EXHIBIT 4.2
================================================================================
WEIGHT WATCHERS INTERNATIONAL, INC.
Issuer
13% Senior Subordinated Notes Due 2009
--------------------
EURO SECURITIES INDENTURE
Dated as of September 29, 1999
---------------------
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
Trustee
================================================================================
CORSS-REFERENCE TABLE
TIA Indenture
Section Section
-------
310(a)(1) .............................. 7.10
(a)(2) .............................. 7.10
(a)(3) .............................. N.A.
(a)(4) .............................. N.A.
(b) .............................. 7.08; 7.10
(c) .............................. N.A.
311(a) .............................. 7.11
(b) .............................. N.A.
(c) .............................. N.A.
312(a) .............................. 2.05
(b) .............................. 11.03
(c) .............................. 11.03
313(a) .............................. 7.06
(b)(1) .............................. N.A.
(b)(2) .............................. 7.06
(c) .............................. N.A.
(d) .............................. 7.06
314(a) .............................. 4.03;
4.11; 11.02
(b) .............................. N.A.
(c)(1) .............................. 11.04
(c)(2) .............................. 11.04
(c)(3) .............................. N.A.
(d) .............................. N.A.
(e) .............................. 11.05
(f) .............................. 4.11
315(a) .............................. 7.01
(b) .............................. 7.05; 11.02
(c) .............................. 7.01
(d) .............................. 7.01
(e) .............................. 6.11
316(a)(last sentence) .............................. 11.06
(a)(1)(A) .............................. 6.05
(a)(1)(B) .............................. 6.04
(a)(2) .............................. N.A.
(b) .............................. 6.07
317(a)(1) .............................. 6.08
(a)(2) .............................. 6.09
(b) .............................. 2.04
318(a) .............................. 11.01
N.A. means Not Applicable.
----------
Note: This Cross-Reference Table shall not, for any
purpose, be deemed to be part of the Indenture.
TABLE OF CONTENTS
ARTICLE 1 Page
----
Definitions and Incorporation by Reference
SECTION 1.01. Definitions ................................................... 1
SECTION 1.02. Other Definitions .............................................33
SECTION 1.03. Incorporation by Reference of Trust Indenture Act .............33
SECTION 1.04. Rules of Construction .........................................34
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating ...............................................35
SECTION 2.02. Execution and Authentication ..................................35
SECTION 2.03. Registrar and Paying Agent ....................................36
SECTION 2.04. Paying Agent To Hold Money in Trust............................37
SECTION 2.05. Securityholder Lists ..........................................37
SECTION 2.06. Transfer and Exchange .........................................37
SECTION 2.07. Replacement Securities ........................................38
SECTION 2.08. Outstanding Securities ........................................38
SECTION 2.09. Temporary Securities ..........................................39
SECTION 2.10. Cancellation ..................................................39
SECTION 2.11. Defaulted Interest ............................................39
SECTION 2.12. CUSIP Numbers .................................................40
SECTION 2.13. Issuance of Additional Securities .............................40
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee ............................................41
SECTION 3.02. Selection of Securities To Be Redeemed ........................41
SECTION 3.03. Notice of Redemption ..........................................41
SECTION 3.04. Effect of Notice of Redemption ................................42
SECTION 3.05. Deposit of Redemption Price ...................................43
SECTION 3.06. Securities Redeemed in Part ...................................43
ARTICLE 4
Covenants
SECTION 4.01 Cessation of Specified Covenants ..............................43
ii
SECTION 4.02. Payment of Securities .........................................43
SECTION 4.03. SEC Reports ...................................................44
SECTION 4.04. Limitation on Indebtedness ....................................44
SECTION 4.05. Limitation on Restricted Payments .............................48
SECTION 4.06. Limitation on Restrictions on Distributions from Subsidiaries .53
SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock ............55
SECTION 4.08. Limitation on Transactions with
Affiliates ..................................................60
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries .....................................62
SECTION 4.10. Change of Control .............................................63
SECTION 4.11. Compliance Certificates .......................................65
SECTION 4.12. Further Instruments and Acts ..................................65
SECTION 4.13. Future Guarantors..............................................65
ARTICLE 5
Successor Company; Successor Subsidiary Guarantors
SECTION 5.01. When Company May Merge or Transfer Assets .....................65
SECTION 5.02. When Subsidiary Guarantors May Merge or Transfer Assets........66
ARTICLE 6
Defaults and Remedies
SECTION 6.01. Events of Default .............................................67
SECTION 6.02. Acceleration ..................................................70
SECTION 6.03. Other Remedies ................................................70
SECTION 6.04. Waiver of Past Defaults .......................................71
SECTION 6.05. Control by Majority ...........................................71
SECTION 6.06. Limitation on Suits ...........................................71
SECTION 6.07. Rights of Holders To Receive Payment ..........................72
SECTION 6.08. Collection Suit by Trustee ....................................72
SECTION 6.09. Trustee May File Proofs of Claim ..............................72
SECTION 6.10. Priorities ....................................................73
SECTION 6.11. Undertaking for Costs .........................................73
SECTION 6.12. Waiver of Stay or Extension Laws ..............................73
ARTICLE 7
Trustee
SECTION 7.01. Duties of Trustee .............................................74
SECTION 7.02. Rights of Trustee .............................................75
SECTION 7.03. Individual Rights of Trustee ..................................76
SECTION 7.04. Trustee's Disclaimer ..........................................76
SECTION 7.05. Notice of Defaults ............................................76
SECTION 7.06. Reports by Trustee to Holders .................................76
SECTION 7.07. Compensation and Indemnity ....................................77
SECTION 7.08. Replacement of Trustee ........................................77
SECTION 7.09. Successor Trustee by Merger ...................................78
SECTION 7.10. Eligibility; Disqualification .................................79
SECTION 7.11. Preferential Collection of Claims Against Company .............79
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance ..............79
SECTION 8.02. Conditions to Defeasance ......................................81
SECTION 8.03. Application of Trust Money ....................................82
SECTION 8.04. Repayment to Company ..........................................82
SECTION 8.05. Indemnity for Government Obligations ..........................82
SECTION 8.06. Reinstatement .................................................83
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders ....................................83
SECTION 9.02. With Consent of Holders .......................................84
SECTION 9.03. Compliance with Trust Indenture ...............................85
SECTION 9.04. Revocation and Effect of Consents and Waivers .................85
SECTION 9.05. Notation on or Exchange of Securities .........................86
SECTION 9.06. Trustee To Sign Amendments ....................................86
SECTION 9.07. Payment for Consent ...........................................86
iii
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate .....................................87
SECTION 10.02. Liquidation, Dissolution, Bankruptcy .........................87
SECTION 10.03. Default on Senior Indebtedness ...............................88
SECTION 10.04. Acceleration of Payment of Securities ........................89
SECTION 10.05. When Distribution Must Be Paid Over ..........................89
SECTION 10.06. Subrogation ..................................................89
SECTION 10.07. Relative Rights ..............................................90
SECTION 10.08. Subordination May Not Be Impaired by Company .................90
SECTION 10.09. Rights of Trustee and Paying Agent ...........................90
SECTION 10.10. Distribution or Notice to Representative .....................91
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate ........................................91
SECTION 10.12. Trust Moneys Not Subordinated ................................91
SECTION 10.13. Trustee Entitled To Rely .....................................91
SECTION 10.14. Trustee To Effectuate Subordination ..........................92
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior Indebtedness .....92
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions ...................................92
ARTICLE 11
Miscellaneous
SECTION 11.01. Trust Indenture Act Controls .................................93
SECTION 11.02. Notices ......................................................93
SECTION 11.03. Communication by Holders with Other Holders ..................94
SECTION 11.04. Certificate and Opinion as to Conditions Precedent ...........94
SECTION 11.05. Statements Required in Certificate or Opinion ................94
SECTION 11.06. When Securities Disregarded ..................................95
SECTION 11.07. Rules by Trustee, Paying Agent and Registrar .................95
SECTION 11.08. Legal Holidays ...............................................95
v
SECTION 11.09. Governing Law ................................................95
SECTION 11.10. No Recourse Against Others ...................................95
SECTION 11.11. Successors ...................................................95
SECTION 11.12. Multiple Originals ...........................................95
SECTION 11.13. Table of Contents; Headings ..................................96
Rule 144A/Regulation S Appendix
Exhibit A - Form of Security
Exhibit B-1 - Form of Certification to be Given by Holder of Beneficial Interest
in a Temporary Regulation S Global Security
Exhibit B-2 - Form of Euroclear and Cedel Certificate
Exhibit C - Form of Guarantee Agreement
INDENTURE dated as of September 29, 1999, between
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia
corporation (the "Company"), and NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION, a national banking association (the
"Trustee").
Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's 13% Senior
Subordinated Notes Due 2009 (the "Initial Securities") and, if and when issued
pursuant to a registered exchange for Initial Securities, the Company's 13%
Senior Subordinated Notes Due 2009 (the "Exchange Securities") and if and when
issued pursuant to a private exchange for Initial Securities, the Company's 13%
Senior Subordinated Notes Due 2009 (the "Private Exchange Securities", together
with the Exchange Securities and the Initial Securities, the "Securities"):
ARTICLE 1
Definitions and Incorporation by Reference
SECTION 1.01. Definitions.
"Additional Assets" means any:
(1) property, plant, equipment or intellectual property used in a
Related Business;
(2) 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 another Restricted Subsidiary; or
(3) Capital Stock constituting a minority interest in any Person
that at such time is a Restricted Subsidiary;
provided, however, that any such Restricted Subsidiary described in clauses (2)
or (3) above is primarily engaged in a Related Business.
"Affiliate" of any specified Person means:
(1) any other Person, directly or indirectly, controlling or
controlled by; or
2
(2) under direct or indirect common control with such specified
Person.
For the purposes of this definition, "control" when used with respect to any
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. For purposes of Sections 4.05, 4.07 and
4.08 only, "Affiliate" shall also mean any beneficial owner of Capital Stock
representing 10% or more of the total voting power of the Voting Stock (on a
fully diluted basis) of the Company or of rights or warrants to purchase such
Capital Stock (whether or not currently exercisable) and any Person who would be
an Affiliate of any such beneficial owner pursuant to the first sentence hereof.
"Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Subsidiary, including any disposition by means of
a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:
(1) any shares of Capital Stock of a Restricted Subsidiary (other
than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Subsidiary);
(2) all or substantially all the assets of any division or line of
business of the Company or any Restricted Subsidiary; or
(3) any other assets of the Company or any Restricted Subsidiary
outside of the ordinary course of business of the Company or such
Restricted Subsidiary
other than, in the case of clauses (1), (2) and (3)
(A) a disposition by a Restricted Subsidiary to the Company or by
the Company or a Restricted Subsidiary to a Restricted
Subsidiary;
(B) any sale of Capital Stock in, or indebtedness or other
securities of, an Unrestricted Subsidiary;
3
(C) a disposition of Temporary Cash Investments;
(D) the disposition of all or substantially all the assets of the
Company in a manner permitted pursuant to Section 5.01 or any
disposition that constitutes a Change of Control;
(E) sales of assets received by the Company upon the foreclosure
on a Lien;
(F) for purposes of Section 4.07 only, a disposition that
constitutes a Restricted Payment permitted by Section 4.05 or
a Permitted Investment; and
(G) a disposition of assets with a fair market value of less than
$1.0 million.
"Attributable Debt" 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 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, the quotient obtained by dividing:
(1) the sum of the products of numbers of years from the date of
determination to the dates of each successive scheduled principal payment
of or redemption or similar payment with respect to such Indebtedness
multiplied by the amount of such payment by
(2) the sum of all such payments.
"Bank Indebtedness" means any and all Indebtedness and other amounts
payable under or in respect of the Credit Agreement or Hedging Obligations
related to the Credit Agreement, including principal, premium (if any), interest
(including interest accruing at the contract rate specified in the Credit
Agreement (including any rate applicable on default) on or after the filing of
any petition in bankruptcy or the commencement of any similar state, Federal or
foreign reorganization or liquidation proceeding relating to the Company and
interest that would accrue but for the
4
commencement of such proceeding 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 the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.
"Business Day" means each day which is not a Legal Holiday.
"Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"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.
"Change of Control" means the occurrence of any of the following
events:
(1) prior to the first public offering of common stock of the
Company, the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
indirectly, of a majority in the aggregate of the total voting power of
the Voting Stock of the Company, whether as a result of issuance of
securities of the Company, any merger, consolidation, liquidation or
dissolution of the Company, any direct or indirect transfer of securities
by the Permitted Holders or otherwise (for purposes of this clause (1) and
clause (2) below, the Permitted Holders shall be deemed to beneficially
own any Voting Stock of a Person (the "specified person") held by any
other Person (the "parent entity") so long as the Permitted Holders
beneficially own (as so defined), directly or indirectly, in the aggregate
a
5
majority of the voting power of the Voting Stock of the parent entity);
(2) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act), other than one or more Permitted Holders, is or
becomes the beneficial owner (as defined in clause (1) above, except that
for purposes of this clause (2) such person shall be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total
voting power of the Voting Stock of the Company; provided, however, that
the Permitted Holders beneficially own (as defined in clause (1) above),
directly or indirectly, in the aggregate a lesser percentage of the total
voting power of the Voting Stock of the Company 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 (for
the purposes of this clause (2), such other person shall be deemed to
beneficially own any Voting Stock of a specified person held by a parent
entity, if such other person is the beneficial owner (as defined in this
clause (2)), directly or indirectly, of more than 35% of the voting power
of the Voting Stock of such parent entity and the Permitted Holders
beneficially own (as defined in clause (1) above), directly or indirectly,
in the aggregate a lesser percentage of the voting power of the Voting
Stock of such parent 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 parent entity);
(3) individuals who on the Issue Date constituted the Board of
Directors (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the
Company was approved by a vote of 66-2/3% of the directors of the Company
then still in office who were either directors on the Issue Date or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in
office;
(4) the adoption of a plan relating to the liquidation or
dissolution of the Company; or
6
(5) the merger or consolidation of the Company with or into another
Person or the merger of another Person with or into the Company, or the
sale of all or substantially all the assets of the Company (determined on
a consolidated basis) to another Person (other than, in all such cases, a
Person that is controlled by the Permitted Holders), other than a
transaction following which (A) in the case of a merger or consolidation
transaction, securities that represented 100% of the Voting Stock of the
Company immediately prior to such transaction (or other securities into
which such securities are converted as part of such merger or
consolidation transaction) constitute at least a majority of the voting
power of the Voting Stock of the surviving Person in such merger or
consolidation transaction, and (B) in the case of a sale of assets
transaction, the transferee Person becomes the obligor in respect of the
Securities and a Subsidiary of the transferor of such assets.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.
"Consolidated Coverage Ratio" as of any date of determination means
the ratio of (x) the aggregate amount of EBITDA for the period of the most
recent four consecutive fiscal quarters ending at least 45 days prior to the
date of such determination to (y) Consolidated Interest Expense for such four
fiscal quarters; provided, however, that:
(1) if the Company or any Restricted Subsidiary has Incurred any
Indebtedness since the beginning of such period that remains outstanding
or if the transaction giving rise to the need to calculate the
Consolidated Coverage Ratio is an Incurrence of Indebtedness, or both,
EBITDA and Consolidated Interest Expense for such period shall be
calculated after giving effect on a pro forma basis to such Indebtedness
as if such Indebtedness had been Incurred on the first day of such period;
(2) if the Company or any Restricted Subsidiary has repaid,
repurchased, defeased or otherwise discharged any Indebtedness since the
beginning of such
7
period or if any Indebtedness is to be repaid, repurchased, defeased or
otherwise discharged (in each case other than Indebtedness Incurred under
any revolving credit facility unless such Indebtedness has been
permanently repaid and has not been replaced) on the date of the
transaction giving rise to the need to calculate the Consolidated Coverage
Ratio, EBITDA and Consolidated Interest Expense for such period shall be
calculated on a pro forma basis as if such discharge had occurred on the
first day of such period and as if the Company or such Restricted
Subsidiary has not earned the interest income actually earned during such
period in respect of cash or Temporary Cash Investments used to repay,
repurchase, defease or otherwise discharge such Indebtedness;
(3) if since the beginning of such period the Company or any
Restricted Subsidiary shall have made any Asset Disposition, the EBITDA
for such period shall be reduced by an amount equal to the 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 EBITDA (if negative), directly attributable thereto for such period
and Consolidated Interest Expense for such period shall 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);
(4) if since the beginning of such period the Company or any
Restricted Subsidiary (by merger or otherwise) shall have made an
Investment in any Restricted Subsidiary (or any person which becomes a
Restricted Subsidiary) or an acquisition, including any acquisition
occurring in connection with a transaction requiring a calculation to be
made hereunder, which constitutes all or substantially all of an operating
unit of a business or shall have implemented a cost-reduction program
resulting in a permanent reduction in cash operating costs, EBITDA and
8
Consolidated Interest Expense for such period shall be calculated after
giving pro forma effect thereto (including the Incurrence of any
Indebtedness) as if such Investment, acquisition or cost-reduction program
occurred on the first day of such period; and
(5) 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 such period)
shall have made any Asset Disposition, any Investment or acquisition that
would have required an adjustment pursuant to clause (3) or (4) above if
made by the Company or a Restricted Subsidiary during such period, or
shall have implemented a cost-reduction program resulting in a permanent
reduction in cash operating costs, EBITDA and Consolidated Interest
Expense for such period shall be calculated after giving pro forma effect
thereto as if such Asset Disposition, Investment, acquisition or
cost-reduction program occurred on the first day of such period.
For purposes of this definition, whenever pro forma effect is to be given to an
acquisition or cost-reduction program, the amount of income, earnings or cost
savings relating thereto and the amount of Consolidated Interest Expense
associated with any Indebtedness Incurred in connection therewith, the pro forma
calculations shall be determined in good faith by a responsible financial or
accounting Officer of the Company. Any such pro forma calculations may include
operating expense reductions for such period resulting from the acquisition or
cost-reduction program which is being given pro forma effect, including, but not
limited to, the execution or termination of any contracts, the termination of
any personnel or the closing (or approval by the Board of Directors of any
closing) of any facility, as applicable; provided, however, that, in either
case, such adjustments are set forth in an Officers' Certificate signed by the
Company's chief financial officer and another Officer which states (a) the
amount of such adjustment or adjustments, (b) that such adjustment or
adjustments are based on the reasonable good faith belief of the Officers
executing such Officers' Certificate at the time of such execution and (c) that
any related Incurrence of Indebtedness is permitted pursuant to this Indenture.
If any Indebtedness bears a floating rate of interest and is being given pro
forma effect, the interest of such Indebtedness shall be calculated as if the
rate in effect on the date of determination had been the applicable rate for the
entire period (taking into account any Interest Rate Agreement
9
applicable to such Indebtedness if such Interest Rate Agreement has a remaining
term in excess of 12 months).
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its consolidated Restricted Subsidiaries,
plus, to the extent not included in such total interest expense, and to the
extent incurred by the Company or its Restricted Subsidiaries, without
duplication:
(1) interest expense attributable to Capital Lease Obligations and
the interest expense attributable to leases constituting part of a
Sale/Leaseback Transaction;
(2) capitalized interest;
(3) non-cash interest expenses;
(4) commissions, discounts and other fees and charges owed with
respect to letters of credit and bankers' acceptance financing;
(5) net payments pursuant to Hedging Obligations;
(6) Preferred Stock dividends in respect of all Preferred Stock held
by Persons other than the Company or a Restricted Subsidiary (other than
the Seller Preferred Stock and other than dividends payable solely in
Capital Stock (other than Disqualified Stock) of the issuer of such
Preferred Stock);
(7) interest incurred in connection with Investments in discontinued
operations;
(8) interest accruing on any Indebtedness of any other Person to the
extent such Indebtedness is Guaranteed by (or secured by the assets of)
the Company or any Restricted Subsidiary; and
(9) 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.
"Consolidated Net Income" means, for any period, the sum of (1) the
net income of the Company and its consolidated Subsidiaries and (2) to the
extent not
10
otherwise included in the calculation of the net income of the Company and its
consolidated Subsidiaries, amounts received by the Company from Warnaco Inc. in
respect of the license agreement, dated as of January 8, 1999, between the
Company and Warnaco Inc. and (3) to the extent deducted in calculating net
income of the Company and its consolidated Subsidiaries, (A) any non-recurring
fees, expenses or charges related to the Transactions and (B) any non-recurring
charges related to one-time severance or lease termination costs incurred in
connection with the Transactions; provided, however, that there shall not be
included in such Consolidated Net Income:
(1) any net income of any Person (other than the Company) if such
Person is not a Restricted Subsidiary, except that:
(A) subject to the exclusion contained in clause (4) below,
the Company's equity in the net income of any such Person for such
period shall be included in such Consolidated Net Income up to the
aggregate amount 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 paid to a Restricted Subsidiary, to the limitations
contained in clause (3) below); and
(B) the Company's equity in a net loss of any such Person
(other than a Person the Company's interest in which is accounted
for pursuant to the equity method of accounting) for such period
shall be included in determining such Consolidated Net Income;
(2) any net income (or 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;
(3) any net income of any Restricted Subsidiary if such Restricted
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 exclusion contained in clause (4) below,
the Company's equity in the net
11
income of any such Restricted Subsidiary for such period shall be
included in such Consolidated Net Income up to the aggregate amount
of cash actually distributed by such Restricted Subsidiary during
such period to the Company or another Restricted Subsidiary as a
dividend or other distribution (subject, in the case of a dividend
or other distribution paid to another Restricted Subsidiary, to the
limitation contained in this clause); provided, however, that such
net income shall not be excluded in calculating Consolidated Net
Income as a component of EBITDA for purposes of calculating the
Consolidated Coverage Ratio; and
(B) the Company's equity in a net loss of any such Restricted
Subsidiary for such period shall be included in determining such
Consolidated Net Income;
(4) any gain (or loss) realized upon the sale or other disposition
of any assets of the Company, its consolidated Subsidiaries or any other
Person (including pursuant to any sale-and-leaseback arrangement) which is
not sold or otherwise disposed of in the ordinary course of business and
any gain (or loss) realized upon the sale or other disposition of any
Capital Stock of any Person;
(5) extraordinary gains or losses;
(6) any increase in amortization or depreciation resulting from
purchase accounting in relation to any acquisition that is consummated
after the Issue Date, net of taxes; and
(7) the cumulative effect of a change in accounting principles.
