable attorneys' fees and expenses) incurred by it without negligence or
bad faith on its part in connection with the administration of this trust and
the performance of its duties hereunder, including the costs and expenses of
enforcing this Indenture (including this Section 7.7) and of defending itself
against any claims (whether asserted by any Securityholder, the Company or
otherwise). The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel provided that the Company shall not be
required to pay such fees and expenses if it assumes the Trustee's defense, and,
in the reasonable judgment of outside counsel to the Trustee, there is no
conflict of interest between the Company and the Trustee in connection with such
defense. The Company need not reimburse any expense or indemnify against any
loss, liability or expense incurred by the Trustee through the Trustee's own
wilful misconduct, negligence or bad faith.
To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities. The Trustee's right to
receive payment of any amounts due under this Section 7.7 shall not be
subordinate to any other liability or Indebtedness of the Company.
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The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.1(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under any Bankruptcy Law.
SECTION 7.8. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
of the Securities may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed by the Company or by the Holders
of a majority in principal amount of the Securities and such Holders do not
reasonably promptly appoint a successor Trustee, or if a vacancy exists in the
office of the Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.7.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount of the Securities may petition, at the Company's
expense, any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.7 shall continue for the
benefit of the retiring Trustee.
SECTION 7.9. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or
74
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation without any further act shall be the successor
Trustee.
In case at the time such successor or successors by merger, conversion
or consolidation to the Trustee shall succeed to the trusts created by this
Indenture, any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA (S) 310(a). The Trustee shall have a
combined capital and surplus of at least $100 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
(S) 310(b); provided, however, that there shall be excluded from the operation
of TIA (S) 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 (S)
310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA (S) 311(a), excluding any creditor relationship
listed in TIA (S) 311(b). A Trustee who has resigned or been removed shall be
subject to TIA (S) 311(a) to the extent indicated.
ARTICLE VIII
Discharge of Indenture; Defeasance
SECTION 8.1. Discharge of Liability on Securities; Defeasance. (a)
Subject to Section 8.1(c), when (i)(x) the Company delivers to the Trustee all
outstanding Securities (other than Securities replaced pursuant to Section 2.9)
for cancellation or (y) all outstanding Securities not theretofore delivered for
cancellation have become due and payable, whether at maturity or upon redemption
or will become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name and at the expense
of the Company and the Company or any Subsidiary Guarantor irrevocably deposits
or caused to be deposited with the Trustee as trust funds in trust solely for
the benefit of the Holders cash in U.S. dollars, non-callable U.S. Government
Securities, or a combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest to pay and discharge the
entire indebtedness on such Securities not theretofore delivered to the Trustee
for cancellation for principal, premium, if any, and accrued interest to the
date of maturity or redemption, (ii) no Default or Event of Default shall have
occurred and be continuing on the date of such deposit or shall occur as a
result of such deposit and such deposit will not result
75
in a breach or violation of, or constitute a default under, any other instrument
to which the Company or any Subsidiary Guarantor is a party or by which the
Company or any Guarantor is bound; (iii) the Company or any Subsidiary Guarantor
has paid or caused to be paid all sums payable by it under this Indenture and
the Securities; and (iv) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward the payment
of such Securities at maturity or the Redemption Date, as the case may be, then
the Trustee shall acknowledge satisfaction and discharge of this Indenture on
demand of the Company (accompanied by an Officers' Certificate and an Opinion of
Counsel stating that all conditions precedent specified herein relating to the
satisfaction and discharge of this Indenture have been complied with) and at the
cost and expense of the Company.
(b) Subject to Sections 8.1(c) and 8.2, the Company at any time may
terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option"), and after giving effect to such legal defeasance,
any omission to comply with such obligations shall no longer constitute a
Default or Event of Default or (ii) its obligations under Sections 3.2, 3.3,
3.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14, 3.16, 3.17, and
4.1(iii) and the Company may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall no longer constitute a Default or an Event of Default under Section
6.1(3), 6.1(4) and 6.1(5) and the operation of Sections 6.1(6), 6.1(7) (but only
with respect to a Significant Subsidiary), 6.1(8) (but only with respect to a
Significant Subsidiary), 6.1(9) and 6.1(10), and the events specified in such
Sections shall no longer constitute an Event of Default (clauses (ii) being
referred to as the "covenant defeasance option"), but except as specified above,
the remainder of this Indenture and the Securities shall be unaffected thereby.
The Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. If the Company exercises its
covenant defeasance option, the Company may elect to have any Subsidiary
Guarantees in effect at such time terminate.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default, and the
Subsidiary Guarantees in effect at such time shall terminate. If the Company
exercises its covenant defeasance option, payment of the Securities may not be
accelerated because of an Event of Default specified in Sections 6.1(3) (as such
Section relates to 4.1(iii)), 6.1(4) (as such Section relates to Sections 3.2
through 3.16), 6.1(5) (as such Section relates to Section 3.17), 6.1(6), 6.1(7)
(but only with respect to a Significant Subsidiary), 6.1(8) (but only with
respect to a Significant Subsidiary), 6.1(9) or 6.1(10) or because of the
failure of the Company to comply with Section 4.1(iii).
Upon satisfaction of the conditions set forth herein and upon request
of the Company, the Trustee shall acknowledge in writing the discharge of those
obligations that the Company terminates.
(c) Notwithstanding the provisions of Sections 8.1(a) and (b), the
Company's obligations in Sections 2.2, 2.3, 2.4, 2.5, 2.6, 2.9, 2.10, 2.11, 6.7,
7.7, 7.8 and in this Article 8
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shall survive until the Securities have been paid in full. Thereafter, the
Company's obligations in Sections 7.7, 8.4 and 8.5 shall survive.
SECTION 8.2. Conditions to Defeasance. The Company may exercise its
legal defeasance option or its covenant defeasance option only if:
(1) the Company irrevocably deposits in trust with the Trustee for
the benefit of the Holders money in U.S. dollars or U.S. Government
Obligations or a combination thereof for the payment of principal, premium,
if any, and interest on the Securities to maturity or redemption, as the
case may be;
(2) the Company delivers to the Trustee a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited U.S. Government Obligations plus any
deposited money without investment will provide cash at such times and in
such amounts as will be sufficient to pay principal and interest when due
on all the Securities to maturity;
(3) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit or, with respect to certain
bankruptcy or insolvency Events of Default, on the 91st day after such date
of deposit;
(4) such legal defeasance or covenant defeasance shall not result in
a breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any of
its Subsidiaries is a party or by which the Company or any of its
Subsidiaries is bound;
(5) the Company shall have delivered to the Trustee an Opinion of
Counsel (subject to customary assumptions and exclusions) to the effect
that (A) the Securities and (B) assuming no intervening bankruptcy of the
Company between the date of deposit and the 91st day following the deposit
and that no Holder of the Securities is an insider of the Company, after
the 91st day following the deposit, the trust funds will not be subject to
the effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' right generally;
(6) the deposit does not constitute a default under any other
agreement binding on the Company;
(7) the Company delivers to the Trustee an Opinion of Counsel
(subject to customary assumptions and exclusions) to the effect that the
trust resulting from the deposit does not constitute, or is qualified as, a
regulated investment company under the Investment Company Act of 1940;
(8) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States stating that (i) the
Company has received from, or
77
there has been published by, the Internal Revenue Service a ruling, or (ii)
since the date of this Indenture there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel shall confirm that, the Securityholders
will not recognize income, gain or loss for federal income tax purposes as
a result of such defeasance and will be subject to federal income tax on
the same amounts, in the same manner and at the same times as would have
been the case if such legal defeasance had not occurred;
(9) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel (subject to customary
assumptions and exclusions) in the United States to the effect that the
Securityholders will not recognize income, gain or loss for federal income
tax purposes as a result of such deposit and covenant defeasance and will
be subject to federal income tax on the same amount, in the same manner and
at the same times as would have been the case if such deposit and covenant
defeasance had not occurred; and
(10) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Securities and this Indenture as
contemplated by this Article VIII have been complied with.
SECTION 8.3. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article VIII. It shall apply the deposited money and the money from U.S.
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities.
SECTION 8.4. Repayment to Company. The Trustee and the Paying Agent
shall promptly turn over to the Company upon request any excess money or
securities held by them upon payment of all the obligations under this
Indenture.
Subject to any applicable abandoned property law, the Trustee and the
Paying Agent shall pay to the Company upon request any money held by them for
the payment of principal of or interest on the Securities that remains unclaimed
for two years, and, thereafter, Securityholders entitled to the money must look
to the Company for payment as general creditors.
SECTION 8.5. Indemnity for U.S. Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.
SECTION 8.6. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or U.S. Government Obligations in accordance with this
Article VIII by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the
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obligations of the Company under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to this
Article VIII until such time as the Trustee or Paying Agent is permitted to
apply all such money or U.S. Government Obligations in accordance with this
Article VIII; provided, however, that, if the Company has made any payment of
interest on or principal of any Securities because of 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 or U.S. Government
Obligations held by the Trustee or Paying Agent.
ARTICLE IX
Amendments
SECTION 9.1. Without Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to or consent of any Securityholder:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article IV in respect of the assumption by a
Successor Company of an obligation of the Company under this Indenture;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Code or in a manner such that the uncertificated
Securities are described in Section 163(f)(2)(B) of the Code;
(4) to add guarantees with respect to the Securities or to secure the
Securities;
(5) 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;
(6) to comply with any requirements of the SEC in connection with
qualifying this Indenture under the TIA;
(7) to make any change that does not adversely affect the rights of
any Securityholder; or
(8) to provide for the issuance of the Exchange Securities, which
will have terms substantially identical in all material respects to the
Initial Securities (except that the transfer restrictions contained in the
Initial Securities will be modified or eliminated, as appropriate), and
which will be treated, together with any outstanding Initial Securities, as
a single issue of securities.
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After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.2. With Consent of Holders. The Company, the Subsidiary
Guarantors and the Trustee may amend this Indenture or the Securities without
notice to any Securityholder but with the written consent of the Holders of at
least a majority in principal amount of the Securities (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for, Securities). However, without the consent of each
Securityholder affected, an amendment may not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or extend the time for payment of interest on
any Security;
(3) reduce the principal of or extend the Stated Maturity of any
Security;
(4) reduce the premium payable upon the redemption or repurchase of
any Security or change the time at which any Security may or shall be
redeemed or repurchased in accordance with this Indenture;
(5) make any Security payable in money other than that stated in the
Security;
(6) impair the right of any Holder to receive payment of principal of
and interest on such Holder's Securities on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect
to such Holder's Securities; or
(7) make any change to the amendment provisions which require each
Holder's consent or to the waiver provisions.
It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.
After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.
SECTION 9.3. Compliance with Trust Indenture Act. Every amendment to
this Indenture or the Securities shall comply with the TIA as then in effect.
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SECTION 9.4. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver shall become effective upon receipt by the Trustee of the
requisite number of written consents under Section 9.1 or 9.2 as applicable.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Securityholders entitled to give their consent or
take any other action described above or required or permitted to be taken
pursuant to this Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Securityholders at such
record date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall become valid or effective more than 120
days after such record date.
SECTION 9.5. Notation on or Exchange of Securities. If an amendment
changes the terms of a Security, the Trustee may require the Holder of the
Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.
SECTION 9.6. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article IX if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Sections 7.1 and 7.2) shall be fully protected in
relying upon, an Officers' Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
ARTICLE X
Guarantee
SECTION 10.1. Guarantee. Each Subsidiary Guarantor hereby fully,
unconditionally and irrevocably guarantees, as primary obligor and not merely as
surety, jointly and severally with each other Subsidiary Guarantor, to each
Holder of the Securities and the Trustee the full and punctual payment when due,
whether at maturity, by acceleration,
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by redemption or otherwise, of the principal of, premium, if any, and interest
on the Securities and all other obligations of the Company under this Indenture
(all the foregoing being hereinafter collectively called the "Obligations").
Each Subsidiary Guarantor further agrees (to the extent permitted by law) that
the Obligations may be extended or renewed, in whole or in part, without notice
or further assent from it, and that it will remain bound under this Article X
notwithstanding any extension or renewal of any Obligation.