Notwithstanding the foregoing, for the purposes of Section 4.05 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of the Investments or
return of capital to the Company or a Restricted Subsidiary to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under Section 4.05 pursuant to clause (3)(D) of
paragraph (a) thereof.
12
"Credit Agreement" means the Credit Agreement to be entered into by
and among the Company, certain of its Subsidiaries, the lenders referred to
therein, The Bank of Nova Scotia, as Administrative Agent, and Credit Suisse
First Boston, New York branch, as Syndication Agent, together with the related
documents thereto (including, without limitation, the deed poll and transferable
loan certificates issued in connection therewith, the term loans and revolving
loans thereunder, any notes, instruments, guarantees, pledge agreements and
security documents), in each case as amended, extended, waived, replaced,
restructured, repaid, refunded, refinanced, renewed, restated, supplemented or
otherwise modified (in whole or in part, and without limitation as to amount,
terms, conditions, covenants and other provisions) from time to time, and any
agreement (and related document) governing Indebtedness incurred to Refinance,
in whole or in part, the borrowings and commitments then outstanding or
permitted to be outstanding under such Credit Agreement or a successor Credit
Agreement, whether by the same or any other lender or group of lenders and
agents. Without limiting the generality of the foregoing, the term "Credit
Agreement" shall include any amendment, amendment and restatement, renewal,
extension, restructuring, supplement or modification to the Credit Agreement and
all refundings, restructurings, renewals, refinancing and replacements of any
facility provided for in the Credit Agreement, including any agreement or
agreements (a) extending the maturity of any Indebtedness incurred thereunder or
contemplated thereby, (b) adding or deleting borrowers or guarantors thereunder
or (c) increasing the amount of Indebtedness incurred thereunder or available to
be borrowed thereunder to the extent permitted under this Indenture.
"Credit Agreement Intercompany Indebtedness" means Indebtedness of
the Company or a Restricted Subsidiary (the "obligor") owing to a Restricted
Subsidiary of the Company (the "obligee") that is a borrower under the Credit
Agreement in respect of an advance to the obligor by the obligee of funds
borrowed by the obligee under the Credit Agreement; provided, however, that the
amount of such Indebtedness constituting Credit Agreement Intercompany
Indebtedness shall be limited to the amount actually owed by the obligee in
respect of the funds advanced to the obligor under the Credit Agreement.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.
13
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Designated Noncash Consideration" means the fair market value of
noncash consideration received by the Company or one of its Restricted
Subsidiaries in connection with an Asset Disposition that is so designated as
Designated Noncash Consideration pursuant to an Officers' Certificate setting
forth the basis of such valuation, less the amount of Temporary Cash Investments
received in connection with a subsequent sale of such Designated Noncash
Consideration.
"Designated Preferred Stock" means Preferred Stock of the Company
(other than Disqualified Stock) that is issued for cash (other than to the
Company, a Subsidiary of the Company or an employee stock ownership plan or
trust established by the Company or any of its Subsidiaries) and is so
designated as Designated Preferred Stock, pursuant to an Officers' Certificate,
on the issuance date thereof, the cash proceeds of which are excluded from the
calculation of amounts under clause (3)(B) of paragraph (a) of Section 4.05.
"Designated Senior Indebtedness" with respect to a Person means:
(1) the Bank Indebtedness; and
(2) any other Senior Indebtedness of such Person which, at the date
of determination, has an aggregate principal amount outstanding of, or
under which, at the date of determination, the holders thereof are
committed to lend up to, at least $20.0 million and is specifically
designated by the Company in the instrument evidencing or governing such
Senior Indebtedness as "Designated Senior Indebtedness" for purposes of
this Indenture.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:
(1) matures or is mandatorily redeemable pursuant to a sinking fund
obligation or otherwise;
14
(2) is convertible or exchangeable at the option of the holder for
Indebtedness or Disqualified Stock; or
(3) is mandatorily redeemable or must be purchased upon the
occurrence of certain events or otherwise, in whole or in part;
in each case on or prior to the first anniversary of the Stated Maturity of the
Securities; provided, however, that if such Capital Stock is issued to any
employee or to any plan for the benefit of employees of the Company or its
Subsidiaries or by any such plan to such employees, such Capital Stock shall not
constitute Disqualified Stock solely because it may be required to be
repurchased by the Company in order to satisfy obligations as a result of such
employee's death or disability; and provided further, however, that any Capital
Stock that would not constitute Disqualified Stock but for provisions thereof
giving holders thereof the right to require such Person to purchase or redeem
such Capital Stock upon the occurrence of an "asset sale" or "change of control"
occurring prior to the first anniversary of the Stated Maturity of the
Securities shall not constitute Disqualified Stock if:
(1) the "asset sale" or "change of control" provisions applicable to
such Capital Stock are not more favorable to the holders of such Capital
Stock than the terms applicable to the Securities pursuant to Sections
4.07 and 4.10; and
(2) any such requirement only becomes operative after compliance
with such terms applicable to the Securities, including the purchase of
any Securities tendered pursuant thereto;
and, provided further, however, that the Seller Preferred Stock shall constitute
Disqualified Stock.
"Dollar Securities Indenture" means the Dollar Securities Indenture
dated as of September 29, 1999, between the Company and the Trustee, as
originally executed.
"Dollar Securities" means the Securities issued under, and as
defined in, the Dollar Securities Indenture.
"Dollar Subsidiary Guarantee" means a Subsidiary Guarantee under,
and as defined in, the Dollar Securities Indenture.
15
"EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income:
(1) all income tax expense of the Company and its consolidated
Restricted Subsidiaries;
(2) Consolidated Interest Expense;
(3) depreciation and amortization expense of the Company and its
consolidated Restricted Subsidiaries (excluding amortization expense
attributable to a prepaid operating activity item that was paid in cash in
a prior period);
(4) any non-recurring fees, expenses or charges related to any
Equity Offering, Permitted Investment, acquisition or Indebtedness
permitted to be Incurred by this Indenture (in each case, whether or not
successful) deducted (and not subsequently added back) in such period in
computing Consolidated Net Income;
(5) any non-recurring charges related to one-time severance or lease
termination costs incurred in connection with acquisitions consummated
after the Issue Date deducted (and not subsequently added back) in such
period in computing Consolidated Net Income; and
(6) all other non-cash charges of the Company and its consolidated
Restricted Subsidiaries (excluding any such non-cash charge to the extent
that it represents an accrual of or reserve for cash expenditures in any
future period);
in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Subsidiary shall be added to Consolidated
Net Income to compute EBITDA only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income and 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 such
Restricted Subsidiary or its stockholders.
16
"EMU" means economic and monetary union as contemplated in the
Treaty on European Union.
"Equity Offering" means any primary offering of common stock or
Preferred Stock of the Company (other than Disqualified Stock) to Persons who
are not Affiliates of the Company other than (1) public offerings with respect
to the Company's common stock registered or Form S-8 and (2) issuances upon
exercise of options by employees of the Company or any of its Restricted
Subsidiaries.
"Euro" means the single currency of participating member states of
the EMU.
"European Government Obligations" means securities that are (a)
direct obligations denominated in Euro of the United Kingdom, France or Germany
or any other member of the European Economic Community rated at least "A" by S&P
or "A" by Moody's, for the timely payment of which their full faith and credit
is pledged or (b) obligations denominated in Euro of a person controlled or
supervised by and acting as an agency or instrumentality of the United Kingdom,
France or Germany or any other member of the European Economic Community rated
at least "A" by S&P or "A" by Moody's, the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
Kingdom, France or Germany, which, in either case, are not callable or
redeemable at the option of the issuer thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Excluded Contributions" means the net cash proceeds received by the
Company after the Issue Date from (1) contributions to its common equity capital
and (2) the sale (other than to a Subsidiary of the Company or to any management
equity plan or stock option plan of the Company or a Restricted Subsidiary or
any other management or employee benefit plan or agreement of the Company or a
Restricted Subsidiary) of Capital Stock (other than Disqualified Stock and
Designated Preferred Stock) of the Company, in each case designated as Excluded
Contributions pursuant to an Officers' Certificate, the cash proceeds of which
are excluded from the calculation of amounts under clause (3)(B) of paragraph
(a) of Section 4.05.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in:
17
(1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants;
(2) statements and pronouncements of the Financial Accounting
Standards Board;
(3) such other statements by such other entity as approved by a
significant segment of the accounting profession; and
(4) the rules and regulations of the SEC governing the inclusion of
financial statements (including pro forma financial statements) in
periodic reports required to be filed pursuant to Section 13 of the
Exchange Act, including opinions and pronouncements in staff accounting
bulletins and similar written statements from the accounting staff of the
SEC.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:
(1) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness of such 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); or
(2) entered into for the purpose of assuring in any other manner the
obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part);
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.
"Guarantee Agreement" means a guarantee agreement, in substantially
the form of Exhibit C hereto, pursuant to which a Subsidiary Guarantor
guarantees the Company's obligations with respect to the Securities.
18
"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 on the Registrar's books.
"Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Subsidiary (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Person at the time it becomes a Restricted Subsidiary. The term
"Incurrence" when used as a noun shall have a correlative meaning. The accretion
of principal of a non-interest bearing or other discount security shall not be
deemed the Incurrence of Indebtedness.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication):
(1) the principal in respect of (A) indebtedness of such Person for
money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
or other similar instruments for the payment of which such Person is
responsible or liable, including, in each case, any premium on such
indebtedness to the extent such premium has become due and payable;
provided, however, that unpaid dividends in respect of the Seller
Preferred Stock shall not constitute Indebtedness;
(2) all Capital Lease Obligations of such Person and all
Attributable Debt in respect of Sale/Leaseback Transactions entered into
by such Person;
(3) all obligations of such Person issued or assumed as the deferred
purchase price of property, all conditional sale obligations of such
Person and all obligations of such Person under any title retention
agreement (but excluding trade accounts payable arising in the ordinary
course of business);
(4) all obligations of such Person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction (other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (1)
through (3) above) entered into in the ordinary course of business of such
Person
19
to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the twentieth
Business Day following payment on the letter of credit);
(5) the amount of all obligations of such Person with respect to the
redemption, repayment or other repurchase of any Disqualified Stock of
such Person or, with respect to any Preferred Stock of any Subsidiary of
such Person, the principal amount of such Preferred Stock to be determined
in accordance with Section 1.04 (but excluding, in each case, any accrued
dividends);
(6) all obligations of the type referred to in clauses (1) through
(5) of other Persons and all dividends of other Persons for the payment of
which, in either case, such Person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise, including by means of any
Guarantee;
(7) all obligations of the type referred to in clauses (1) through
(6) of other Persons secured by any Lien on any property or asset of such
Person (whether or not such obligation is assumed by such Person), the
amount of such obligation being deemed to be the lesser of the value of
such property or assets and the amount of the obligation so secured; and
(8) to the extent not otherwise included in this definition, Hedging
Obligations of such Person.
The amount of indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date.
"Indenture" means this Euro Securities Indenture as amended or
supplemented from time to time.
"Interest Rate Agreement" means in respect of a Person any interest
rate swap agreement, interest rate cap agreement or other financial agreement or
arrangement designed to protect such Person against fluctuations in interest
rates.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable on the balance sheet of the lender) or
20
other extensions of credit (including by way of Guarantee or similar
arrangement) 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.
For purposes of the definition of "Unrestricted Subsidiary", the
definition of "Restricted Payment" and Section 4.05:
(1) "Investment" shall include the portion (proportionate to the
Company's equity interest in such Subsidiary) of the fair market value of
the net assets of any Subsidiary of the Company at the time that such
Subsidiary is designated an Unrestricted Subsidiary; provided, however,
that upon a redesignation of such Subsidiary as a Restricted Subsidiary,
the Company shall be deemed to continue to have a permanent "Investment"
in an Unrestricted Subsidiary equal to an amount (if positive) equal to
(A) the Company's "Investment" in such Subsidiary at the time of such
redesignation less (B) the portion (proportionate to the Company's equity
interest in such Subsidiary) of the fair market value of the net assets of
such Subsidiary at the time of such redesignation; and
(2) any property transferred to or from an Unrestricted Subsidiary
shall be valued at its fair market value at the time of such transfer, in
each case as determined in good faith by the Company.
"Investment Grade Rating" means a rating equal to or higher than
Baa3 (or the equivalent) and BBB- (or the equivalent) by ▇▇▇▇▇'▇ and S&P,
respectively.
"Investment Grade Status" shall be deemed to have been reached on
the date the Securities have an Investment Grade Rating from both S&P and
▇▇▇▇▇'▇.
"Issue Date" means the date on which the Initial Securities are
originally issued.
"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).
21
"Local Management Plan" means an equity plan or program for the
issuance or sale of Capital Stock to local management or a plan for the issuance
or sale of Capital Stock to local strategic investors in respect of Subsidiaries
of the Company whose principal business is conducted outside of the United
States.
"Moody's" means ▇▇▇▇▇'▇ Investor Services, Inc. or any successor to
the rating agency business thereof.
"Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, 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 such properties or assets or
received in any other noncash form), in each case net of:
(1) 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 accrued
as a liability under GAAP, as a consequence of such Asset Disposition;
(2) 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 or other security agreement of any kind with respect to 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;
(3) all distributions and other payments required to be made to
minority interest holders in Restricted Subsidiaries as a result of such
Asset Disposition; and
(4) the deduction of appropriate amounts provided by the seller as a
reserve, in accordance with GAAP, against any liabilities associated with
the property or other assets disposed in such Asset Disposition and
retained by the Company or any Restricted Subsidiary after such Asset
Disposition.
22
"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 thereof.
"Obligations" means with respect to any Indebtedness all obligations
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, and other amounts payable pursuant to the documentation
governing such Indebtedness; provided, however, that Obligations with respect to
the Securities shall not include fees or indemnification in favor of the Trustee
and other third parties other than the holders of the Securities.
"Offering Circular" means the confidential offering circular, dated
September 22, 1999, relating to the offering of the Initial Securities.
"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.
"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.
"Permitted Holders" means Artal Luxembourg S.A., ▇.▇. ▇▇▇▇▇ Company
and each of their respective Affiliates.
"Permitted Investment" means an Investment by the Company or any
Restricted Subsidiary in:
(1) the Company, a Restricted Subsidiary or a Person that will, upon
the making of such Investment, become a Restricted Subsidiary; provided,
however, that the primary business of such Restricted Subsidiary is a
Related Business;
(2) 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
23
Restricted Subsidiary; provided, however, that such Person's primary
business is a Related Business;
(3) cash and Temporary Cash Investments;
(4) receivables owing to the Company or any Restricted Subsidiary if
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;
(5) 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;
(6) loans or advances to employees made in the ordinary course of
business consistent with past practices of the Company or such Restricted
Subsidiary;
(7) 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;
(8) any Person to the extent such Investment represents the non-cash
portion of the consideration received for an Asset Disposition as
permitted pursuant to Section 4.07;
(9) any Investment existing on the Issue Date;
(10) additional Investments having an aggregate fair market value,
taken together with all other Investments made pursuant to this clause (10), not
to exceed $15.0 million at the time of such Investment (with the fair market
value of each Investment being measured at the time made and without giving
effect to subsequent changes in value);
(11) Investments the payment for which consists of Capital Stock of
the Company (other than Disqualified Stock);
(12) any Guarantee Incurred in connection with a "synthetic lease"
or similar financing of an acquisition or
24
construction of property used in a Related Business by the Company or a
Restricted Subsidiary; provided, however, that such Guarantee and any other
Indebtedness Incurred in connection with such transaction is permitted to be
Incurred pursuant to Section 4.04;
(13) any Investment acquired by the Company or any of its Restricted
Subsidiaries (a) in exchange for any other Investment or accounts receivable
held by the Company or any such Restricted Subsidiary in connection with or as a
result of a bankruptcy, workout, reorganization or recapitalization of the
issuer of such other Investment or accounts receivable or (b) as a result of a
foreclosure by the Company or any of its Restricted Subsidiaries with respect to
any secured Investment or other transfer of title with respect to any secured
Investment in default; and
(14) Investments of up to $10.0 million in ▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, the
Company's Internet affiliate.
"Permitted Junior Securities" shall mean debt or equity securities
of the Company or any successor corporation issued pursuant to a plan of
reorganization or readjustment of the Company that are subordinated to the
payment of all then-outstanding Senior Indebtedness of the Company at least to
the same extent that the Securities are subordinated to the payment of all
Senior Indebtedness of the Company on the Issue Date, so long as to the extent
that any Senior Indebtedness of the Company outstanding on the date of
consummation of any such plan of reorganization or readjustment is not paid in
full in cash or Temporary Cash Investments on such date, the holders of any such
Senior Indebtedness not so paid in full in cash have consented to the terms of
such plan of reorganization or readjustment.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.
25
"principal" of a Security means the principal of the Security plus
the premium, if any, payable on the Security which is due or overdue or is to
become due at the relevant time.
"Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such Indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.
"Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted Subsidiary existing on the Issue
Date or Incurred in compliance with this Indenture, including Indebtedness that
Refinances Refinancing Indebtedness; provided, however, that:
(1) such Refinancing Indebtedness has a Stated Maturity no earlier
than the Stated Maturity of the Indebtedness being Refinanced;
(2) such 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; and
(3) such Refinancing Indebtedness has an aggregate principal amount
(or if Incurred with original issue discount, an aggregate issue price)
that is equal to or less than the aggregate principal amount (or if
Incurred with original issue discount, the aggregate accreted value) then
outstanding or committed (plus fees and expenses, including any premium
and defeasance costs) under the Indebtedness being Refinanced;
provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Restricted Subsidiary that Refinances Indebtedness of the
Company or (B) Indebtedness of the Company or a Restricted Subsidiary that
Refinances Indebtedness of an Unrestricted Subsidiary; and provided further that
clauses (1) and (2) of this clause will not apply to any refunding or
refinancing of any Senior Indebtedness.
"Registration Rights Agreement" means the Registration Rights
Agreement dated September 22, 1999, among the Company, Credit Suisse First
Boston Corporation and Scotia Capital Markets (USA) Inc.
26
"Related Business" means any business in which the Company was
engaged on the Issue Date and any business related, ancillary or complementary
to any business of the Company in which the Company was engaged on the Issue
Date.
"Representative" means with respect to a Person any trustee, agent
or representative (if any) for an issue of Senior Indebtedness of such Person.
"Restricted Payment" with respect to any Person means:
(1) the declaration or payment of any dividends or any other
distributions of any sort in respect of its Capital Stock (including any
payment in connection with any merger or consolidation involving such
Person) or similar payment to the direct or indirect holders of its
Capital Stock (other than dividends or distributions payable solely in its
Capital Stock (other than Disqualified Stock) and dividends or
distributions payable solely to the Company or a Restricted Subsidiary,
and other than pro rata dividends or other distributions made by a
Subsidiary that is not a Wholly Owned Subsidiary to minority stockholders
(or owners of an equivalent interest in the case of a Subsidiary that is
an entity other than a corporation));
(2) the purchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any Person or of any
Capital Stock of a Restricted Subsidiary held by any Affiliate of the
Company (other than a Restricted Subsidiary), including the exercise of
any option to exchange any Capital Stock (other than into Capital Stock of
the Company that is not Disqualified Stock);
(3) the purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value, prior to scheduled maturity,
scheduled repayment or scheduled sinking fund payment of any Subordinated
Obligations of such Person (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 such purchase,
repurchase or other acquisition or Indebtedness Incurred pursuant to
clause (2) of paragraph (b) of Section 4.04 and not subsequently
27
transferred to a Person other than the Company or its Restricted
Subsidiaries); or
(4) the making of any Investment (other than a Permitted Investment)
in any Person.
"Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Subsidiary on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Subsidiary transfers such property to a Person and the
Company or a Restricted 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.
"Securities" means the Securities issued under this Indenture.
"Securities Act" means the Securities Act of 1933.
"Seller Preferred Stock" means the 6% preferred stock of the Company
issued to ▇.▇. ▇▇▇▇▇ Company on the Issue Date.