Each Subsidiary Guarantor waives presentation to, demand of payment
from and protest to the Company of any of the Obligations and also waives notice
of protest for nonpayment. Each Subsidiary Guarantor waives notice of any
default under the Securities or the Obligations. The obligations of each
Subsidiary Guarantor hereunder shall not be affected by (a) the failure of any
Holder to assert any claim or demand or to enforce any right or remedy against
the Company or any other person under this Indenture, the Securities or any
other agreement or otherwise; (b) any extension or renewal of any thereof; (c)
any rescission, waiver, amendment or modification of any of the terms or
provisions of this Indenture, the Securities or any other agreement; (d) the
release of any security held by any Holder or the Trustee for the Obligations or
any of them; (e) the failure of any Holder to exercise any right or remedy
against any other Subsidiary Guarantor; or (f) any change in the ownership of
the Company.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a Guarantee of payment when due (and not a Guarantee of
collection) and waives any right to require that any resort be had by any Holder
to any security held for payment of the Obligations.
The obligations of each Subsidiary Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any reason
(other than payment of the Obligations in full), including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense of setoff, counterclaim, recoupment or termination whatsoever or by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations of
each Subsidiary Guarantor herein shall not be discharged or impaired or
otherwise affected by the failure of any Holder to assert any claim or demand or
to enforce any remedy under this Indenture, the Securities or any other
agreement, by any waiver or modification of any thereof, by any default, failure
or delay, willful or otherwise, in the performance of the Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Subsidiary
Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor
as a matter of law or equity.
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein shall continue to be effective or be reinstated, as the case may be, if
at any time payment, or any part thereof, of principal of or interest on any of
the Obligations is rescinded or must otherwise be restored by any Holder upon
the bankruptcy or reorganization of the Company or otherwise.
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In furtherance of the foregoing and not in limitation of any other
right which any Holder has at law or in equity against any Subsidiary Guarantor
by virtue hereof, upon the failure of the Company to pay any of the Obligations
when and as the same shall become due, whether at maturity, by acceleration, by
redemption or otherwise, each Subsidiary Guarantor hereby promises to and will,
upon receipt of written demand by the Trustee, forthwith pay, or cause to be
paid, in cash, to the Holders an amount equal to the sum of (i) the unpaid
amount of such Obligations then due and owing and (ii) accrued and unpaid
interest on such Obligations then due and owing (but only to the extent not
prohibited by law).
Each Subsidiary Guarantor further agrees that, as between such
Subsidiary Guarantor, on the one hand, and the Holders, on the other hand, (x)
the maturity of the Obligations guaranteed hereby may be accelerated as provided
in this Indenture for the purposes of its Subsidiary Guarantee herein,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed hereby and (y) in the
event of any such declaration of acceleration of such Obligations, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Subsidiary Guarantor for the purposes of this Subsidiary
Guarantee.
Each Subsidiary Guarantor also agrees to pay any and all reasonable
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or the Holders in enforcing any rights under this Section.
SECTION 10.2. Limitation on Liability; Termination, Release and
Discharge. The obligations of each Subsidiary Guarantor hereunder will be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor (including,
without limitation, any guarantees under a Senior Credit Agreement) 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 its
contribution obligations under this Indenture, result in the obligations of such
Subsidiary Guarantor under its Subsidiary Guarantee not constituting a
fraudulent conveyance or fraudulent transfer under federal or state law.
Each Subsidiary Guarantor may consolidate with or merge into or sell
its assets to the Company or another Subsidiary Guarantor without limitation.
Each Subsidiary Guarantor may consolidate with or merge into or sell all or
substantially all its assets to a corporation, partnership or trust other than
the Company or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor), except that if the surviving corporation of any such
merger or consolidation is a Subsidiary of the Company, such merger,
consolidation or sale shall not be permitted unless (i) the Person formed by or
surviving any such consolidation or merger assumes all the obligations of such
Subsidiary under the Subsidiary Guarantee pursuant to a supplemental indenture
in form and substance reasonably satisfactory to the Trustee in respect of the
Securities, this Indenture and the Subsidiary Guarantee, (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists; and
(iii) the Company delivers to the Trustee an Officers' Certificate
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and an Opinion of Counsel addressed to the Trustee with respect to the foregoing
matters. Upon the sale or disposition of a Subsidiary Guarantor (by merger,
consolidation, the sale of its Capital Stock or the sale of all or substantially
all of its assets) to a Person (whether or not an Affiliate of the Subsidiary
Guarantor) which is not a Subsidiary of the Company, which sale or disposition
is otherwise in compliance with this Indenture (including Section 3.6), such
Subsidiary Guarantor will be deemed released from all its obligations under this
Indenture and its Subsidiary Guarantee and such Subsidiary Guarantee will
terminate; provided, however, that any such termination will occur only to the
extent that all obligations of such Subsidiary Guarantor under a Senior Credit
Agreement and all of its guarantees of, and under all of its pledges of assets
or other security interests which secure, any other Indebtedness of the Company
will also terminate upon such release, sale or transfer.
A Subsidiary Guarantor will be deemed released and relieved of its
obligations under this Indenture and its Subsidiary Guarantee without any
further action required on the part of the Company or such Subsidiary Guarantor
upon the designation of such Subsidiary Guarantor as an Unrestricted Subsidiary
in accordance with the terms of this Indenture.
SECTION 10.3. Right of Contribution. Each Subsidiary Guarantor
hereby agrees that to the extent that any Subsidiary Guarantor shall have paid
more than its proportionate share of any payment made on the obligations under
the Subsidiary Guarantees, such Subsidiary Guarantor shall be entitled to seek
and receive contribution from and against the Company or any other Subsidiary
Guarantor who has not paid its proportionate share of such payment. Each
Subsidiary Guarantor's right of contribution shall be subject to the terms and
conditions of Section 3.5. The provisions of this Section 10.3 shall in no
respect limit the obligations and liabilities of each Subsidiary Guarantor to
the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to
the Trustee and the Holders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
SECTION 10.4. No Subrogation. Notwithstanding any payment or
payments made by each Subsidiary Guarantor hereunder, no Subsidiary Guarantor
shall be entitled to be subrogated to any of the rights of the Trustee or any
Holder against the Company or any other Subsidiary Guarantor or any collateral
security or guarantee or right of offset held by the Trustee or any Holder for
the payment of the Obligations, nor shall any Subsidiary Guarantor seek or be
entitled to seek any contribution or reimbursement from the Company or any other
Subsidiary Guarantor in respect of payments made by such Subsidiary Guarantor
hereunder, until all amounts owing to the Trustee and the Holders by the Company
on account of the Obligations are paid in full. If any amount shall be paid to
any Subsidiary Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be
held by such Subsidiary Guarantor in trust for the Trustee and the Holders,
segregated from other funds of such Subsidiary Guarantor, and shall, forthwith
upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the
exact form received by such Subsidiary Guarantor (duly indorsed by such
Subsidiary Guarantor to the Trustee, if required), to be applied against the
Obligations.