"Senior Indebtedness" with respect to a Person means, without
duplication:
(1) Bank Indebtedness;
(2) Indebtedness of such Person, whether outstanding on the Issue
Date or thereafter Incurred; and
(3) accrued and unpaid interest (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization
relating to such Person to the extent post-filing interest is allowed in
such proceeding) and premium (if any) in respect of (A) indebtedness of
such Person for money borrowed and (B) indebtedness evidenced by notes,
debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable
28
unless, in the case of clauses (1), (2) and (3), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Securities or
the Subsidiary Guarantees, as the case may be; provided, however, that Senior
Indebtedness shall not include:
(1) any obligation of such Person to any Subsidiary (other than
Credit Agreement Intercompany Indebtedness);
(2) any liability for Federal, state, local or other taxes owed or
owing by such Person;
(3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof
or instruments evidencing such liabilities);
(4) any Indebtedness of such Person (and any accrued and unpaid
interest in respect thereof) which is subordinate or junior in any respect
to any other Indebtedness or other obligation of such Person;
(5) that portion of any Indebtedness which at the time of Incurrence
is Incurred in violation of this Indenture; provided, however, that such
Indebtedness shall be deemed not to have been Incurred in violation of
this Indenture for purposes of this clause (5) if (x) the holders of such
Indebtedness or their representative or the Company shall have furnished
to the Trustee an opinion of recognized independent legal counsel,
unqualified in all material respects, addressed to the Trustee (which
legal counsel may, as to matters of fact, rely upon an Officers'
Certificate) to the effect that the Incurrence of such Indebtedness does
not violate the provisions of this Indenture or (y) such Indebtedness
consists of Bank Indebtedness, and the holders of such Indebtedness or
their agent or representative (1) had no actual knowledge at the time of
the Incurrence that the Incurrence of such Indebtedness violated this
Indenture and (2) shall have received an Officers' Certificate to the
effect that the Incurrence of such Indebtedness does not violate the
provisions of this Indenture; or
(6) the Dollar Securities.
29
"Senior Subordinated Indebtedness" means with respect to a Person,
the Securities and the Dollar Securities (in the case of the Company), any
Subsidiary Guarantee and any Dollar Subsidiary Guarantee (in the case of a
Subsidiary Guarantor) and any other Indebtedness of such Person that
specifically provides that such Indebtedness is to rank pari passu with the
Securities or such Subsidiary Guarantee, as the case may be, in right of payment
and is not subordinated by its terms in right of payment to any Indebtedness or
other obligation of such Person which is not Senior Indebtedness of such Person.
"Significant Subsidiary" means any Restricted Subsidiary that would
be a "Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the SEC.
"S&P" means Standard & Poor's Rating Group (or any successor to the
rating agency business thereof).
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency unless such contingency has occurred).
"Subordinated Obligation" means with respect to a Person, any
Indebtedness of such Person (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Securities,
the Dollar Securities, a Subsidiary Guarantee or a Dollar Subsidiary Guarantee
of such Person as the case may be, pursuant to a written agreement to that
effect.
"Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such Person; or
(3) one or more Subsidiaries of such Person.
30
"Subsidiary Guarantor" means any Subsidiary that provides a
Guarantee under the Credit Agreement (other than special purpose vehicles used
to lend cash to guarantors of the Credit Agreement).
"Subsidiary Guarantee" means a Guarantee by a Subsidiary Guarantor
of the Company's obligations with respect to the Securities pursuant to a
Guarantee Agreement.
"Temporary Cash Investments" means any of the following:
(1) any investment in direct obligations of the United States of
America or any agency thereof or obligations guaranteed by the United
States of America or any agency thereof;
(2) investments in time deposit accounts, certificates of deposit
and money market deposits maturing within one year of the date of
acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States, and which bank or trust
company has capital, surplus and undivided profits aggregating in excess
of $50.0 million (or the foreign currency equivalent thereof) and has
outstanding debt which is rated "A" (or such similar equivalent rating) or
higher by at least one nationally recognized statistical rating
organization (as defined in Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor;
(3) repurchase obligations with a term of not more than 90 days for
underlying securities of the types described in clause (1) above entered
into with a bank meeting the qualifications described in clause (2) above;
(4) investments in commercial paper, maturing not more than one year
after the date of acquisition, issued by a corporation (other than an
Affiliate of the Company) organized and in existence under the laws of the
United States of America or any foreign country recognized by the United
States of America with a rating at the time as of which any investment
therein is made of "P-1" (or higher) according to ▇▇▇▇▇'▇ or "A-1" (or
higher) according to S&P; and
31
(5) investments in securities with maturities of six months or less
from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America, or by any
political subdivision or taxing authority thereof, and rated at least "A"
by S&P or "A" by ▇▇▇▇▇'▇.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date of this Indenture.
"Total Assets" means the total consolidated assets of the Company
and its Restricted Subsidiaries, as shown on the most recent balance sheet of
the Company.
"Transactions" means the transactions contemplated by the
Recapitalization and Stock Purchase Agreement, dated as of July 22, 1999, among
Weight Watchers International, Inc., ▇.▇. ▇▇▇▇▇ Company and Artal International
S.A. and any financings related thereto.
"Treaty on European Union" means the Treaty of Rome of March 25,
1957, as amended by the Single ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the Maastricht Treaty
(which was signed at Maastricht on February 7, 1992, and came into force on
November 1, 1993), as amended from time to time.
"Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.
"Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.
"Unrestricted Subsidiary" means:
(1) 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
(2) any Subsidiary of an Unrestricted Subsidiary.
The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed
32
Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of
its Subsidiaries owns any Capital Stock or Indebtedness of, or holds any Lien on
any property of, the Company or any other Subsidiary of the Company that is not
a Subsidiary of the Subsidiary to be so designated; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $1,000 or less
or (B) if such Subsidiary has assets greater than $1,000, such designation would
be permitted under Section 4.05.
The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (A) the Company could Incur $1.00 of additional
Indebtedness under paragraph (a) of Section 4.04 and (B) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors shall
be evidenced to the Trustee by promptly filing with the Trustee a copy of the
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing provisions.
"U.S. Dollar Equivalent" means with respect to any monetary amount
in a currency other than U.S. dollars, at any time for determination thereof,
the amount of U.S. dollars obtained by converting such foreign currency involved
in such computation into U.S. dollars at the spot rate for the purchase of U.S.
dollars with the applicable foreign currency as published in The Wall Street
Journal in the "Exchange Rates" column under the heading "Currency Trading" on
the date two Business Days prior to such determination.
Except as required by Section 4.04, whenever it is necessary to
determine whether the Company has complied with any covenant in this Indenture
or a Default has occurred and an amount is expressed in a currency other than
U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent
determined as of the date such amount is initially determined in such currency.
"Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
33
"Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.
SECTION 1.02. Other Definitions.
Defined in
Term Section
---- -------
"Additional Securities" ................ 2.02
"Affiliate Transaction" ................ 2.03
"Appendix" ............................. 2.01
"Bankruptcy Law" ....................... 6.01
"Blockage Notice" ...................... 10.03
"Change of Control Offer" .............. 4.10(b)
"covenant defeasance option" ........... 8.01(b)
"Custodian" ............................ 6.01
"Event of Default" ..................... 6.01
"legal defeasance option" .............. 8.01(b)
"Legal Holiday" ........................ 11.08
"Notice of Default" .................... 6.01
"Offer" ................................ 4.07(b)
"Offer Amount" ......................... 4.07(c)(2)
"Offer Period" ......................... 4.08
"pay the Securities" ................... 10.03
"Paying Agent" ......................... 2.03
"Payment Blockage Period" .............. 10.03
"Purchase Date" ........................ 4.07(c)(1)
"Registrar"............................. 4.07
"Successor Company" .................... 5.01
SECTION 1.03. 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;
and
34
"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 by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.
SECTION 1.04. 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;
(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; and
(9) all references to the date the Securities were originally issued
shall refer to the date the Initial Securities were originally issued.
35
ARTICLE 2
The Securities
SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Appendix attached hereto (the "Appendix") which is hereby
incorporated in and expressly made part of this Indenture. The Initial
Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix and Exhibit A are part of the terms of this
Indenture.
SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature. The Company's
seal shall be impressed, affixed, imprinted or reproduced on the Securities and
may be in facsimile form.
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.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
On the Issue Date, the Trustee shall authenticate and deliver
Securities for original issue in an aggregate principal amount of EURO 100.0
million, 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 and, at any time and from time to time thereafter, the Trustee shall
authenticate and deliver
36
additional securities ("Additional Securities") for original issue 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. Such 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, in the case
of an issuance of Additional Securities pursuant to Section 2.13 after the Issue
Date, shall certify that such issuance is in compliance with Section 4.04.
The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.
SECTION 2.03. 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 Registrar
shall keep a register of the Securities and of their transfer and exchange. 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.
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 any 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 7.07. The
Company or any of its domestically incorporated Wholly Owned Subsidiaries may
act as Paying Agent, Registrar, co-registrar or transfer agent. For so long as
the Securities are listed on the Luxembourg Stock Exchange, the Company will
maintain a Paying Agent in Luxembourg.
37
The Company initially appoints Citibank, N.A. as Paying Agent and
the Trustee as Registrar in connection with the Securities.
SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each due
date of the principal and interest on any Security, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal and interest when
so becoming due. The Company shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Securityholders or the Trustee all money held by the Paying Agent for
the payment of principal of or interest on the Securities and shall notify the
Trustee of any default by the Company 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 to pay all money held by it to the Trustee and to account
for any funds disbursed by the Paying Agent. Upon complying with this Section
2.04, the Paying Agent shall have no further liability for the money delivered
to the Trustee.
SECTION 2.05. 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, the Company shall furnish to the Trustee, in writing at least five
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 2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of Section 8-401(1)
of the Uniform Commercial Code are met. When Securities are presented to the
Registrar or a co-registrar with a request to exchange them for an equal
principal amount of Securities of other denominations, the Registrar shall make
the exchange as requested if the same requirements are met. To permit
registration of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Securities at the Registrar's or co-registrar's
request. The Company
38
may require payment of a sum sufficient to pay all taxes, assessments or other
governmental charges in connection with any transfer or exchange pursuant to
this Section 2.06. The Company shall not be required to make and the Registrar
need not register transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed) or any Securities for a period of 15 days before a selection
of Securities to be redeemed or 15 days before an interest payment date.
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.
All Securities issued upon any transfer or exchange pursuant to the
terms of this Indenture will evidence the same debt and will be entitled to the
same benefits under this Indenture as the Securities surrendered upon such
transfer or exchange.
SECTION 2.07. Replacement 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 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. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities. Securities outstanding at any
time are all Securities authenticated by the Trustee except for those canceled
by it, those delivered
39
to it for cancellation and those described in this Section 2.08 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate of the Company holds the Security.
If a Security is replaced pursuant to Section 2.07, 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 2.09. 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 and
deliver them in exchange for temporary Securities.
SECTION 2.10 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
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company. The
Company may not issue new Securities to replace Securities it has redeemed, paid
or delivered to the Trustee for cancellation.
SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the
40
persons who are Securityholders on a subsequent special record date. The Company
shall fix or cause to be fixed any such special record date and payment date to
the reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.
SECTION 2.12. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 2.13. Issuance of Additional Securities. The Company shall
be entitled, subject to its compliance with Section 4.04, to issue Additional
Securities under this Indenture which shall have identical terms as the Initial
Securities issued on the Issue Date, other than with respect to the date of
issuance, issue price and amount of interest payable on the first payment date
applicable thereto. The Initial Securities issued on the Issue Date, any
Additional Securities and all Exchange Securities or Private Exchange Securities
issued in exchange therefor shall be treated as a single class for all purposes
under this Indenture.
With respect to any Additional Securities, the Company shall set
forth in a resolution of the Board of Directors and an Officers' Certificate, a
copy of each of which shall be delivered to the Trustee prior to the Trustee's
issuance of the Additional Securities, the following information:
(1) the aggregate principal amount and CUSIP number of such
Additional Securities to be authenticated and delivered pursuant to this
Indenture;
(2) the issue price and the issue date of such Additional Securities
and the amount of interest payable on the first payment date applicable
thereto; provided, however, that no Additional Securities may be issued at
a price that would cause such Additional Securities to have "original
issue discount" within the meaning of Section 1273 of the Code; and
41
(3) whether such Additional Securities shall be transfer restricted
securities and issued in the form of Initial Securities as set forth in
Exhibit 1 to the Appendix to this Indenture or shall be issued in the form
of Exchange Securities as set forth in Exhibit A to the Appendix.
ARTICLE 3
Redemption
SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount of Securities to
be redeemed and the clause of paragraph 5 of the Securities pursuant to which
the redemption will occur.
The Company shall give each notice to the Trustee provided for in
this Section 3.01 at least 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.
SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal of Securities that have denominations larger than EURO
1,000. Securities and portions of them the Trustee selects shall be in amounts
of EURO 1,000 or a whole multiple of EURO 1,000. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption. The Trustee shall notify the Company promptly
of the Securities or portions of Securities to be redeemed.
SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of
42
redemption by first-class mail to each Holder of Securities to be redeemed at
such Holder's registered address.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(5) if fewer than all the outstanding Securities are to be redeemed,
the identification and principal amounts of the particular Securities to
be redeemed;
(6) that, unless the Company defaults in making such redemption
payment or the Paying Agent is prohibited from making such payment
pursuant to the terms of this Indenture, interest on Securities (or
portion thereof) called for redemption ceases to accrue on and after the
redemption date;
(7) the clause of paragraph 5 of the Securities pursuant to which
the Securities called for redemption are being redeemed; and
(8) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Securities.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense. In such event,
the Company shall provide the Trustee with the information required by this
Section 3.03. In addition, as long as the Securities are listed on the
Luxembourg Stock Exchange, notice of a redemption shall be published in a
Luxembourg newspaper of general circulation.
SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued
43
interest to the redemption date (subject to the right of Holders of record on
the relevant record date to receive interest due on the related interest payment
date). Failure to give notice or any defect in the notice to any Holder shall
not affect the validity of the notice to any other Holder.
SECTION 3.05. Deposit of Redemption Price. Prior to the redemption
date, the Company shall deposit with the Paying Agent (or, if the Company or a
Subsidiary is the Paying Agent, shall segregate and hold in trust) money
sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount to the unredeemed portion of the Security
surrendered.
ARTICLE 4
Covenants
SECTION 4.01. Cessation of Specified Covenants. Following the first
day that (1) the Company has achieved Investment Grade Status and (2) no Default
has occurred and is continuing (and notwithstanding that the Company may later
cease to have an Investment Grade Rating from either or both of the Rating
Agencies or a Default shall have occurred), the Company and its Restricted
Subsidiaries will not be subject to the Sections 4.04, 4.05, 4.06, 4.07, 4.08
and 4.09, and clause (3) under Section 5.01.
SECTION 4.02. 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
44
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. In addition, as
long as the Securities are listed on the Luxembourg Stock Exchange, notice of
any change in interest rates shall be published in a Luxembourg newspaper of
general circulation.
SECTION 4.03. SEC Reports. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the SEC and provide the Trustee and Holders and
prospective Holders (upon request in the case of prospective Holders) within 15
days after it files them with the SEC, copies of its annual report and the
information, documents and other reports that are specified in Sections 13 and
15(d) of the Exchange Act; provided, however, that the Company shall not be so
obligated to file such reports with the SEC if the SEC does not permit such
filing, in which event the Company will make available such information to the
Trustee, Holders and prospective investors (upon request in the case of
prospective investors) within 15 days after the time the Company would be
required to file such information with the SEC if it were subject to Section 13
or 15(d) of the Exchange Act. Notwithstanding the foregoing, such requirements
shall be deemed satisfied prior to the commencement of the Registered Exchange
Offer or the effectiveness of the Shelf Registration Statement (each as defined
in the Registration Rights Agreement) by the filing with the SEC of the Exchange
Offer Registration Statement and/or Shelf Registration Statement, and any
amendments thereto, with such financial information that satisfies Regulation
S-X of the Securities Act. The Company also will comply with the other
provisions of TIA ss. 314(a).
In addition, the Company shall furnish to the Holders of the
Securities and to prospective investors, upon the requests of such Holders, any
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act so long as the Securities are not freely transferable under the
Securities Act.
SECTION 4.04. Limitation on Indebtedness. (a) The Company will not,
and will not permit any Restricted Subsidiary to, Incur, directly or indirectly,
any Indebtedness; provided, however, that the Company and its Restricted
Subsidiaries will be entitled to Incur
45
Indebtedness if, on the date of such Incurrence and after giving effect thereto
on a pro forma basis, the Consolidated Coverage Ratio exceeds 2.0 to 1 if such
Indebtedness is Incurred prior to October 1, 2002 or 2.25 to 1 if such
Indebtedness is Incurred thereafter.
(b) Notwithstanding paragraph (a) of Section 4.04, the Company and
the Restricted Subsidiaries will be entitled to Incur any or all of the
following Indebtedness:
(1) Indebtedness Incurred pursuant to the Credit Agreement;
provided, however, that, after giving effect to any such Incurrence, the
aggregate principal amount of such Indebtedness then outstanding does not
exceed $292.0 million less the sum of all principal payments with respect
to such Indebtedness pursuant to clause (3)(A) paragraph (a) of Section
4.07;
(2) Indebtedness owed to and held by the Company or a Restricted
Subsidiary; provided, however, that (A) any subsequent issuance or
transfer of any Capital Stock which results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any subsequent
transfer of such Indebtedness (other than to the Company or a Restricted
Subsidiary) shall be deemed, in each case, to constitute the Incurrence of
such Indebtedness by the obligor thereon and (B) if the Company is the
obligor on such Indebtedness (other than Credit Agreement Intercompany
Indebtedness), such Indebtedness is expressly subordinated to the prior
payment in full in cash of all obligations with respect to the Securities;
(3) the Securities and the Dollar Securities (other than any
Additional Securities issued pursuant to the Indenture or any Additional
Securities as defined in and issued pursuant to the Dollar Securities
Indenture), the Dollar Subsidiary Guarantees and the Subsidiary
Guarantees;
(4) Indebtedness outstanding on the Issue Date (other than
Indebtedness described in clause (1), (2) or (3) of this paragraph (b) of
this Section 4.04);
(5) Indebtedness of a Restricted Subsidiary Incurred and outstanding
on or prior to the date on which such Subsidiary was acquired by the
Company (other than Indebtedness Incurred in connection with, or to
provide all or any portion of the funds or credit
46
support utilized to consummate, the transaction or series of related
transactions pursuant to which such Subsidiary became a Subsidiary or was
acquired by the Company); provided, however, that on the date of such
acquisition and after giving pro forma effect thereto, the Company would
have been able to Incur at least $1.00 of additional Indebtedness pursuant
to paragraph (a) of Section 4.04;
(6) Refinancing Indebtedness in respect of Indebtedness Incurred
pursuant to paragraph (a) of Section 4.04 or pursuant to clause (3), (4)
of (5) or this clause (6) of this paragraph (b) of this Section 4.04;
provided, however, that to the extent such Refinancing Indebtedness
directly or indirectly Refinances Indebtedness of a Subsidiary Incurred
pursuant to clause (5), such Refinancing Indebtedness shall be Incurred
only by such Subsidiary;
(7) Hedging Obligations consisting of (A) Interest Rate Agreements
directly related to Indebtedness permitted to be Incurred by the Company
or a Restricted Subsidiary pursuant to this Indenture or (B) Currency
Agreements entered into in respect of Credit Agreement Intercompany
Indebtedness or in the ordinary course of business and not for the purpose
of speculation;
(8) Indebtedness (including Capital Lease Obligations) Incurred by
the Company or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment (whether
through the direct purchase of assets or the Capital Stock of any Person
owning such assets) in an aggregate principal amount which, when taken
together with the principal amount of all other Indebtedness then
outstanding and Incurred pursuant to this clause (8) of this paragraph (b)
of this Section 4.04, does not exceed 5.0% of Total Assets at the time of
Incurrence;
(9) 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 in
connection with the disposition of any business, assets or a Subsidiary of
the Company in accordance with the terms of this Indenture, other than
guarantees of Indebtedness Incurred by any person acquiring all or any
portion of such business, assets or Subsidiary for the purpose of
financing such acquisition;
47
(10) obligations in respect of performance, bid and surety bonds and
completion guarantees provided by the Company or any Restricted Subsidiary
in the ordinary course of business;
(11) any guarantee by the Company or a Restricted Subsidiary of
Indebtedness or other obligations of the Company or any of its Restricted
Subsidiaries so long as the Incurrence of such Indebtedness by the Company
or such Restricted Subsidiary is permitted under the terms of this
Indenture;
(12) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of business, provided
that such Indebtedness is extinguished within two Business Days of its
Incurrence; and
(13) Indebtedness of the Company or any Restricted Subsidiaries in
an aggregate principal amount which, when taken together with all other
Indebtedness of the Company or any Restricted Subsidiaries outstanding on
the date of such Incurrence (other than Indebtedness permitted by clauses
(1) through (12) of this paragraph (b) of this Section 4.04 or paragraph
(a) of Section 4.04) does not exceed $25.0 million.
(c) Notwithstanding the foregoing, neither the Company nor any
Restricted Subsidiary will Incur any Indebtedness pursuant to paragraph (b) of
Section 4.04 if the proceeds thereof are used, directly or indirectly, to
Refinance any Subordinated Obligations of the Company or any Restricted
Subsidiary unless such Indebtedness shall be subordinated to the Securities or
the applicable Restricted Subsidiary to at least the same extent as such
Subordinated Obligations.
(d) For purposes of determining compliance with this Section 4.04,
(1) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses (provided that any Indebtedness classified as Incurred
pursuant to clause (13) of paragraph (b) of Section 4.04 may later be
reclassified as having been Incurred pursuant to paragraph (a) of Section 4.04
to the extent that such reclassified Indebtedness could be Incurred
48
pursuant to paragraph (a) of Section 4.04 at the time of such reclassification)
and (2) the Company will be entitled to divide and classify an item of
Indebtedness in more than one of the types of Indebtedness described above.