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ARTICLE XI
Miscellaneous
SECTION 11.1. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the provision required by
the TIA shall control. Each Subsidiary Guarantor in addition to performing its
obligations under its Subsidiary Guarantee shall perform such other obligations
as may be imposed upon it with respect to this Indenture under the TIA.
SECTION 11.2. Notices. Any notice or communication shall be in
writing and delivered in person or mailed by first-class mail addressed as
follows:
if to the Company:
Favorite Brands International, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
With a copy to:
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
if to the Trustee:
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Services Division
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a registered Securityholder
shall be mailed to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
85
SECTION 11.3. Communication by Holders with other Holders.
Securityholders may communicate pursuant to TIA (S) 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA (S) 312(c).
SECTION 11.4. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take or refrain
from taking any action under this Indenture, the Company shall furnish to the
Trustee:
(1) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of the signers,
all conditions precedent, if any, provided for in this Indenture relating
to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee stating that, in the opinion of such counsel,
all such conditions precedent have been complied with.
SECTION 11.5. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:
(1) a statement that the individual making such certificate or
opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he 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 or not, in the opinion of such
individual, such covenant or condition has been complied with.
In giving such Opinion of Counsel, counsel may rely as to factual
matters on an Officers' Certificate or on certificates of public officials.
SECTION 11.6. When Securities Disregarded. In determining whether
the Holders of the required principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by the Company or by any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company shall be disregarded and deemed not to be
outstanding, except that, for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded. Also,
86
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.7. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by, or a meeting of,
Securityholders. The Registrar and the Paying Agent may make reasonable rules
for their functions.
SECTION 11.8. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or other day on which commercial banking institutions are authorized or
required to be closed in New York City. If a payment date is a Legal Holiday,
payment shall be made on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period. If a regular record
date is a Legal Holiday, the record date shall not be affected.
SECTION 11.9. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
SECTION 11.10. No Recourse Against Others. An incorporator,
director, officer, employee, stockholder or controlling person, as such, of each
of Holdings, the Company or any Subsidiary Guarantor shall not have any
liability for any obligations of the Company under the Securities, this
Indenture or the Subsidiary Guarantees or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 11.11. Successors. All agreements of the Company in this
Indenture and the Securities shall bind their respective successors. All
agreements of the Trustee in this Indenture shall bind its successors.
SECTION 11.12. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.
SECTION 11.13. Variable Provisions. The Company initially appoints
the Trustee as Paying Agent and Registrar and custodian with respect to any
Global Securities.
SECTION 11.14. Qualification of Indenture. The Company shall qualify
this Indenture under the TIA in accordance with the terms and conditions of the
Registration Rights Agreement and shall pay all reasonable costs and expenses
(including attorneys' fees and expenses for the Company, the Trustee and the
Holders) incurred in connection therewith, including, but not limited to, costs
and expenses of qualification of this Indenture and the Securities and printing
this Indenture and the Securities. The Trustee shall be entitled to receive
from the Company any such Officers' Certificates, Opinions of Counsel or other
documentation as it may reasonably request in connection with any such
qualification of this Indenture under the TIA.
87
SECTION 11.15. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.
88
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
FAVORITE BRANDS INTERNATIONAL, INC.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
TROLLI INC., as a Subsidiary Guarantor
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ TRUCKING CORPORATION, as a Subsidiary
Guarantor
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
LASALLE NATIONAL BANK, as Trustee
By:______________________________
Name:
Title:
88
IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date first written above.
FAVORITE BRANDS INTERNATIONAL, INC.
By:______________________________
Name:
Title:
TROLLI INC., as a Subsidiary Guarantor
By:______________________________
Name:
Title:
▇▇▇▇▇▇ TRUCKING CORPORATION, as a Subsidiary
Guarantor
By:______________________________
Name:
Title:
LASALLE NATIONAL BANK, as Trustee
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
By:______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Exhibit A
EXHIBIT A
[FORM OF FACE OF INITIAL SECURITY]
No. [___] Principal Amount $[______________],
as revised by the Schedule of Increases
and Decreases in Global Security
attached hereto
CUSIP NO. ____________
10 3/4% Senior Notes due 2006
Favorite Brands International, Inc., a Delaware corporation, promises
to pay to [___________], or registered assigns, the principal sum of
[__________________] Dollars, as revised by the Schedule of Increases and
Decreases in Global Security attached hereto, on ________ __, 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Additional provisions of this Security are set forth on the other side
of this Security.
FAVORITE BRANDS INTERNATIONAL, INC.
By: _________________________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE NATIONAL BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By ____________________________
Authorized Signatory Date: _____________, 1998
A-1
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
10 3/4% Senior Note due 2006
1. Interest
Favorite Brands International, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May 15 and November 15
of each year commencing November 15, 1998. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from May 19, 1998. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the May 1 or November 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by the
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium,if any, and interest) by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
3. Paying Agent and Registrar
Initially, LaSalle National Bank, a national bank organized and
existing under the laws of the United States of America (the "Trustee"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to
A-2
any Securityholder. The Company or any of its domestically incorporated Wholly-
Owned Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of May
19, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are general unsecured senior obligations of the Company
limited to $300.0 million aggregate principal amount (subject to Section 2.6,
Section 2.9, Section 2.11, Section 5.8 and Section 9.5 of the Indenture), of
which $200.0 million in aggregate principal amount will be initially issued on
the Issue Date. Subject to the conditions set forth in the Indenture, the
Company may issue up to an additional $100.0 million aggregate principal amount
of Subsequent Series Notes. This Security is one of the Original Securities
referred to in the Indenture. The Initial Securities, Private Exchange
Securities and the Exchange Securities will be treated as a single class of
securities under the Indenture. The Indenture imposes certain limitations on,
among other things: the Incurrence of Indebtedness by the Company and its
Restricted Subsidiaries, the payment of dividends and other distributions on the
Capital Stock of the Company and its Restricted Subsidiaries, the purchase or
redemption of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, certain purchases or redemptions of Subordinated Obligations, the
Incurrence of Liens by the Company or its Restricted Subsidiaries, the entering
into Sale/Leaseback Transactions by the Company or its Restricted Subsidiaries,
the sale or transfer of assets and Capital Stock of Restricted Subsidiaries, the
issuance or sale of Capital Stock of Restricted Subsidiaries, the business
activities and investments of the Company and its Restricted Subsidiaries, and
transactions with Affiliates. In addition, the Indenture limits the ability of
the Company and its Restricted Subsidiaries to restrict distributions and
dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior basis pursuant to the terms of the Indenture.
5. Redemption
Except as set forth below, the Securities will not be redeemable at
the option of the Company prior to May 15, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
A-3
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
If redeemed during the 12-month period commencing on May 15 of the years
set forth below:
Period Redemption Price
------ ----------------
2003 105.375%
2004 102.688%
2005 and thereafter 100.000%
In addition, at any time and from time to time prior to May 15, 2001,
the Company may redeem in the aggregate up to 35% of the original principal
amount of the Securities with the proceeds of one or more Public Equity
Offerings received by, or invested in, the Company at a redemption price
(expressed as a percentage of principal amount) of 110.750% plus accrued and
unpaid interest, if any, to the redemption date (subject to the right of holders
of record on the relevant record date to receive interest due on the relevant
interest payment date); provided, however, that at least 65% of the original
principal amount of the Securities must remain outstanding after each such
redemption; provided further, that each such redemption occurs within 90 days of
the date of closing of such Public Equity Offering.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.
6. Repurchase Provisions
(a) Upon a Change of Control any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (iii)(C) of paragraph (a) of Section 3.6 of the
Indenture, the Company will be required to apply such Excess Proceeds to the
repayment of the Securities and any Pari Passu Notes in accordance with the
procedures set forth in Section 3.6 of the Indenture.
A-4
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article IV of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with
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qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder, or to provide for the
issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal or premium, if any, on the Securities at Stated Maturity, upon
required repurchase or upon optional redemption pursuant to paragraphs 5 and 6
of the Securities, upon declaration or otherwise; (iii) the failure by the
Company or any Subsidiary Guarantor to comply with its obligations under Article
IV or Section 10.2 of the Indenture; (iv) failure by the Company to comply for
30 days after notice with any of its obligations under the covenants described
under Sections 3.2 through 3.16 inclusive of the Indenture (in each case, other
than a failure to purchase Securities when required pursuant to Sections 3.6 or
3.8, which failure shall constitute an Event of Default under clause (ii)
above); (v) the failure by the Company to comply for 60 days after notice with
its other agreements contained in the Indenture or under the Securities (other
than those referred to in (i), (ii), (iii) or (iv) above); (vi) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), other than
Indebtedness owed to the Company or a Wholly-Owned Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness unless being contested in good faith by
appropriate proceedings ("Payment Default") or (b) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more (the
"cross acceleration provision"); (vii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Subsidiaries), would
constitute a Significant Subsidiary (the "bankruptcy provisions"); (viii)
failure by the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Subsidiaries) would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of $5.0
million or its foreign currency equivalent at the time (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days (the "judgment default provision") or (ix) any Subsidiary
Guarantee ceases to be in full force and effect (except as contemplated by the
terms of the Indenture) or is declared null and void in a judicial proceeding or
any Subsidiary Guarantor denies or disaffirms its obligations under the
Indenture or its Subsidiary Guarantee. However, a default under clauses (iv) and
(v) will not constitute an Event of Default until the Trustee or the holders of
more than 25% in principal amount of the outstanding Securities notify the
Company of the default and the Company does not cure such default within the
time specified in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable
A-6
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of Holdings, the Company, or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under
the Securities, the Indenture or any Subsidiary Guarantees or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on
A-7
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Favorite Brands International, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
A-8
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:___________________
Signature Guarantee:______________________________
(Signature must be guaranteed)
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
In connection with any transfer or exchange of any of the Securities evidenced
by this certificate occurring prior to the date that is two years 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:
CHECK ONE BOX BELOW:
1 [ ] acquired for the undersigned's own account, without transfer; or
2 [ ] transferred to the Company; or
3 [ ] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"); or
4 [ ] transferred pursuant to an effective registration statement under
the Securities Act; or
5 [ ] transferred pursuant to and in compliance with Regulation S under
the Securities Act; or
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6 [ ] transferred to an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act), that has
furnished to the Trustee a signed letter containing certain
representations and agreements (the form of which letter appears as
Section 2.7 of the Indenture); or
7 [ ] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933.
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 (5), (6) or
(7) is checked, the Trustee or the Company may require, prior to registering any
such transfer of the Securities, in their sole discretion, such legal opinions,
certifications and other information as the Trustee or the Company may
reasonably request 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, such as the exemption provided by
Rule 144 under such Act.
______________________________
Signature
Signature Guarantee:
________________________________ ____________________
(Signature must be guaranteed) Signature
____________________________________________________________
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
TO BE COMPLETED BY PURCHASER IF (1) OR (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
-----------------------------------------
Dated:
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[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 signatory of Trustee or
Global Security Global Security such decrease or increase Securities Custodian
_______ ______________________ ________________________ ___________________________ ______________________
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.6 or 3.8 of the Indenture, check either box:
[ ] [ ]
3.6 3.8
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.6 or 3.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: __________ Your Signature ____________________________
(Sign exactly as your name appears on the
other side of the Security)
Signature Guarantee: _______________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
A-12
Exhibit B
EXHIBIT B
[FORM OF FACE OF EXCHANGE SECURITY]
No. [_____] Principal Amount $[____________],
as revised by the Schedule of Increases
and Decreases in Global Security
attached hereto
CUSIP NO. _____________
10 3/4% Senior Notes due 2006
Favorite Brands International, Inc., a Delaware corporation, promises
to pay to [______________], or registered assigns, the principal sum of
[_______________] Dollars, as revised by the Schedule of Increases and Decreases
in Global Security attached hereto, on ______ __, 2006.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Additional provisions of this Security are set forth on the other side
of this Security.
FAVORITE BRANDS INTERNATIONAL, INC.