(e) Notwithstanding paragraphs (a) and (b) of Section 4.04, neither
the Company nor any Subsidiary Guarantor will Incur (1) any Indebtedness if such
Indebtedness is subordinate or junior in ranking in any respect to any Senior
Indebtedness of such Person, unless such Indebtedness is Senior Subordinated
Indebtedness or is expressly subordinated in right of payment to Senior
Subordinated Indebtedness of such Person or (2) any Secured Indebtedness of such
Person that is not Senior Indebtedness unless contemporaneously therewith such
Person makes effective provision to secure the Securities equally and ratably
with such Secured Indebtedness for so long as such Secured Indebtedness is
secured by a Lien.
(f) For purposes of determining compliance with any U.S. dollar
denominated restriction on the Incurrence of Indebtedness where the Indebtedness
Incurred is denominated in a different currency, the amount of such Indebtedness
will be the U.S. Dollar Equivalent determined on the date of the Incurrence of
such Indebtedness; provided, however, that if any such Indebtedness denominated
in a different currency is subject to a Currency Agreement with respect to U.S.
dollars covering all principal, premium, if any, and interest payable on such
Indebtedness, the amount of such Indebtedness expressed in U.S. dollars will be
provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness being Refinanced
will be the U.S. Dollar Equivalent of the Indebtedness Refinanced, except to the
extent that (1) such U.S. Dollar Equivalent was determined based on a Currency
Agreement, in which case the Refinancing Indebtedness will be determined in
accordance with the preceding sentence, and (2) the principal amount of the
Refinancing Indebtedness exceeds the principal amount of the Indebtedness being
Refinanced, in which case the U.S. Dollar Equivalent of such excess will be
determined on the date such Refinancing Indebtedness is Incurred.
SECTION 4.05. Limitation on Restricted Payments. (a) The Company
will not, and will not permit any Restricted Subsidiary, directly or indirectly,
to make a Restricted Payment if at the time the Company or such Restricted
Subsidiary makes such Restricted Payment:
49
(1) a Default shall have occurred and be continuing (or would result
therefrom);
(2) the Company is not entitled to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 4.04; or
(3) the aggregate amount of such Restricted Payment and all other
Restricted Payments since the Issue Date would exceed the sum of (without
duplication):
(A) 50% of the Consolidated Net Income accrued during the
period (treated as one accounting period) from the beginning of the
fiscal quarter immediately following the fiscal quarter during which
the Issue Date occurs to the end of the most recent fiscal quarter
ending at least 45 days prior to the date of such Restricted Payment
(or, in case such Consolidated Net Income shall be a deficit, minus
100% of such deficit); plus
(B) 100% of the aggregate Net Cash Proceeds received by the
Company from the issuance or sale of its Capital Stock (other than
Disqualified Stock) subsequent to the Issue Date (other than an
issuance or sale to a Subsidiary of the Company and other than an
issuance or sale to an employee stock ownership plan or to a trust
established by the Company or any of its Subsidiaries for the
benefit of their employees) and 100% of any cash contribution
subsequent to the Issue Date; plus
(C) the amount by which Indebtedness of the Company or any of
its Restricted Subsidiaries 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 or any of its Restricted Subsidiaries convertible or
exchangeable for Capital Stock (other than Disqualified Stock) of
the Company (less the amount of any cash, or the fair value of any
other property, distributed by the Company upon such conversion or
exchange); plus
(D) an amount equal to the sum of (x) the net reduction in the
Investments (other than Permitted Investments) made by the Company
or any Restricted
50
Subsidiary in any Person resulting from repurchases, repayments or
redemptions of such Investments by such Person, proceeds realized on
the sale of such Investment, proceeds representing the return of
capital (excluding dividends and distributions) and from repayments
of loans or advances which constituted Restricted Payments, in each
case received by the Company or any Restricted Subsidiary, and (y)
to the extent such Person is an Unrestricted Subsidiary, the portion
(proportionate to the Company's equity interest in such Subsidiary)
of the fair market value of the net assets of such Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary; provided, however, that the foregoing sum
shall not exceed, in the case of any such Person or Unrestricted
Subsidiary, the amount of Investments (excluding Permitted
Investments) previously made (and treated as a Restricted Payment)
by the Company or any Restricted Subsidiary in such Person or
Unrestricted Subsidiary.
(b) The provisions of paragraph (a) of Section 4.05 will not
prohibit:
(1) any Restricted Payment made out of the Net Cash Proceeds of the
substantially concurrent sale of, or made by exchange for, Capital Stock
of the Company (other than Disqualified Stock and other than Capital Stock
issued or sold to a Subsidiary of the Company or an employee stock
ownership plan or to a trust established by the Company or any of its
Subsidiaries for the benefit of their employees) or a substantially
concurrent capital contribution; provided, however, that (A) such
Restricted Payment shall be excluded in the calculation of the amount of
Restricted Payments and (B) the Net Cash Proceeds from such sale or such
capital contribution (to the extent so used for such Restricted Payment)
shall be excluded from the calculation of amounts under clause (3)(B) of
paragraph (a) of Section 4.05;
(2) any purchase, repurchase, redemption, defeasance or other
acquisition or retirement for value of Subordinated Obligations made by
exchange for, or out of the proceeds of the substantially concurrent sale
of, Indebtedness which is permitted to be Incurred pursuant to Section
4.04; provided, however, that such purchase, repurchase, redemption,
defeasance or other
51
acquisition or retirement for value shall be excluded in the calculation
of the amount of Restricted Payments;
(3) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted by Section 4.07; provided, however,
that such purchase or redemption shall be excluded in subsequent
calculations of the amount of Restricted Payments;
(4) dividends paid within 60 days after the date of declaration
thereof if at such date of declaration such dividend would have complied
with this covenant; provided, however, that such dividends shall be
included in the calculation of the amount of Restricted Payments;
(5) so long as no Default has occurred and is continuing, the
repurchase or other acquisition of shares of Capital Stock of the Company
or any of its Subsidiaries from employees, former employees, directors or
former directors of the Company or any of its Subsidiaries (or permitted
transferees of such employees, former employees, directors or former
directors), pursuant to the terms of the agreements (including employment
agreements) or plans (or amendments thereto) approved by the Board of
Directors under which such individuals purchase or sell or are granted the
option to purchase or sell, shares of such Capital Stock; provided,
however, that the aggregate amount of such repurchases and other
acquisitions shall not exceed $2.0 million in any calendar year (with
unused amounts in any calendar year being permitted to be carried over for
the two succeeding calendar years); provided, further, however, that such
amount may be increased by an amount not to exceed (A) the cash proceeds
from sales of Capital Stock of the Company (other than Disqualified Stock)
to members of management or directors or consultants of the Company and
its Subsidiaries that occur after the Issue Date plus (B) the cash
proceeds of key man life insurance policies received by the Company and
its Restricted Subsidiaries after the Issue Date (provided, however, that
to the extent such amount is increased by the receipt of any such cash
proceeds, such cash proceeds shall be excluded from the calculation of
amounts under clause (3)(B) of paragraph (a) of Section 4.05 and the
calculation of Consolidated Net Income); and provided further, however,
that such repurchases and other
52
acquisitions shall be excluded in the calculation of the amount of
Restricted Payments;
(6) the declaration and payment of dividends or distributions to
holders of any class or series of Disqualified Stock (other than the
Seller Preferred Stock) of the Company or any of its Restricted
Subsidiaries issued or Incurred in accordance with Section 4.04; provided,
however, that, to the extent included in the calculation of Consolidated
Interest Expense, such dividends or distributions shall be excluded in the
calculation of the amount of Restricted Payments;
(7) Investments in Unrestricted Subsidiaries in an aggregate amount
which, when taken together with all other Investments made pursuant to
this clause (7) of this paragraph (b) of this Section 4.05, do not exceed
$10.0 million provided, however, that such Investments shall be excluded
in the calculation of the amount of Restricted Payments;
(8) the payment of annual management, consulting, monitoring and
advisory fees to The Invus Group, Ltd. in an amount in any fiscal year not
to exceed the greater of $1.0 million and 1.0% of EBITDA and any related
out-of-pocket expenses; provided, however, that such payments shall be
excluded in the calculation of the amount of Restricted Payments;
(9) the payment of dividends on the Company's common stock following
the first public offering of common stock of the Company, after the Issue
Date, of up to 6% per annum of the net proceeds received by the Company
from such public offering; provided, however, that (a) the aggregate
amount of all such dividends shall not exceed the aggregate amount of net
proceeds received by the Company from such public offering, (b) at the
time of, and after giving effect to, any payment permitted under this
clause (9) of this paragraph (b) of this Section 4.05, no Default or Event
of Default shall have occurred and be continuing or would occur as a
consequence thereof and (c) any such payment shall be included in
subsequent calculations of the amount of Restricted Payments;
(10) other Restricted Payments (other than dividends in respect of
the Seller Preferred Stock) in an aggregate amount not to exceed $5.0
million; provided, however, that such Restricted Payments shall
53
be excluded in the calculation of the amount of Restricted Payments;
(11) so long as no Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof, the declaration
and payment of dividends to holders of any class or series of Designated
Preferred Stock issued after the Issue Date; provided, however, that for
the most recently ended four full fiscal quarters ending at least 45 days
prior to the date of such determination for which financial statements are
available immediately preceding the declaration of any such dividend or
distribution after giving effect to such dividend or distribution on a pro
forma basis, the Company would have had a Consolidated Coverage Ratio of
at least 2.0 to 1; provided, however, that such dividends shall be
included in the calculation of the amount of Restricted Payments;
(12) Investments that are made with Excluded Contributions;
provided, however, that such Investments shall be excluded in the
calculation of the amount of Restricted Payments; and
(13) repurchases of Capital Stock deemed to occur upon exercise of
stock options if such Capital Stock represents a portion of the exercise
price of such options; provided, however, that such repurchases shall be
excluded in the calculation of the amount of Restricted Payments.
SECTION 4.06. 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 restriction on the ability of any
Restricted Subsidiary to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Subsidiary or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the Company
or (c) transfer any of its property or assets to the Company, except:
(1) any encumbrance or restriction pursuant to applicable law or any
applicable rule, regulation or order or an agreement in effect at or
entered into on the Issue Date;
(2) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement
54
relating to any Indebtedness Incurred by such 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 or credit support 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) and outstanding on such date;
(3) any encumbrance or restriction pursuant to an agreement
effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
referred to in clause (1) or (2) of this Section 4.06 or this clause (3)
of this Section 4.06 or contained in any amendment to an agreement
referred to in clause (1) or (2) of this Section 4.06 or this clause (3)
of this Section 4.06; provided, however, that the encumbrances and
restrictions with respect to such Restricted Subsidiary contained in any
such refinancing agreement or amendment are no less favorable to the
Securityholders than encumbrances and restrictions with respect to such
Restricted Subsidiary contained in such predecessor agreements;
(4) any such encumbrance or restriction consisting of customary non
assignment provisions in leases governing leasehold interests to the
extent such provisions restrict the transfer of the lease or the property
leased thereunder;
(5) in the case of clause (c) above, restrictions contained in
security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary to the extent such restrictions restrict the transfer of the
property subject to such security agreements or mortgages;
(6) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all
or substantially all the Capital Stock or assets of such Restricted
Subsidiary pending the closing of such sale or disposition;
(7) any restriction on cash or other deposits or net worth imposed
by customers under contracts entered into in the ordinary course of
business;
55
(8) encumbrances and restrictions contained in the agreements
evidencing other Indebtedness of Restricted Subsidiaries permitted to be
Incurred subsequent to the Issue Date pursuant to Section 4.04; provided,
however, that the encumbrances or restrictions apply only in the event of
and during the continuance of a default contained in such Indebtedness or
agreement; and
(9) customary provisions in joint venture agreements and other
similar agreements entered into in the ordinary course of business.
SECTION 4.07. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company will not, and will not permit any Restricted Subsidiary to,
directly or indirectly, consummate any Asset Disposition unless:
(1) the Company or such Restricted Subsidiary receives consideration
at the time of such Asset Disposition at least equal to the fair market
value (including as to the value of all non-cash consideration), as
determined in good faith by the Company, of the shares and assets subject
to such Asset Disposition;
(2) at least 75% of the consideration thereof received by the
Company or such Restricted Subsidiary is in the form of cash or cash
equivalents; provided that the amount of (A) any liabilities (as shown on
the Company's or such Restricted Subsidiary's most recent balance sheet or
in the notes thereto) of the Company or any Restricted Subsidiary (other
than liabilities that are by their terms subordinated to the Securities),
that are assumed by the transferee of any such assets (provided that the
Company or such Restricted Subsidiary is released from all liability with
respect thereto), (B) any notes, other obligations or securities received
by the Company or such Restricted Subsidiary from such transferee that are
converted by the Company or such Restricted Subsidiary into cash (to the
extent of the cash received) within 180 days following the closing of such
Asset Disposition and (C) any Designated Noncash Consideration received by
the Company or any of its Restricted Subsidiaries in such Asset
Disposition having an aggregate fair market value, when taken together
with all other Designated Noncash Consideration received pursuant to this
clause (C) of this paragraph (a) of this Section 4.07 that is at that time
outstanding, not to exceed $5.0 million at time of
56
receipt of such Designated Noncash Consideration (with the fair market
value of each item of Designated Noncash Consideration being measured at
the time received and without giving effect to subsequent changes in
value), shall be deemed to be cash for purposes of this provision and for
no other purpose; and
(3) 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) to the extent the Company elects (or is required by the
terms of any Indebtedness), to prepay, repay, redeem or purchase
Senior Indebtedness or Indebtedness (other than any Disqualified
Stock) of a Restricted Subsidiary (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) to the extent the Company elects, to acquire Additional
Assets within one year from the later of the date of such Asset
Disposition or the receipt of such Net Available Cash;
(C) to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A) and (B) of this
paragraph (a)(3) of this Section 4.07, to make an offer to the
holders of the Securities (and to holders of other Senior
Subordinated Indebtedness designated by the Company) to purchase
Securities (and such other Senior Subordinated Indebtedness)
pursuant to and subject to the conditions contained in this
Indenture; and
(D) to the extent of the balance of such Net Available Cash
after application in accordance with clauses (A), (B) and (C) of
this paragraph (a) of this Section 4.07, for any general corporate
purpose permitted pursuant to the terms of this Indenture;
provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) of this paragraph (a) of this
Section 4.07, the
57
Company or such Restricted Subsidiary shall permanently retire such Indebtedness
and shall cause the related loan commitment (if any) to be permanently reduced
in an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions of this paragraph (a) of
this Section 4.07 the Company and the Restricted Subsidiaries will not be
required to apply any Net Available Cash in accordance with this covenant except
to the extent that the aggregate Net Available Cash from all Asset Dispositions
which is not applied in accordance with this covenant exceeds $15.0 million.
Pending application of Net Available Cash pursuant to this Section 4.07, such
Net Available Cash shall be invested in Temporary Cash Investments or applied to
temporarily reduce revolving credit indebtedness.
(b) In the event of an Asset Disposition that requires the purchase
of the Securities (and other Senior Subordinated Indebtedness) pursuant to
clause (3)(C) of paragraph (a) of Section 4.07, the Company will purchase
Securities tendered pursuant to an offer by the Company for the Securities (and
such other Senior Subordinated Indebtedness) (the "Offer") at a purchase price
of 100% of their principal amount (or, in the event such other Senior
Subordinated Indebtedness was issued with significant original issue discount,
100% of the accreted value thereof), without premium, plus accrued but unpaid
interest (or, in respect of such other Senior Subordinated Indebtedness, such
lesser price, if any, as may be provided for by the terms of such Senior
Subordinated Indebtedness) in accordance with the procedures (including
prorating in the event of oversubscription) set forth in paragraph (c) of
Section 4.07. If the aggregate purchase price of the securities tendered exceeds
the Net Available Cash allotted to their purchase, the Company will select the
securities to be purchased on a pro rata basis but in round denominations, which
in the case of the Securities will be denominations of EURO 1,000 principal
amount or multiples thereof. The Company shall not be required to make such an
Offer to purchase Securities (and other Senior Subordinated Indebtedness)
pursuant to this Section 4.07 if the Net Available Cash available therefor is
less than $15.0 million (which lesser amount shall be carried forward for
purposes of determining whether such an offer is required with respect to the
Net Available Cash from any subsequent Asset Disposition).
58
(c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall be obligated to deliver to
the Trustee and send, by first-class mail to each Holder, and, as long as the
Securities are listed on the Luxembourg Stock Exchange, publish in a Luxembourg
newspaper of general circulation, 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 EURO 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") and shall contain such information concerning the business of the Company
which the Company in good faith believes will enable such Holders to make an
informed decision (which at a minimum will include (i) the most recently filed
Annual Report on Form 10-K (including audited consolidated financial statements)
of the Company, the most recent subsequently filed Quarterly Report on Form 10-Q
and any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report, other than Current Reports describing Asset Dispositions
otherwise described in the offering materials (or corresponding successor
reports), (ii) a description of material developments in the Company's business
subsequent to the date of the latest of such Reports, and (iii) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer, together with the
information contained in clause (3).
(2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (i) the amount of the Offer (the "Offer
Amount"), (ii) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (iii) the compliance
of such allocation with the provisions of paragraph (a) of Section 4.07. On such
date, the Company shall also irrevocably 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) in Temporary Cash Investments, maturing on the last day prior
to the Purchase Date or on the Purchase Date if funds are immediately available
by open of business, an amount equal to the Offer Amount to be held for payment
in accordance with the provisions of this Section. Upon the expiration of the
period for which the Offer remains open (the "Offer Period"), the Company shall
deliver to the Trustee for
59
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. In the event that the aggregate purchase price of the
Securities delivered by the Company to the Trustee is less than the Offer Amount
applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.07.
(3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Security which was delivered for
purchase by the Holder and a statement that such Holder is withdrawing his
election to have such Security purchased. If at the expiration of the Offer
Period the aggregate principal amount of Securities (and any other Senior
Subordinated Indebtedness included in the Offer) surrendered by holders thereof
exceeds the Offer Amount, the Company shall select the Securities and the other
Senior Subordinated Indebtedness to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Company so that only Securities
and the other Senior Subordinated Indebtedness in denominations of EURO 1,000,
or integral multiples thereof, shall be purchased). Holders whose Securities are
purchased only in part shall be issued new Securities equal in principal amount
to the unpurchased portion of the Securities surrendered.
(4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.
(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
60
connection with the repurchase of Securities pursuant to this Section 4.07. To
the extent that the provisions of any securities laws or regulations conflict
with provisions of this Section 4.07, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.07 by virtue of its compliance
with such securities laws or regulations.
SECTION 4.08. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any Restricted Subsidiary to, enter into or permit
to exist any transaction (including the purchase, sale, lease or exchange of any
property, employee compensation arrangements or the rendering of any service)
with, or for the benefit of, any Affiliate of the Company (an "Affiliate
Transaction") unless:
(1) the terms of the Affiliate Transaction are not materially less
favorable to the Company or such Restricted Subsidiary than those that
could be obtained at the time of the Affiliate Transaction in arm's-length
dealings with a Person who is not an Affiliate;
(2) if such Affiliate Transaction involves an amount in excess of
$5.0 million, the terms of the Affiliate Transaction are set forth in
writing and a majority of directors of the Company have determined in good
faith that the criteria set forth in clause (1) of this Section 4.08(a)
are satisfied and have approved the relevant Affiliate Transaction as
evidenced by a Board Resolution; and
(3) if such Affiliate Transaction involves an amount in excess of
$25.0 million, the Board of Directors shall also have received a written
opinion from an investment banking, accounting or appraisal firm of
national prominence that is not an Affiliate of the Company to the effect
that such Affiliate Transaction is fair, from a financial standpoint, to
the Company and its Restricted Subsidiaries.
(b) The provisions of paragraph (a) of Section 4.08 will not
prohibit:
(1) any Investment or other Restricted Payment, in each case
permitted to be made pursuant to Section 4.05;
61
(2) 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 approved
by the Board of Directors;
(3) loans or advances to employees or consultants in the ordinary
course of business of the Company or its Restricted Subsidiaries, but in
any event not to exceed $3.0 million in the aggregate outstanding at any
one time;
(4) the payment of reasonable fees to officers, employees,
consultants or directors of the Company or its Restricted Subsidiaries and
indemnity provided on behalf of officers, employees, consultants or
directors of the Company or its Restricted Subsidiaries;
(5) any transaction with a Restricted Subsidiary or joint venture or
similar entity which would constitute an Affiliate Transaction solely
because the Company or a Restricted Subsidiary owns an equity interest in
or otherwise controls such Restricted Subsidiary, joint venture or similar
entity;
(6) the issuance or sale of any Capital Stock (other than
Disqualified Stock) of the Company;
(7) the payment of annual management, consulting, monitoring and
advisory fees to The Invus Group, Ltd. in an amount in any fiscal year not
to exceed the greater of $1.0 million and 1.0% of EBITDA and any related
out-of-pocket expenses;
(8) the payment by the Company or any of its Restricted Subsidiaries
of fees to The Invus Group, Ltd. and its Affiliates in connection with any
acquisition or divestiture transaction entered into by the Company or any
Restricted Subsidiary; provided, however, that the aggregate amount of
fees paid to The Invus Group, Ltd. and its Affiliates in respect of any
acquisition or divestiture transaction shall not exceed 1% of the total
amount of such transaction;
(9) any agreement as in effect on the Issue Date and described in
the Offering Circular or any renewals, extensions or amendments of any
such agreement (so long as such renewals, extensions or amendments are not
less favorable to the Company or the Restricted Subsidiaries) and the
transactions evidenced thereby;
62
(10) the existence of, or the performance by the Company or any of
its Restricted Subsidiaries of its obligations under the terms of any
stockholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party as of the Issue
Date and any similar agreements which it may enter into thereafter;
provided, however, that the existence of, or the performance by the
Company or any of its Restricted Subsidiaries of obligations under any
future amendment to any such existing agreement or under any similar
agreement entered into after the Issue Date shall only be permitted by
this clause (10) of this paragraph (b) of this Section 4.08 to the extent
that the terms of any such amendment or new agreement are not otherwise
disadvantageous to the Holders of the Securities in any material respect;
and
(11) transactions with customers, clients, suppliers or purchasers
or sellers of goods or services in each case in the ordinary course of
business and otherwise in compliance with the terms of this Indenture
which are fair to the Company or its Restricted Subsidiaries, in the
reasonable determination of the Board of Directors of the Company or the
senior management thereof, or are on terms at least as favorable as might
reasonably have been obtained at such time from an unaffiliated party.