By:_____________________________
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
LASALLE NATIONAL BANK
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
By:_____________________________
Authorized Signatory Date: ______________
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[FORM OF REVERSE SIDE OF EXCHANGE SECURITY]
10 3/4% Senior Note due 2006
1. Interest
Favorite Brands International, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.
The Company will pay interest semiannually on May 15 and November 15
of each year commencing November 15, 1998. Interest on the Securities will
accrue from the most recent date to which interest has been paid on the
Securities or, if no interest has been paid, from May 19, 1998. The Company
shall pay interest on overdue principal or premium, if any (plus interest on
such interest to the extent lawful), at the rate borne by the Securities to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment
By at least 10:00 a.m. (New York City time) on the date on which any
principal of or interest on any Security is due and payable, the Company shall
irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay
such principal, premium, if any, and/or interest. The Company will pay interest
(except Defaulted Interest) to the Persons who are registered Holders of
Securities at the close of business on the May 1 or November 1 next preceding
the interest payment date even if Securities are cancelled, repurchased or
redeemed after the record date and on or before the interest payment date.
Holders must surrender Securities to a Paying Agent to collect principal
payments. The Company will pay principal and interest in money of the United
States that at the time of payment is legal tender for payment of public and
private debts. Payments in respect of Securities represented by a Global
Security (including principal, premium, if any, and interest) will be made by
the transfer of immediately available funds to the accounts specified by the
Depository Trust Company. The Company will make all payments in respect of a
Definitive Security (including principal, premium, if any, and interest), by
mailing a check to the registered address of each Holder thereof; provided,
however, that payments on the Securities may also be made, in the case of a
Holder of a least $1,000,000 aggregate principal amount of Securities, by wire
transfer to a U.S. dollar account maintained by the payee with a bank in the
United States if such Holder elects payment by wire transfer by giving written
notice to the Trustee or the Paying Agent to such effect designating such
account no later than 15 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).
Payments in respect of Securities represented by a Global Security (including
principal, premium, if any, and interest) will be made by the transfer of
immediately available funds to the accounts specified by the Depository Trust
Company. The Company will make all payments in respect of a Definitive Security
(including principal, premium, if any, and interest), by mailing a check to the
registered address of each Holder thereof; provided, however, that payments on
the Securities may also be made, in the case of a Holder of a least $1,000,000
aggregate principal amount of Securities, by wire transfer to a U.S. dollar
account maintained by the payee with a bank in the United States if such Holder
elects payment by wire transfer by giving written notice to the Trustee or the
Paying Agent to such effect
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designating such account no later than 15 days immediately preceding the
relevant due date for payment (or such other date as the Trustee may accept in
its discretion).
3. Paying Agent and Registrar
Initially, LaSalle National Bank, a national bank organized and
existing under the laws of the United States of America (the "Trustee"), will
act as Trustee, Paying Agent and Registrar. The Company may appoint and change
any Paying Agent, Registrar or co-registrar without notice to any
Securityholder. The Company or any of its domestically incorporated Wholly-Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.
4. Indenture
The Company issued the Securities under an Indenture dated as of May
19, 1998 (as it may be amended or supplemented from time to time in accordance
with the terms thereof, the "Indenture"), among the Company, the Subsidiary
Guarantors and the Trustee. The terms of the Securities include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb) as in effect on the date
of the Indenture (the "Act"). Capitalized terms used herein and not defined
herein have the meanings ascribed thereto in the Indenture. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture and
the Act for a statement of those terms.
The Securities are general unsecured senior obligations of the Company
limited to $300.0 million aggregate principal amount (subject to Section 2.6,
Section 2.9, Section 2.11, Section 5.8 and Section 9.5 of the Indenture), of
which $200.0 million in aggregate principal amount will be initially issued on
the Issue Date. Subject to the conditions set forth in the Indenture, the
Company may issue up to an additional $100.0 million aggregate principal amount
of Subsequent Series Notes. The Initial Securities, Private Exchange Securities
and the Exchange Securities will be treated as a single class of securities
under the Indenture. The Indenture imposes certain limitations on, among other
things: the Incurrence of Indebtedness by the Company and its Restricted
Subsidiaries, the payment of dividends and other distributions on the Capital
Stock of the Company and its Restricted Subsidiaries, the purchase or redemption
of Capital Stock of the Company and Capital Stock of such Restricted
Subsidiaries, certain purchases or redemptions of Subordinated Obligations, the
Incurrence of Liens by the Company or its Restricted Subsidiaries, the entering
into Sale/Leaseback Transactions by the Company or its Restricted Subsidiaries,
the sale or transfer of assets and Capital Stock of Restricted Subsidiaries, the
issuance or sale of Capital Stock of Restricted Subsidiaries, the business
activities and investments of the Company and its Restricted Subsidiaries, and
transactions with Affiliates. In addition, the Indenture limits the ability of
the Company and its Restricted Subsidiaries to restrict distributions and
dividends from Restricted Subsidiaries.
To guarantee the due and punctual payment of the principal, premium, if
any, and interest on the Securities and all other amounts payable by the Company
under the Indenture and the Securities when and as the same shall be due and
payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Securities and the Indenture, the Subsidiary Guarantors have
unconditionally guaranteed (and future Subsidiary Guarantors, together with the
Subsidiary Guarantors, will unconditionally guarantee), jointly and severally,
such obligations on a senior basis pursuant to the terms of the Indenture.
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5. Redemption
Except as set forth below, the Securities will not be redeemable at the
option of the Company prior to May 15, 2003. On and after such date, the
Securities will be redeemable, at the Company's option, in whole or in part, at
any time upon not less than 30 nor more than 60 days prior notice mailed by
first-class mail to each holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), plus accrued
and unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
interest payment date):
If redeemed during the 12-month period commencing on May 15 of the years
set forth below:
Period Redemption Price
------ ----------------
2003 105.375%
2004 102.688%
2005 and thereafter 100.000%
In addition, at any time and from time to time prior to May 15, 2001, the
Company may redeem in the aggregate up to 35% of the original principal amount
of the Securities with the proceeds of one or more Public Equity Offerings
received by, or invested in, the Company at a redemption price (expressed as a
percentage of principal amount) of 110.750% plus accrued and unpaid interest, if
any, to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant interest payment
date); provided, however, that at least 65% of the original principal amount of
the Securities must remain outstanding after each such redemption; provided
further, that each such redemption occurs within 90 days of the date of closing
of such Public Equity Offering.
In the case of any partial redemption, selection of the Securities for
redemption will be made by the Trustee on a pro rata basis, by lot or by such
other method as the Trustee in its sole discretion shall deem to be fair and
appropriate, although no Securities of $1,000 in original principal amount or
less will be redeemed in part. If any Security is to be redeemed in part only,
the notice of redemption relating to such Security shall state the portion of
the principal amount thereof to be redeemed. A new Security in principal amount
equal to the unredeemed portion thereof will be issued in the name of the holder
thereof upon cancellation of the original Security. On and after the redemption
date, interest will cease to accrue on Securities or portions thereof called for
redemption as long as the Company has deposited with the Paying Agent funds in
satisfaction of the applicable redemption price pursuant to the Indenture.
6. Repurchase Provisions
(a) Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a purchase price in cash equal to 101% of the principal amount
thereof, plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date) as provided in, and
subject to the terms of, the Indenture.
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(b) In the event of an Asset Disposition that requires the purchase
of Securities pursuant to clause (iii)(C) of paragraph (a) of Section 3.6 of the
Indenture, the Company will be required to apply such Excess Proceeds to the
repayment of the Securities and any Pari Passu Notes in accordance with the
procedures set forth in Section 3.6 of the Indenture.
7. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in denominations
of principal amount of $1,000 and whole multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements or
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of or exchange (i)
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
beginning 15 days before the mailing of a notice of Securities to be redeemed
and ending on the date of such mailing or (ii) any Securities for a period
beginning 15 days before an interest payment date and ending on such interest
payment date.
8. Persons Deemed Owners
The registered holder of this Security may be treated as the owner of
it for all purposes.
9. Unclaimed Money
If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.
10. Defeasance
Subject to certain conditions set forth in the Indenture, the Company
at any time may terminate some or all of its obligations under the Securities
and the Indenture if the Company deposits with the Trustee money or U.S.
Government Obligations for the payment of principal and interest on the
Securities to redemption or maturity, as the case may be.
11. Amendment, Waiver
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount of the then outstanding
Securities and (ii) any default (other than with respect to nonpayment or in
respect of a provision that cannot be amended without the written consent of
each Securityholder affected) or noncompliance with any provision may be waived
with the written consent of the Holders of a majority in principal amount of the
then outstanding Securities. Subject to certain exceptions set forth in the
Indenture, without the consent of any Securityholder, the Company and the
Trustee may amend the Indenture or the Securities to cure any ambiguity,
B-5
omission, defect or inconsistency, or to comply with Article IV of the
Indenture, or to provide for uncertificated Securities in addition to or in
place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any
Securityholder, or to provide for the issuance of Exchange Securities.
12. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30 days
in payment of interest when due on the Securities; (ii) default in payment of
principal or premium, if any, on the Securities at Stated Maturity, upon
required repurchase or upon optional redemption pursuant to paragraphs 5 and 6
of the Securities, upon declaration or otherwise; (iii) the failure by the
Company or any Subsidiary Guarantor to comply with its obligations under Article
IV or Section 10.2 of the Indenture; (iv) failure by the Company to comply for
30 days after notice with any of its obligations under the covenants described
under Sections 3.2 through 3.16 inclusive of the Indenture (in each case, other
than a failure to purchase Securities, when required pursuant to Section 3.6 or
3.8, which failure shall constitute an Event of Default under clause (ii)
above); (v) the failure by the Company to comply for 60 days after notice with
its other agreements contained in the Indenture or under the Securities (other
than those referred to in (i), (ii), (iii) or (iv) above); (vi) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), other than
Indebtedness owed to the Company or a Wholly-Owned Subsidiary, whether such
Indebtedness or guarantee now exists, or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
premium, if any, on such Indebtedness prior to the expiration of the grace
period provided in such Indebtedness unless being contested in good faith by
appropriate proceedings ("Payment Default") or (b) results in the acceleration
of such Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal amount of
any other such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $10.0 million or more (the
"cross acceleration provision"); (vii) certain events of bankruptcy, insolvency
or reorganization of the Company or a Significant Subsidiary or group of
Restricted Subsidiaries that, taken together (as of the latest audited
consolidated financial statements for the Company and its Subsidiaries), would
constitute a Significant Subsidiary (the "bankruptcy provisions"); (viii)
failure by the Company or any Significant Subsidiary or group of Restricted
Subsidiaries that, taken together (as of the latest audited consolidated
financial statements for the Company and its Subsidiaries) would constitute a
Significant Subsidiary to pay final judgments aggregating in excess of $5.0
million or its foreign currency equivalent at the time (net of any amounts with
respect to which a reputable and creditworthy insurance company has acknowledged
liability in writing), which judgments are not paid, discharged or stayed for a
period of 60 days (the "judgment default provision") or (ix) any Subsidiary
Guarantee ceases to be in full force and effect (except as contemplated by the
terms of the Indenture) or is declared null and void in a judicial proceeding or
any Subsidiary Guarantor denies or disaffirms its obligations under the
Indenture or its Subsidiary Guarantee. However, a default under clauses (iv) and
(v) will not constitute an Event of Default until the Trustee or the holders of
more than 25% in principal amount of the outstanding Securities notify the
Company of
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the default and the Company does not cure such default within the time specified
in clauses (iv) and (v) hereof after receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the Securities may declare all
the Securities to be due and payable immediately. Certain events of bankruptcy
or insolvency are Events of Default which will result in the Securities being
due and payable immediately upon the occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in principal amount of the Securities
may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default or Event of
Default (except a Default or Event of Default in payment of principal or
interest) if it determines that withholding notice is in their interest.
13. Trustee Dealings with the Company
Subject to certain limitations set forth in the Indenture, the Trustee
under the Indenture, in its individual or any other capacity, may become the
owner or pledgee of Securities and may otherwise deal with and collect
obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its affiliates with the same rights it would have if it were
not Trustee.
14. No Recourse Against Others
An incorporator, director, officer, employee, stockholder or
controlling person, as such, of each of Holdings, the Company or any Subsidiary
Guarantor shall not have any liability for any obligations of the Company under
the Securities, the Indenture or any Subsidiary Guarantees or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Security, each Securityholder waives and releases all such
liability. The waiver and release are part of the consideration for the issue of
the Securities.
15. Authentication
This Security shall not be valid until an authorized signatory of the
Trustee (or an authenticating agent acting on its behalf) manually signs the
certificate of authentication on the other side of this Security.
16. Abbreviations
Customary abbreviations may be used in the name of a Securityholder or
an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants
in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).
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17. CUSIP Numbers
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. No representation is
made as to the accuracy of such numbers either as printed on the Securities or
as contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
18. Governing Law
This Security shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
Favorite Brands International, Inc.
▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
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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 ____________________
Signature Guarantee: ____________________________________
(Signature must be guaranteed)
-------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.6 or 3.8 of the Indenture, check either box:
[ ] [ ]
3.6 3.8
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 3.6 or 3.8 of the Indenture, state the amount in
principal amount (must be integral multiple of $1,000): $
Date: _______________ Your Signature: ______________________________
(Sign exactly as your name appears on the other side of
the Security)
Signature Guarantee: ___________________________________________
(Signature must be guaranteed)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
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Exhibit C
EXHIBIT C
FORM OF SUBSIDIARY GUARANTEE
----------------------------
This Supplemental Indenture, dated as of [__________] (this
"Supplemental Indenture" or "Guarantee"), among [name of future Subsidiary
Guarantor] (the "Guarantor"), Favorite Brands International, Inc. (together with
its successors and assigns, the "Company"), each other then existing Subsidiary
Guarantor under the Indenture referred to below, and LaSalle National Bank, as
Trustee under the Indenture referred to below.
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore executed and
delivered an Indenture, dated as of May 19, 1998 (as amended, supplemented,
waived or otherwise modified, the "Indenture"), providing for the issuance of an
aggregate principal amount of $200.0 million of __% Senior Notes due 2006 of the
Company (the "Securities");
WHEREAS, Section 3.11 of the Indenture provides that the Company is
required to cause each Restricted Subsidiary (other than a Foreign Subsidiary or
a Receivables Entity) created or acquired by the Company to execute and deliver
to the Trustee a Subsidiary Guarantee pursuant to which such Restricted
Subsidiary will unconditionally Guarantee, on a joint and several basis with the
other Subsidiary Guarantors, the full and prompt payment of the principal of,
premium, if any, and interest on the Securities on a senior basis; and
WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the
Company are authorized to execute and deliver this Supplemental Indenture to
amend the Indenture, without the consent of any Securityholder;
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guarantor, the Company, the other Subsidiary Guarantors and the Trustee mutually
covenant and agree for the equal and ratable benefit of the holders of the
Securities as follows:
ARTICLE I
Definitions
-----------
SECTION 1.1 Defined Terms. As used in this Subsidiary Guarantee,
terms defined in the Indenture or in the preamble or recital hereto are used
herein as therein defined, except that the term "Holders" in this Guarantee
shall refer to the term "Holders" as defined in the Indenture and the Trustee
acting on behalf or for the benefit of such holders. The words "herein,"
"hereof" and "hereby" and other words of similar import used in this
Supplemental Indenture refer to this Supplemental Indenture as a whole and not
to any particular section hereof.
C-1
ARTICLE II
Agreement to be Bound; Guarantee
--------------------------------
SECTION 2.1 Agreement to be Bound. The Guarantor hereby becomes a
party to the Indenture as a Subsidiary Guarantor and as such will have all of
the rights and be subject to all of the obligations and agreements of a
Subsidiary Guarantor under the Indenture. The Guarantor agrees to be bound by
all of the provisions of the Indenture applicable to a Subsidiary Guarantor and
to perform all of the obligations and agreements of a Subsidiary Guarantor under
the Indenture.
SECTION 2.2 Guarantee. The Guarantor hereby fully, unconditionally
and irrevocably guarantees, as primary obligor and not merely as surety, jointly
and severally with each other Subsidiary Guarantor, to each Holder of the
Securities and the Trustee, the full and punctual payment when due, whether at
maturity, by acceleration, by redemption or otherwise, of the Obligations
pursuant to Article X of the Indenture.
ARTICLE III
Miscellaneous
-------------
SECTION 3.1 Notices. All notices and other communications to the
Guarantor shall be given as provided in the Indenture to the Guarantor, at its
address set forth below, with a copy to the Company as provided in the Indenture
for notices to the Company.
SECTION 3.2 Parties. Nothing expressed or mentioned herein is
intended or shall be construed to give any Person, firm or corporation, other
than the Holders and the Trustee, any legal or equitable right, remedy or claim
under or in respect of this Supplemental Indenture or the Indenture or any
provision herein or therein contained.
SECTION 3.3 Governing Law. This Supplemental Indenture shall be
governed by the laws of the State of New York.
SECTION 3.4 Severability Clause. In case any provision in this
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and such provision shall be ineffective only to the
extent of such invalidity, illegality or unenforceability.
SECTION 3.5 Ratification of Indenture; Supplemental Indentures Part
of Indenture. Except as expressly amended hereby, the Indenture is in all
respects ratified and confirmed and all the terms, conditions and provisions
thereof shall remain in full force and effect. This Supplemental Indenture shall
form a part of the Indenture for all purposes, and every holder of Securities
heretofore or hereafter authenticated and delivered shall be bound hereby. The
Trustee makes no representation or warranty as to the validity or sufficiency of
this Supplemental Indenture.
SECTION 3.6 Counterparts. The parties hereto may sign one or more
copies of this Supplemental Indenture in counterparts, all of which together
shall constitute one and the same agreement.
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SECTION 3.7 Headings. The headings of the Articles and the sections
in this Guarantee are for convenience of reference only and shall not be deemed
to alter or affect the meaning or interpretation of any provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
[NAME OF GUARANTOR],
as a Subsidiary Guarantor
By:______________________________
Name:
Title:
FAVORITE BRANDS INTERNATIONAL, INC.
By:______________________________
Name:
Title:
TROLLI INC.,
as a Subsidiary Guarantor
By:______________________________
Name:
Title:
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▇▇▇▇▇▇ TRUCKING CORPORATION,
as a Subsidiary Guarantor
By:______________________________
Name:
Title:
[Add signature block for any other existing Subsidiary Guarantors]
LASALLE NATIONAL BANK, as Trustee
By:______________________________
Name:
Title:
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