SECTION 4.09. Limitation on the Sale or Issuance of Capital Stock of
Restricted Subsidiaries. The Company
(1) will not, and will not permit any Restricted Subsidiary to,
sell, lease, transfer or otherwise dispose of any Capital Stock of any
Restricted Subsidiary to any Person (other than the Company or a Wholly
Owned Subsidiary), and
(2) will not permit any Restricted Subsidiary to issue any of its
Capital Stock (other than, if necessary, shares of its Capital Stock
constituting directors' or other legally required qualifying shares) to
any Person (other than to the Company or a Wholly Owned Subsidiary),
unless
(A) immediately after giving effect to such issuance, sale or
other disposition, neither the
63
Company nor any of its Subsidiaries own any Capital Stock of such
Restricted Subsidiary;
(B) immediately after giving effect to such issuance, sale or
other disposition, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment in such Person
remaining after giving effect thereto would have been permitted to
be made under Section 4.05 if made on the date of such issuance,
sale or other disposition; or
(C) such issuance or sale is made pursuant to a Local
Management Plan and, immediately after giving effect to such
issuance or sale, the Company or a Wholly Owned Subsidiary owns at
least 85% of the Capital Stock of such Restricted Subsidiary.
SECTION 4.10. Change of Control. (a) Upon the occurrence of Change
of Control, each Holder shall have the right to require that the Company
repurchase such Holder's Securities at a purchase price in cash equal to 101% of
the principal amount thereof on the date of purchase 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), in accordance with the terms of paragraph (b) of this
Section 4.10.
(b) Within 30 days following any Change of Control, unless the
Company has exercised its option pursuant to clause (c) of paragraph 5 of the
Securities, the Company shall mail a notice to each Holder with a copy to the
Trustee (the "Change of Control Offer") and, as long as the Securities are
listed on the Luxembourg Stock Exchange, publish such notice in a Luxembourg
newspaper of general circulation, stating:
(1) that a Change of Control has occurred and that such Holder has
the right to require the Company to purchase such Holder's Securities at a
purchase price in cash equal to 101% of the principal amount thereof on
the date of purchase 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 on the relevant interest payment date);
64
(2) the circumstances and relevant facts regarding such Change of
Control (including information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such
Change of Control);
(3) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
(4) the instructions determined by the Company, consistent with
this Section 4.10, that a Holder must follow in order to have its
Securities purchased.
(c) Holders electing to have a Security purchased will be
required to surrender the Security, with an appropriate form duly completed, to
the Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than one Business Day prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased.
(d) On the purchase date, all Securities purchased by the
Company under this Section 4.10 shall be delivered by the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.
(e) Notwithstanding the foregoing provisions of this Section
4.10, 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 Section 4.10 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 or if the Company exercises its option to purchase the Securities
pursuant to clause (c) of paragraph 5 of the Securities.
(f) 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 4.10. To the extent that the provisions of any
65
securities laws or regulations conflict with provisions of this Section 4.10,
the Company will comply with the applicable securities laws and regulations and
shall not be deemed to have breached its obligations under this Section 4.10 by
virtue thereof.
SECTION 4.11. 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 and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).
SECTION 4.12. 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.
SECTION 4.13. Future Guarantors. The Company shall cause all the
Subsidiary Guarantors to execute and deliver to the Trustee a Guarantee
Agreement pursuant to which such Subsidiary Guarantors will Guarantee payment of
the Securities on the same terms and conditions as those set forth in the
Indenture on or before the later of (a) the date such Subsidiary Guarantor
became a guarantor under the Credit Agreement and (b) June 22, 2000.
ARTICLE 5
Successor Company; Successor Subsidiary Guarantors
SECTION 5.01. When Company May Merge or Transfer Assets. The Company
will not consolidate with or merge with or into, or convey, transfer or lease,
in one transaction or a series of transactions, directly or indirectly, all or
substantially all its assets to, any Person, unless:
(1) the resulting, surviving or transferee Person (the "Successor
Company") shall be a Person 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
an indenture supplemental hereto,
66
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, all the obligations of the Company under the Securities and
this Indenture;
(2) immediately after giving pro forma effect to such transaction
(and treating any Indebtedness which becomes an obligation of the
Successor Company or any Subsidiary as a result of such transaction as
having been Incurred by such Successor Company or such Subsidiary at the
time of such transaction), no Default shall have occurred and be
continuing;
(3) immediately after giving pro forma effect to such transaction,
the Successor Company would be able to Incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) of Section 4.04; and
(4) 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;
provided, however, that clauses (3) and (4) of this Section 5.01 will not be
applicable to (A) a Restricted Subsidiary consolidating with, merging into or
transferring all or part of its properties and assets to the Company or to
another Restricted Subsidiary or (B) the Company merging with an Affiliate of
the Company solely for the purpose and with the sole effect of reincorporating
the Company in another jurisdiction or changing the form of organization of the
Company.
The Successor Company will be the successor to the Company and shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture, but the predecessor Company in the case of a
conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Securities.
SECTION 5.02. When Subsidiary Guarantors May Merge or Transfer
Assets. The Company will not permit any Subsidiary Guarantor to consolidate with
or merge with or into, or convey, transfer or lease, in one transaction or a
series of transactions, all or substantially all of its assets to any Person
unless:
67
(A) except in the case of a Subsidiary Guarantor that has been
disposed of in its entirety to another Person (other than to the Company
or an Affiliate of the Company), whether through a merger, consolidation
or sale of Capital Stock or assets, if in connection therewith the Company
provides an Officers' Certificate to the Trustee to the effect that the
Company will comply with its obligations under Section 4.07 in respect of
such disposition, the resulting, surviving or transferee Person (if not
such Subsidiary) shall be a Person organized and existing under the laws
of the jurisdiction under which such Subsidiary was organized or under the
laws of the United States of America, or any State thereof or the District
of Columbia, and such Person shall expressly assume, by a Guaranty
Agreement in form satisfactory to the Trustee, all the obligations of such
Subsidiary, if any, under its Subsidiary Guarantee;
(B) immediately after giving effect to such transaction or
transactions on a pro forma basis (and treating any Indebtedness which
becomes an obligation of the resulting, surviving or transferee Person as
a result of such transaction as having been issued by such Person at the
time of such transaction), no Default shall have occurred and be
continuing; and
(C) the Company delivers to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such Guaranty Agreement, if any, complies with the Indenture.
ARTICLE 6
Defaults and Remedies
SECTION 6.01. 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, whether or not such payment shall
be prohibited by Article 10, and such default continues for a period of 30
days;
(2) the Company (A) defaults in the payment of the principal of any
Security when the same becomes due and payable at its Stated Maturity,
upon redemption, upon
68
declaration or otherwise, whether or not such payment shall be prohibited
by Article 10, or (B) fails to redeem or purchase Securities when required
pursuant to this Indenture or the Securities, whether or not such
redemption or purchase shall be prohibited by Article 10;
(3) the Company fails to comply with Section 5.01 or 5.02;
(4) the Company fails to comply with Section 4.03, 4.04, 4.05, 4.06,
4.07, 4.08, 4.09, 4.10 or 4.13 (other than a failure to purchase
Securities when required under Section 4.07 or 4.10) and such failure
continues for 30 days after the notice specified below;
(5) the Company or a Subsidiary Guarantor fails to comply with any
of its agreements in the Securities or this Indenture (other than those
referred to in clause (1), (2), (3) or (4) above) or in a Subsidiary
Guarantee and such failure continues for 60 days after the notice
specified below;
(6) Indebtedness of the Company or any Significant Subsidiary is not
paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $10.0 million,
or its foreign currency equivalent at the time;
(7) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case;
(C) consents to the appointment of a Custodian of it or for
any substantial part of its property; or
(D) makes a general assignment for the benefit of its
creditors;
or takes any comparable action under any foreign laws relating to
insolvency;
69
(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 or
decree remains unstayed and in effect for 60 days;
(9) any judgment or decree for the payment of money in excess of
$10.0 million or its foreign currency equivalent at the time is entered
against the Company or any Significant Subsidiary, remains outstanding for
a period of 60 days following the entry of such judgment or decree and is
not discharged, waived or the execution thereof stayed within 10 days
after the notice specified below; or
(10) a Subsidiary Guarantee ceases to be in full force and effect
(other than in accordance with the terms of such Subsidiary Guarantee) or
a Subsidiary Guarantor denies or disaffirms its obligations under the
Subsidiary Guarantee.
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.
A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the holders of at least 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 after receipt of
70
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 Event of Default under clause (6) or (10) and any event which with the
giving of notice or the lapse of time would become an Event of Default under
clause (4), (5) or (9), its status and what action the Company is taking or
proposes to take with respect thereto.
SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount of the Securities by notice to the
Company and the Trustee, may declare the principal of and accrued but unpaid
interest on all the Securities to be due and payable; provided, however, that so
long as any Bank Indebtedness remains outstanding, no such acceleration shall be
effective until the earlier of (1) five business days after the giving of
written notice to the Company and the administrative agent (or similar agent if
there is no administrative agent) under the Credit Agreement and (2) the day on
which any Bank Indebtedness is accelerated. Upon such a declaration, such
principal and interest shall be due and payable immediately. If an Event of
Default specified in Section 6.01(7) or (8) with respect to the Company occurs,
the principal of and interest on all the Securities shall ipso facto become and
be immediately due and payable without any declaration or other act on the part
of the Trustee or any Securityholders. The Holders of a majority in principal
amount of the Securities by notice to the Trustee may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
71
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 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences except (i) a Default in the payment of the
principal of or interest on a Security (ii) a Default arising from the failure
to redeem or purchase any Security when required pursuant to this Indenture or
(iii) a Default in respect of a provision that under Section 9.02 cannot be
amended without the consent of each Securityholder affected. When a Default is
waived, it is deemed cured, but no such waiver shall extend to any subsequent or
other Default or impair any consequent right.
SECTION 6.05. 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 Section 7.01, 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 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may 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;
72
(2) the Holders of at least 25% in principal amount of the
Securities make a written 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
(5) the Holders of a majority in principal amount of the Securities
do not give the Trustee a direction inconsistent with the request during
such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and 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 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(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
7.07.
SECTION 6.09. 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 creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
73
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
7.07.
SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness of the Company to the
extent required by Article 10;
THIRD: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
FOURTH: to the Company.
The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section 6.10. 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 a Holder pursuant to Section 6.07 or a suit by Holders of
more than 10% in principal amount of the Securities.
SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter
74
in force, which may affect the covenants or the performance of this Indenture;
and the Company (to the extent that it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law, and shall not hinder, delay or
impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE 7
Trustee
SECTION 7.01. 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.
(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, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(1) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(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
75
(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 6.05.
(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 7.01.
(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 7.01 and to the provisions of the TIA.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document 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 the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through 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;
76
provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.
(e) The Trustee may consult with counsel, 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 7.03. 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 7.04. 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 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its Trust Officers in good faith determines that withholding the
notice is in the interests of Securityholders.
SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to June 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).
77
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 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. 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, 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 attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. 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. 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 7.07,
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 Company's payment obligations pursuant to this Section 7.07
shall survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(7) or (8) with
respect to the Company, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.
SECTION 7.08. 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
78
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, 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 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 7.07.
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 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 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or
79
transfers all or substantially all its corporate trust business or 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 ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50.0 million as set forth in its most
recent published annual report of condition. The Trustee shall comply with
TIAss. 310(b); provided, however, that there shall be excluded from the
operation of TIAss. 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
TIAss. 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA ss. 311(b). A Trustee who has resigned or been removed shall be
subject to TIA ss. 311(a) to the extent indicated.
ARTICLE 8
Discharge of Indenture; Defeasance
SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (ii) all
outstanding Securities have become due and payable, whether at maturity or as a
result of the mailing of a
80
notice of redemption pursuant to Article 3 hereof and the Company irrevocably
deposits with the Trustee funds sufficient to pay at maturity or upon redemption
all outstanding Securities, including interest thereon to maturity or such
redemption date (other than Securities replaced pursuant to Section 2.07), and
if in either case the Company pays all other sums payable hereunder by the
Company, then this Indenture shall, subject to Section 8.01(c), cease to be of
further effect. 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 and at the cost and expense of the Company.
(b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (i) all its obligations under the Securities and this Indenture
("legal defeasance option") or (ii) its obligations under Sections 4.03, 4.04,
4.05, 4.06, 4.07, 4.08, 4.09, 4.10, 4.13 and 5.02 and the operation of Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(7) and (8), with respect only to Significant Subsidiaries) and the
limitations contained in Section 5.01(3) ("covenant defeasance option"). The
Company may exercise its legal defeasance option notwithstanding its prior
exercise of its covenant defeasance option. In the event the Company exercises
its legal defeasance option or its covenant defeasance option, each Subsidiary
Guarantor will be released from all of its obligations with respect to its
Subsidiary Guarantee.
If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. 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 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Subsidiaries) or
because of the failure of the Company to comply with Section 5.01(3) or 5.02.
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 clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
81
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.
SECTION 8.02. 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 money
or European Government Obligations for the payment of principal of 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 European 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 or redemption, as the case may be;
(3) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Sections 6.01(7) or (8) with respect to the
Company occurs which is continuing at the end of the period;
(4) the deposit does not constitute a default under any other
agreement binding on the Company and is not prohibited by Article 10;
(5) the Company delivers to the Trustee an Opinion of Counsel 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;
(6) in the case of the legal defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or 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
82
subject to Federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such defeasance had not
occurred;
(7) in the case of the covenant defeasance option, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Securityholders will not recognize income, gain or loss for Federal income
tax purposes as a result of such covenant defeasance and will be subject
to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such covenant defeasance had not
occurred; and
(8) 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 as contemplated by this Article
8 have been complied with.
Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.
SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or European Government Obligations deposited with it pursuant to
this Article 8. It shall apply the deposited money and the money from European
Government Obligations through the Paying Agent and in accordance with this
Indenture to the payment of principal of and interest on the Securities. Money
and securities so held in trust are not subject to Article 10.
SECTION 8.04. 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 at any time.
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 or interest that remains unclaimed for two years,
and, thereafter, Securityholders entitled to the money must look to the Company
for payment as general creditors.
SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited European Government Obligations
83
or the principal and interest received on such European Government Obligations.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or European Government Obligations in accordance with
this Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or European Government
Obligations in accordance with this Article 8; 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 European Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
Amendments
SECTION 9.01. Without Consent of Holders. The Company 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 5;
(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 make any change in Article 10 that would limit or terminate
the benefits available to any holder of Senior Indebtedness (or
Representatives therefor) under Article 10;
84
(5) to add guarantees with respect to the Securities or to secure
the Securities;
(6) 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;
(7) to comply with any requirements of the SEC in connection with
qualifying, or maintaining the qualification of, this Indenture under the
TIA;
(8) to make any change in the Appendix or Exhibit B-1 or B-2 thereto
to facilitate trading or transferring the Securities; or
(9) to make any change that does not adversely affect the rights of
any Securityholder.
An amendment under this Section 9.01 may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
After an amendment under this Section 9.01 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 9.02. With Consent of Holders. The Company 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 then outstanding (including consents obtained in
connection with a tender offer or exchange for the Securities). However, without
the consent of each Securityholder affected thereby, 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;
85
(4) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed in accordance
with Article 3;
(5) make any Security payable in money other than that stated in the
Security;
(6) make any change in Article 10 that adversely affects the rights
of any Securityholder under Article 10;
(7) make any change in Section 6.04 or 6.07 or the second sentence
of this Section; or
(8) make any change in any Subsidiary Guarantee that would adversely
affect the Securityholders.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section may not make any change that
adversely affects the rights under Article 10 of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any group or representative thereof authorized to give a consent) consent to
such change.
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 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.
SECTION 9.04. 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
86
amendment or waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Securityholder. An amendment or waiver becomes
effective upon the execution of such amendment or waiver by the Trustee.
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 be valid or
effective for more than 120 days after such record date.
SECTION 9.05. 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 9.06. Trustee To Sign Amendments. The Trustee shall sign any
amendment authorized pursuant to this Article 9 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 Section 7.01) 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.
SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid
87
to all Holders that so consent, waive or agree to amend in the time frame set
forth in solicitation documents relating to such consent, waiver or agreement.
ARTICLE 10
Subordination
SECTION 10.01. Agreement To Subordinate. The Company agrees, and
each Securityholder by accepting a Security agrees, that the Indebtedness
evidenced by the Securities is subordinated in right of payment, to the extent
and in the manner provided in this Article 10, to the prior payment of all
Senior Indebtedness and that the subordination is for the benefit of and
enforceable by the holders of such Senior Indebtedness. The Securities shall in
all respects rank pari passu with all other Senior Subordinated Indebtedness of
the Company and only Indebtedness which is Senior Indebtedness shall rank senior
to the Securities in accordance with the provisions set forth herein. All
provisions of this Article 10 shall be subject to Section 10.12.
SECTION 10.02. Liquidation, Dissolution, Bankruptcy. Upon any
payment or distribution of the assets of the Company to creditors upon a total
or partial liquidation or a total or partial dissolution of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property:
(1) the holders of Senior Indebtedness of the Company will be
entitled to receive payment in full in cash or Temporary Cash Investments
of such Senior Indebtedness before the holders of the Securities are
entitled to receive any payment or distribution of cash, securities or
other property, except that holders of Securities may receive and retain
(a) Permitted Junior Securities and (b) payments made from a trust
established pursuant to Article 8 so long as, on the date or dates the
respective amounts were paid into the trust, such payments were made with
respect to the Securities without violating the subordination provisions
of this Article 10;
(2) until the Senior Indebtedness of the Company is paid in full in
cash or Temporary Cash Investments, any payment or distribution to which
holders of the Securities would be entitled but for the subordination
provisions of this Article 10 will be made to holders
88
of such Senior Indebtedness as their interests may appear, except that
holders of Securities may receive and retain (a) Permitted Junior
Securities and (b) payments made from a trust established pursuant to
Article 8 so long as, on the date or dates the respective amounts were
paid into the trust, such payments were made with respect to the
Securities without violating the subordination provisions of this Article
10; and
(3) if a distribution is made to holders of the Securities that, due
to the subordination provisions of this Article 10, should not have been
made to them, such holders of the Securities are required to hold it in
trust for the holders of Senior Indebtedness of the Company and pay it
over to them as their interests may appear.
SECTION 10.03. Default on Senior Indebtedness. The Company may not
pay the principal of or interest on the Securities or make any deposit pursuant
to Section 8.01 and may not repurchase, redeem or otherwise retire any
Securities (collectively, "pay the Securities") if (i) any Designated Senior
Indebtedness is not paid in full in cash or Temporary Cash Investments when due
or (ii) any other default on Designated Senior Indebtedness occurs and the
maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, (x) the default has been cured or waived
and any such acceleration has been rescinded or (y) such Designated Senior
Indebtedness has been paid in full in cash or Temporary Cash Investments;
provided, however, that the Company may pay the Securities without regard to the
foregoing if the Company and the Trustee receive written notice approving such
payment from the Representative of such Designated Senior Indebtedness. During
the continuance of any default (other than a default described in clause (i) or
(ii) of the preceding sentence) with respect to any Designated Senior
Indebtedness pursuant to which the maturity thereof may be accelerated
immediately without further notice (except such notice as may be required to
effect such acceleration) or the expiration of any applicable grace periods, the
Company may not pay the Securities for a period (a "Payment Blockage Period")
commencing upon the receipt by the Company and the Trustee of written notice (a
"Blockage Notice") of such default from the Representative of such Designated
Senior Indebtedness specifying an election to effect a Payment Blockage Period
and ending 179 days thereafter (or earlier if such Payment Blockage Period is
terminated (i) by written notice to the Trustee
89
and the Company from the Person or Persons who gave such Blockage Notice, (ii)
because the default giving rise to such Blockage Notice is no longer continuing
or (iii) because such Designated Senior Indebtedness has been discharged or
repaid in full in cash or Temporary Cash Investments. Notwithstanding the
provisions described in the immediately preceding sentence (but subject to the
provisions contained in the first sentence of this Section 10.03), unless the
holders of such Designated Senior Indebtedness or the Representative of such
holders shall have accelerated the maturity of such Designated Senior
Indebtedness, the Company may resume payments on the Securities after
termination of such Payment Blockage Period. Not more than one Blockage Notice
may be given in any consecutive 360-day period, irrespective of the number of
defaults with respect to Designated Senior Indebtedness during such period. For
purposes of this Section 10.03, no default or event of default which existed or
was continuing on the date of the commencement of any Payment Blockage Period
with respect to the Designated Senior Indebtedness initiating such Payment
Blockage Period shall be, or be made, the basis of the commencement of a
subsequent Payment Blockage Period by the Representative of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default shall have been cured or waived for a
period of not less than 90 consecutive days.
SECTION 10.04. Acceleration of Payment of Securities. If payment of
the Securities is accelerated because of an Event of Default, the Company or the
Trustee shall promptly notify the holders of the Designated Senior Indebtedness
(or their Representatives) of the acceleration.
SECTION 10.05. When Distribution Must Be Paid Over. If a
distribution is made to Securityholders that because of this Article 10 should
not have been made to them, the Securityholders who receive the distribution
shall hold it in trust for holders of Senior Indebtedness and pay it over to
them as their interests may appear.
SECTION 10.06. Subrogation. After all Senior Indebtedness is paid in
full and until the Securities are paid in full, Securityholders shall be
subrogated to the rights of holders of such Senior Indebtedness to receive
distributions applicable to such Senior Indebtedness. A distribution made under
this Article 10 to holders of such Senior Indebtedness which otherwise would
have been made to Securityholders is not, as between the Company and
90
Securityholders, a payment by the Company on such Senior Indebtedness.
SECTION 10.07. Relative Rights. This Article 10 defines the relative
rights of Securityholders and holders of Senior Indebtedness. Nothing in this
Indenture shall:
(1) impair, as between the Company and Securityholders, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness to receive distributions otherwise payable to
Securityholders.
SECTION 10.08. Subordination May Not Be Impaired by Company. No
right of any holder of Senior Indebtedness to enforce the subordination of the
Indebtedness evidenced by the Securities shall be impaired by any act or failure
to act by the Company or by its failure to comply with this Indenture.
SECTION 10.09. Rights of Trustee and Paying Agent. Notwithstanding
Section 10.03, the Trustee or Paying Agent may continue to make payments on the
Securities and shall not be charged with knowledge of the existence of facts
that would prohibit the making of any such payments unless, not less than two
Business Days prior to the date of such payment, a Trust Officer of the Trustee
receives notice satisfactory to it that payments may not be made under this
Article 10. The Company, the Registrar or co-registrar, the Paying Agent, a
Representative or a holder of Senior Indebtedness may give the notice; provided,
however, that, if an issue of Senior Indebtedness has a Representative, only the
Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 10 with respect to any Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of such Senior Indebtedness; and
nothing in Article 7 shall deprive the Trustee of any of its rights as such
holder. Nothing in this Article 10 shall
91
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness,
the distribution may be made and the notice given to their Representative (if
any).
SECTION 10.11. Article 10 Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the Securities by
reason of any provision in this Article 10 shall not be construed as preventing
the occurrence of a Default. Nothing in this Article 10 shall have any effect on
the right of the Securityholders or the Trustee to accelerate the maturity of
the Securities.
SECTION 10.12. Trust Moneys Not Subordinated. Notwithstanding
anything contained herein to the contrary, payments from money or the proceeds
of European Government Obligations held in trust under Article 8 by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness or subject to the
restrictions set forth in this Article 10, and none of the Securityholders shall
be obligated to pay over any such amount to the Company or any holder of Senior
Indebtedness or any other creditor of the Company.
SECTION 10.13. Trustee Entitled To Rely. Upon any payment or
distribution pursuant to this Article 10, the Trustee and the Securityholders
shall be entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 10.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of such Senior Indebtedness and
other Indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 10. In the event that the Trustee determines, in good
faith, that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article 10, the Trustee may request such Person to furnish
92
evidence to the reasonable satisfaction of the Trustee as to the amount of such
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and other facts
pertinent to the rights of such Person under this Article 10, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 shall be applicable to all
actions or omissions of actions by the Trustee pursuant to this Article 10.
SECTION 10.14. Trustee To Effectuate Subordination. Each
Securityholder by accepting a Security authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to acknowledge or
effectuate the subordination between the Securityholders and the holders of
Senior Indebtedness as provided in this Article 10 and appoints the Trustee as
attorney-in-fact for any and all such purposes.
SECTION 10.15. Trustee Not Fiduciary for Holders of Senior
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall mistakenly pay over or distribute to Securityholders or the Company or any
other Person, money or assets to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article 10 or otherwise.
SECTION 10.16. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Securityholder by accepting a Security
acknowledges and agrees that the foregoing subordination provisions, and the
subordination provisions contained in the Guarantee Agreement are, and are
intended to be, an inducement and a consideration to each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, or the Subsidiary Guarantees, as the case
may be, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of such Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness.
93
ARTICLE 11
Miscellaneous
SECTION 11.01. 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 required provision
shall control.
SECTION 11.02. 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:
Weight Watchers International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of General Counsel
if to the Trustee:
Norwest Bank Minnesota, National Association
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ and Marquette Avenue
MAC ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention of Corporate Trust Services
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 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
94
above, it is duly given, whether or not the addressee receives it.
SECTION 11.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 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 ss. 312(c).
SECTION 11.04. 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 11.05. 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.
95
SECTION 11.06. 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,
subject to the foregoing, only Securities outstanding at the time shall be
considered in any such determination.
SECTION 11.07. 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 11.08. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York or the city of Luxembourg. 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 11.09. 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. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. 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 its 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
96
represent the same agreement. One signed copy is enough to prove this Indenture.
SECTION 11.13. 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.
97
IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.
WEIGHT WATCHERS INTERNATIONAL,
INC.,
by
---------------------------------
Name:
Title:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
by
---------------------------------
Name:
Title:
APPENDIX
PROVISIONS RELATING TO INITIAL SECURITIES,
PRIVATE EXCHANGE SECURITIES
AND EXCHANGE SECURITIES
1. Definitions
1.1 Definitions
For the purposes of this Appendix the following terms shall have the
meanings indicated below:
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Temporary or Permanent Regulation S Global Security or
beneficial interest therein, the rules and procedures of the Depositary for such
Global Security, Euroclear and Cedel, in each case to the extent applicable to
such transaction and as in effect from time to time.
"Cedel" means Cedel Bank, S.A., or any successor securities clearing
agency.
"Depository" means The Depository Trust Company, its nominees and
their respective successors.
"Euroclear" means the Euroclear Clearance System or any successor
securities clearing agency.
"Exchange Securities" means the 13% Senior Subordinated Notes Due
2009 to be issued pursuant to this Indenture in connection with a Registered
Exchange Offer pursuant to the Registration Rights Agreement.
"Global Securities Legend" means the legend set forth under that
caption in Exhibit 1 to this Indenture.
"Initial Purchasers" means Credit Suisse First Boston Corporation
and Scotia Capital Markets (USA) Inc.
"Initial Securities" means the 13% Senior Subordinated Notes Due
2009, issued under this Indenture on or about the date hereof.
"Private Exchange" means the offer by the Company, pursuant to the
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount of Private Exchange Securities.
2
"Purchase Agreement" means the Purchase Agreement dated September
22, 1999, between the Company and the Initial Purchasers.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registered Exchange Offer" means the offer by the Company, pursuant
to the Registration Rights Agreement, to certain Holders of Initial Securities,
to issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount of Exchange Securities registered under the
Securities Act.
"Registration Rights Agreement" means the Registration Rights
Agreement dated September 22, 1999, among the Company and the Initial
Purchasers.
"Regulation S" means Regulation S under the Securities Act, as
amended.
"Regulation S Securities" means all Initial Securities offered and
sold outside the United States in reliance on Regulation S.
"Restricted Period", with respect to any Securities, means the
period of 40 consecutive days beginning on and including the later of (i) the
day on which such Securities are first offered to persons other than
distributors (as defined in Regulation S under the Securities Act) in reliance
on Regulation S and (ii) the Issue Date with respect to such Securities.
"Restricted Securities Legend" means the legend set forth in Section
2.3(c) herein.
"Rule 144A" means Rule 144A under the Securities Act, as amended.
"Rule 144A Securities" means all Initial Securities offered and sold
to QIBs in reliance on Rule 144A.
"Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.
"Securities Act" means the Securities Act of 1933.
3
"Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor person thereto and
shall initially be the Trustee.
"Shelf Registration Statement" means the registration statement
issued by the Company, in connection with the offer and sale of Initial
Securities or Private Exchange Securities, pursuant to the Registration Rights
Agreement.
"Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.
1.2 Other Definitions
Defined in
Term Section:
---- --------
"Agent Members".........................................................2.1(b)
"Global Security".......................................................2.1(a)
"Permanent Regulation S Global Security"................................2.3(b)
"Regulation S Global Securities"........................................2.1(a)
"Rule 144A Global Security".............................................2.1(a)
"Temporary Regulation S Global Security"................................2.1(a)
2. The Securities.
2.1 Form and Dating.
The Initial Securities issued on the date hereof shall be (i)
offered and sold by the Company pursuant to the Purchase Agreement and (ii)
resold, initially only to (A) QIBs in reliance on Rule 144A and (B) Persons
other than U.S. Persons (as defined in Regulation S) in reliance on Regulation
S. Such Initial Securities may thereafter be transferred to, among others, QIBs
and purchasers in reliance on Regulation S.
(a) Global Securities. Rule 144A Securities shall be issued
initially in the form of one or more permanent global Securities in definitive,
fully registered form (collectively, the "Rule 144A Global Security") and
Regulation S Securities shall be issued initially in the form of one or more
temporary global Securities (collectively, the "Temporary Regulation S Global
Security"), in each case without interest coupons and bearing the Global
Securities Legend and Restricted Securities Legend, which shall be
4
deposited on behalf of the purchasers of the Securities represented thereby with
the Securities Custodian, and registered in the name of the Depository or a
nominee of the Depository, duly executed by the Company and authenticated by the
Trustee as provided in this Indenture. Except as set forth in Section 2.3,
beneficial ownership interests in the Temporary Regulation S Global Security
shall not be exchangeable for interests in the Rule 144A Global Security or a
Permanent Regulation S Global Security (as defined below) or any other Security
without a Restricted Securities Legend until the expiration of the Restricted
Period. Upon the expiration of the Restricted Period, beneficial interests in
the Securities represented by the Temporary Regulation S Global Security may be
exchanged for interests in the Permanent Regulation S Global Security as
described below in Section 2.3(b). The Rule 144A Global Security, the Temporary
Regulation S Global Security and the Permanent Regulation S Global Security are
each referred to herein as a Global Security and are collectively referred to
herein as "Global Securities." The Temporary Regulation S Global Security and
the Permanent Regulation S Global Security are referred to herein as "Regulation
S Global Securities." The aggregate principal amount of the Global Securities
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of such Depository and (b)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instructions or held by the Trustee as custodian for the
Depository.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Depository may be treated by
the Company, the Trustee and any agent of the Company or the Trustee as the
absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving
5
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Agent Members, the
operation of customary practices of such Depository governing the exercise of
the rights of a holder of a beneficial interest in any Global Security.
(c) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Global Securities will
not be entitled to receive physical delivery of certificated Securities.
2.2 Authentication. The Trustee shall authenticate and deliver: (1) on the
Issue Date, EURO 100.0 million of 13% Senior Subordinated Notes due 2009, (2)
any Additional Securities for an original issue in an aggregate principal amount
specified in a written order of the Company pursuant to Section 2.02 of this
Indenture and (3) Exchange Securities or Private Exchange Securities for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to the Registration Rights Agreement, for a like principal amount of
Initial 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. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and whether the Securities are to be Initial Securities,
Exchange Securities or Private Exchange Securities. In addition, in the case of
an issuance of Additional Securities pursuant to Section 2.13 of this Indenture,
such order shall certify that such issuance is in compliance with Section 4.04
of this Indenture.
2.3 (a) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the participant account
of the Depository to credited with a beneficial interest in the Global Security.
The Registrar shall, in accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Security and to debit the account of the
Person making the transfer the beneficial interest in the Global Security being
transferred.
6
Transfers by an owner of a beneficial interest in the Rule 144A Global Security
to a transferee who takes delivery of such interest through the Regulation S
Global Security, whether before or after the expiration of the Restricted
Period, will be made only upon receipt by the Trustee of a certification from
the transferor to the effect that such transfer is being made in accordance with
Regulation S or (if available) Rule 144 under the Securities Act and that, if
such transfer is being made prior to the expiration of the Restricted Period,
the interest transferred will be held immediately thereafter through Euroclear
or Cedel.
(ii) If the proposed transfer is a transfer of a beneficial interest
in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date
and an increase in the principal amount of the Global Security to which
such interest is being transferred in an amount equal to the principal
amount of the interest to be so transferred, and the Registrar shall
reflect on its books and records the date and a corresponding decrease in
the principal amount of the Global Security from which such interest is
being transferred.
(iii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not
be transferred as a whole except by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Security is exchanged for Securities
in definitive registered form pursuant to Section 2.4 or Section 2.09 of
this Indenture, prior to the consummation of a Registered Exchange Offer
or the effectiveness of a Shelf Registration Statement with respect to
such Securities, such Securities may be exchanged only in accordance with
such procedures as are substantially consistent with the provisions of
this Section 2.3 (including the certification requirements set forth on
the reverse of the Initial Securities intended to ensure that such
transfers comply with Rule 144A or Regulation S, as the case may be) and
such other procedures as may from time to time be adopted by the Company.
(b) Restrictions on Transfer of Temporary Regulation S Global
Security. (i) Prior to the
7
expiration of the Restricted Period, interests in the Temporary Regulation
S Global Security may only be held through Euroclear or Cedel. During the
Restricted Period, beneficial ownership interests in the Temporary
Regulation S Global Security may only be sold, pledged or transferred
through Euroclear or Cedel in accordance with the Applicable Procedures
and only (A) to the Company, (B) inside the United States to a person whom
the seller reasonably believes is a Qualified Institutional Buyer (as
defined in Rule 144A under the Securities Act) in a transaction meeting
the requirements of Rule 144A, (C) outside the United States in an
offshore transaction in accordance with Rule 904 under the Securities Act,
(D) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 (if available), or (E) pursuant to an effective
registration statement under the Securities Act, in each of cases (A)
through (E) in accordance with any applicable securities laws of any state
of the United States.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in the Temporary Regulation S Global Security may be
exchanged for interests in a permanent global security in definitive,
fully registered form without the Restricted Security Legend (the
"Permanent Regulation S Global Security") upon certification to the
Trustee that such interests are owned either by non-U.S. persons or U.S.
persons who purchased such interests pursuant to an exemption from, or
transfer not subject to, the registration requirements of the Securities
Act. On or prior to the expiration of the Restricted Period, each Holder
of a Temporary Regulation S Global Security shall deliver to Euroclear or
Cedel (as applicable) a Regulation S Certificate in the form of Exhibit
B-1 attached hereto; provided, however, that any Holder of a Temporary
Regulation S Global Security upon expiration of the Restricted Period or
on any payment date that has previously delivered a Regulation S
Certificate hereunder shall not be required to deliver any subsequent
Regulation S Certificate (unless the certificate previously delivered is
no longer true as of such subsequent date, in which case such beneficial
owner shall promptly notify Euroclear and Cedel, as applicable, thereof
and shall deliver to the Paying Agent or the Trustee an updated Regulation
S Certificate). Euroclear or Cedel, as applicable, shall deliver to the
Paying Agent or the Trustee a certificate (a "Non-U.S. Certificate")
substantially in the form of Exhibit B-2 attached hereto promptly upon the
receipt of each such Regulation S Certificate, and no such Holder
8
(or transferee from such Holder) shall be entitled to receive an interest
in a Permanent Regulation S Global Security or any payment of
distributions or a redemption price, if applicable, or any other payment
with respect to its beneficial interest in a Temporary Regulation S Global
Security prior to the Paying Agent or the Trustee receiving such Non-U.S.
Certificate from Euroclear or Cedel with respect to the portion of the
Temporary Regulation S Global Security owned by such Holder (and, with
respect to an interest in the Permanent Regulation S Global Security,
prior to the expiration of the Restricted Period).
The Permanent Regulation S Global Security shall bear a legend in
substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF,
ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE
SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN
REGULATION S UNDER THE SECURITIES ACT.
(iii) Any payments of distributions or a redemption price, if
applicable, or any other payment on a Temporary Regulation S Global
Security received by Euroclear or Cedel with respect to any portion of
such Regulation S Global Security owned by a Holder that has not delivered
the Regulation S Certificate required by Section 2.3(b) shall be held by
Euroclear and Cedel solely as agents for the Paying Agent and the Trustee.
Euroclear and Cedel shall remit such payments to the applicable Holder (or
to a Euroclear or Cedel member on behalf of such Holder) only after
Euroclear or Cedel has received the requisite Regulation S Certificate.
Until the Paying Agent or the Trustee has received a Non-U.S. Certificate
from Euroclear or Cedel, as applicable, that it has received the requisite
Regulation S Certificate with respect to the beneficial ownership of any
portion of a Temporary Regulation S Global Security, the Paying Agent or
the Trustee may revoke the right of Euroclear or Cedel, as applicable, to
hold any payments made with respect to such portion of such Regulation S
Global Security. If the Paying Agent or the Trustee exercises its right of
revocation pursuant to the immediately preceding sentence, Euroclear or
Cedel, as applicable, shall return
9
such payments to the Paying Agent or the Trustee and the Paying Agent or
the Trustee, as applicable, shall hold such payments until Euroclear or
Cedel, as applicable, has provided the necessary Non-U.S. Certificates to
the Paying Agent or the Trustee (at which time the Paying Agent shall
forward such payments to Euroclear or Cedel, as applicable, to be remitted
to the beneficial owner that is entitled thereto on the records of
Euroclear or Cedel (or on the records of their respective members)).
(iv) Upon the expiration of the Restricted Period, the Issuer shall
prepare and execute the Permanent Regulation S Global Security in
accordance with the terms of this Indenture and deliver it to the Trustee
for authentication. The Trustee shall retain the Permanent Regulation S
Global Security as Securities Custodian. Any transfers of beneficial
ownership interests in the Temporary Regulation S Global Security made in
reliance on Regulation S shall thenceforth be recorded by the Trustee by
making an appropriate increase in the principal amount of the Permanent
Regulation S Global Security and a corresponding decrease in the principal
amount of the Temporary Regulation S Global Security. At such time as the
principal amount of the Temporary Regulation S Global Security has been
reduced to zero, the Trustee shall cancel the Temporary Regulation S
Global Security and deliver it to the Issuer.
(c) Legend.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv) and except for the Permanent Regulation S Global Security as provided
above, each Security certificate evidencing the Global Securities(and all
Securities issued in exchange therefor or in substitution thereof) shall
bear a legend in substantially the following form:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION. EACH PURCHASER OF THIS NOTE
IS NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A.
10
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF WEIGHT
WATCHERS INTERNATIONAL, INC. THAT (A) THIS NOTE MAY BE OFFERED,
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY,
(II) INSIDE THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF AVAILABLE) OR (V) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE
HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN (A) ABOVE.
(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global
Security) pursuant to Rule 144 under the Securities Act, the Registrar
shall permit the Holder thereof to exchange such Transfer Restricted
Security for a certificated Security that does not bear the legend set
forth above and rescind any restriction on the transfer of such Transfer
Restricted Security, if the Holder certifies in writing to the Registrar
that its request for such exchange was made in reliance on Rule 144 (such
certification to be in the form set forth on the reverse of the Security).
(iii) After a transfer of any Initial Securities or Private Exchange
Securities during the period of the effectiveness of a Shelf Registration
Statement with respect to such Initial Securities or Private Exchange
Securities, as the case may be, all requirements pertaining to legends on
such Initial Security or such Private Exchange Security will cease to
apply, the requirements requiring any such Initial Security or such
Private Exchange Security issued to certain Holders be issued in global
form will cease to apply, and a certificated Initial Security or
11
Private Exchange Security without legends will be available to the
transferee of the Holder of such Initial Securities or Private Exchange
Securities upon exchange of such transferring Holder's certificated
Initial Security or Private Exchange Security or directions to transfer
such Holder's interest in the Global Security, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with
respect to the Initial Securities pursuant to which Holders of such
Initial Securities are offered Exchange Securities in exchange for their
Initial Securities, all requirements pertaining to such Initial Securities
that Initial Securities issued to certain Holders be issued in global form
will cease to apply and certificated Initial Securities with the
restricted securities legend set forth in Exhibit 1 hereto will be
available to Holders of such Initial Securities that do not exchange their
Initial Securities, and Exchange Securities in certificated or global form
will be available to Holders that exchange such Initial Securities in such
Registered Exchange Offer.
(v) Upon the consummation of a Private Exchange with respect to the
Initial Securities pursuant to which Holders of such Initial Securities
are offered Private Exchange Securities in exchange for their Initial
Securities, all requirements pertaining to such Initial Securities that
Initial Securities issued to certain Holders be issued in global form will
still apply, and Private Exchange Securities in global form with the
Restricted Securities Legend set forth in Exhibit 1 hereto will be
available to Holders that exchange such Initial Securities in such Private
Exchange.
(c) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, repurchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a Global Security is exchanged for certificated Securities, redeemed,
repurchased or canceled, the principal amount of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.
(d) Obligations with Respect to Transfers and Exchanges of
Securities.
12
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate certificated Securities
and Global Securities at the Registrar's or co-registrar's request.
(ii)No service charge shall be made for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax, assessments, or similar governmental charge
payable in connection therewith (other than any such transfer taxes,
assessments or similar governmental charge payable upon exchange or
transfer pursuant to Sections 3.06, 4.07, 4.10 and 9.05).
(iii) The Registrar or co-registrar shall not be required to
register the transfer of or exchange of (a) any certificated Security
selected for redemption in whole or in part pursuant to Article 3 of this
Indenture, except the unredeemed portion of any certificated Security
being redeemed in part, or (b) any Security for a period beginning 15
Business Days before the mailing of a notice of an offer to repurchase or
redeem Securities or 15 Business Days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of
any Security, the Company, the Trustee, the Paying Agent, the 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) 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.
(e) 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
the Depository or other Person with respect to the accuracy of the records
of the Depository or its nominee or of any participant or member thereof,
with respect to any ownership interest in the
13
Securities or with respect to the delivery to any participant, member,
beneficial owner or other Person (other than the Depository) of any notice
(including any notice of redemption) or the payment of any amount, under
or with respect to such Securities. All notices and communications to be
given to the Holders and all payments to be made to Holders under the
Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depository or its nominee in the
case of a Global Security). The rights of beneficial owners in any Global
Security shall be exercised only through the Depository subject to the
applicable rules and procedures of the Depository. The Trustee may rely
and shall be fully protected in relying upon information furnished by the
Depository with respect to its members, participants and any beneficial
owners.
(ii) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between
or among Depository participants, members or beneficial owners in any
Global Security) other than to require delivery of such certificates and
other documentation or evidence as are expressly required by, and to do so
if and when expressly required by, the terms of this Indenture, and to
examine the same to determine substantial compliance as to form with the
express requirements hereof.
2.4 Certificated Securities.
(a) A Global Security deposited with the Depository or with the
Trustee as custodian for the Depository pursuant to Section 2.1 shall be
transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount equal to the principal amount of
such Global Security, in exchange for such Global Security, only if such
transfer complies with Section 2.3 and (i) the Depository notifies the Company
that it is unwilling or unable to continue as Depository for such Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, or (ii) an Event of Default has
occurred and is continuing or (iii) the Company, in its sole discretion,
notifies the Trustee in writing that it elects to cause the issuance of
certificated Securities under this Indenture.
14
(b) Any Global Security that is transferable to the beneficial
owners thereof pursuant to this Section shall be surrendered by the Depository
to the Trustee located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without charge, and the
Trustee shall authenticate and deliver, upon such transfer of each portion of
such Global Security, an equal aggregate principal amount of certificated
Initial Securities of authorized denominations. Any portion of a Global Security
transferred pursuant to this Section shall be executed, authenticated and
delivered only in denominations of EURO 1,000 and any integral multiple thereof
and registered in such names as the Depository shall direct. Any certificated
Initial Security delivered in exchange for an interest in the Global Security
shall, except as otherwise provided by Section 2.3(b), bear the restricted
securities legend set forth in Exhibit 1 hereto.
(c) Subject to the provisions of Section 2.4(b), 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.
(d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.
EXHIBIT 1
TO APPENDIX
[FORM OF FACE OF INITIAL SECURITY]
[Global Securities Legend]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), NEW YORK, NEW
YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.
[Restricted Securities Legend]
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION. EACH
PURCHASER OF THIS NOTE IS NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING
ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED
BY RULE 144A.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF WEIGHT WATCHERS
INTERNATIONAL, INC. THAT (A) THIS Security MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) TO THE COMPANY, (II) INSIDE THE UNITED STATES TO
A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
(IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS
2
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
3
No. o EURO
CUSIP NO.
ISIN NO.
13% Senior Subordinated Notes Due 2009
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia corporation,
promises to pay to o , or registered assigns, the principal sum of EURO o (o
Euro) on October 1, 2009.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15 .
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
WEIGHT WATCHERS INTERNATIONAL, INC.,
by
-----------------------
Name:
Title:
-----------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
NORWEST BANK MINNESOTA
NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
4
[FORM OF REVERSE SIDE OF INITIAL SECURITY]
13% Senior Subordinated Note Due 2009
1. Interest
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia 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; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this Security at a rate of 0.50% per
annum (increasing by 0.50% per annum after each consecutive 90-day period that
occurs after the date on which such Registration Default occurs, up to a maximum
additional interest rate of 2.00% per annum) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured. The Company will pay interest
semiannually on April 1 and October 1 of each year, commencing April 1, 2000.
Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 29,
1999. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 15 or September 15 next preceding the interest payment
date even if Securities are canceled 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 the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the
5
registered address of each Holder thereof; provided, however, that payments on a
certificated Security will be made 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 30 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, Norwest Bank Minnesota, National Association, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. 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
September 29, 1999 (the "Indenture"), between the Company 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.
▇▇.▇▇. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture 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 obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.04 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture limits, among other things (i) the incurrence of
additional debt by the Company and its subsidiaries, (ii) the payment of
dividends on capital stock of the Company and the purchase, redemption or
retirement of capital stock or subordinated indebtedness, (iii) making of
certain investments, (iv) certain transactions with
6
affiliates, (v) sales of assets, including capital stock of subsidiaries, and
(vi) certain consolidations, mergers and transfers of assets. The Indenture also
prohibits certain restrictions on distributions from subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications contained in the Indenture. In addition, following the first day
that (1) the Company has achieved Investment Grade Status and (2) no Default has
occurred and is continuing under the Indenture (and notwithstanding that the
Company may later cease to have an Investment Grade Rating from either or both
of the Rating Agencies or default under the Indenture), the Company and its
Restricted Subsidiaries will not be subject to the covenants described above.
5. Optional Redemption
(a) Except as set forth in Section 5(b) or 5(c), the Securities may
not be redeemed prior to October 1, 2004. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date):
if redeemed during the 12-month period beginning October 1,
Period Percentage
2004...................................... 106.500%
2005...................................... 104.333%
2006...................................... 102.167%
2007 and thereafter....................... 100.000%
(b) Before October 1, 2002, the Company may at its option on one or
more occasions redeem Securities (which includes Additional Securities, if any)
in an aggregate principal amount not to exceed 35% of the aggregate principal
amount of the Securities (which includes Additional Securities, if any)
originally issued at a redemption price (expressed as a percentage of principal
amount) of 113%, plus accrued and unpaid interest, if any, to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided,
however, that
7
(1) at least 65% of such aggregate principal amount of the
Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each
such redemption; and
(2) each such redemption occurs within 90 days after the date of
the related Equity Offering.
(c) At any time prior to October 1, 2004, the Securities may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' notice (but in no event
more than 90 days after the occurrence of such Change of Control), at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium at the time plus accrued interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
"Applicable Premium" means, with respect to a Security at any time,
the greater of (1) 1.0% of the principal amount of such Security and (2) the
excess of (a) the present value at such time of (i) the redemption price of such
Security on October 1, 2004 plus (ii) all required interest payments due on such
Security through October 1, 2004, computed using a discount rate equal to the
Bund Rate plus 50 basis points, over (b) the principal amount of such Security.
"Bund Rate" means the five day average of the daily fixing on the
Frankfurt Stock Exchange of the rate for German Bund securities having a
constant maturity most nearly equal to the period from the redemption date to
October 1, 2004; provided, however, that if the period from the redemption date
to October 1, 2004 is not equal to the constant maturity of a German Bund
security for which a weekly average yield is given, the Bund Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of German Bund securities for which such
yields are given, except that if the period from the redemption date to October
1, 2004 is less than one year, the weekly average yield on actually traded
German Bund securities adjusted to a constant maturity of one year shall be
used.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address.
8
In addition, as long as the Securities are listed on the Luxembourg Stock
Exchange, notice of redemption shall be published in a Luxembourg newspaper of
general circulation. Securities in denominations larger than EURO 1,000 may be
redeemed in part but only in whole multiples of EURO 1,000. If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all or
any part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest
to the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give it effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of EURO 1,000 and whole multiples of EURO 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 any
Securities selected for redemption (except, in the case of a Security to
9
be redeemed in part, the portion of the Security not to be redeemed) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. 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.
12. Discharge and Defeasance
Subject to certain conditions, 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 European Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. 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 outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the 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 5 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
10
request of the SEC in connection with qualifying the Indenture under the Act, or
to make certain changes in the subordination provisions, or to make any change
that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company to
comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company or any Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $10.0 million; (v) certain events of
bankruptcy or insolvency with respect to the Company and the Significant
Subsidiaries; and (vi) certain judgments or decrees for the payment of money in
excess of $10.0 million. 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
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, 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
11
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.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. 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.
17. Authentication
This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.
18. 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
entireties), 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).
19. 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.
20. Holders' Compliance with Registration Rights Agreement.
12
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein.
21. 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:
Weight Watchers International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of General Counsel
13
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: ________________ Your Signature: _____________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) |_| to the Company; or
(2) |_| pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) |_| inside the United States to a "qualified institutional buyer"
(as defined in Rule 144A under the Securities Act of 1933)
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that
such transfer is
14
being made in reliance on Rule 144A, in each case pursuant to
and in compliance with Rule 144A under the Securities Act of
1933; or
(4) |_| outside the United States in an offshore transaction within
the meaning of Regulation S under the Securities Act in
compliance with Rule 904 under the Securities Act of 1933; or
(5) |_| pursuant to another available exemption from registration
provided by Rule 144 under 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 (4) or (5) is checked, the Trustee may require, prior to
registering any such transfer of the Securities, such legal opinions,
certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act of 1933, such as the exemption provided
by Rule 144 under such Act.
------------------------
Signature
Signature Guarantee:
--------------------- --------------------------
Signature must be guaranteed Signature
--------------------------------------------------------------------------------
15
TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, 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: ________________ ______________________________
NOTICE: To be executed by
an executive officer
TO BE COMPLETED BY PURCHASER IF (4) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security outside the United States as a "foreign person" in compliance with Rule
904 of Regulation S under the Securities Act and is aware that the sale to it is
being made in reliance on Regulation S and acknowledges that a holder of an
interest in a temporary Regulation S global security may not (i) receive the
payment of any distributions, redemption price or any other payments with
respect to the holder's beneficial interest in the temporary global security or
(ii) receive an interest in a permanent Regulation S global security until (A)
expiration of the 40th day after the later of the commencement of the offering
of the Securities and the closing date and (B) certification that the beneficial
owner of the interest in the Security is a non-U.S. person.
Dated: ________________ ______________________________
NOTICE: To be executed by
an executive officer
16
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is EURO
100,000,000 ($100.0 million euros). The following increases or decreases in this
Global Security have been made:
Principal amount Signature of
Amount of decrease Amount of increase of this Global authorized officer
in Principal in Principal Security following of Trustee or
Date of Amount of this Amount of this such decrease or Securities
Exchange Global Security Global Security increase) Custodian
-------- --------------- ------------------ ------------------ ------------------
17
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.07 or 4.10 of the Indenture, state the amount
in principal amount: EURO
Date: _______________ Your Signature: _______________________________
(Sign exactly as your name
appears on the other side of
this Security.)
Signature Guarantee: ___________________________________________
(Signature must be guaranteed by a member of
the firm of the New York Stock Exchange or a
commercial bank or trust company)
EXHIBIT A
[FORM OF FACE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE SECURITY]
[*/]
[**/]
No. o EURO o
13% Senior Subordinated Notes Due 2009
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia corporation,
promises to pay to o , or registered assigns, the principal sum of EURO o (o
Euro) on , 2009.
Interest Payment Dates: April 1 and October 1.
Record Dates: March 15 and September 15.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
WEIGHT WATCHERS INTERNATIONAL, INC.,
by
------------------------------
Name:
Title:
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION,
as Trustee, certifies
that this is one of
the Securities referred
to in the Indenture.
by
-----------------------------
Authorized Signatory
2
----------
*/ If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".
**/ If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.
3
[FORM OF REVERSE SIDE OF EXCHANGE SECURITY OR PRIVATE EXCHANGE
SECURITY]
13% Senior Subordinated Note Due 2009
1. Interest
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia 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 [; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, interest will accrue on this Security at a rate of 0.50% per
annum (increasing by 0.50% per annum after each consecutive 90-day period that
occurs after the date on which such Registration Default occurs, up to a maximum
additional interest rate of 2.00% per annum) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which all Registration Defaults have been cured] ***/. The Company will pay
interest semiannually on April 1 and October 1 of each year, commencing April 1,
2000. Interest on the Securities will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from September 29,
1999. Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
2. Method of Payment
The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the March 15 or September 15 next preceding the interest payment
date even if Securities are canceled 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
--------
***/ Insert if at the time of issuance of the Exchange Security or Private
Exchange Security (as the case may be) neither the Registered Exchange Offer has
been consummated nor a Shelf Registration Statement has been declared effective
in accordance with the Registration Rights Agreement.
4
payment of public and private debts. Payments in respect of Securities
(including principal, premium and interest) will be made by wire transfer of
immediately available funds to the accounts specified by the holders thereof or,
if no U.S. dollar account maintained by the payee with a bank in the United
States is designated by any holder to the Trustee or the Paying Agent at least
30 days prior to the relevant due date for payment (or such other date as the
Trustee may accept in its discretion), by mailing a check to the registered
address of such holder.
3. Paying Agent and Registrar
Initially, Norwest Bank Minnesota, National Association, a national
banking association (the "Trustee"), will act as Paying Agent and Registrar. The
Company may appoint and change any Paying Agent, Registrar or co-registrar
without notice. 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
September 29, 1999 (the "Indenture"), between the Company 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.
▇▇.▇▇. 77aaa-77bbbb) as in effect on the date of the Indenture (the "Act").
Terms defined in the Indenture 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 obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.04 of the
Indenture, to issue Additional Securities pursuant to Section 2.13 of the
Indenture. The Initial Securities issued on the Issue Date, any Additional
Securities and all Exchange Securities or Private Exchange Securities issued in
exchange therefor will be treated as a single class for all purposes under the
Indenture. The Indenture limits, among other things (i) the incurrence of
additional debt by the Company and its subsidiaries, (ii) the payment of
dividends on capital stock of the Company and the purchase, redemption or
retirement of capital stock or subordinated indebtedness, (iii) making of
5
certain investments, (iv) certain transactions with affiliates, (v) sales of
assets, including capital stock of subsidiaries, and (vi) certain
consolidations, mergers and transfers of assets. The Indenture also prohibits
certain restrictions on distributions from subsidiaries. All of these
limitations and prohibitions, however, are subject to a number of important
qualifications contained in the Indenture. In addition, following the first day
that (1) the Company has achieved Investment Grade Status and (2) no Default has
occurred and is continuing under the Indenture (and notwithstanding that the
Company may later cease to have an Investment Grade Rating from either or both
of the Rating Agencies or default under the Indenture), the Company and its
Restricted Subsidiaries will not be subject to the covenants described above.
5. Optional Redemption
(a) Except as set forth in Section 5(b) or 5(c), the Securities may
not be redeemed prior to October 1, 2004. On and after that date, the Company
may redeem the Securities in whole at any time or in part from time to time at
the following redemption prices (expressed in percentages of principal amount),
plus accrued interest to the redemption date (subject to the right of Holders of
record on the relevant record date to receive interest due on the related
interest payment date):
if redeemed during the 12-month period beginning October 1,
Period Percentage
------ ----------
2004...................................... 106.500%
2005...................................... 104.333%
2006...................................... 102.167%
2007 and thereafter....................... 100.000%
(b) Before October 1, 2002, the Company may at its option on one or
more occasions redeem Securities (which includes Additional Securities, if any)
in an aggregate principal amount not to exceed 35% of the aggregate principal
amount of the Securities (which includes Additional Securities, if any)
originally issued at a redemption price (expressed as a percentage of principal
amount) of 113%, plus accrued and unpaid interest, if any, to the redemption
date, with the net cash proceeds from one or more Equity Offerings; provided,
however, that
6
(1) at least 65% of such aggregate principal amount of the
Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each
such redemption; and
(2) each such redemption occurs within 90 days after the date of
the related Equity Offering.
(c) At any time prior to October 1, 2004, the Securities may also be
redeemed as a whole at the option of the Company upon the occurrence of a Change
of Control, upon not less than 30 nor more than 60 days' notice (but in no event
more than 90 days after the occurrence of such Change of Control), at a
redemption price equal to 100% of the principal amount thereof plus the
Applicable Premium at the time plus accrued interest, if any, to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date).
"Applicable Premium" means, with respect to a Security at any time,
the greater of (1) 1.0% of the principal amount of such Security and (2) the
excess of (a) the present value at such time of (i) the redemption price of such
Security on October 1, 2004 plus (ii) all required interest payments due on such
Security through October 1, 2004, computed using a discount rate equal to the
Bund Rate plus 50 basis points, over (b) the principal amount of such Security.
"Bund Rate" means the five day average of the daily fixing on the
Frankfurt Stock Exchange of the rate for German Bund securities having a
constant maturity most nearly equal to the period from the redemption date to
October 1, 2004; provided, however, that if the period from the redemption date
to October 1, 2004 is not equal to the constant maturity of a German Bund
security for which a weekly average yield is given, the Bund Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of German Bund securities for which such
yields are given, except that if the period from the redemption date to October
1, 2004 is less than one year, the weekly average yield on actually traded
German Bund securities adjusted to a constant maturity of one year shall be
used.
6. Notice of Redemption
Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address.
7
In addition, as long as the Securities are listed on the Luxembourg Stock
Exchange, notice of redemption shall be published in a Luxembourg newspaper of
general circulation. Securities in denominations larger than EURO 1,000 may be
redeemed in part but only in whole multiples of EURO 1,000. If money sufficient
to pay the redemption price of and accrued interest on all Securities (or
portions thereof) to be redeemed on the redemption date is deposited with the
Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Securities
(or such portions thereof) called for redemption.
7. Put Provisions
Upon a Change of Control, any Holder of Securities will have the
right, subject to certain conditions, to cause the Company to repurchase all or
any part of the Securities of such Holder at a repurchase price equal to 101% of
the principal amount of the Securities to be repurchased plus accrued interest
to the date of repurchase (subject to the right of holders of record on the
relevant record date to receive interest due on the related interest payment
date) as provided in, and subject to the terms of, the Indenture.
8. Subordination
The Securities are subordinated to Senior Indebtedness, as defined
in the Indenture. To the extent provided in the Indenture, Senior Indebtedness
must be paid before the Securities may be paid. The Company agrees, and each
Securityholder by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give it effect and
appoints the Trustee as attorney-in-fact for such purpose.
9. Denominations; Transfer; Exchange
The Securities are in registered form without coupons in
denominations of EURO 1,000 and whole multiples of EURO 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 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
8
redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.
10. Persons Deemed Owners
The registered Holder of this Security may be treated as the owner
of it for all purposes.
11. 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.
12. Discharge and Defeasance
Subject to certain conditions, 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 European Government Obligations for
the payment of principal and interest on the Securities to redemption or
maturity, as the case may be.
13. 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 outstanding of the Securities
and (ii) any default or noncompliance with any provision may be waived with the
written consent of the Holders of a majority in principal amount outstanding of
the 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 5 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
9
under the Act, or to make certain changes in the subordination provisions, or to
make any change that does not adversely affect the rights of any Securityholder.
14. Defaults and Remedies
Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
redeem or purchase Securities when required; (iii) failure by the Company to
comply with other agreements in the Indenture or the Securities, in certain
cases subject to notice and lapse of time; (iv) certain accelerations (including
failure to pay within any grace period after final maturity) of other
Indebtedness of the Company or a Significant Subsidiary if the amount
accelerated (or so unpaid) exceeds $10.0 million; (v) certain events of
bankruptcy or insolvency with respect to the Company and the Significant
Subsidiaries; and (vi) certain judgments or decrees for the payment of money in
excess of $10.0 million. 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
(except a Default in payment of principal or interest) if it determines that
withholding notice is in the interest of the Holders.
15. Trustee Dealings with the Company
Subject to certain limitations imposed by the Act, 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
10
the Company or its Affiliates with the same rights it would have if it were not
Trustee.
16. No Recourse Against Others
A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. 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.
17. Authentication
This Security shall not be valid until an authorized signatory of the Trustee
(or an authenticating agent) manually signs the certificate of authentication on
the other side of this Security.
18. 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
entireties), 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).
19. 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.
11
20. Holders' Compliance with Registration Rights Agreement.
Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including,
without limitation, the obligations of the Holders with respect to a
registration and the indemnification of the Company to the extent provided
therein. ****/
21. 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:
Weight Watchers International, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention of General Counsel
--------
****/ For Exchange or Private Exchange Security only.
12
--------------------------------------------------------------------------------
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Print or type assignee's name, address and zip code)
(Insert assignee's soc. sec. or tax I.D. No.)
and irrevocably appoint agent to transfer this Security on the
books of the Company. The agent may substitute another to act for him.
--------------------------------------------------------------------------------
Date: ________________ Your Signature: _____________________
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.
13
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 4.07 or 4.10 of the Indenture, check the box:
|_|
If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.07 or 4.10 of the Indenture, state the amount:
EURO
Date: __________________ Your Signature: __________________________________
(Sign exactly as your name appears
on the other side of the Security)
Signature Guarantee:_______________________________________________________
(Signature must be guaranteed by a member firm of
the New York Stock Exchange or a commercial bank or
trust company)
EXHIBIT B-1
Form of Certification to be Given by Holder of Beneficial
Interest in a Temporary Regulation S Global Security
Re: WEIGHT WATCHERS INTERNATIONAL, INC.
(the "Company") 13% Senior Subordinated
Notes due 2009 (the "Notes")
[▇▇▇▇▇▇ Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear
System][Cedel, societe anonymne]
Securities, [CUSIP No. ][ISIN No. ]
Reference if hereby made to the Indenture dated as of September 29,
1999 (the "Indenture") between the Company and Norwest Bank Minnesota, National
Association, as Trustee. Capitalized terms used herein and not otherwise defined
have the meanings set forth in the Indenture.
[For purposes of acquiring a beneficial interest in the Permanent
Regulation S Global Security upon the expiration of the Restricted period,][For
purposes of receiving payments under the Temporary Regulation S Global
Security,] the undersigned Holder of a beneficial interest in the Temporary
Regulation S Global Security issued under the Indenture certifies that it is
[not a U.S. Person as defined by Regulation S under][a U.S. Person who purchased
the beneficial interest in the Security pursuant to an exemption from, or
transfer not subject to,] the Securities Act of 1933, as amended.
We undertake to advise you promptly by telex on or prior to the date
on which you intend to submit your corresponding certification relating to the
Securities held by you if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certificate applies as of such date.
We understand that this certificate is required in connection with
certain securities laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocable authorize
you to produce this certificate to any interested party in such proceeding. This
certificate and the statements
2
contained herein are made for your benefit and for the benefit of the Initial
Purchasers.
Date: ________________________
By:___________________________
as, or as agent for, the
Holder of a beneficial
interest in the Securities
to which this certificate
relates
3
EXHIBIT B-2
Form of Euroclear and Cedel Certificate
Re: WEIGHT WATCHERS INTERNATIONAL, INC.
(the "Company") 13% Senior Subordinated
Notes due 2009 (the "Notes")
________________________, as
Paying Agent
[address of Paying Agent]
________________________, as
Trustee
[address of Trustee]
This is to certify that, based solely on the certifications we have
received in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount of the Securities set forth below (our "Member
Organizations") substantially to the effect set forth in the Indenture (the
"Indenture") dated as of September 29, 1999, between the Company and Norwest
Bank Minnesota, National Association, as Trustee, EURO ______________ principal
amount of the Securities held by us or our behalf are beneficially owned by
non-U.S. person(s). Capitalized terms used herein and not otherwise defined have
the meanings set forth in the Indenture. As used in this paragraph, the term
"U.S. person" has the meaning given to it by Regulation S under the United
States Securities Act of 1933, as amended.
We further certify that as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any interest in the
Securities identified above are no longer true and cannot be relied upon as of
the date hereof.
[Upon expiration of Restricted Period: We hereby acknowledge that no
portion of the Temporary Regulation S Global Security shall be exchanged for an
interest in the Permanent Regulation S Global Security with respect to the
portion thereof for which we have not received the applicable certifications
from our Member Organizations.]
4
[On ____________________ and upon any other payment under the Temporary
Regulation S Global Security: We hereby agree to hold (and return to the [ ]
upon request) any payments received by us on the Temporary Regulation S Global
Security with respect to the portion thereof for which we have not received the
applicable certificates from our Member Organizations.]
We understand that this certification is required in connection with
certain securities laws of the United States of America. In connection
therewith, if administrative or legal proceedings are commenced or threatened in
connection with which this certification is or would be relevant, we irrevocable
authorized you to produce this certification to any interested party in such
proceedings.
Dated:_______________________*****/
[▇▇▇▇▇▇ GUARANTY TRUST COMPANY OF
NEW YORK, Brussels office, as
operator of the Euroclear System
or
CEDEL, societe anonyme]
By:_______________________________
Name:
Title:
--------
*****/ Insert dated of expiration of Restricted Period or
payment date, as the case may be.
EXHIBIT C
GUARANTEE AGREEMENT, dated as of , 1999, made by the
undersigned subsidiary or subsidiaries (each, a "Subsidiary
Guarantor") of Weight Watchers International, Inc.(the
"Company"), in favor of the Holders (as defined in the
Indenture referred to below) and the Trustee (as defined
below).
Reference is made to the Indenture (as the same may be amended, restated,
supplemented or modified from time to time, the "Indenture") among the Company
and Norwest Bank Minnesota, National Association, as trustee (the "Trustee")
dated as of September 29, 1999, relating to the Securities.
WHEREAS, the Company owns directly or indirectly all or a majority of
interest in each Subsidiary Guarantor;
WHEREAS, the Company has agreed pursuant to the Indenture to cause the
Subsidiary Guarantors to Guarantee the Securities pursuant to the terms of the
Indenture and this Guarantee Agreement;
NOW, THEREFORE, in consideration of the promises thereby, each Subsidiary
Guarantor hereby agrees with and for the benefit of the Holders as follows:
ARTICLE 1
Definitions
SECTION 1.01. Defined Terms. As used in this Guarantee Agreement, terms
defined in the Indenture (to the extent not otherwise defined herein) or in the
preamble or recitals hereto are used herein as therein defined.
ARTICLE 2
Guarantees
SECTION 2.01. Guarantees. Each Subsidiary Guarantor hereby unconditionally
and irrevocably guarantees, jointly and severally, to each Holder and to the
Trustee and its successors and assigns (a) the full and punctual payment of
principal of and interest on the Securities when due, whether at maturity, by
acceleration, by redemption or otherwise, and all other monetary obligations of
the Company under the Indenture and the Securities and (b) the full and punctual
2
performance within applicable grace periods of all other obligations of the
Company under the Indenture and the Securities (all the foregoing being
hereinafter collectively called the "Obligations"). Each Subsidiary Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, without notice or further assent from such Subsidiary Guarantor and that
such Subsidiary Guarantor will remain bound under the Indenture 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 or
the Trustee to assert any claim or demand or to enforce any right or remedy
against the Company or any other Person under the Indenture, the Securities or
any other agreement or otherwise; (b) any extension or renewal of any such
claim, demand, right or remedy; (c) any rescission, waiver, amendment or
modification of any of the terms or provisions of the 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 or
the Trustee to exercise any right or remedy against any other guarantor of the
Obligations; or (f) any change in the ownership of such Subsidiary Guarantor
(except as provided in Section 2.06).
Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee
herein constitutes a guarantee of payment, performance and compliance when due
(and not a guarantee of collection) and waives any right to require that any
resort be had by any Holder or the Trustee to any security held for payment of
the Obligations.
Each Subsidiary Guarantee is, to the extent and in the manner set forth in
Article 3, subordinated and subject in right of payment to the prior payment in
full of the principal of and premium, if any, and interest on all Senior
Indebtedness of the Subsidiary Guarantor giving such Subsidiary Guarantee and
each Subsidiary Guarantee is made subject to such provisions of the Indenture.
Except as expressly set forth in Section 8.01(b) of the Indenture and
Sections 2.02 and 2.06 of this Guarantee Agreement, the obligations of each
Subsidiary Guarantor hereunder shall not be subject to any reduction,
limitation, impairment or termination for any reason, including any claim
3
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 or the Trustee to
assert any claim or demand or to enforce any remedy under the 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 such 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 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 Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Company or otherwise.
In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Subsidiary
Guarantor by virtue hereof, upon the failure of the Company to pay the principal
of or interest on any Obligation when and as the same shall become due, whether
at maturity, by acceleration, by redemption or otherwise, or to perform or
comply with any other Obligation, 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 or the Trustee an amount equal to the sum of
(i) the unpaid amount of such Obligations, (ii) accrued and unpaid interest on
such Obligations (but only to the extent not prohibited by law) and (iii) all
other monetary Obligations of the Company to the Holders and the Trustee.
Each Subsidiary Guarantor agrees that it shall not be entitled to any
right of subrogation in respect of any Obligations guaranteed hereby until
payment in full of all Obligations and all obligations to which the Obligations
are subordinated as provided in Article 3. Each Subsidiary Guarantor further
agrees that, as between it, on the one hand, and the Holders and the Trustee, on
the other hand, (x) the maturity of the Obligations Guaranteed hereby may be
4
accelerated as provided in Article 6 of the Indenture for the purposes of such
Subsidiary Guarantor's 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 declaration of
acceleration of such obligations as provided in Article 6 of the Indenture, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purposes of this Section.
Each Subsidiary Guarantor also agrees to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by the Trustee or any
Holder in enforcing any rights under this Section.
SECTION 2.02. Limitation on Liability. Any term or provision of this
Guarantee Agreement to the contrary notwithstanding, the maximum, aggregate
amount of the Obligations guaranteed hereunder by any Subsidiary Guarantor shall
not exceed the maximum amount that can be hereby guaranteed without rendering
this Guarantee Agreement, as it relates to such Subsidiary Guarantor, voidable
under applicable law relating to fraudulent conveyance or fraudulent transfer or
similar laws affecting the rights of creditors generally.
SECTION 2.03. Successors and Assigns. This Article 2 shall be binding upon
each Subsidiary Guarantor and its successors and assigns and shall enure to the
benefit of the successors and assigns of the Trustee and the Holders and, in the
event of any transfer or assignment of rights by any Holder or the Trustee, the
rights and privileges conferred upon that party in the Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of the Indenture.
Each Subsidiary Guarantor that makes a payment under its Subsidiary
Guarantee will be entitled to a contribution from each other Subsidiary
Guarantor in an amount equal to such other Subsidiary Guarantor's pro rata
portion of such payment based on the respective net assets of all the Subsidiary
Guarantors at the time of such payment determined in accordance with GAAP.
SECTION 2.04. No Waiver. Neither a failure nor a delay on the part of
either the Trustee or the Holders in exercising any right, power or privilege
under this Article 2 shall operate as a waiver thereof, nor shall a single or
partial exercise thereof preclude any other or further exercise of any
5
right, power or privilege. The rights, remedies and benefits of the Trustee and
the Holders herein expressly specified are cumulative and not exclusive of any
other rights, remedies or benefits which either may have under this Article 2 at
law, in equity, by statute or otherwise.
SECTION 2.05. Modification. No modification, amendment or waiver of any
provision of this Article 2, nor the consent to any departure by any Subsidiary
Guarantor therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice to or demand on any Subsidiary Guarantor in any case shall entitle such
Subsidiary Guarantor to any other or further notice or demand in the same,
similar or other circumstances.
SECTION 2.06. Release of Subsidiary Guarantor. Upon (w) the sale
(including any sale pursuant to any exercise of remedies by a holder of Senior
Indebtedness) or other disposition (including by way of consolidation or merger)
of a Subsidiary Guarantor, (x) the sale or disposition of all or substantially
all the assets of such Subsidiary Guarantor (in each case other than to the
Company or an Affiliate of the Company),(y) a Subsidiary Guarantor's ceasing for
any reason to be a Guarantor under the Credit Agreement or (z) the exercise by
the Company of its legal defeasance option or its covenant defeasance option
pursuant to Article 8 of the Indenture, such Subsidiary Guarantor shall be
deemed released from all obligations under this Article 2 without any further
action required on the part of the Trustee or any Holder. At the request of the
Company, the Trustee shall execute and deliver an appropriate instrument
evidencing such release.
ARTICLE 3
Subordination of Subsidiary Guaranties
SECTION 3.01. Agreement To Subordinate. Each Subsidiary Guarantor agrees,
and each Securityholder by accepting a Security agrees, that the Obligations of
such Subsidiary Guarantor are subordinated in right of payment, to the extent
and in the manner provided in this Article 3, to the prior payment of all Senior
Indebtedness of such Subsidiary Guarantor and that the subordination is for the
benefit of and enforceable by the holders of such Senior Indebtedness. The
Obligations of a Subsidiary Guarantor shall in all respects rank pari passu with
all other Senior Subordinated Indebtedness of such Subsidiary Guarantor and
6
only Senior Indebtedness of such Subsidiary Guarantor (including such Subsidiary
Guarantor's Guarantee of Senior Indebtedness of the Company) shall rank senior
to the Obligations of such Subsidiary Guarantor in accordance with the
provisions set forth herein.
SECTION 3.02. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of any Subsidiary Guarantor to creditors upon a total
or partial liquidation or a total or partial dissolution of such Subsidiary
Guarantor or in a bankruptcy, reorganization, insolvency, receivership or
similar proceeding relating to such Subsidiary Guarantor or its property:
(1) holders of Senior Indebtedness of such Subsidiary Guarantor
shall be entitled to receive payment in full of such Senior Indebtedness
in cash or Temporary Cash Investments before Securityholders shall be
entitled to receive any payment pursuant to any Obligations of such
Subsidiary Guarantor; and
(2) until the Senior Indebtedness of any Subsidiary Guarantor is
paid in full in cash or Temporary Cash Investments, any payment or
distribution to which Securityholders would be entitled but for this
Article 3 shall be made to holders of such Senior Indebtedness as their
interests may appear, except that Securityholders may receive shares of
stock and any debt securities of such Subsidiary Guarantor that are
subordinated to Senior Indebtedness, and to any debt securities received
by holders of Senior Indebtedness, of such Subsidiary Guarantor to at
least the same extent as the Obligations of such Subsidiary Guarantor are
subordinated to Senior Indebtedness of such Subsidiary Guarantor.
SECTION 3.03. Default on Senior Indebtedness of Subsidiary Guarantor. No
Subsidiary Guarantor may make any payment pursuant to any of its Obligations or
repurchase, redeem or otherwise retire or defease any Securities or other
Obligations (collectively, "pay its Subsidiary Guarantee") if (i) any Designated
Senior Indebtedness of the Company is not paid in full in cash or Temporary Cash
Investments when due or (ii) any other default on Designated Senior Indebtedness
of the Company occurs and the maturity of such Designated Senior Indebtedness is
accelerated in accordance with its terms unless, in either case, (x) the default
has been cured or waived and any such acceleration has been rescinded or (y)
such Designated Senior Indebtedness has been paid in full in cash or Temporary
Cash Investments; provided, however, that any Subsidiary Guarantor may pay its
Subsidiary Guarantee
7
without regard to the foregoing if such Subsidiary Guarantor and the Trustee
receive written notice approving such payment from the Representatives of the
Designated Senior Indebtedness. No Subsidiary Guarantor may pay its Subsidiary
Guarantee during the continuance of any Payment Blockage Period after receipt by
the Company and the Trustee of a Blockage Notice under Section 10.03 of the
Indenture. Notwithstanding the provisions described in the immediately preceding
sentence (but subject to the provisions contained in the first sentence of this
Section), unless the holders of Designated Senior Indebtedness giving such
Blockage Notice or the Representative of such holders shall have accelerated the
maturity of such Designated Senior Indebtedness, any Subsidiary Guarantor may
resume payments pursuant to its Subsidiary Guarantee after termination of such
Payment Blockage Period.
SECTION 3.04. Demand for Payment. If a demand for payment is made on a
Subsidiary Guarantor pursuant to Article 2, the Trustee shall promptly notify
the holders of the Designated Senior Indebtedness (or their Representatives) of
such demand.
SECTION 3.05. When Distribution Must Be Paid Over. If a distribution is
made to Securityholders that because of this Article 3 should not have been made
to them, the Securityholders who receive the distribution shall hold it in trust
for holders of the relevant Senior Indebtedness and pay it over to them or their
Representatives as their interests may appear.
SECTION 3.06. Subrogation. After all Senior Indebtedness of a Subsidiary
Guarantor is paid in full and until the Securities are paid in full,
Securityholders shall be subrogated to the rights of holders of such Senior
Indebtedness to receive distributions applicable to Senior Indebtedness. A
distribution made under this Article 3 to holders of such Senior Indebtedness
which otherwise would have been made to Securityholders is not, as between the
relevant Subsidiary Guarantor and Securityholders, a payment by such Subsidiary
Guarantor on such Senior Indebtedness.
SECTION 3.07. Relative Rights. This Article 3 defines the relative rights
of Securityholders and holders of Senior Indebtedness of a Subsidiary Guarantor.
Nothing in this Agreement or the Indenture shall:
(1) impair, as between a Subsidiary Guarantor and Securityholders,
the obligation of such Subsidiary
8
Guarantor, which is absolute and unconditional, to pay the Obligations to
the extent set forth in Article 2; or
(2) prevent the Trustee or any Securityholder from exercising its
available remedies upon a default by such Subsidiary Guarantor under the
Obligations, subject to the rights of holders of Senior Indebtedness of
such Subsidiary Guarantor to receive distributions otherwise payable to
Securityholders.
SECTION 3.08. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Indebtedness of any Subsidiary Guarantor to enforce the
subordination of the Obligations of such Subsidiary Guarantor shall be impaired
by any act or failure to act by such Subsidiary Guarantor or by its failure to
comply with the Indenture.
SECTION 3.09. Rights of Trustee and Paying Agent. Notwithstanding Section
3.03, the Trustee or Paying Agent may continue to make payments on any
Subsidiary Guarantee and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less than
two Business Days prior to the date of such payment, a Trust Officer of the
Trustee receives written notice satisfactory to it that payments may not be made
under this Article 3. The Company, the relevant Subsidiary Guarantor, the
Registrar or co-registrar, the Paying Agent, a Representative or a holder of
Senior Indebtedness of any Subsidiary Guarantor may give the notice; provided,
however, that, if an issue of Senior Indebtedness of any Subsidiary Guarantor
has a Representative, only the Representative may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not the Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article 3 with respect to any Senior Indebtedness of any Subsidiary Guarantor
which may at any time be held by it, to the same extent as any other holder of
Senior Indebtedness; and nothing in Article 7 of the Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article 3 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
7.07 of the Indenture.
SECTION 3.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Indebtedness
of any Subsidiary Guarantor,
9
the distribution may be made and the notice given to their Representative (if
any).
SECTION 3.11. Article 3 Not To Prevent Defaults Under a Subsidiary
Guarantee or Limit Right To Demand Payment. The failure to make a payment
pursuant to a Subsidiary Guarantee by reason of any provision in this Article 3
shall not be construed as preventing the occurrence of a default under such
Subsidiary Guarantee. Nothing in this Article 3 shall have any effect on the
right of the Securityholders or the Trustee to make a demand for payment on any
Subsidiary Guarantor pursuant to Article 2.
SECTION 3.12. Trustee Entitled To Rely. Upon any payment or distribution
pursuant to this Article 3, the Trustee and the Securityholders shall be
entitled to rely (i) upon any order or decree of a court of competent
jurisdiction in which any proceedings of the nature referred to in Section 3.02
are pending, (ii) upon a certificate of the liquidating trustee or agent or
other Person making such payment or distribution to the Trustee or to the
Securityholders or (iii) upon the Representatives for the holders of Senior
Indebtedness of any Subsidiary Guarantor for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the holders of
such Senior Indebtedness and other indebtedness of such Subsidiary Guarantor,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 3. In the event
that the Trustee determines, in good faith, that evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness of any
Subsidiary Guarantor to participate in any payment or distribution pursuant to
this Article 3, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
of such Subsidiary Guarantor held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article 3, and, if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment. The provisions of Sections 7.01 and 7.02 of the Indenture shall be
applicable to all actions or omissions of actions by the Trustee pursuant to
this Article 3.
SECTION 3.13. Trustee To Effectuate Subordination. Each Securityholder by
accepting a Security authorizes and directs the Trustee on his behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
10
subordination between the Securityholders and the holders of Senior Indebtedness
of any Subsidiary Guarantor as provided in this Article 3 and appoints the
Trustee as attorney-in-fact for any and all such purposes.
SECTION 3.14. Trustee Not Fiduciary for Holders of Senior Indebtedness of
Subsidiary Guarantor. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness of any Subsidiary Guarantor and shall not
be liable to any such holders if it shall mistakenly pay over or distribute to
Securityholders or the Company or any other Person, money or assets to which any
holders of such Senior Indebtedness shall be entitled by virtue of this Article
3 or otherwise.
SECTION 3.15. Reliance by Holders of Senior Indebtedness on Subordination
Provisions. The Indenture provides that each Securityholder by accepting a
Security acknowledges and agrees that the foregoing subordination provisions
are, and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness of any Subsidiary Guarantor, whether such Senior
Indebtedness was created or acquired before or after the issuance of the
Securities, to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed conclusively
to have relied on such subordination provisions in acquiring and continuing to
hold, or in continuing to hold, such Senior Indebtedness.
ARTICLE 4
Miscellaneous
SECTION 4.01. Notices. All notices and other communications pertaining to
this Guarantee Agreement shall be in writing and shall be deemed to have been
duly given upon the receipt thereof. Such notices shall be delivered by hand, or
mailed, certified or registered mail with postage prepaid (a) if to the
Guarantor, at the Company's address set forth in the Indenture, and (b) if to
the Holders or the Trustee, as provided in the Indenture.
SECTION 4.02. PartiesNothing expressed or mentioned in this Guarantee
Agreement 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 Guarantee Agreement or any
provision herein contained.
11
SECTION 4.03. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 4.04. Severability Clause. In case any provision of this Guarantee
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be ineffective
only to the extent of such invalidity, illegality or unenforceability.
SECTION 4.05. Waivers, Amendments and Remedies. The failure to insist in
any one or more instances upon strict performance of any of the provisions of
this Guarantee Agreement or to take advantage of any of its rights hereunder
shall not be construed as a waiver of any such provisions or the relinquishment
of any such rights, but the same shall continue and remain in full force and
effect. Except as otherwise expressly limited in this Guarantee Agreement, all
remedies under this Guarantee Agreement shall be cumulative and in addition to
every other remedy provided for herein or by law.
SECTION 4.06. Headings.The headings of the Articles and the sections in
this Guarantee Agreement 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.
IN WITNESS WHEREOF, the Subsidiary Guarantors have duly executed this
Guarantee Agreement as of the date first above written.
[SUBSIDIARY GUARANTOR],
by
------------------------
Name:
Title:
[SUBSIDIARY GUARANTOR],
by
------------------------
Name:
Title:
12
Acknowledged:
WEIGHT WATCHERS INTERNATIONAL, INC.,
by
-----------------------
Name:
Title:
[TRUSTEE,]
as Trustee,
by
-----------------------
Name:
Title: