EXHIBIT 4.2
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BARNEY'S, INC.
and each of the Guarantors named herein
9.000% SENIOR SECURED NOTES DUE 2008
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INDENTURE
Dated as of April 1, 2003
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Wilmington Trust Company
Trustee
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)................................................................................ 7.10
(a)(2).............................................................................. 7.10
(a)(3).............................................................................. N.A.
(a)(4).............................................................................. N.A.
(a)(5).............................................................................. 7.10
(b)................................................................................. 7.10
(c)................................................................................. N.A.
311(a)................................................................................... 7.11
(b)................................................................................. 7.11
(c)................................................................................. N.A.
312(a)................................................................................... 2.05
(b)................................................................................. 12.03
(c)................................................................................. 12.03
313(a)................................................................................... 7.06
(b)(1).............................................................................. 4.22
(b)(2).............................................................................. 7.06; 7.07
(c)................................................................................. 7.06; 12.02
(d)................................................................................. 7.06
314(a)................................................................................... 4.03;12.02; 12.05
(b)................................................................................. 4.22
(c)(1).............................................................................. 12.04
(c)(2).............................................................................. 12.04
(c)(3).............................................................................. N.A.
(d)................................................................................. 4.22
(e)................................................................................. 4.22
(f)................................................................................. N.A.
315(a)................................................................................... 7.01
(b)................................................................................. 7.05,12.02
(c)................................................................................. 7.01
(d)................................................................................. 7.01
(e)................................................................................. 6.11
316(a) (last sentence)................................................................... 2.09
(a)(1)(A)........................................................................... 6.05
(a)(1)(B)........................................................................... 6.04
(a)(2).............................................................................. N.A.
(b)................................................................................. 6.07
(c)................................................................................. 2.12
317(a)(1)................................................................................ 6.08
(a)(2).............................................................................. 6.09
(b)................................................................................. 2.04
318(a)................................................................................... 12.01
(b)................................................................................. N.A.
(c)................................................................................. 12.01
N.A. means not applicable.
* This Cross Reference Table is not part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.........................................................................................1
Section 1.02 Other Definitions..................................................................................25
Section 1.03 Incorporation by Reference of Trust Indenture Act..................................................26
Section 1.04 Rules of Construction..............................................................................26
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating....................................................................................27
Section 2.02 Execution and Authentication.......................................................................28
Section 2.03 Registrar and Paying Agent.........................................................................28
Section 2.04 Paying Agent to Hold Money in Trust................................................................28
Section 2.05 Holder Lists.......................................................................................29
Section 2.06 Transfer and Exchange..............................................................................29
Section 2.07 Replacement Notes..................................................................................41
Section 2.08 Outstanding Notes..................................................................................41
Section 2.09 Treasury Notes.....................................................................................42
Section 2.10 Temporary Notes....................................................................................42
Section 2.11 Cancellation.......................................................................................42
Section 2.12 Defaulted Interest.................................................................................42
Section 2.13 CUSIP or ISIN Numbers..............................................................................43
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.................................................................................43
Section 3.02 Selection of Notes to Be Redeemed or Purchased.....................................................43
Section 3.03 Notice of Redemption...............................................................................44
Section 3.04 Effect of Notice of Redemption.....................................................................44
Section 3.05 Deposit of Redemption or Purchase Price............................................................45
Section 3.06 Notes Redeemed or Purchased in Part................................................................45
Section 3.07 Optional Redemption................................................................................45
Section 3.08 Mandatory Redemption...............................................................................46
Section 3.09 Offer to Purchase by Application of Excess Proceeds................................................46
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes...................................................................................47
Section 4.02 Maintenance of Office or Agency....................................................................48
Section 4.03 Reports............................................................................................48
Section 4.04 Compliance Certificate.............................................................................49
Section 4.05 Taxes..............................................................................................50
Section 4.06 Stay, Extension and Usury Laws.....................................................................50
Section 4.07 Restricted Payments................................................................................50
Section 4.08 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries..........................52
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.........................................54
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Section 4.10 Asset Sales........................................................................................54
Section 4.11 Transactions with Affiliates.......................................................................56
Section 4.12 Liens..............................................................................................57
Section 4.13 Business Activities................................................................................57
Section 4.14 Corporate Existence................................................................................57
Section 4.15 Change of Control..................................................................................58
Section 4.16 Limitation on Issuances and Sales of Equity Interests in Wholly Owned Restricted Subsidiaries......59
Section 4.17 Payments for Consent...............................................................................59
Section 4.18 Additional Subsidiary Guarantees and Note Liens....................................................60
Section 4.19 Further Assurances; Expense Reimbursement..........................................................60
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries............................................61
Section 4.21 Restrictions on Activities of Holdings.............................................................62
Section 4.22 Filing, Recording and Opinions.....................................................................62
Section 4.23 Excess Cash Flow Offers............................................................................63
Section 4.24 Limitation of Capital Expenditures.................................................................64
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets...........................................................65
Section 5.02 Successor Corporation Substituted..................................................................66
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default..................................................................................66
Section 6.02 Acceleration.......................................................................................68
Section 6.03 Other Remedies.....................................................................................68
Section 6.04 Waiver of Past Defaults............................................................................68
Section 6.05 Control by Majority................................................................................69
Section 6.06 Limitation on Suits................................................................................69
Section 6.07 Rights of Holders of Notes to Receive Payment......................................................69
Section 6.08 Collection Suit by Trustee.........................................................................69
Section 6.09 Trustee May File Proofs of Claim...................................................................70
Section 6.10 Priorities.........................................................................................70
Section 6.11 Undertaking for Costs..............................................................................70
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee..................................................................................71
Section 7.02 Rights of Trustee..................................................................................72
Section 7.03 Individual Rights of Trustee.......................................................................72
Section 7.04 Trustee's Disclaimer...............................................................................73
Section 7.05 Notice of Defaults.................................................................................73
Section 7.06 Reports by Trustee to Holders of the Notes.........................................................73
Section 7.07 Compensation and Indemnity.........................................................................73
Section 7.08 Replacement of Trustee.............................................................................74
Section 7.09 Successor Trustee by Merger, etc...................................................................75
Section 7.10 Eligibility; Disqualification......................................................................75
Section 7.11 Preferential Collection of Claims Against Company..................................................75
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ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance...........................................75
Section 8.02 Legal Defeasance and Discharge.....................................................................75
Section 8.03 Covenant Defeasance................................................................................76
Section 8.04 Conditions to Legal or Covenant Defeasance.........................................................76
Section 8.05 Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions......78
Section 8.06 Repayment to Company...............................................................................78
Section 8.07 Reinstatement......................................................................................78
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes................................................................79
Section 9.02 With Consent of Holders of Notes...................................................................80
Section 9.03 Compliance with Trust Indenture Act................................................................81
Section 9.04 Revocation and Effect of Consents..................................................................81
Section 9.05 Notation on or Exchange of Notes...................................................................82
Section 9.06 Trustee to Sign Amendments, etc....................................................................82
ARTICLE 10.
NOTE GUARANTEES
Section 10.01 Guarantee..........................................................................................82
Section 10.02 Limitation on Guarantor Liability..................................................................83
Section 10.03 Execution and Delivery of Note Guarantee...........................................................83
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.................................................84
Section 10.05 Releases Following Sale of Assets..................................................................85
ARTICLE 11.
satisfaction and discharge
Section 11.01 Satisfaction and Discharge.........................................................................85
Section 11.02 Application of Trust Money.........................................................................86
ARTICLE 12.
ranking of note liens
Section 12.01 Agreement for the Benefit of Holders of Priority...................................................86
Section 12.02 Ranking............................................................................................87
Section 12.03 Collateral Sharing with Additional Notes...........................................................87
Section 12.04 Restriction on Enforcement of Note Liens...........................................................87
Section 12.05 Insolvency or Liquidation Proceedings..............................................................90
Section 12.06 Release of Collateral or Note Guarantees upon Sale or Other Disposition............................91
Section 12.07 Amendment of Security Documents....................................................................93
Section 12.08 Waiver of Certain Subrogation, Marshalling, Appraisal and Valuation Rights.........................93
Section 12.09 Limitation on Certain Relief and Defenses..........................................................95
Section 12.10 Reinstatement......................................................................................96
Section 12.11 Amendment; Waiver..................................................................................97
Section 12.12 Enforcement........................................................................................98
Section 12.13 Notes, Note Guarantees and other Note Obligations not Subordinated.................................99
Section 12.14 Relative Rights....................................................................................99
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ARTICLE 13.
COLLATERAL AND SECURITY
Section 13.01 Security Documents.................................................................................99
Section 13.02 Collateral Agent..................................................................................100
Section 13.03 Authorization of Actions to Be Taken..............................................................100
Section 13.04 Release of Note Liens.............................................................................101
ARTICLE 14.
MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls......................................................................102
Section 14.02 Notices...........................................................................................102
Section 14.03 Communication by Holders of Notes with Other Holders of Notes.....................................104
Section 14.04 Certificate and Opinion as to Conditions Precedent................................................104
Section 14.05 Statements Required in Certificate or Opinion.....................................................104
Section 14.06 Rules by Trustee and Agents.......................................................................104
Section 14.07 No Personal Liability of Directors, Officers, Employees and Stockholders..........................104
Section 14.08 Governing Law.....................................................................................105
Section 14.09 No Adverse Interpretation of Other Agreements.....................................................105
Section 14.10 Successors........................................................................................105
Section 14.11 Severability......................................................................................105
Section 14.12 Counterpart Originals.............................................................................105
Section 14.13 Table of Contents, Headings, etc..................................................................105
EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of April 1, 2003 among Barney's, Inc., a Delaware
corporation (the "Company"), the Guarantors (as defined) and Wilmington Trust
Company, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders (as
defined) of the 9.000% Senior Secured Notes due 2008 (the "Notes"):
ARTICLE 1.
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01 Definitions.
"144A Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount at maturity of the Notes sold in reliance on Rule
144A.
"Accreted Value" means, as of any date (the "Specified Date"), with respect
to each $1,000 principal amount at maturity of Notes:
(1) if the Specified Date is one of the following dates (each, a
"Semi-Annual Accrual Date"), the amount set forth opposite such date below:
SEMI-ANNUAL ACCRUAL DATE ACCRETED VALUE
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April 1, 2003..............................................$ 850.00
October 1, 2003............................................$ 863.93
April 1, 2004..............................................$ 878.08
October 1, 2004............................................$ 892.47
April 1, 2005..............................................$ 907.09
October 1, 2005............................................$ 921.95
April 1, 2006..............................................$ 937.06
October 1, 2006............................................$ 952.41
April 1, 2007..............................................$ 968.02
October 1, 2007............................................$ 983.88
April 1, 2008..............................................$1,000.00
(2) if the Specified Date occurs between two Semi-Annual Accrual
Dates, the sum of (A) the Accreted Value for the Semi-Annual Accrual Date
immediately preceding the Specified Date and (B) an amount equal to the product
of (a) the difference of (x) the Accreted Value for the immediately following
Semi-Annual Accrual Date and (y) the Accreted Value for the immediately
preceding Semi-Annual Accrual Date and (b) a fraction, the numerator of which is
the number of days actually lapsed from the immediately preceding Semi-Annual
Accrual Date to the Specified Date and the denominator of which is the number of
days between the two Semi-Annual Accrual Dates.
"Acquired Debt" means, with respect to any specified Person:
(1) Indebtedness of any other Person existing at the time
such other Person is merged with or into or becomes a Subsidiary of
such specified Person, whether or not such Indebtedness is incurred
in connection with, or in contemplation of, such other Person merging
with or into, or becoming a Subsidiary of, such specified Person; and
(2) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means an unlimited amount of Notes (other than the
Notes offered hereby) issued under and in accordance with this Indenture, as
part of the same class as the Notes offered hereby.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person will be deemed to be control; provided, further, that
as of the date hereof Isetan and its Affiliates will not be deemed to be
Affiliates of Holdings, the Company or any of their Subsidiaries. For purposes
of this definition, the terms "controlling," "controlled by" and "under common
control with" have correlative meanings.
"Agent" means any Registrar, co-registrar, Paying Agent or additional
paying agent.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any
assets or rights; provided that the sale, conveyance or other
disposition of all or substantially all of the assets of the Company
and its Subsidiaries taken as a whole will be governed by Section
4.15 and/or Section 5.01 and not by Section 4.10; and
(2) the issuance of Equity Interests in any of the
Company's Restricted Subsidiaries or the sale of Equity Interests in
any of its Subsidiaries.
Notwithstanding the preceding, none of the following items
will be deemed to be an Asset Sale:
(1) any single transaction or series of related
transactions that involves assets having a fair market value of less
than $1.0 million;
(2) the sale, lease, conveyance or other disposition of
assets between or among the Company and its Restricted Subsidiaries;
(3) an issuance of Equity Interests by a Restricted
Subsidiary to the Company or to another Restricted Subsidiary;
(4) the sale or lease of equipment, inventory or accounts
receivable (included defaulted receivables) in the ordinary course of
business;
(5) the sale or other disposition of cash or Cash
Equivalents;
(6) a Restricted Payment or Permitted Investment that is
permitted by Section 4.07;
2
(7) the sale or other disposition of equipment that is
obsolete or no longer used or useful in the business of the Company
or any of its Restricted Subsidiaries;
(8) the granting of any Lien in compliance with the terms
of this Indenture; and
(9) grants of licenses to use intellectual property in the
ordinary course of business.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Bay Harbour" means Bay Harbour Management L.C.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act. The terms "Beneficially Owns" and
"Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors
of the corporation;
(2) with respect to a partnership, the Board of Directors
of the general partner of the partnership; and
(3) with respect to any other Person, the board or
committee of such Person serving a similar function.
"Board Resolution" means a copy of a resolution certified by the
Secretary or Assistant Secretary of the applicable Person to have been duly
adopted by the Board of Directors of such Person and to be in full force and
effect on the date of such certification.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Expenditures" means, for any period, all direct or indirect
(by way of acquisition of securities of a Person or the expenditure of cash or
the transfer of property or the incurrence of Indebtedness) expenditures in
respect of the purchase or other acquisition of fixed or capital assets
determined in conformity with GAAP, excluding (i) normal replacement and
maintenance programs properly charged to current operations, and (ii) the
purchase price of equipment to the extent that the consideration therefor
consists of used, worn out, damaged, obsolete or surplus equipment being traded
in at such time or the proceeds of a concurrent sale of such used, worn out,
damaged, obsolete or surplus equipment.
"Capital Lease Obligation" means, at the time any determination is to
be made, the amount of the liability in respect of a capital lease that would at
that time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means:
(1) in the case of a corporation, corporate stock;
3
(2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other
equivalents (however designated) of corporate stock;
(3) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or
limited); and
(4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means:
(1) securities issued or directly and fully guaranteed or
insured by the United States government or any agency or
instrumentality of the United States government (provided that the
full faith and credit of the United States is pledged in support of
those securities) having maturities of not more than one year from
the date of acquisition;
(2) marketable general obligations of any State of the
United States of America or any political subdivision of any such
State maturing within one year from the date of acquisition thereof
and, at the time of acquisition, having the highest available credit
rating from either ▇▇▇▇▇'▇ Investors Service, Inc. or Standard &
Poor's Rating Services;
(3) certificates of deposit, eurodollar time deposits and
bankers' acceptances, in each case, with maturities of one year or
less from the date of acquisition and overnight bank deposits, in
each case, with any lender party to the Credit Agreement or any
domestic commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than
seven days for underlying securities of the types described in
clauses (1), (2) and (3) above entered into with any financial
institution meeting the qualifications specified in clause (3) above;
(5) commercial paper having the highest rating obtainable
from ▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Rating
Services and in each case maturing within one year after the date of
acquisition; and
(6) money market funds at least 95% of the assets of which
constitute cash and Cash Equivalents of the kinds described in
clauses (1) through (5) of this definition.
"Change of Control" means the occurrence of any of the following:
(1) the direct or indirect sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or substantially all
of the properties or assets of the Company and its Restricted
Subsidiaries taken as a whole to any "person" (as that term is used
in Section 13(d)(3) of the Exchange Act) other than a Principal or a
Related Party of a Principal;
(2) the adoption of a plan relating to the liquidation or
dissolution of the Company or Holdings;
(3) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that
any "person" (as defined above), other than the Principals and their
4
Related Parties or a Permitted Group, becomes the Beneficial Owner,
directly or indirectly, of more than 50% of the Voting Stock of
Holdings, measured by voting power rather than number of shares;
(4) the first day on which a majority of the members of the
Board of Directors of Holdings are not Continuing Directors; or
(5) the first day on which Holdings ceases to own 100% of
the outstanding Equity Interests of the Company, Beneficially and of
record.
"Clearstream" means Clearstream Banking, S.A., and any successor
thereto.
"Collateral" means all of the property in which the Company or any
Guarantor now or hereafter has rights or the power to pledge or transfer a
security interest to secure the Note Obligations pursuant to the Security
Documents, including all of the assets that are subject to the Priority Liens.
"Collateral Agent" means the Trustee in its capacity as the holder of
Liens granted to it pursuant to the Security Documents and any successor in such
capacity.
"Commission" means the Securities and Exchange Commission.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net
loss realized by such Person or any of its Restricted Subsidiaries in
connection with an Asset Sale, to the extent such losses were
deducted in computing such Consolidated Net Income; plus
(2) provision for taxes based on income or profits of such
Person and its Restricted Subsidiaries for such period, to the extent
that such provision for taxes was deducted in computing such
Consolidated Net Income; plus
(3) consolidated interest expense of such Person and its
Restricted Subsidiaries for such period, whether paid or accrued and
whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount,
non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments
associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net of the effect of all payments
made or received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net
Income; plus
(4) any non-recurring expenses and charges of such Person
or any of its Restricted Subsidiaries; plus
(5) depreciation, amortization (including amortization of
goodwill and other intangibles but excluding amortization of prepaid
cash expenses that were paid in a prior period) and other non-cash
expenses (excluding any such non-cash expense to the extent that it
represents an accrual of or reserve for cash expenses in any future
period or amortization of a prepaid cash expense that was paid in a
prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other
non-cash expenses were deducted in computing such Consolidated Net
Income; minus
5
(6) non-cash items increasing such Consolidated Net Income
for such period, other than the accrual of revenue in the ordinary
course of business,
in each case, on a consolidated basis and determined in accordance
with GAAP.
"Consolidated Net Income" means, with respect to any specified Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that:
(1) the Net Income of any Person that is not a Restricted
Subsidiary or that is accounted for by the equity method of
accounting will be included only to the extent of the amount of
dividends or distributions paid in cash to the specified Person or a
Restricted Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will be
excluded to the extent that the declaration or payment of dividends
or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any
prior governmental approval (that has not been obtained) or, directly
or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or
its stockholders;
(3) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such
acquisition will be excluded;
(4) the cumulative effect of a change in accounting
principles will be excluded; and
(5) the Net Income of any Unrestricted Subsidiary will be
included only to the extent distributed to the specified Person or
one of its Restricted Subsidiaries.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of Holdings who:
(1) was a member of such Board of Directors on the date of
this Indenture;
(2) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors
who were members of such Board at the time of such nomination or
election; or
(3) was nominated to serve on the Board of Directors by one
or more of the Principals pursuant to the Stockholders Agreement or
any other similar agreement.
"Corporate Trust Office of the Trustee" will be at the address of the
Trustee specified in Section 14.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means the Restated Credit Agreement, dated as of
April 1, 2003, entered into by the Company and the Subsidiary Guarantors party
thereto and led by General Electric Capital Corporation, providing for up to
$70.0 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, restated, modified, renewed,
refunded, replaced or refinanced from time to time.
6
"Credit Agreement Agent" means, at any time, the Person serving at
such time as the "Agent" or "Administrative Agent" under the Credit Agreement or
any other representative of the Lenders then most recently designated by the
Majority Lenders, in a written notice delivered to the Trustee and the
Collateral Agent, as the Credit Agreement Agent for the purposes of this
Indenture.
"Credit Bid Rights" means, in respect of any order relating to a sale
of assets in any Insolvency or Liquidation Proceeding, that:
(1) such order grants the Holders of Notes (individually
and in any combination) the right to bid at the sale of such assets
and the right to offset such holders' claims secured by Note Liens
upon such assets against the purchase price of such assets if:
(a) the bid of such holders is the highest bid or
otherwise determined by the Court to be the best offer at
the sale; and
(b) the bid of such holders includes a cash
purchase price component payable at the closing of the sale
in an amount that would be sufficient on the date of the
closing of the sale, if such amount were applied to such
payment on such date, to pay all unpaid Priority Lien
Obligations (except Unasserted Contingent Obligations) and
to satisfy all liens entitled to priority over the Priority
Liens that attach to the proceeds of the sale, and such
order requires or permits such amount to be so applied; and
(2) such order allows the claims of the Holders of Notes in
such insolvency or liquidation proceeding to the extent required for
the grant of such rights.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name of
the Holder thereof and issued in accordance with Section 2.06 hereof,
substantially in the form of Exhibit A hereto except that such Note shall not
bear the Global Note Legend and shall not have the "Schedule of Exchanges of
Interests in the Global Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Discharge of Credit Agreement Obligations" means termination of all
commitments to extend credit that would constitute Priority Lien Debt
outstanding under the Credit Agreement, payment in full in cash of the principal
of and interest and premium (if any) on all Priority Lien Debt outstanding under
the Credit Agreement (except undrawn letters of credit), discharge or cash
7
collateralization (at 105% of the aggregate undrawn amount) of all letters of
credit outstanding under the Credit Agreement, and payment in full in cash of
all other Priority Lien Obligations (except Unasserted Contingent Obligations)
that are outstanding under the Credit Agreement and unpaid at the time the
Priority Lien Debt outstanding under the Credit Agreement is paid in full in
cash.
"Discharge of Priority Lien Obligations" means termination of all
commitments to extend credit that would constitute Priority Lien Debt, payment
in full in cash of the principal of and interest and premium (if any) on all
Priority Lien Debt (except undrawn letters of credit), discharge or cash
collateralization (at 105% of the aggregate undrawn amount) of all letters of
credit outstanding under any Priority Lien Debt, and payment in full in cash of
all other Priority Lien Obligations (except Unasserted Contingent Obligations)
that are outstanding and unpaid at the time the Priority Lien Debt is paid in
full in cash.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder of the Capital Stock), or
upon the happening of any event, matures or is mandatorily redeemable, pursuant
to a sinking fund obligation or otherwise, or is redeemable at the option of the
holder of the Capital Stock, in whole or in part, on or prior to the date that
is 91 days after the date on which the Notes mature. Notwithstanding the
preceding sentence, any Capital Stock that would constitute Disqualified Stock
solely because the holders of the Capital Stock have the right to require the
Company to repurchase such Capital Stock upon the occurrence of a change of
control or an asset sale will not constitute Disqualified Stock if the terms of
such Capital Stock provide that the Company may not repurchase or redeem any
such Capital Stock pursuant to such provisions unless such repurchase or
redemption complies with Section 4.07.
"Domestic Restricted Subsidiary" means any Restricted Subsidiary of
the Company that was formed under the laws of the United States or any State of
the United States or the District of Columbia or that guarantees or otherwise
provides direct credit support for any other Indebtedness of the Company or any
other Guarantor.
"DTC" means The Depository Trust Company.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Euroclear Bank, S.A./N.V., as operator of the
Euroclear systems, and any successor thereto.
"Excess Cash Flow" means, for any fiscal year, the Company's
Consolidated Cash Flow for such year, adjusted as follows: (i) minus the cash
portion of the Company's consolidated interest expense (net of interest income)
and any related financing fees for such year; (ii) minus all federal, state and
foreign income taxes and franchise taxes paid (without duplication) by the
Company and its Subsidiaries during such year; (iii) minus all Capital
Expenditures made during such year by the Company and its Subsidiaries; (iv)
minus any net increase in Working Capital for such year; and (v) plus any net
decrease in Working Capital for such year.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" has the meaning set forth in the Registration Rights
Agreement.
8
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Exchange Securities" has the meaning assigned to it in the
Registration Rights Agreement.
"Existing Agreements" means (1) the Existing Registration Rights
Agreements, (2) the employment agreement dated as of January 8, 2001, as amended
on January 10, 2003, between Barneys New York, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇, (3) the
restricted stock award agreement dated as of February 2, 2003 between Barneys
New York, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇, (4) the license agreement dated as of January
28, 1999 between Barney's, Inc., BNY Licensing Corp. and Barneys Japan Co.,
Ltd., (5) the license agreement dated as of January 28, 1999 between Barney's,
Inc., BNY Licensing Corp. and Barneys Asia Co. LLC and (6) the letter agreement
dated January 28, 1999 among Bay Harbour, Whippoorwill/Barneys Obligations Trust
-- ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, Inc. and Isetan of America Inc.
"Existing Indebtedness" means Indebtedness of the Company and its
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of this Indenture, until such amounts are repaid.
"Existing Registration Rights Agreements" means (1) the registration
rights agreement dated as of January 28, 1999, as amended as of February 1,
2000, among Barneys New York, Inc., Bay Harbour, Whippoorwill/Barneys
Obligations Trust -- 1996 and Isetan of America Inc. and (2) the registration
rights agreement dated as of January 8, 2001 between Barneys New York, Inc. and
▇▇▇▇▇▇ ▇▇▇▇▇.
"Fixed Charge Coverage Ratio" means with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, guarantees, repays, repurchases or redeems any Indebtedness (other than
ordinary working capital borrowings) or issues, repurchases or redeems preferred
stock subsequent to the commencement of the period for which the Fixed Charge
Coverage Ratio is being calculated and on or prior to the date on which the
event for which the calculation of the Fixed Charge Coverage Ratio is made (the
"Calculation Date"), then the Fixed Charge Coverage Ratio will be calculated
giving pro forma effect to such incurrence, assumption, guarantee, repayment,
repurchase or redemption of Indebtedness, or such issuance, repurchase or
redemption of preferred stock, and the use of the proceeds therefrom as if the
same had occurred at the beginning of the applicable four-quarter reference
period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(1) acquisitions that have been made by the specified
Person or any of its Restricted Subsidiaries, including through
mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent
to such reference period and on or prior to the Calculation Date will
be given pro forma effect as if they had occurred on the first day of
the four-quarter reference period and Consolidated Cash Flow for such
reference period will be calculated on a pro forma basis in
accordance with Regulation S-X under the Securities Act, but without
giving effect to clause (3) of the proviso set forth in the
definition of Consolidated Net Income;
(2) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be
excluded; and
9
(3) the Fixed Charges attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, will be
excluded, but only to the extent that the obligations giving rise to
such Fixed Charges will not be obligations of the specified Person or
any of its Restricted Subsidiaries following the Calculation Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of:
(1) the consolidated interest expense of such Person and
its Restricted Subsidiaries for such period, whether paid or accrued,
including, without limitation, amortization of debt issuance costs
and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations,
commissions, discounts and other fees and charges incurred in respect
of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging
Obligations; plus
(2) the consolidated interest expense of such Person and
its Restricted Subsidiaries that was capitalized during such period
(other than debt issuance costs); plus
(3) any interest expense on Indebtedness of another Person
that is guaranteed by such Person or one of its Restricted
Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such guarantee or Lien is
called upon; plus
(4) the product of (a) all dividends, whether paid or
accrued and whether or not in cash, on any series of preferred stock
of such Person or any of its Restricted Subsidiaries, other than
dividends on Equity Interests payable solely in Equity Interests of
the Company (other than Disqualified Stock) or to the Company or a
Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus
the then current combined Federal, State and local statutory tax rate
of such Person, expressed as a decimal, in each case, on a
consolidated basis and in accordance with GAAP.
"Flagship Store" means each store of the Company existing on the
date hereof located:
(1) on Madison Avenue in New York, New York;
(2) in Beverly Hills, California; and
(3) in Chicago, Illinois.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Note Legend" means the legend set forth in Section
2.06(g)(2), which is required to be placed on all Global Notes issued under this
Indenture.
10
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, substantially in the
form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(3),
2.06(b)(4), 2.06(d)(2) or 2.06(f) hereof.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America, and the payment for which the
United States pledges its full faith and credit.
"guarantee" means a guarantee other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means each of:
(1) Holdings;
(2) the Subsidiary Guarantors; and
(3) any other Subsidiary that executes a Note Guarantee in
accordance with the provisions of this Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under:
(1) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, foreign exchange
contracts and currency swap agreements; and
(2) other agreements or arrangements designed to protect
such Person against fluctuations in interest rates and/or currency
values.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means Barneys New York, Inc. and its successors and
assigns.
"Holdings' Guarantee" means the guarantee of the Notes by Holdings.
"IAI Global Note" means a Global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of, and registered in the name of, the
Depositary or its nominee that will be issued in a denomination equal to the
outstanding principal amount at maturity of the Notes sold to Institutional
Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar
instruments or letters of credit (or reimbursement agreements in
respect thereof);
(3) in respect of banker's acceptances;
11
(4) representing Capital Lease Obligations;
(5) representing the balance deferred and unpaid of the
purchase price of any property, except any such balance that
constitutes an accrued expense or trade payable; or
(6) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of
any Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with
any interest on the Indebtedness that is more than 30 days past due,
in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a Person who holds a beneficial interest
in a Global Note through a Participant.
"Initial Notes" means the first $106.0 million aggregate principal
amount at maturity of Notes issued under this Indenture on the date hereof.
"Initial Purchaser" means ▇▇▇▇▇▇▇▇▇ & Company, Inc.
"Insolvency or Liquidation Proceeding" means:
(1) any case commenced by or against the Company or any
other Obligor under any Bankruptcy Law, any other proceeding for the
reorganization, recapitalization or adjustment or marshalling of the
assets or liabilities of the Company or any other Obligor, any
receivership or assignment for the benefit of creditors relating to
the Company or any other Obligor or any similar case or proceeding
relative to the Company or any other Obligor or its creditors, as
such, in each case whether or not voluntary;
(2) any liquidation, dissolution, marshalling of assets or
liabilities or other winding up of or relating to the Company or any
other Obligor, in each case whether or not voluntary and whether or
not involving bankruptcy or insolvency; or
(3) any other proceeding of any type or nature in which
substantially all claims of creditors of the Company or any other
Obligor are determined and any payment or distribution is or may be
made on account of such claims.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
12
"Intercreditor Agreement" means any agreement at any time entered
into by the Collateral Agent:
(1) with any Credit Agreement Agent, to confirm, elaborate,
perform, implement or give further assurance for any of the
obligations of the Holders of Notes, the Trustee and the Collateral
Agent under Article 12 in any respect that is not materially
inconsistent with the provisions, intents and purposes set forth
under Article 12; or
(2) with the holder of any other Lien upon any Collateral,
on terms not materially inconsistent with the terms of any comparable
agreement entered into with such holder by the Credit Agreement Agent
in respect of Priority Liens upon such Collateral or on any other
terms approved by the Trustee:
(a) to confirm the priority of such Lien, as
against the Note Liens, as to such Collateral (and in
delivering such confirmation the Collateral Agent may rely
conclusively, without further inquiry, upon an Opinion of
Counsel to the effect that such Lien is otherwise entitled,
as to such Collateral, to priority over the Note Liens);
(b) to subordinate such Lien to the Note Liens or
to any other Lien;
(c) to confirm the release of any Collateral from
such Lien;
(d) to confirm consent by the holder of such Lien
to the attachment of the Note Liens to such Collateral; or
(e) to grant, confirm or alter any other rights
or obligations of the holder of such Lien or the Collateral
Agent, as holders of Liens, in respect of such Collateral,
all as the Trustee may determine not to be materially inconsistent with the
provisions, intents and purposes set forth under Article 12 or to be favorable
to the holders of Note Liens or Note Obligations (which determination may be
made solely and conclusively by the Trustee in the good faith exercise of its
discretion and shall be conclusively proven by the execution and delivery of
such agreement by the Collateral Agent upon the direction of the Trustee).
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including guarantees or other obligations but excluding
receivables arising in the ordinary course of business), advances or capital
contributions (excluding commission, travel and similar advances to officers,
directors, independent contractors and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Subsidiary of the Company, the Company will be deemed
to have made an Investment on the date of any such sale or disposition equal to
the fair market value of the Company's Investments in such Subsidiary that were
not sold or disposed of in an amount determined as provided in the final
paragraph of Section 4.07. The acquisition by the Company or any Restricted
Subsidiary of the Company of a Person that holds an Investment in a third Person
will be deemed to be an Investment by the Company or such Restricted Subsidiary
in such third Person in an amount equal to the fair market value of the
Investments held by the acquired Person in such third Person in an amount
determined as provided in the final paragraph of Section 4.07.
13
"Isetan" means Isetan Company Limited.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, the city in which the Corporate Trust
Office of the Trustee is located or at a place of payment are authorized by law,
regulation or executive order to remain closed. If a payment date is a Legal
Holiday at a place of payment, payment may be made at that place on the next
succeeding day that is not a Legal Holiday, and no interest shall accrue on such
payment for the intervening period.
"Lenders" means, at any time, the parties to the Credit Agreement
then holding (or committed to provide) loans, letters of credit or other
extensions of credit that constitute (or when provided will constitute) Priority
Lien Debt outstanding under the Credit Agreement.
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Initial Notes for use by
such Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means all liquidated damages then owing pursuant
to the Registration Rights Agreement.
"Maturity Date" means April 1, 2008.
"Majority Lenders" means, at any time, Lenders then holding or
committed to provide at least a majority in principal amount of the aggregate
loans, letters of credit and other extensions of credit outstanding or committed
under the Credit Agreement.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however:
(1) any gain (or loss), together with any related provision
for taxes on such gain (or loss), realized in connection with: (a)
any Asset Sale; or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of
any Indebtedness of such Person or any of its Restricted
Subsidiaries; and
(2) any extraordinary gain (or loss), together with any
related provision for taxes on such extraordinary gain (or loss).
"Net Proceeds" means the aggregate cash proceeds and Cash Equivalents
received by the Company or any of its Restricted Subsidiaries in respect of any
Asset Sale (including, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received in any Asset Sale), net
of the direct costs relating to such Asset Sale, including, without limitation,
legal, accounting and investment banking fees, and sales commissions, and any
relocation expenses incurred as a result of the Asset Sale, taxes paid or
payable as a result of the Asset Sale, in each case, after taking into account
any available tax credits or deductions and any tax sharing arrangements, and
amounts required to be applied to the repayment of Indebtedness, other than
Indebtedness under a Credit Facility, secured by a Lien on the asset or assets
14
that were the subject of such Asset Sale and any reserve for indemnities,
reimbursements or adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither the Company nor any of its
Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable as a
guarantor or otherwise, or (c) constitutes the lender; and
(2) no default with respect to which (including any rights
that the holders of the Indebtedness may have to take enforcement
action against an Unrestricted Subsidiary) would permit upon notice,
lapse of time or both any holder of any other Indebtedness (other
than the Notes) of the Company or any of its Restricted Subsidiaries
to declare a default on such other Indebtedness or cause the payment
of the Indebtedness to be accelerated or payable prior to its stated
maturity.
"Note Documents" means this Indenture, the Notes, the Note
Guarantees, the Security Documents and each Intercreditor Agreement.
"Note Guarantee" means the guarantee of the Notes by each of the
Guarantors pursuant to Article 10 and in the form of the Note Guarantee attached
hereto as Exhibit E endorsed on the form of Note attached hereto as Exhibit A,
and any additional guarantee of the Notes to be executed by any Subsidiary of
the Company pursuant to the provisions of this Indenture.
"Note Lien" means, to the extent securing Note Obligations, a Lien
granted pursuant to a Security Document as security for Note Obligations.
"Note Obligations" means the Notes (including without limitation, any
Additional Notes), the Note Guarantees and all other Obligations of any Obligor
under this Indenture, the Notes (including without limitation, any Additional
Notes), the Note Guarantees, the Security Documents and each Intercreditor
Agreement.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Obligor" means a Person obligated as an issuer or guarantor of the
Notes.
"Offering Circular" means the offering circular relating to the
Initial Notes dated March 26, 2003.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer or the
principal accounting officer of the Company, that meets the requirements of
Section 14.05 hereof.
15
"Opinion of Counsel" means an opinion from legal counsel who is
reasonably acceptable to the Trustee, that meets the requirements of Section
14.05 hereof. The counsel may be an employee of or counsel to the Company, any
Subsidiary of the Company or the Trustee.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to DTC, shall include Euroclear and
Clearstream).
"Permitted Business" means (a) each business conducted, or service
rendered, (i) by the Company or any of its Restricted Subsidiaries on the date
hereof, (ii) by the Company or any of its Restricted Subsidiaries at any time,
which involves the use or licensing of any brand, trademark, trade name or
service ▇▇▇▇ owned or licensed by the Company or any Restricted Subsidiary, or
(iii) by any other retailer of goods or any other provider of services of the
type sold or provided by the Company or any of its Restricted Subsidiaries at
any time, or (b) any business or service reasonably related, ancillary or
complementary to any business or service referred to in subclauses (i), (ii) or
(iii) of clause (a) of this definition.
"Permitted Debt" means:
(1) the incurrence by the Company and/or any Guarantor of
additional Indebtedness and letters of credit under Credit Facilities
in an aggregate principal amount at any one time outstanding under
this clause (1) (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and its Restricted Subsidiaries thereunder) not to exceed
$70.0 million less the aggregate amount of all Net Proceeds of Asset
Sales applied by the Company or any of its Restricted Subsidiaries
since the date of this Indenture to repay any term Indebtedness under
a Credit Facility or to repay any revolving credit Indebtedness under
a Credit Facility and effect a corresponding commitment reduction
thereunder pursuant to Section 4.10;
(2) the incurrence by the Company and its Restricted
Subsidiaries of the Existing Indebtedness;
(3) the incurrence by the Company and the Guarantors of
Indebtedness represented by the Notes and the related Note Guarantees
to be issued on the date of this Indenture and the Exchange
Securities and the related Note Guarantees to be issued pursuant to
the registration rights agreement;
(4) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations
and purchase money obligations in the ordinary course of business,
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this
clause (4), in an aggregate principal amount not to exceed $5.0
million at any time outstanding;
(5) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for,
or the net proceeds of which are used to refund, refinance or replace
Indebtedness (other than intercompany Indebtedness) that was
permitted by this Indenture to be incurred under the first paragraph
of the "Incurrence of Indebtedness and Issuance of Preferred Stock"
covenant or clauses (2), (3), (4), (5), (8) or (10) of this
paragraph;
16
(6) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the
Company and any of its Restricted Subsidiaries; provided, however,
that:
(a) any subsequent issuance or transfer of Equity
Interests that results in any such Indebtedness being held
by a Person other than the Company or a Restricted
Subsidiary of the Company; and
(b) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or
a Restricted Subsidiary of the Company,
will be deemed, in each case, to constitute an incurrence of such
Indebtedness by the Company or such Restricted Subsidiary, as the
case may be, that was not permitted by this clause (6);
(7) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose
of fixing or hedging (i) interest rate risk with respect to any
floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding or (ii) currency values with respect to
transactions entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business;
(8) additional guarantees of the Notes and the guarantee by
the Company or any of the Guarantors of Indebtedness of the Company
or a Restricted Subsidiary of the Company that was permitted to be
incurred by another provision of the "Incurrence of Indebtedness and
Issuance of Preferred Stock" covenant;
(9) obligations in respect of performance bonds, surety
bonds and completion guarantees provided by the Company or any of its
Restricted Subsidiaries in the ordinary course of business; and
(10) the incurrence by the Company or any of the Guarantors
of additional Indebtedness in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or
replace any Indebtedness incurred pursuant to this clause (10), not
to exceed $2.5 million.
For purposes of determining compliance with Section 4.09, in the
event that an item of proposed Indebtedness meets the criteria of more than one
of the categories of Permitted Debt described in clauses (1) through (10) above,
or is entitled to be incurred pursuant to the first paragraph of such covenant,
the Company will be permitted to classify such item of Indebtedness on the date
of its incurrence, or later reclassify all or a portion of such item of
Indebtedness, in any manner that complies with Section 4.09. Indebtedness under
Credit Facilities outstanding on the date on which Notes are first issued and
authenticated under this Indenture will be deemed to have been incurred on such
date in reliance on the exception provided by clause (1) of the definition of
Permitted Debt. Additionally, the accrual of interest, the accretion or
amortization of original issue discount, the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms, and the
payment of dividends on Disqualified Stock in the form of additional shares of
the same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of Section 4.09;
provided, in each such case, that the amount thereof is included in Fixed
Charges of the Company as accrued.
"Permitted Group" means any group of investors that is deemed to be a
"person" (as that term is used in Section 13(d)(3) of the Exchange Act) at any
time prior to the Company's initial public offering of common stock, by virtue
of either or both of the Stockholders Agreements, as the same may be amended,
17
modified or supplemented from time to time, provided that no single Person
(other than the Principals and their Related Parties) Beneficially Owns
(together with its Affiliates) more of the Voting Stock of the Company that is
Beneficially Owned by such group of investors than is then collectively
Beneficially Owned by the Principals and their Related Parties in the aggregate.
"Permitted Investments" means:
(1) any Investment in the Company or in a Restricted
Subsidiary of the Company that is a Guarantor;
(2) any Investment in Cash Equivalents;
(3) any Investment by the Company or any Restricted
Subsidiary of the Company in a Person, if as a result of such
Investment:
(a) such Person concurrently becomes a Restricted
Subsidiary of the Company and a Guarantor; or
(b) such Person is concurrently merged,
consolidated or amalgamated with or into, or concurrently
transfers or conveys substantially all of its assets to, or
is concurrently liquidated into, the Company or a
Subsidiary of the Company that is a Guarantor;
(4) any Investment made as a result of the receipt of
non-cash consideration from an Asset Sale that was made pursuant to
and in compliance with Section 4.10;
(5) any acquisition of assets solely in exchange for the
issuance of Equity Interests (other than Disqualified Stock) of the
Company;
(6) any Investments received in compromise of obligations
of such persons incurred in the ordinary course of trade creditors or
customers that were incurred in the ordinary course of business,
including pursuant to any plan of reorganization or similar
arrangement upon the bankruptcy or insolvency of any trade creditor
or customer;
(7) Hedging Obligations;
(8) Investments in stock, obligations or securities in the
ordinary course of business received in compromise of obligations
owing to the Company or any Restricted Subsidiary or in satisfaction
of judgments;
(9) Investments in any person to the extent that such
Investments consist of lease, utility and workers' compensation,
performance or other similar deposits made in the ordinary course of
business;
(10) endorsements of instruments for collection or deposit
in the ordinary course of business;
(11) to the extent permitted by law, loans to employees,
directors and officers in connection with the purchase by such
Persons of Equity Interests of Holdings, not to exceed $500,000 at
any one time outstanding;
18
(12) Investments outstanding on the date hereof;
(13) Investments in cash collateral pledged to the Credit
Agreement Agent or deposited in the concentration account pursuant to
the terms of the Credit Agreement; and
(14) other Investments in any Person having an aggregate
fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause (14)
not to exceed $1.5 million at any one time outstanding.
"Permitted Liens" means:
(1) Note Liens;
(2) Priority Liens;
(3) Liens in favor of the Company or the Guarantors;
(4) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory or regulatory
obligations, bankers' acceptances, surety, appeal and customs bonds,
government contracts, performance bonds and other obligations of a
similar nature incurred in the ordinary course of business;
(5) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (4) of the definition of "Permitted
Debt" covering only the assets acquired with the proceeds of such
Indebtedness;
(6) Liens existing on the date of this Indenture;
(7) Liens for taxes, assessments or governmental charges or
claims that are not yet delinquent or that are being contested in
good faith by appropriate proceedings promptly instituted and
diligently concluded, provided that any reserve or other appropriate
provision as is required in conformity with GAAP has been made
therefor;
(8) Liens arising with respect to easements, rights-of-way,
zoning restrictions, licenses, reservations, covenants, building
restrictions and other similar charges, encumbrances or title defects
with respect to real property in the ordinary course of business and
consistent with industry practices;
(9) Liens securing reimbursement obligations with respect
to commercial letters of credit which encumber documents and other
property relating to such letters of credit and products and proceeds
thereof;
(10) Liens encumbering deposits made to secure obligations
arising from statutory, regulatory, contractual or warranty
requirements of the Company or any of its Restricted Subsidiaries,
including rights of offset and set-off;
(11) judgment liens not giving rise to an Event of Default;
(12) deposits with the owner or lessor of premises leased
and operated in the ordinary course of business;
19
(13) nonconsensual liens incurred in the ordinary course of
business that do not individually or in the aggregate detract
materially from the value or transferability of the assets of the
Company or any of its Restricted Subsidiaries taken as a whole, or
impair materially the use of any such assets in the operation of the
businesses of the Company and its Restricted Subsidiaries taken as a
whole;
(14) statutory mechanics', workmen's, materialmen's,
operators' or similar Liens imposed by law and arising in the
ordinary course of business for sums that are not yet due or are
being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and for which adequate reserves
have been established or other provisions have been made in
accordance with GAAP;
(15) Liens in favor of custom and revenue authorities
arising as a matter of law incurred in the ordinary course of
business to secure payment of nondelinquent customs duties in
connection with the importation of goods; and
(16) Liens incurred in the ordinary course of business of
the Company or any Subsidiary of the Company with respect to
obligations that do not exceed $2.5 million at any one time
outstanding.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries
(other than intercompany Indebtedness); provided that:
(1) the principal amount (or accreted value, if applicable)
of such Permitted Refinancing Indebtedness does not exceed the
principal amount (or accreted value, if applicable) of the
Indebtedness extended, refinanced, renewed, replaced, defeased or
refunded (plus all accrued interest on the Indebtedness and the
amount of all expenses and premiums incurred in connection
therewith);
(2) such Permitted Refinancing Indebtedness has a final
maturity date later than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the
Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded;
(3) if the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness is
subordinated in right of payment to, the Notes on terms at least as
favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; and
(4) such Indebtedness is incurred either by the Company or
by the Restricted Subsidiary who is the obligor on the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Principals" means ▇▇▇▇▇▇ ▇▇▇▇▇, Bay Harbour and Whippoorwill.
20
"Priority Lien" means, to the extent securing Priority Lien
Obligations, a Lien granted to any holder, or representative of holders, of
Priority Lien Obligations as security for Priority Lien Obligations.
"Priority Lien Agent" means the Credit Agreement Agent or, after the
Credit Agreement and all commitments to extend credit thereunder have been
terminated, all letters of credit (if any) issued under the Credit Agreement
have been discharged or cash collateralized in accordance with the terms
thereof, and all Priority Lien Obligations (except Unasserted Contingent
Obligations) outstanding under the Credit Agreement have been paid in full in
cash, a single representative of all holders of Priority Liens most recently
designated by the Company in an Officers' Certificate delivered to the Trustee
and Collateral Agent or the successor of such representative in its capacity as
such.
"Priority Lien Debt" means:
(1) the principal of and interest on Indebtedness under the
Credit Agreement which, when advanced (or, in the case of any
reimbursement obligation for a letter of credit issued under the
Credit Agreement, when such letter of credit was issued), either (a)
was permitted to be incurred by clause (1) or clause (10) of the
definition of "Permitted Debt" or (b) was advanced (or, in the case
of any such reimbursement obligation, relates to a letter of credit
that was issued) upon delivery to the Trustee and the Credit
Agreement Agent of an Officers' Certificate to the effect that such
Indebtedness was permitted to be incurred by clause (1) or clause
(10) of the definition of "Permitted Debt," including without
limitation any such Indebtedness incurred in any Insolvency or
Liquidation Proceeding to the extent permitted by clause (1) or
clause (10) of the definition of "Permitted Debt;"
(2) Hedging Obligations permitted to be incurred by clause
(7) of the definition of "Permitted Debt" that, pursuant to the
Credit Agreement, are equally and ratably secured by any and all
Liens securing Indebtedness outstanding under the Credit Agreement;
and
(3) the principal of and interest on Indebtedness under any
Credit Facility other than the Credit Agreement to the extent such
Indebtedness was permitted to be incurred by clause (1) or clause
(10) of the definition of "Permitted Debt" and by the Credit
Agreement but only if on or before the day on which such Indebtedness
was incurred by the Company or any of its Restricted Subsidiaries
such Indebtedness is designated by the Company, in an Officers'
Certificate delivered to the Trustee, the Collateral Agent and the
Credit Agreement Agent on or before such date, as Priority Lien Debt
for the purposes of this Indenture.
"Priority Lien Documents" means the Credit Agreement, the Priority
Lien Security Documents and all other agreements governing, securing or relating
to any Priority Lien Obligations.
"Priority Lien Obligations" means the Priority Lien Debt and all
other Obligations of the Company or any Guarantor under the Priority Lien
Documents.
"Priority Lien Security Documents" means one or more security
agreements, pledge agreements, collateral assignment, mortgages, deed of trust
or other grants or transfers for security executed and delivered by the Company
or any Guarantor creating a Lien upon property owned or to be acquired by the
Company or such Guarantor in favor of any holder or holders of Priority Lien
Debt, or any trustee, agent or representative acting for any such holders, as
security for any Priority Lien Obligations.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(1) to be placed on all Notes issued under this Indenture except where
otherwise permitted by the provisions of this Indenture.
21
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of April 1, 2003, among the Company, the Guarantors and the
other parties named on the signature pages thereof, as such agreement may be
amended, modified or supplemented from time to time and, with respect to any
Additional Notes, one or more registration rights agreements among the Company,
the Guarantors and the other parties thereto, as such agreement(s) may be
amended, modified or supplemented from time to time, relating to rights given by
the Company to the purchasers of Additional Notes to register such Additional
Notes under the Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a Global Note bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf of,
and registered in the name of, the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount at maturity of the Notes
sold in reliance on Rule 903 of Regulation S.
"Related Party" means:
(1) any controlling stockholder, a majority owned
Subsidiary, or immediate family member (in the case of an individual)
of any one or more Principals; or
(2) any trust, corporation, partnership or other entity,
the beneficiaries, stockholders, partners, owners or Persons
beneficially holding a majority controlling interest of which consist
of any one or more Principals and/or such other Persons referred to
in the immediately preceding clause (1).
"Replacement Assets" means, with respect to any Asset Sale,
properties and assets (including Capital Stock of a Person) that replace the
properties and assets that were the subject of such Asset Sale or properties and
assets (including Capital Stock of a Person) that will be used in the business
of the Company and its Restricted Subsidiaries or in businesses reasonably
related or ancillary thereto.
"Responsible Officer," when used with respect to the Trustee, means
any officer within the Corporate Trust Department of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his or her
knowledge of and familiarity with the particular subject.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
22
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Documents" means one or more security agreements, pledge
agreements, collateral assignments, mortgages, deed of trust or other grants or
transfers for security executed and delivered by the Company or any other
Obligor creating a Lien upon property owned or to be acquired by the Company or
such other Obligor in favor of the Collateral Agent for the benefit of the
holders of Note Obligations, whenever incurred, and also for the benefit of the
present and future holders of all other Note Obligations and any document
perfecting such security interests including, without limitation, any collateral
account control agreements.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Stockholders Agreements" means (1) the restated stockholders
agreement effective as of November 13, 1998 between Bay Harbour and Whippoorwill
and (2) the stockholders agreement dated as of January 8, 2001 among Bay
Harbour, Whippoorwill and ▇▇▇▇▇▇ ▇▇▇▇▇.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by:
(1) such Person;
(2) such Person and one or more Subsidiaries of such
Person; or
(3) one or more Subsidiaries of such Person.
"Subsidiary Guarantors" means:
(1) Barneys America, Inc., Barneys (CA) Lease Corp.,
Barneys (NY) Lease Corp., ▇▇▇▇▇ All-American Sportswear Corp., BNY
Licensing Corp. and Barneys America (Chicago) Lease Corp.; and
(2) any other Subsidiary that executes a Note Guarantee in
accordance with the provisions of this Indenture,
23
and their respective successors and assigns.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unasserted Contingent Obligations" means, at any time, Obligations
for taxes, costs, indemnifications, reimbursements, damages and other
liabilities (except (i) the principal of and interest and premium (if any) on,
and fees relating to, any Indebtedness and (ii) contingent obligations to
reimburse the issuer of an outstanding letter of credit for amounts that may be
drawn or paid thereunder) in respect of which no claim or demand for payment has
been made at such time.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a Global Note that bears the Global
Note Legend and that has the "Schedule of Exchanges of Interests in the Global
Note" attached thereto, and that is deposited with or on behalf of and
registered in the name of the Depositary, representing a series of Notes that do
not bear the Private Placement Legend.
"Unrestricted Subsidiary" means Barneys Asia Co. LLC and any other
Subsidiary of the Company (including any Subsidiary of such Subsidiary or any
successor to any of them) that is designated by the Board of Directors as an
Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent
that such Subsidiary:
(1) has no Indebtedness other than Non-Recourse Debt;
(2) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the
Company unless the terms of any such agreement, contract, arrangement
or understanding are no less favorable to the Company or such
Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Company;
(3) is a Person with respect to which neither the Company
nor any of its Restricted Subsidiaries has any direct or indirect
obligation (a) to subscribe for additional Equity Interests or (b) to
maintain or preserve such Person's financial condition or to cause
such Person to achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly
provided credit support for any Indebtedness of the Company or any of
its Restricted Subsidiaries (other than through the pledge of Equity
Interests of such Subsidiary).
Any designation of a Subsidiary of the Company as an Unrestricted
Subsidiary will be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
preceding conditions and was permitted by Section 4.07. If, at any time, any
Unrestricted Subsidiary would fail to meet the preceding requirements as an
Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
24
incurred as of such date under Section 4.09, the Company will be in default of
such covenant. The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will only be permitted if (1) such Indebtedness
is permitted under Section 4.09, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period;
and (2) no Default or Event of Default would be in existence following such
designation.
"U.S. Person" means a U.S. Person as defined in Rule 902(k) under the
Securities Act.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(1) the sum of the products obtained by multiplying (a) the
amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment
at final maturity, in respect of the Indebtedness, by (b) the number
of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment; by
(2) the then outstanding principal amount of such
Indebtedness.
"Whippoorwill" means Whippoorwill Associates, Inc.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person, all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
"Working Capital" means, as of any date, the difference between (x)
current assets, other than cash and Cash Equivalents of the Company and its
Restricted Subsidiaries for such date, and (y) current liabilities of the
Company and its Restricted Subsidiaries for such date.
Section 1.02 Other Definitions.
Defined in
Term Section
---- -------
"Affiliate Transaction"................................ 4.11
"Asset Sale Offer"..................................... 3.09
"Authentication Order"................................. 2.02
"Change of Control Offer".............................. 4.15
"Change of Control Payment"............................ 4.15
"Change of Control Payment Date"....................... 4.15
"Covenant Defeasance".................................. 8.03
"Event of Default"..................................... 6.01
"Excess Cash Flow Offer Amount" ....................... 4.23
25
Defined in
Term Section
---- -------
"Excess Proceeds"...................................... 4.10
"incur"................................................ 4.09
"Legal Defeasance"..................................... 8.02
"losses" .............................................. 4.19
"Offer Amount"......................................... 3.09
"Offer Period"......................................... 3.09
"Paying Agent"......................................... 2.03
"Payment Default"...................................... 6.01
"Purchase Date"........................................ 3.09
"Registrar"............................................ 2.03
"Restricted Payments".................................. 4.07
"Sold Subsidiary" ..................................... 12.06
Section 1.03 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture; and
"indenture trustee" or "institutional trustee" means the Trustee.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule under
the TIA have the meanings so assigned to them.
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) words in the singular include the plural, and in the
plural include the singular;
(5) "will" shall be interpreted to express a command;
(6) provisions apply to successive events and
transactions; and
26
(7) references to sections of or rules under the
Securities Act will be deemed to include substitute, replacement of
successor sections or rules adopted by the Commission from time to
time.
ARTICLE 2.
THE NOTES
Section 2.01 Form and Dating.
(a) General. The Notes and the Trustee's certificate of
authentication will be substantially in the form of Exhibit A hereto. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note will be dated the date of its authentication. The Notes
shall be in denominations of $1,000 and integral multiples thereof.
The terms and provisions contained in the Notes will constitute, and
are hereby expressly made, a part of this Indenture and the Company, the
Guarantors and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby. However,
to the extent any provision of any Note conflicts with the express provisions of
this Indenture, the provisions of this Indenture shall govern and be
controlling.
(b) Global Notes. Notes issued in global form will be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form will be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note will represent such of the outstanding Notes as will
be specified therein and each shall provide that it represents the aggregate
principal amount of outstanding Notes from time to time endorsed thereon and
that the aggregate principal amount of outstanding Notes represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a Global Note to reflect the amount of any
increase or decrease in the aggregate principal amount of outstanding Notes
represented thereby will be made by the Trustee or the Custodian, at the
direction of the Trustee, in accordance with instructions given by the Holder
thereof as required by Section 2.06 hereof. The provisions of the "Operating
Procedures of the Euroclear System" and "Terms and Conditions Governing Use of
Euroclear" and the "General Terms and Conditions of Clearstream Banking" and
"Customer Handbook" of Clearstream will be applicable to transfers of beneficial
interests in the Regulation S Global Notes that are held by Participants through
Euroclear or Clearstream.
(c) Book-Entry Provisions. This Section 2.01(c) shall only apply to
Global Notes deposited with the Trustee, as custodian to the Depositary.
Participants and Indirect Participants shall have no rights under this Indenture
with respect to any Global Notes held on their behalf by the Depositary or by
the Trustee, as the custodian for the Depositary, or under such Global Note, and
the Depositary shall be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever under this Indenture. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between the
Depositary and its Participants or Indirect Participants, the Applicable
Procedures or the operation of customary practices of the Depositary governing
the exercise of the rights of a holder of a beneficial interest in any Global
Note.
27
Section 2.02 Execution and Authentication.
One Officer must sign the Notes for the Company by manual or
facsimile signature.
If an Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note will nevertheless be valid.
A Note will not be valid until authenticated by the manual signature
of the Trustee. The signature will be conclusive evidence that the Note has been
authenticated under this Indenture.
The Trustee will, upon receipt of a written order of the Company
signed by two Officers (an "Authentication Order"), authenticate Notes for
original issue up to the aggregate principal amount at maturity stated in the
Notes. The aggregate principal amount at maturity of Notes outstanding at any
time may not exceed the aggregate amounts stated in all Authentication Orders
executed pursuant to this Indenture, except as provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
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 an Agent to deal with Holders or an
Affiliate of the Company.
The Company may issue Additional Notes from time to time after the
offering of the Initial Notes. The Initial Notes, the Exchange Securities and
any Additional Notes subsequently issued under this Indenture shall be treated
as a single class for all purposes under this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
Section 2.03 Registrar and Paying Agent.
The Company will maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar will keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company will notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints DTC to act as Depositary with respect
to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04 Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium or Liquidated Damages, if any, or interest on the Notes, and
will notify the Trustee of any default by the Company in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
28
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) will have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company, the
Trustee will serve as Paying Agent for the Notes.
Section 2.05 Holder Lists.
The Trustee will preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company will furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA ss. 312(a).
Section 2.06 Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depositary to a nominee of the Depositary,
by a nominee of the Depositary to the Depositary or to another nominee of the
Depositary, or by the Depositary or any such nominee to a successor Depositary
or a nominee of such successor Depositary. All Global Notes will be exchanged by
the Company for Definitive Notes if:
(1) the Company delivers to the Trustee notice from the
Depositary that it is unwilling or unable to continue to act as
Depositary or that it is no longer a clearing agency registered under
the Exchange Act and, in either case, a successor Depositary is not
appointed by the Company within 120 days after the date of such
notice from the Depositary;
(2) the Company in its sole discretion determines that the
Global Notes (in whole but not in part) should be exchanged for
Definitive Notes and delivers a written notice to such effect to the
Trustee; or
(3) an Event of Default shall have occurred and be
continuing.
Upon the occurrence of any of the preceding events in (1), (2) or (3)
above, Definitive Notes shall be issued in denominations of $1,000 or integral
multiples thereof and in such names as the Depositary shall instruct the
Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as
provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be
authenticated and delivered in the form of, and shall be, a Global Note. A
Global Note may not be exchanged for another Note other than as provided in this
Section 2.06(a), however, beneficial interests in a Global Note may be
transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
will be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes will be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also will require
compliance with either subparagraph (1) or (2) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
29
(1) Transfer of Beneficial Interests in the Same Global
Note. Beneficial interests in any Restricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in the same Restricted Global Note in accordance
with the transfer restrictions set forth in the Private Placement
Legend. Beneficial interests in any Unrestricted Global Note may be
transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders
or instructions shall be required to be delivered to the Registrar to
effect the transfers described in this Section 2.06(b)(1).
(2) All Other Transfers and Exchanges of Beneficial
Interests in Global Notes. In connection with all transfers and
exchanges of beneficial interests that are not subject to Section
2.06(b)(1) above, the transferor of such beneficial interest must
deliver to the Registrar either:
(A) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to
credit or cause to be credited a beneficial interest in
another Global Note in an amount equal to the beneficial
interest to be transferred or exchanged; and
(ii) instructions given in accordance with the
Applicable Procedures containing information regarding the
Participant account to be credited with such increase; or
(B) both:
(i) a written order from a Participant or an
Indirect Participant given to the Depositary in accordance
with the Applicable Procedures directing the Depositary to
cause to be issued a Definitive Note in an amount equal to
the beneficial interest to be transferred or exchanged;
and
(ii) instructions given by the Depositary to
the Registrar containing information regarding the Person
in whose name such Definitive Note shall be registered to
effect the transfer or exchange referred to in (1) above.
Upon consummation of an Exchange Offer by the Company in
accordance with Section 2.06(f) hereof, the requirements
of this Section 2.06(b)(2) shall be deemed to have been
satisfied upon receipt by the Registrar of the
instructions contained in the Letter of Transmittal
delivered by the Holder of such beneficial interests in
the Restricted Global Notes. Upon satisfaction of all of
the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and
the Notes or otherwise applicable under the Securities
Act, the Trustee shall adjust the principal amount of the
relevant Global Note(s) pursuant to Section 2.06(h)
hereof.
(3) Transfer of Beneficial Interests to Another Restricted
Global Note. A beneficial interest in any Restricted Global Note may
be transferred to a Person who takes delivery thereof in the form of
a beneficial interest in another Restricted Global Note if the
transfer complies with the requirements of Section 2.06(b)(2) above
and the Registrar receives the following:
30
(A) if the transferee will take delivery in the
form of a beneficial interest in the 144A Global Note,
then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item
(1) thereof;
(B) if the transferee will take delivery in the
form of a beneficial interest in the Regulation S Global
Note, then the transferor must deliver a certificate in
the form of Exhibit B hereto, including the certifications
in item (2) thereof; and
(C) if the transferee will take delivery in the
form of a beneficial interest in the IAI Global Note, then
the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications,
certificates and Opinion of Counsel required by item (3)
thereof, if applicable.
(4) Transfer and Exchange of Beneficial Interests in a
Restricted Global Note for Beneficial Interests in an Unrestricted
Global Note. A beneficial interest in any Restricted Global Note may
be exchanged by any holder thereof for a beneficial interest in an
Unrestricted Global Note or transferred to a Person who takes
delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note if the exchange or transfer complies with
the requirements of Section 2.06(b)(2) above and:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of the
beneficial interest to be transferred, in the case of an
exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it
is not (i) a Broker-Dealer, (ii) a Person participating in
the distribution of the Exchange Securities or (iii) a
Person who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes
to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the
form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(ii) if the holder of such
beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in
the form of a beneficial interest in an
Unrestricted Global Note, a certificate from
such holder in the form of Exhibit B hereto,
including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
31
longer required in order to maintain compliance with the
Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
(1) Beneficial Interests in Restricted Global Notes to
Restricted Definitive Notes. If any holder of a beneficial interest
in a Restricted Global Note proposes to exchange such beneficial
interest for a Restricted Definitive Note or to transfer such
beneficial interest to a Person who takes delivery thereof in the
form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest
in a Restricted Global Note proposes to exchange such
beneficial interest for a Restricted Definitive Note, a
certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a)
thereof;
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such beneficial interest is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such beneficial interest is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such beneficial interest is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
32
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(1) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(2) Beneficial Interests in Restricted Global Notes to
Unrestricted Definitive Notes. A holder of a beneficial interest in a
Restricted Global Note may exchange such beneficial interest for an
Unrestricted Definitive Note or may transfer such beneficial interest
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the holder of such
beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the
applicable Letter of Transmittal that it is not (i) a
Broker-Dealer, (ii) a Person participating in the
distribution of the Exchange Securities or (iii) a Person
who is an affiliate (as defined in Rule 144) of the
Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the holder of such beneficial
interest in a Restricted Global Note proposes
to exchange such beneficial interest for an
Unrestricted Definitive Note, a certificate
from such holder in the form of Exhibit C
hereto, including the certifications in item
(1)(b) thereof; or
(ii) if the holder of such
beneficial interest in a Restricted Global Note
proposes to transfer such beneficial interest
to a Person who shall take delivery thereof in
the form of an Unrestricted Definitive Note, a
certificate from such holder in the form of
Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
33
(3) Beneficial Interests in Unrestricted Global Notes to
Unrestricted Definitive Notes. If any holder of a beneficial interest
in an Unrestricted Global Note proposes to exchange such beneficial
interest for a Definitive Note or to transfer such beneficial
interest to a Person who takes delivery thereof in the form of a
Definitive Note, then, upon satisfaction of the conditions set forth
in Section 2.06(b)(2) hereof, the Trustee will cause the aggregate
principal amount of the applicable Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company will
execute and the Trustee will authenticate and deliver to the Person
designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a
beneficial interest pursuant to this Section 2.06(c)(3) will be
registered in such name or names and in such authorized denomination
or denominations as the holder of such beneficial interest requests
through instructions to the Registrar from or through the Depositary
and the Participant or Indirect Participant. The Trustee will deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered. Any Definitive Note issued in exchange for a beneficial
interest pursuant to this Section 2.06(c)(3) will not bear the
Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial
Interests.
(1) Restricted Definitive Notes to Beneficial Interests in
Restricted Global Notes. If any Holder of a Restricted Definitive
Note proposes to exchange such Note for a beneficial interest in a
Restricted Global Note or to transfer such Restricted Definitive
Notes to a Person who takes delivery thereof in the form of a
beneficial interest in a Restricted Global Note, then, upon receipt
by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive
Note proposes to exchange such Note for a beneficial
interest in a Restricted Global Note, a certificate from
such Holder in the form of Exhibit C hereto, including the
certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being
transferred to a QIB in accordance with Rule 144A, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such Restricted Definitive Note is being
transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 903 or Rule 904, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being
transferred pursuant to an exemption from the registration
requirements of the Securities Act in accordance with Rule
144, a certificate to the effect set forth in Exhibit B
hereto, including the certifications in item (3)(a)
thereof;
(E) if such Restricted Definitive Note is being
transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration
requirements of the Securities Act other than those listed
in subparagraphs (B) through (D) above, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being
transferred to the Company or any of its Subsidiaries, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (3)(b) thereof; or
34
(G) if such Restricted Definitive Note is being
transferred pursuant to an effective registration
statement under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee will cancel the Restricted Definitive Note,
increase or cause to be increased the aggregate principal
amount of, in the case of clause (A) above, the
appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C)
above, the Regulation S Global Note, and in all other
cases, the IAI Global Note.
(2) Restricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of a Restricted Definitive Note
may exchange such Note for a beneficial interest in an Unrestricted
Global Note or transfer such Restricted Definitive Note to a Person
who takes delivery thereof in the form of a beneficial interest in an
Unrestricted Global Note only if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a Broker-Dealer, (ii) a
Person participating in the distribution of the Exchange
Securities or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the
Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Definitive
Notes proposes to exchange such Notes for a
beneficial interest in the Unrestricted Global
Note, a certificate from such Holder in the
form of Exhibit C hereto, including the
certifications in item (1)(c) thereof; or
(ii) if the Holder of such
Definitive Notes proposes to transfer such
Notes to a Person who shall take delivery
thereof in the form of a beneficial interest in
the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B
hereto, including the certifications in item
(4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests or if the Applicable
Procedures so require, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
Upon satisfaction of the conditions of any of the
subparagraphs in this Section 2.06(d)(2), the Trustee will cancel the
Definitive Notes and increase or cause to be increased the aggregate
principal amount of the Unrestricted Global Note.
35
(3) Unrestricted Definitive Notes to Beneficial Interests
in Unrestricted Global Notes. A Holder of an Unrestricted Definitive
Note may exchange such Note for a beneficial interest in an
Unrestricted Global Note or transfer such Definitive Notes to a
Person who takes delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note at any time. Upon receipt of
a request for such an exchange or transfer, the Trustee will cancel
the applicable Unrestricted Definitive Note and increase or cause to
be increased the aggregate principal amount of one of the
Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to
a beneficial interest is effected pursuant to subparagraphs (2)(B),
(2)(D) or (3) above at a time when an Unrestricted Global Note has
not yet been issued, the Company will issue and, upon receipt of an
Authentication Order in accordance with Section 2.02 hereof, the
Trustee will authenticate one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of
Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar will register the transfer
or exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder must present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by its attorney, duly authorized in writing. In addition, the requesting Holder
must provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(1) Restricted Definitive Notes to Restricted Definitive
Notes. Any Restricted Definitive Note may be transferred to and
registered in the name of Persons who take delivery thereof in the
form of a Restricted Definitive Note if the Registrar receives the
following:
(A) if the transfer will be made pursuant to
Rule 144A, then the transferor must deliver a certificate
in the form of Exhibit B hereto, including the
certifications in item (1) thereof;
(B) if the transfer will be made pursuant to
Rule 903 or Rule 904, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof; and
(C) if the transfer will be made pursuant to
any other exemption from the registration requirements of
the Securities Act, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(2) Restricted Definitive Notes to Unrestricted Definitive
Notes. Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a
Person or Persons who take delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected
pursuant to the Exchange Offer in accordance with the
Registration Rights Agreement and the Holder, in the case
of an exchange, or the transferee, in the case of a
transfer, certifies in the applicable Letter of
Transmittal that it is not (i) a broker-dealer, (ii) a
Person participating in the distribution of the Exchange
36
Securities or (iii) a Person who is an affiliate (as
defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to
the Shelf Registration Statement in accordance with the
Registration Rights Agreement;
(C) any such transfer is effected by a
Broker-Dealer pursuant to the Exchange Offer Registration
Statement in accordance with the Registration Rights
Agreement; or
(D) the Registrar receives the following:
(i) if the Holder of such Restricted
Definitive Notes proposes to exchange such
Notes for an Unrestricted Definitive Note, a
certificate from such Holder in the form of
Exhibit C hereto, including the certifications
in item (1)(d) thereof; or
(ii) if the Holder of such
Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted
Definitive Note, a certificate from such Holder
in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D),
if the Registrar so requests, an Opinion of Counsel in form
reasonably acceptable to the Registrar to the effect that
such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are no
longer required in order to maintain compliance with the
Securities Act.
(3) Unrestricted Definitive Notes to Unrestricted
Definitive Notes. A Holder of Unrestricted Definitive Notes may
transfer such Notes to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note. Upon receipt of a request to
register such a transfer, the Registrar shall register the
Unrestricted Definitive Notes pursuant to the instructions from the
Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company will issue and,
upon receipt of an Authentication Order in accordance with Section 2.02 hereof,
the Trustee will authenticate:
(1) one or more Unrestricted Global Notes in an aggregate
principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes accepted for exchange in the
Exchange Offer by Persons that certify in the applicable Letters of
Transmittal that (A) they are not Broker-Dealers, (B) they are not
participating in a distribution of the Exchange Securities and (z)
they are not affiliates (as defined in Rule 144) of the Company; and
(2) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer by
Persons who made the foregoing certification.
Concurrently with the issuance of such Notes, the Trustee will cause
the aggregate principal amount of the applicable Restricted Global Notes to be
reduced accordingly, and the Company will execute and the Trustee will
37
authenticate and deliver to the Persons designated by the Holders of Definitive
Notes so accepted Unrestricted Definitive Notes in the appropriate principal
amount.
(g) Legends. The following legends will appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this Indenture.
(1) Private Placement Legend.
(A) Except as permitted by subparagraph (B)
below, each Global Note and each Definitive Note (and all
Notes issued in exchange therefor or substitution thereof)
shall bear the legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER, SELL OR
OTHERWISE TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH BARNEY'S, INC. OR ANY AFFILIATE OF
BARNEY'S, INC. WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH
SECURITY) ONLY (A) TO BARNEY'S, INC., BARNEYS NEW YORK, INC. OR ANY SUBSIDIARY
THEREOF, (B) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH
NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C)
PURSUANT TO OFFERS AND SALES TO NON-U.S. PURCHASERS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (D)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
BARNEY'S, INC.'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER PURSUANT TO CLAUSE (D) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM,
AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE FORM
APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE
TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
38
(B) Notwithstanding the foregoing, any Global
Note or Definitive Note issued pursuant to subparagraphs
(b)(4), (c)(2), (c)(3), (d)(2), (d)(3), (e)(2), (e)(3) or
(f) of this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) will not bear the
Private Placement Legend.
(2) Global Note Legend Each Global Note will bear a legend
in substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (1) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.06 OF THE INDENTURE, (2) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (3) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION
2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A
NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR
ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("▇▇▇"),
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
(3) Original Issue Discount Legend. Each Note will bear a
legend in substantially the following form:
"THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT UNDER SECTIONS 1272, 1273,
AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND IS SUBJECT TO THE
RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY REGULATION
ss. 1.1275-4(b). FOR INFORMATION REGARDING THE ISSUE PRICE, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT, THE ISSUE DATE, THE YIELD TO MATURITY, THE COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD submit a
written request for it to the Company at THE FOLLOWING ADDRESS: BARNEy's, Inc.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, aTTENTION: CORPORATE SECRETARY."
(4) Unit Legend. Until the Separation Date (as defined in
the Warrant Agreement, dated as of the date hereof, between Holdings
and Wilmington Trust Company, in its capacity as warrant agent), each
Note will bear a legend in substantially the following form:
39
"THE SECURITY EVIDENCED BY THIS CERTIFICATE IS INITIALLY ISSUED AS PART OF AN
ISSUANCE OF UNITS (THE "UNITS"), EACH OF WHICH CONSISTS OF $1,000 PRINCIPAL
AMOUNT AT MATURITY OF THE 9.000% SENIOR SECURED NOTES DUE 2008 (THE "NOTES") OF
BARNEY'S, INC. AND ONE WARRANT TO PURCHASE SHARES OF COMMON STOCK, PAR VALUE
$0.01 PER SHARE, OF BARNEYS NEW YORK, INC.
PRIOR TO THE EARLIEST TO OCCUR OF (I) 180 DAYS AFTER THE CLOSING OF THE OFFERING
OF THE UNITS, (II) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO A
REGISTERED EXCHANGE OFFER FOR THE NOTES IS DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (III) THE DATE A SHELF REGISTRATION STATEMENT WITH RESPECT TO
THE WARRANT SHARES IS DECLARED EFFECTIVE UNDER THE SECURITIES ACT, AND (IV) SUCH
DATE AS ▇▇▇▇▇▇▇▇▇ & COMPANY, INC. IN ITS SOLE DISCRETION SHALL DETERMINE, THE
SECURITY EVIDENCED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED OR EXCHANGED
SEPARATELY FROM, BUT MAY BE TRANSFERRED OR EXCHANGED ONLY AS, A UNIT."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note will be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who will take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note will be
reduced accordingly and an endorsement will be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note will be increased accordingly and
an endorsement will be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(1) To permit registrations of transfers and exchanges,
the Company will execute and the Trustee will authenticate Global
Notes and Definitive Notes upon receipt of an Authentication Order in
accordance with Section 2.02 or at the Registrar's request.
(2) No service charge will be made to a Holder of a
beneficial interest in a Global Note or to a Holder of a Definitive
Note for any registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other
than any such transfer taxes or similar governmental charge payable
upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09,
4.10, 4.15 and 9.05 hereof).
(3) The Registrar will not be required to register the
transfer of or exchange any Note selected for redemption in whole or
in part, except the unredeemed portion of any Note being redeemed in
part.
(4) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive
Notes will be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as
the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
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(5) Neither the Registrar nor the Company will be
required:
(A) to issue, to register the transfer of or to
exchange any Notes during a period beginning at the
opening of business 15 days before the day of any
selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of
selection;
(B) to register the transfer of or to exchange
any Note selected for redemption in whole or in part,
except the unredeemed portion of any Note being redeemed
in part; or
(C) to register the transfer of or to exchange
a Note between a record date and the next succeeding
interest payment date.
(6) Prior to due presentment for the registration of a
transfer of any Note, the Trustee, any Agent and the Company shall
deem and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes and for all other purposes
under this Indenture, and none of the Trustee, any Agent or the
Company shall be affected by notice to the contrary.
(7) The Trustee will authenticate Global Notes and
Definitive Notes in accordance with the provisions of Section 2.02
hereof.
(8) All certifications, certificates and Opinions of
Counsel required to be submitted to the Registrar pursuant to this
Section 2.06 to effect a registration of transfer or exchange may be
submitted by facsimile.
(9) The Trustee is hereby authorized to enter into a
letter of representations with the Depositary in the form provided by
the Company to act in accordance with such letter.
Section 2.07 Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company
and the Trustee receives evidence to its satisfaction of the destruction, loss
or theft of any Note, the Company will issue and the Trustee, upon receipt of an
Authentication Order, will authenticate a replacement Note if the Trustee's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
will be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
Section 2.08 Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
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If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a protected purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes will be deemed to be no longer outstanding and will cease to accrue
interest.
Section 2.09 Treasury Notes.
In determining whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver or consent, Notes 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, will be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee will be protected in relying on any such direction, waiver or consent,
only Notes that the Trustee knows are so owned will be so disregarded.
Section 2.10 Temporary Notes.
Until certificates representing Notes are ready for delivery, the
Company may prepare and the Trustee, upon receipt of an Authentication Order,
will authenticate temporary Notes. Temporary Notes will be substantially in the
form of certificated Notes but may have variations that the Company considers
appropriate for temporary Notes and as may be reasonably acceptable to the
Trustee. Without unreasonable delay, the Company will prepare and the Trustee
will authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes will be entitled to all of the benefits of
this Indenture.
Section 2.11 Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent will forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else will cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and will destroy
canceled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all canceled Notes will be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
Section 2.12 Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it
will pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company will notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company will fix or cause to be fixed each such
special record date and payment date, provided that no such special record date
may be less than 10 days prior to the related payment date for such defaulted
interest. At least 15 days before the special record date, the Company (or, upon
the written request of the Company, the Trustee in the name and at the expense
42
of the Company) will mail or cause to be mailed to Holders a notice that states
the special record date, the related payment date and the amount of such
interest to be paid.
Section 2.13 CUSIP or ISIN Numbers.
The Company in issuing the Notes may use "CUSIP" or "ISIN" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" or "ISIN"
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 printed on the Notes or as contained in any
notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" or "ISIN" numbers.
ARTICLE 3.
REDEMPTION AND PREPAYMENT
Section 3.01 Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it must furnish to the Trustee, at
least 45 days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth:
(1) the clause of this Indenture pursuant to which the
redemption shall occur;
(2) the redemption date;
(3) the principal amount of Notes to be redeemed; and
(4) the redemption price.
Section 3.02 Selection of Notes to Be Redeemed or Purchased.
If less than all of the Notes are to be redeemed or purchased in an
offer to purchase at any time, the Trustee will select Notes for redemption or
purchase as follows:
(1) if the Notes are listed on any national securities
exchange, in compliance with the requirements of the principal
national securities exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities
exchange, on a pro rata basis, by lot or by such method as the
Trustee shall deem fair and appropriate.
In the event of partial redemption or purchase by lot, the particular
Notes to be redeemed or purchased will be selected, unless otherwise provided
herein, not less than 30 nor more than 60 days prior to the redemption or
purchase date by the Trustee from the outstanding Notes not previously called
for redemption or purchase.
The Trustee will promptly notify the Company in writing of the Notes
selected for redemption or purchase and, in the case of any Note selected for
partial redemption or purchase, the principal amount thereof to be redeemed or
purchased. Notes and portions of Notes selected will be in amounts of $1,000 or
whole multiples of $1,000; except that if all of the Notes of a Holder are to be
redeemed or purchased, the entire outstanding amount of Notes held by such
Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except
43
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or purchase also apply to portions of Notes
called for redemption or purchase.
Section 3.03 Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days
but not more than 60 days before a redemption date, the Company will mail or
cause to be mailed, by first class mail, a notice of redemption to each Holder
whose Notes are to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture pursuant to Articles 8 or 11 of this Indenture.
The notice will identify the Notes to be redeemed and will state:
(1) the redemption date;
(2) the redemption price;
(3) if any Note is being redeemed in part, the portion of
the principal amount at maturity of such Note to be redeemed and
that, after the redemption date upon surrender of such Note, a new
Note or Notes in principal amount equal to the unredeemed portion
will be issued upon cancellation of the original Note;
(4) the name and address of the Paying Agent;
(5) that Notes called for redemption must be surrendered
to the Paying Agent to collect the redemption price;
(6) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(7) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes 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 Notes.
At the Company's request, the Trustee will give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company has delivered to the Trustee, at least 45 days prior to the redemption
date, an Officers' Certificate requesting that the Trustee give such notice and
setting forth the information to be stated in such notice as provided in the
preceding paragraph.
Section 3.04 Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become irrevocably due and payable on the
redemption date at the redemption price. A notice of redemption may not be
conditional.
44
Section 3.05 Deposit of Redemption or Purchase Price.
One Business Day prior to the redemption or purchase date, the
Company will deposit with the Trustee or with the Paying Agent money sufficient
to pay the redemption or purchase price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed or purchased on that date. The
Trustee or the Paying Agent will promptly return to the Company any money
deposited with the Trustee or the Paying Agent by the Company in excess of the
amounts necessary to pay the redemption or purchase price of, and accrued
interest and Liquidated Damages, if any, on, all Notes to be redeemed or
purchased.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption or purchase date, interest will cease to
accrue on the Notes or the portions of Notes called for redemption or purchase.
If a Note is redeemed or purchased on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
shall be paid to the Person in whose name such Note was registered at the close
of business on such record date, and no additional interest will be payable to
Holders whose Notes will be subject to redemption by the Company. If any Note
called for redemption or purchase is not so paid upon surrender for redemption
or purchase because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
or purchase date until such principal is paid, and to the extent lawful on any
interest not paid on such unpaid principal, in each case at the rate provided in
the Notes and in Section 4.01 hereof.
Section 3.06 Notes Redeemed or Purchased in Part.
Upon surrender of a Note that is redeemed or purchased in part, the
Company will issue and, upon receipt of an Authentication Order, the Trustee
will authenticate for the Holder at the expense of the Company a new Note equal
in principal amount at maturity to the unredeemed or unpurchased portion of the
Note surrendered.
Section 3.07 Optional Redemption.
(a) At any time prior to April 1, 2005, the Company may on any one or
more occasions redeem up to 35% of the aggregate principal amount at maturity of
Notes issued under this Indenture at a redemption price equal to 113.192% of the
Accreted Value thereof on the date of redemption, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date, with
the net cash proceeds of an offering of Equity Interests (other than
Disqualified Stock) of the Company or a contribution to the Company's common
equity capital made with the net cash proceeds of a concurrent offering of
Equity Interests by Holdings; provided that:
(1) at least 65% of the aggregate principal amount at
maturity of Notes issued under this Indenture remains outstanding
immediately after the occurrence of such redemption (excluding Notes
held by the Company and its Subsidiaries); and
(2) the redemption occurs within 60 days of the date of
the closing of any such offering.
(b) Except pursuant to the preceding paragraph, the Notes are not
redeemable at the Company's option prior to April 1, 2006.
(c) On or after April 1, 2006, the Company may, at its option, redeem
some or all of the Notes upon not less than 30 nor more than 60 days' notice at
the redemption price of 109.894% of the Accreted Value of the Notes on the
45
redemption date, and on or after April 1, 2007, the Company may, at its option,
redeem some or all of the Notes upon not less than 30 nor more than 60 days'
notice at the redemption price of 100% of the principal amount at maturity of
the Notes, in each case, plus accrued and unpaid interest and Liquidated
Damages, if any, on the Notes redeemed, to the applicable redemption date.
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Sections 3.01 through 3.06 hereof.
Section 3.08 Mandatory Redemption.
The Company is not required to make mandatory redemption payments
with respect to the Notes.
Section 3.09 Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company is
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it will follow the procedures specified below.
The Asset Sale Offer shall be made to all Holders and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain
open for a period of at least 20 Business Days following its commencement and
not more than 30 Business Days, except to the extent that a longer period is
required by applicable law (the "Offer Period"). No later than three Business
Days after the termination of the Offer Period (the "Purchase Date"), the
Company will apply all Excess Proceeds (the "Offer Amount") to the purchase of
Notes and such other pari passu Indebtedness (on a pro rata basis, if
applicable) or, if less than the Offer Amount has been tendered, all Notes and
other Indebtedness tendered in response to the Asset Sale Offer. Payment for any
Notes so purchased will be made in the same manner as interest payments are
made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, will be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest will be payable to Holders who tender Notes pursuant to the Asset Sale
Offer.
Upon the commencement of an Asset Sale Offer, the Company will send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice will contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Asset Sale
Offer. The notice, which will govern the terms of the Asset Sale Offer, will
state:
(1) that the Asset Sale Offer is being made pursuant to
this Section 3.09 and Section 4.10 hereof and the length of time the
Asset Sale Offer will remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Note not tendered or accepted for payment
will continue to accrete or accrue interest;
(4) that, unless the Company defaults in making such
payment, any Note accepted for payment pursuant to the Asset Sale
Offer will cease to accrete or accrue interest after the Purchase
Date;
46
(5) that Holders electing to have a Note purchased
pursuant to an Asset Sale Offer may elect to have Notes purchased in
integral multiples of $1,000 only;
(6) that Holders electing to have a Note purchased
pursuant to any Asset Sale Offer will be required to surrender the
Note, with the form entitled "Option of Holder to Elect Purchase" on
the reverse of the Note completed, or transfer by book-entry
transfer, to the Company, a Depositary, if appointed by the Company,
or a Paying Agent at the address specified in the notice at least
three Business Days before the Purchase Date;
(7) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the expiration of the Offer
Period, a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the Note the
Holder delivered for purchase and a statement that such Holder is
withdrawing his election to have such Note purchased;
(8) that, if the aggregate principal amount of Notes and
other pari passu Indebtedness surrendered by holders thereof exceeds
the Offer Amount, the Company will select the Notes and other pari
passu Indebtedness to be purchased on a pro rata basis based on the
principal amount of Notes and such other pari passu Indebtedness
surrendered (with such adjustments as may be deemed appropriate by
the Company so that only Notes in denominations of $1,000, or
integral multiples thereof, will be purchased); and
(9) that Holders whose Notes were purchased only in part
will be issued new Notes equal in principal amount at maturity to the
unpurchased portion of the Notes surrendered (or transferred by
book-entry transfer).
On or before the Purchase Date, the Company will, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and will deliver to the Trustee an Officers' Certificate stating that such Notes
or portions thereof were accepted for payment by the Company in accordance with
the terms of this Section 3.09. The Company, the Depositary or the Paying Agent,
as the case may be, will promptly mail or deliver to each tendering Holder an
amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company will promptly issue a new
Note, and the Trustee, upon written request from the Company will authenticate
and mail or deliver such new Note to such Holder, in a principal amount equal to
any unpurchased portion of the Note surrendered. Any Note not so accepted shall
be promptly mailed or delivered by the Company to the Holder thereof. The
Company will publicly announce the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
ARTICLE 4.
COVENANTS
Section 4.01 Payment of Notes.
The Company will pay or cause to be paid the principal of, premium,
if any, and interest and Liquidated Damages, if any, on, the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest and Liquidated Damages, if any will be considered paid on the date due
if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as
of 10:00 a.m. Eastern Time on the due date money deposited by the Company in
47
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company will pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company will pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it will pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02 Maintenance of Office or Agency.
The Company will maintain an office or agency (which may be an office
of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be surrendered for registration of transfer or for exchange and where
notices and demands to or upon the Company in respect of the Notes and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company fails to maintain any such required office or
agency or fails to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03 hereof.
Section 4.03 Reports.
Whether or not required by the Commission's rules and regulations, so
long as any Notes are outstanding, the Company will furnish to the Holders of
Notes, within the time periods specified in the Commission's rules and
regulations:
(1) all quarterly and annual reports that would be
required to be filed with the Commission on Forms 10-Q and 10-K if
the Company were required to file such reports; and
(2) all current reports that would be required to be filed
with the Commission on Form 8-K if the Company were required to file
such reports.
All such reports will be prepared in all material respects in accordance with
all of the rules and regulations applicable to such reports. Each annual report
on Form 10-K will include a report on the Company's consolidated financial
statements by the Company's' certified independent accountants. In addition,
following the consummation of the exchange offer contemplated by the
Registration Rights Agreement, the Company will file a copy of each of the
reports referred to in clauses (1) and (2) above with the Commission for public
availability within the time periods specified in the rules and regulations
applicable to such reports (unless the Commission will not accept such a filing)
and make such information available to securities analysts and prospective
investors upon request.
48
If, at any time after consummation of the exchange offer contemplated
by the Registration Rights Agreement, the Company is no longer subject to the
periodic reporting requirements of the Exchange Act for any reason, the Company
will nevertheless continue filing the reports specified in the preceding
paragraph with the Commission within the time periods specified above unless the
Commission will not accept such a filing. the Company agrees that it will not
take any action for the purpose of causing the Commission not to accept any such
filings. If, notwithstanding the foregoing, the Commission will not accept the
Company's filings for any reason, the Company will post the reports referred to
in the preceding paragraph on its website within the time periods that would
apply if the Company were required to file those reports with the Commission.
In addition, the Company and the Guarantors agree that, for so long
as any Notes remain outstanding, at any time they are not required to file the
reports required by the preceding paragraphs with the Commission, they will
furnish to the Holders and to securities analysts and prospective investors,
upon their request, the information required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
At any time that Holdings is a Guarantor, the Company's obligation to
file and furnish the reports referred to in clauses (1) and (2) above will be
deemed satisfied if Holdings prepares, files and furnishes all such reports with
respect to Holdings in accordance with the foregoing provisions.
Section 4.04 Compliance Certificate.
(a) The Company and each Guarantor (to the extent that such Guarantor
is so required under the TIA) shall deliver to the Trustee, within 90 days after
the end of each fiscal year, an Officers' Certificate stating that a review of
the activities of the Company and its Subsidiaries during the preceding fiscal
year has been made under the supervision of the signing Officers with a view to
determining whether the Company has kept, observed, performed and fulfilled its
obligations under this Indenture and the Security Documents, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and the Security Documents
and is not in default in the performance or observance of any of the terms,
provisions and conditions of this Indenture or the Security Documents (or, if a
Default or Event of Default has occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Company is
taking or proposes to take with respect thereto) and that to the best of his or
her knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03 above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) So long as any of the Notes are outstanding, the Company will
deliver to the Trustee, forthwith upon any Officer becoming aware of any Default
49
or Event of Default, an Officers' Certificate specifying such Default or Event
of Default and what action the Company is taking or proposes to take with
respect thereto.
Section 4.05 Taxes.
The Company will pay, and will cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06 Stay, Extension and Usury Laws.
The Company and each of the Guarantors covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Indenture; and the
Company and each of the Guarantors (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law has been enacted.
Section 4.07 Restricted Payments.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(1) declare or pay any dividend or make any other payment
or distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the
Company or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Company's or any of its Restricted
Subsidiaries' Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company or to the Company or a Restricted
Subsidiary of the Company);
(2) purchase, redeem or otherwise acquire or retire for
value (including, without limitation, in connection with any merger
or consolidation involving the Company) any Equity Interests of the
Company or any direct or indirect parent of the Company;
(3) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value any
Indebtedness that is subordinated to the Notes or the Note
Guarantees, except a payment of interest or principal at the Stated
Maturity thereof; or
(4) make any Restricted Investment (all such payments and
other actions set forth in these clauses (1) through (4) above being
collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(1) no Default or Event of Default has occurred and is
continuing;
(2) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment had been made at the beginning of the applicable
50
four-quarter period, have been permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.09; and
(3) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture (excluding
Restricted Payments permitted by clauses (2) through (9) of the next
succeeding paragraph), is less than the sum, without duplication, of:
(a) 50% of the Consolidated Net Income of the
Company for the period (taken as one accounting period)
from the beginning of the first fiscal quarter commencing
after the date of this Indenture to the end of the
Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of
such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such
deficit), plus
(b) 100% of the aggregate net cash proceeds
received by the Company since the date of this Indenture as
a contribution to its common equity capital or from the
issue or sale of Equity Interests of the Company (other
than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of the Company
that have been converted into or exchanged for such Equity
Interests (other than Equity Interests (or Disqualified
Stock or debt securities) sold to a Subsidiary of the
Company) to the extent such net cash proceeds have not been
used pursuant to Section 4.24(i)(y) hereof, plus
(c) to the extent that any Restricted Investment
that was made after the date of this Indenture is sold for
cash or otherwise liquidated or repaid for cash, the lesser
of (i) the cash return of capital with respect to such
Restricted Investment (less the cost of disposition, if
any) and (ii) the initial amount of such Restricted
Investment, plus
(d) in the event that any Unrestricted Subsidiary
(i) is designated as a Restricted Subsidiary in accordance
with the provisions of this Indenture, the lesser of (x)
the aggregate fair market value of all Investments owned by
the Company and its Restricted Subsidiaries in such
Subsidiary at the time of such designation and (y) the
aggregate amount of Restricted Investments made in such
Unrestricted Subsidiary since the date of this Indenture or
(ii) pays any cash dividends or cash distributions to the
Company or any of its Restricted Subsidiaries, 50% of any
such cash dividends or cash distributions made after the
date of this Indenture.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the
date of declaration of the dividend, if at the date of declaration,
the dividend payment would have complied with the provisions of this
Indenture;
(2) the defeasance, redemption, repurchase or other
acquisition of subordinated Indebtedness of the Company or any
Guarantor with the net cash proceeds from an incurrence of Permitted
Refinancing Indebtedness;
(3) the payment of any dividend or the making of any
distribution by a Restricted Subsidiary of the Company to the holders
of its Equity Interests on a pro rata basis;
51
(4) so long as no Default has occurred and is continuing or
would be caused thereby, the payment of dividends to Holdings to be
used by it to repurchase, redeem or otherwise acquire or retire for
value any Equity Interests of Holdings, the Company or any Restricted
Subsidiary of the Company from any current or future employee of
Holdings, the Company or any Restricted Subsidiary of the Company;
provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests may not exceed $1.0
million since the date of this Indenture;
(5) payments of principal and interest on intercompany
loans and advances, the incurrence of which was permitted pursuant to
the terms of this Indenture;
(6) the payments of dividends or other distributions by the
Company to Holdings in amounts required for Holdings to pay franchise
taxes and other fees required to maintain its existence and to
provide for all other operating costs of Holdings, including, without
limitation, in respect of director fees and expenses, administrative,
legal and accounting services provided by third parties and other
costs and expenses (including all costs and expenses with respect to
filings with the Commission);
(7) so long as the Company and each of its Subsidiaries is
a member of the same consolidated group filing U.S. Federal
consolidated returns (or State or local consolidated, combined or
unitary returns) of which Holdings is the parent, the payment of
dividends or other distributions by the Company to Holdings in
amounts required to pay the tax obligations of Holdings attributable
to the Company and its Subsidiaries, determined as if the Company and
its Subsidiaries had filed a separate consolidated, combined or
unitary return for the relevant taxing jurisdiction; provided, in no
event may the amount of dividends paid pursuant to this clause (7) to
enable Holdings to pay U.S. Federal, State and local taxes exceed the
amount of such U.S. Federal, State, and local taxes actually owing by
Holdings at such time and any refunds received by Holdings
attributable to the Company or any of its Subsidiaries shall promptly
be returned by Holdings; and
(8) other Restricted Payments in an aggregate amount since
the date of this Indenture not to exceed $1.0 million.
The amount of all Restricted Payments (other than cash) will be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any assets or securities that are required to be valued
by this Section 4.07 will be determined by the Board of Directors of the Company
whose resolution with respect thereto will be delivered to the Trustee. The
Board of Directors' determination must be based upon an opinion or appraisal
issued by an accounting, appraisal or investment banking firm of national
standing if the fair market value exceeds $7.5 million. Not later than the date
of making any Restricted Payment, the Company will deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 covenant were computed, together with a copy of any fairness opinion or
appraisal required by this Indenture.
Section 4.08 Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
52
(1) pay dividends or make any other distributions on its
Capital Stock to the Company or any of its Restricted Subsidiaries,
or with respect to any other interest or participation in, or
measured by, its profits, or pay any indebtedness owed to the Company
or any of its Restricted Subsidiaries;
(2) make loans or advances to the Company or any of its
Restricted Subsidiaries; or
(3) transfer any of its properties or assets to the
Company or any of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) the Credit Agreement as in effect on the date of this
Indenture and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings of
the Credit Agreement, provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings,
replacement or refinancings are not materially more restrictive,
taken as a whole, with respect to such dividend and other payment
restrictions than those contained in the Credit Agreement on the date
of this Indenture;
(2) this Indenture, the Notes, the Note Guarantees and the
Security Documents;
(3) applicable law;
(4) customary non-assignment provisions in leases entered
into in the ordinary course of business and consistent with past
practices;
(5) purchase money obligations (including Capital Lease
Obligations) for property acquired in the ordinary course of business
that impose restrictions on that property of the nature described in
clause (3) of the preceding paragraph;
(6) any agreement for the sale or other disposition of a
Restricted Subsidiary that restricts distributions by that Restricted
Subsidiary pending its sale or other disposition;
(7) Permitted Refinancing Indebtedness, provided that the
restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness
being refinanced;
(8) Liens securing Indebtedness otherwise permitted to be
incurred under the provisions of Section 4.12 that limit the right of
the debtor to dispose of the assets subject to such Liens;
(9) provisions with respect to the disposition or
distribution of assets or property in joint venture agreements, asset
sale agreements, stock sale agreements and other similar agreements
entered into in the ordinary course of business;
(10) restrictions on cash or other deposits or net worth
imposed by customers under contracts entered into in the ordinary
course of business; and
53
(11) amendments, modifications, renewals, refinancings,
replacements or substitutions of an instrument or agreement referred
to in clause (2) above; provided, however, that the provisions
relating to such encumbrances or restrictions are not materially more
restrictive, taken as a whole, with respect to such dividend and
other payment restrictions than those contained in such instrument or
agreement on the date of this Indenture.
Section 4.09 Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and will not permit
any of its Restricted Subsidiaries to issue any shares of preferred stock (other
than Permitted Debt); provided, however, that the Company and/or the Guarantors
may incur additional Indebtedness (including Acquired Debt) or issue
Disqualified Stock, if the Fixed Charge Coverage Ratio for the Company's most
recently ended four full fiscal quarters for which internal financial statements
are available immediately preceding the date on which such additional
Indebtedness is incurred or such Disqualified Stock is issued would have been at
least 2.5 to 1, determined on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred or the preferred stock or Disqualified Stock had been issued,
as the case may be, at the beginning of such four-quarter period.
The Company will not incur any Indebtedness (including Permitted
Debt) that is contractually subordinated in right of payment to any other
Indebtedness of the Company unless such Indebtedness is also contractually
subordinated in right of payment to the Notes on substantially identical terms;
provided, however, that no Indebtedness of the Company will be deemed to be
contractually subordinated in right of payment to any other Indebtedness of the
Company solely by virtue of being unsecured or being secured on a junior basis.
Section 4.10 Asset Sales.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) the Company (or the Restricted Subsidiary, as the case
may be) receives consideration at the time of the Asset Sale at least
equal to the fair market value of the assets or Equity Interests
issued or sold or otherwise disposed of, as determined in good faith
by the Company's Board of Directors; and
(2) at least 75% of the consideration received in the Asset
Sale by the Company or such Restricted Subsidiary is in the form of
cash or Cash Equivalents. For purposes of this provision, each of the
following will also be deemed to be cash:
(a) any liabilities, as shown on the Company's
most recent consolidated balance sheet, of the Company or
any Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms
subordinated to the Notes or any Note Guarantee) that are
assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability; and
(b) any securities, notes or other obligations
received by the Company or such Restricted Subsidiary from
such transferee that are converted by the Company or such
54
Restricted Subsidiary into cash or Cash Equivalents within
90 days of such Asset Sale, to the extent of the cash
received in that conversion.
Within 180 days after the receipt of any Net Proceeds from an Asset
Sale, the Company (or the Restricted Subsidiary, as the case may be) may apply
those Net Proceeds:
(1) to repay Priority Lien Debt, including repayment of
revolving credit Indebtedness without reduction of the commitment
thereunder; provided that at such time as the aggregate amount
applied pursuant to this clause (1) equals $10.0 million since the
date of this Indenture, any excess Net Proceeds applied pursuant to
this clause (1) shall be used to reduce commitments with respect to
revolving credit Indebtedness;
(2) to acquire Replacement Assets; provided that the
aggregate price paid for all such Replacement Assets shall not exceed
$10.0 million in the aggregate since the date hereof; or
(3) to do any combination of the foregoing;
provided that if the Company (or the Restricted Subsidiary, as the case may be)
sells any Flagship Store, all Net Proceeds from such an Asset Sale must be used
to repay or repurchase Priority Lien Debt and effect a permanent reduction
thereof.
Pending the final application of any Net Proceeds, the Company (or the
Restricted Subsidiary, as the case may be) may temporarily reduce revolving
credit borrowings or otherwise invest the Net Proceeds in any manner that is not
prohibited by this Indenture.
Any Net Proceeds from Asset Sales that are not applied or invested as
provided in the preceding paragraph (other than the $10.0 million referred to in
clause (1) above) will constitute "Excess Proceeds." Within 30 days after the
date that the aggregate amount of Excess Proceeds exceeds $2.5 million, the
Company will make an Asset Sale Offer to all Holders of Notes and all holders of
other Indebtedness that is pari passu with the Notes containing provisions
similar to those set forth in this Indenture with respect to offers to purchase
or redeem with the proceeds of sales of assets to purchase the maximum Accreted
Value of Notes and such other pari passu Indebtedness that may be purchased out
of the Excess Proceeds. The offer price in any Asset Sale Offer will be payable
in cash and equal to 100% of the Accreted Value thereof on the date of
repurchase, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the date of repurchase, in accordance with the procedures set forth
in this Indenture. If any Excess Proceeds remain after consummation of an Asset
Sale Offer, the Company (or the Restricted Subsidiary, as the case may be) may
use those Excess Proceeds for any purpose not otherwise prohibited by this
Indenture. If the aggregate Accreted Value of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the Trustee will select the Notes and such other pari passu
Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds will be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
Sections 3.09 and 4.10 of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under Sections 3.09 and 4.10 of this Indenture by
virtue of such conflict.
55
Section 4.11 Transactions with Affiliates.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate of the Company or any of its Restricted Subsidiaries (each, an
"Affiliate Transaction"), unless:
(1) the Affiliate Transaction is on terms that, taken as a
whole, are no less favorable to the Company or the relevant
Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary
with an unrelated Person; and
(2) the Company delivers to the Trustee:
(a) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving
aggregate consideration in excess of $1.0 million, a
resolution of the Board of Directors certified in an
Officers' Certificate, which also certifies that such
Affiliate Transaction complies with this Section 4.11 and
that such Affiliate Transaction has been approved by a
majority of the disinterested members of the Board of
Directors; and
(b) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving
aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Company of such Affiliate
Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of
national standing.
The following items will not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any employment agreement entered into by the Company or
any of its Restricted Subsidiaries in the ordinary course of business
and consistent with the past practice of the Company or such
Restricted Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) transactions with a Person that is an Affiliate of the
Company solely because the Company owns an Equity Interest in, or
controls, such Person;
(4) sales of Equity Interests of the Company (other than
Disqualified Stock) to Affiliates;
(5) transactions pursuant to the terms of the Existing
Agreements as the same are in effect on the date of this Indenture
and any amendments, modifications, restatements, renewals,
supplements or replacements of the Existing Agreements, provided that
the terms of such amendments, modifications, restatements, renewals,
supplements or replacements are not materially more restrictive,
taken as a whole, than those contained in the Existing Agreements on
the date of this Indenture;
(6) payments, customary loans, advances, fees and
compensation paid to, and indemnity provided on behalf of, officers,
directors, employees or consultants of the Company or any Guarantor
56
for their service to the Company or a Guarantor, in each case in the
ordinary course of business;
(7) distributions to Holdings in respect of taxes in the
amounts contemplated by clause (8) of Section 4.07; and
(8) Restricted Payments that are permitted by Section
4.07.
Section 4.12 Liens.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly create, incur, assume or suffer to exist
any Lien of any kind:
(1) on any asset now owned or hereafter acquired, except
Permitted Liens;
(2) securing any Priority Lien Obligation, unless the
Company or such Restricted Subsidiary concurrently (a) grants a Lien
of such kind, pursuant to a security document upon substantially the
same terms but subject to Article 12, to the Collateral Agent for the
benefit of the holders of Note Obligations and (b) causes such Lien
to be duly perfected, except with respect to any deposit or security
accounts as to which the Company and its Restricted Subsidiaries are
only required to use commercially reasonable best efforts to perfect
such Liens; or
(3) securing any Priority Lien Debt if:
(a) such Lien is junior or subordinated in any
respect to any other Lien securing Priority Lien Debt; or
(b) such Priority Lien Debt is contractually
subordinated in any respect to any other Priority Lien
Debt.
Section 4.13 Business Activities.
The Company will not, and will not permit any Restricted Subsidiary
to, engage in any business other than Permitted Businesses, except to such
extent as would not be material to the Company and its Subsidiaries taken as a
whole.
Section 4.14 Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done
all things necessary to preserve and keep in full force and effect:
(1) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in
accordance with the respective organizational documents (as the same
may be amended from time to time) of the Company or any such
Subsidiary; and
(2) the rights (charter and statutory), licenses and
franchises of the Company and its Subsidiaries,
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
57
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
Section 4.15 Change of Control.
(a) Upon the occurrence of a Change of Control, the Company will make
an offer (a "Change of Control Offer") to each Holder to repurchase all or any
part (equal to $1,000 or an integral multiple of $1,000) of each Holder's Notes
at a purchase price equal to 101% of the Accreted Value thereof on the date of
repurchase, plus accrued and unpaid interest and Liquidated Damages, if any, on
the Notes repurchased to the date of repurchase (the "Change of Control
Payment"). Within 20 days following any Change of Control, the Company will mail
a notice to each Holder describing the transaction or transactions that
constitute the Change of Control and stating:
(1) that the Change of Control Offer is being made
pursuant to this Section 4.15 and that all Notes tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall
be no earlier than 30 days and no later than 60 days from the date
such notice is mailed (the "Change of Control Payment Date");
(3) that any Note not tendered will continue to accrete or
accrue interest;
(4) that, unless the Company defaults in the payment of
the Change of Control Payment, all Notes accepted for payment
pursuant to the Change of Control Offer will cease to accrete or
accrue interest after the Change of Control Payment Date;
(5) that Holders electing to have any Notes purchased
pursuant to a Change of Control Offer will be required to surrender
the Notes, with the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes completed, or transfer by
book-entry transfer, to the Company, a Depositary, if appointed by
the Company, or a Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding
the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their
election if the Company, the Depositary or the Paying Agent, as the
case may be, receives, not later than the close of business on the
second Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for
purchase, and a statement that such Holder is withdrawing his
election to have the Notes purchased; and
(7) that Holders whose Notes are being purchased only in
part will be issued new Notes equal in principal amount at maturity
to the unpurchased portion of the Notes surrendered (or transferred
by book-entry transfer), which unpurchased portion must be equal to
$1,000 in principal amount at maturity or an integral multiple
thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the
provisions of Section 4.15 of this Indenture, the Company will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under this Section 4.15 by virtue of such conflict.
58
(b) On the Change of Control Payment Date, the Company will, to the
extent lawful:
(1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer;
(2) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions of
Notes properly tendered; and
(3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount at maturity of Notes or portions of Notes
being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes properly
tendered the Change of Control Payment for such Notes, and the Trustee will
promptly authenticate and mail (or cause to be transferred by book entry) to
each Holder a new Note equal in principal amount at maturity to any unpurchased
portion of the Notes surrendered, if any; provided that each new Note will be in
a principal amount at maturity of $1,000 or an integral multiple thereof. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.15,
the Company will not be required to make a Change of Control Offer upon a Change
of Control if a third party makes the Change of Control Offer in the manner, at
the times and otherwise in compliance with the requirements set forth in this
Section 4.15 and purchases all Notes properly tendered and not withdrawn under
the Change of Control Offer.
Section 4.16 Limitation on Issuances and Sales of Equity Interests in
Wholly Owned Restricted Subsidiaries.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any
Equity Interests in any Wholly Owned Restricted Subsidiary of the Company (other
than, if necessary, Equity Interests constituting directors' qualifying shares)
to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of
the Company), unless:
(1) such transfer, conveyance, sale, lease or other
disposition is of all the Equity Interests in such Wholly Owned
Restricted Subsidiary; and
(2) the cash Net Proceeds from such transfer, conveyance,
sale, lease or other disposition are applied in accordance with
Section 4.10.
In addition, the Company will not permit any of its Wholly Owned
Restricted Subsidiaries to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
Section 4.17 Payments for Consent.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Notes unless such consideration is offered to be paid
and is paid to all Holders of the Notes that consent, waive or agree to amend in
59
the time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
Section 4.18 Additional Note Guarantees and Note Liens.
The Company will be required to add additional Note Guarantees and/or
Note Liens in the following circumstances:
(1) If the Company or any of its Restricted Subsidiaries
acquires or creates another Domestic Restricted Subsidiary after the
date of this Indenture, the Company will cause that newly acquired or
created Domestic Restricted Subsidiary to execute a Note Guarantee
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee and deliver an Opinion of Counsel to the
Trustee within ten Business Days of the date on which it was acquired
or created to the effect that such supplemental indenture has been
duly authorized, executed and delivered by that Domestic Restricted
Subsidiary and constitutes a valid and binding agreement of that
Domestic Restricted Subsidiary, enforceable in accordance with its
terms (subject to customary exceptions).
(2) If the Company or any of its Restricted Subsidiaries
at any time grants, assumes or becomes subject to any Lien upon any
of its property then owned or thereafter acquired as security for any
Priority Lien Obligation, the Company will, or will cause such
Restricted Subsidiary to, concurrently:
(a) execute and deliver to the Collateral Agent a
Security Document upon substantially the same terms, but
subject to Article 12, granting a Lien upon such property
to the Collateral Agent for the benefit of the holders of
Note Obligations;
(b) cause (or, in the case of deposit accounts as
defined in Article 9 of the New York Uniform Commercial
Code, use commercially reasonable best efforts to cause)
the Lien granted in such Security Document to be duly
perfected in any manner permitted by law; and
(c) deliver to the Trustee and the Collateral
Agent an Opinion of Counsel reasonably satisfactory to the
Trustee and the Collateral Agent, confirming as to such
Security Document the matters set forth as to the Security
Documents and Liens thereunder in the Opinions of Counsel
delivered on behalf of the Company to the Initial Purchaser
in connection with the issuance of the Initial Notes and,
if the property subject to such Security Document is an
interest in real estate, such local counsel opinions, title
and flood insurance policies, surveys and other supporting
documents as may have been delivered to the Initial
Purchaser or in connection with the grant of a Priority
Lien thereon or as the Collateral Agent may reasonably
request.
Section 4.19 Further Assurances; Expense Reimbursement.
At any time prior to the release of the Note Liens pursuant to
Section 13.04, upon request of the Collateral Agent at any time and from time to
time, the Company will, and will cause each of the Guarantors to, promptly
execute, acknowledge and deliver such Security Documents, instruments,
certificates, notices and other documents and take such other actions as the
Collateral Agent may reasonably request to create, perfect, protect, assure or,
subject to Article 12, enforce the Liens and benefits intended to be conferred
as contemplated by this Indenture for the benefit of the holders of Note
Obligations. If the Company or such Guarantor fails to do so, the Collateral
Agent will be irrevocably authorized and empowered, with full power of
60
substitution, to execute, acknowledge and deliver such Security Documents,
instruments, certificates, notices and other documents and, subject to Article
12, take such other actions in the name, place and stead of the Company or such
Guarantor, but the Collateral Agent will have no obligation to do so and no
liability for any action taken or omitted by it in good faith in connection
therewith.
At any time prior to the release of the Note Liens pursuant to
Section 13.04, upon request of the Collateral Agent at any time and from time to
time, the Company will, and will cause the Guarantors to:
(1) permit the Collateral Agent or any advisor, auditor,
consultant, attorney or representative acting for the Collateral
Agent, upon reasonable notice to the Company and during normal
business hours unless an Event of Default is continuing, to visit and
inspect any of the property of the Company and the Guarantors, to
review, make extracts from and copy the books and records of the
Company and the Guarantors relating to any such property, and to
discuss any matter pertaining to any such property with the officers
and employees of the Company and the Guarantors; and
(2) deliver to the Collateral Agent such reports,
including valuations, relating to any such property or any Lien
thereon as the Collateral Agent may reasonably request.
The Company will bear and pay all legal expenses, collateral audit
and valuation costs, filing fees, insurance premiums and other costs associated
with the performance of the obligations of the Company and the Guarantors set
forth in this Section 4.19.
The Company will pay or reimburse the Trustee and the Collateral
Agent for, and, to the fullest extent lawful, defend and indemnify each of them
against, all liabilities, taxes, costs and expenses of every type and nature
(including, without limitation, the reasonable fees and charges of attorneys,
advisors, auditors, consultants or other representatives acting for any of them)
("losses") incurred by any of them in connection with the performance of the
obligations of the Company and the Guarantors set forth in this Section 4.19 or
as a result of or in connection with the creation, perfection, protection or
enforcement of the Note Liens or the exercise or enforcement of any right or
remedy under the Security Documents or to prove, preserve, protect or enforce
any Note Lien or any claim based upon the Note Liens in any legal proceeding,
including any Insolvency or Liquidation Proceeding, except to the extent such
losses may be attributable to the gross negligence, willful misconduct or bad
faith of the party seeking payment or reimbursement.
Without limiting the foregoing, the Company will pay all UCC search
and filing fees incurred in connection with the Collateral.
Section 4.20 Designation of Restricted and Unrestricted Subsidiaries.
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default. If a Restricted Subsidiary is designated as an Unrestricted
Subsidiary, the aggregate fair market value of all outstanding Investments owned
by the Company and its Restricted Subsidiaries in the Subsidiary properly
designated will be deemed to be an Investment made as of the time of the
designation and will reduce the amount available for Restricted Payments under
the first paragraph of Section 4.07 or the definition of "Permitted
Investments," as determined by the Company. That designation will only be
permitted if the Investment would be permitted at that time and if the
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary. The Board of Directors of the Company may redesignate any
Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would
not cause a Default.
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Section 4.21 Restrictions on Activities of Holdings.
Holdings will not engage in any business activities other than
holding the Capital Stock of the Company and activities directly related to or
necessary in connection with the holding of such Capital Stock. Holdings will
not hold any Equity Interests or other Investments in any other Person (other
than Cash Equivalents).
Holdings will not make any Restricted Payment or engage in any
Affiliate Transaction except to the extent that the Company would have been
permitted to make such Restricted Payment or engage in such Affiliate
Transaction. In addition, Holdings will not, directly or indirectly, create,
incur, issue, assume, guarantee, or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to any Indebtedness (other than
Permitted Debt).
Section 4.22 Filing, Recording and Opinions.
(a) The Company will furnish to the Trustee and the Collateral Agent
immediately prior to the issuance of the Exchange Securities an Opinion of
Counsel either:
(1) stating that, in the opinion of such counsel, all
action has been taken with respect to the recording, registering and
filing of this Indenture, financing statements, mortgages, collateral
assignments, lien notices or other instruments necessary to make
effective and perfect the Liens intended to be created by the
Security Documents, and reciting the details of such action; or
(2) stating that, in the opinion of such counsel, no such
action is necessary to make such Liens effective and perfected.
(b) The Company will furnish to the Trustee and the Collateral Agent
on April 1 of each year, beginning with April 1, 2004, an Opinion of Counsel,
dated as of such date, either:
(1) stating that, in the opinion of such counsel, (A)
action has been taken with respect to the recording, registering,
filing, re-recording, re-registering and re-filing of all
supplemental indentures, financing statements, continuation
statements or notices, recordations or instruments of further
assurance as is necessary to maintain and perfect the Liens intended
to be created by the Security Documents and reciting the details of
such action or referring to prior Opinions of Counsel in which such
details are given, and (B) based on relevant laws as in effect on the
date of such Opinion of Counsel, all financing statements and
continuation statements have been executed and filed that are
necessary as of such date and during the succeeding 13 months to
perfect the Note Liens, to the extent the Note Liens can be perfected
by the filing of a financing statement; or
(2) stating that, in the opinion of such counsel, no such
action is necessary to maintain such Liens as effective and
perfected.
(c) The Company will otherwise comply with the provisions of TIA
ss.314(b).
(d) To the extent applicable, the Company will cause TIA ss. 313(b),
relating to reports, and TIA ss. 314(d), relating to the release of property or
securities from Note Liens or relating to the substitution therefor of any
property or securities to be subjected to the Lien of the Security Documents, to
be complied with. Any certificate or opinion required by TIA ss. 314(d) may be
made by an Officer of the Company except in cases where TIA ss. 314(d) requires
that such certificate or opinion be made by an independent Person, which Person
62
will be an independent engineer, appraiser or other expert selected or
reasonably satisfactory to the Trustee and the Collateral Agent.
(e) To the extent applicable, the Company will furnish to the Trustee
and the Collateral Agent, prior to each proposed release of Collateral pursuant
to the Security Documents:
(1) all documents required by TIA ss.314(d); and
(2) an Opinion of Counsel to the effect that such
accompanying documents constitute all documents required by TIA
ss.314(d).
The Trustee may, to the extent permitted by Sections 7.01 and 7.02
hereof, accept as conclusive evidence of compliance with the foregoing
provisions the appropriate statements contained in such documents and Opinion of
Counsel.
(f) Notwithstanding anything to the contrary in this Section 4.22,
the Company will not be required to comply with all or any portion of TIA
ss.314(d) if it determines, in good faith based on advice of counsel, that under
the terms of TIA ss.314(d) and/or any interpretation or guidance as to the
meaning thereof of the Commission or its staff, including "no action"' letters
or exemptive orders, all or any portion of TIA ss.314(d) is inapplicable to one
or a series of released Collateral.
Section 4.23 Excess Cash Flow Offers
Within 120 days after the end of each fiscal year (beginning with the
fiscal year ending January 31, 2004), the Company will make an offer to all
Holders to purchase the maximum Accreted Value of Notes that may be purchased
with 50% of Excess Cash Flow for such fiscal year (the "Excess Cash Flow Offer
Amount"), at a purchase price in cash equal to 103% of the Accreted Value of the
Notes to be purchased, plus accrued and unpaid interest and Liquidated Damages,
if any, to the date of such purchase; provided, however, the Excess Cash Flow
Offer Amount shall be reduced by the aggregate principal amount at maturity of
Notes purchased by the Company in the open market completed prior to the date of
such Excess Cash Flow offer. Each Excess Cash Flow offer shall remain open for a
period of 20 Business Days, unless a longer period is required by law. Promptly
after the termination of the Excess Cash Flow offer period, the Company will
purchase and mail or deliver payment for the Excess Cash Flow Offer Amount for
the Notes or portions thereof tendered, pro rata, or by such other method as may
be required by law, or, if Notes with an aggregate Accreted Value less than the
Excess Cash Flow Offer Amount have been tendered, all Notes tendered pursuant to
the Excess Cash Flow offer. If the aggregate amount of Notes tendered pursuant
to any Excess Cash Flow offer is less than the Excess Cash Flow Offer Amount,
the Company may, subject to the other provisions of this Indenture, use any such
Excess Cash Flow for general corporate purposes. Upon receiving notice of the
Excess Cash Flow offer, Holders may elect to tender their Notes, in whole or in
part, in integral multiples of $1,000 principal amount at maturity in exchange
for cash.
Notwithstanding anything in this Section 4.23, the repurchase of
Notes by the Company under this Section 4.23 shall not be required if it would
breach any covenant under any Credit Facility and shall be limited to amounts as
provided under any Credit Facility.
No later than 30 days prior to the required purchase date, the
Company must send, by first-class mail, postage prepaid, an offer to each
Holder, with a copy to the Trustee, which offer will govern the terms of the
Excess Cash Flow offer. Such offer will state:
(1) the purchase price;
63
(2) the purchase date, which must be no earlier than 30
days nor later than 60 days from the date such notice is mailed,
other than as may be required by law;
(3) that the Company is making an Excess Cash Flow offer;
(4) that any Note not tendered will continue to accrete or
accrue interest;
(5) that unless the Company defaults on the payment of the
purchase price, any Notes accepted for payment pursuant to the Excess
Cash Flow offer will cease to accrete or accrue interest after the
purchase date; and
(6) the procedures that a Holder must follow to accept the
Excess Cash Flow offer or to withdraw such acceptance.
Holders electing to have a Note purchased pursuant to an Excess Cash
Flow offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, or
transfer by book-entry transfer, to the Company, a Depositary if appointed by
the Company, or a Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day prior to the purchase date.
On the purchase date, the Company will, to the extent lawful:
(1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Excess Cash Flow offer;
(2) deposit with the Paying Agent an amount equal to the
purchase price in respect of all Notes or portions thereof so
tendered; and
(3) deliver or cause to be delivered to the Trustee the
Notes so accepted together with an Officers' Certificate stating the
aggregate principal amount at maturity of Notes or portions thereof
being purchased by the Company.
The Paying Agent will promptly mail to each Holder of Notes so
tendered the purchase price for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount at maturity to any unpurchased portion of
the Notes surrendered; provided that each such new Note will be in a principal
amount at maturity of $1,000 or an integral multiple thereof.
The Company will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with the
repurchase of Notes pursuant to an Excess Cash Flow offer. To the extent that
the provisions of any securities laws or regulations conflict with this Section
4.23, the Company will comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations under this
Section 4.23 by virtue thereof.
Section 4.24 Limitation of Capital Expenditures.
The aggregate amount of the Company's and its Restricted
Subsidiaries' Capital Expenditures in any fiscal year will not exceed the lesser
of:
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(i) $10.0 million plus (x) any unused Capital Expenditures,
if any, carried over from preceding fiscal years and (y)
any net cash proceeds from an offering of Equity Interests
(other than Disqualified Stock) of the Company or a cash
contribution to the Company's common equity capital from
Holdings completed during such fiscal year to the extent
such net cash proceeds have not been used pursuant to
clause 3(b) of the first paragraph of Section 4.07 hereof;
and
(ii) $14.0 million plus any unused Capital Expenditures, if
any, carried over from preceding fiscal years.
ARTICLE 5.
SUCCESSORS
Section 5.01 Merger, Consolidation, or Sale of Assets.
The Company may not, directly or indirectly: (1) consolidate or merge
with or into another Person (whether or not the Company is the surviving
corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all
or substantially all of the properties or assets of the Company and its
Restricted Subsidiaries taken as a whole, in one or more related transactions,
to another Person; unless:
(1) either: (a) the Company is the surviving corporation;
or (b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or to which such sale, assignment,
transfer, conveyance or other disposition has been made is a
corporation organized or existing under the laws of the United
States, any State of the United States or the District of Columbia;
(2) the Person formed by or surviving any such
consolidation or merger (if other than the Company) or the Person to
which such sale, assignment, transfer, conveyance or other
disposition has been made assumes all the obligations of the Company
under the Notes, this Indenture, the Registration Rights Agreement
and the Security Documents pursuant to agreements reasonably
satisfactory to the Trustee;
(3) immediately after such transaction, no Default or
Event of Default exists; and
(4) the Company or the Person formed by or surviving any
such consolidation or merger (if other than the Company), or to which
such sale, assignment, transfer, conveyance or other disposition has
been made will, on the date of such transaction after giving pro
forma effect thereto and any related financing transactions as if the
same had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set
forth in Section 4.09.
The preceding clause (4) shall not prohibit a merger between the
Company and an Affiliate with no substantial assets or liabilities for the sole
purpose of reincorporating the Company in another State of the United States or
the District of Columbia.
In addition, the Company may not, directly or indirectly, lease all
or substantially all of its properties or assets, in one or more related
transactions, to any other Person. This Section 5.01 will not apply to a sale,
assignment, transfer, conveyance or other disposition of assets between or among
the Company and any of its Wholly Owned Restricted Subsidiaries.
65
Section 5.02 Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in a transaction that is subject to, and that complies with the
provisions of, Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets in a transaction that is subject to,
and that complies with the provisions of, Section 5.01 hereof.
ARTICLE 6.
DEFAULTS AND REMEDIES
Section 6.01 Events of Default.
Each of the following is an "Event of Default":
(1) the Company defaults for 30 days in the payment when
due of interest on, or Liquidated Damages with respect to, the Notes;
(2) the Company defaults in the payment when due (at
maturity, upon redemption or otherwise) of the principal of, or
premium, if any, on the Notes;
(3) the Company or any of its Restricted Subsidiaries
fails to comply with the provisions of Section 3.09, 4.10, 4.15 or
5.01 hereof;
(4) the Company or any of its Restricted Subsidiaries
fails to comply with any of the other agreements in this Indenture,
the Notes or the Security Documents for 60 days after notice to the
Company or such Restricted Subsidiary by the Trustee or the Holders
of at least 25% in aggregate principal amount at maturity of the
Notes then outstanding ;
(5) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists, or
is created after the date of this Indenture, if that default:
(A) is caused by a failure to pay principal of,
or interest or premium, if any, on such Indebtedness prior
to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment
Default"); or
(B) results in the acceleration of such
Indebtedness prior to its express maturity,
and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any
other such Indebtedness under which there has been a
66
Payment Default or the maturity of which has been so
accelerated, aggregates $5.0 million or more at any one
time;
(6) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Restricted Subsidiaries, which
judgment or judgments are not paid, discharged or stayed for a period
of 60 days; provided that the aggregate of all such undischarged
judgments exceeds $5.0 million (that are not covered by a reputable
and solvent third-party insurer as to which such insurer has not
disclaimed coverage);
(7) the Company, any Restricted Subsidiary of the Company
that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant
to or within the meaning of 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 all or substantially all of its property,
(D) makes a general assignment for the benefit
of its creditors, or
(E) generally is not paying its debts as they
become due;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company, any
Restricted Subsidiary of the Company that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary in an
involuntary case;
(B) appoints a custodian of the Company, any
Restricted Subsidiary of the Company that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary or for
all or substantially all of the property of the Company,
any Restricted Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant
Subsidiary; or
(C) orders the liquidation of the Company, any
Restricted Subsidiary of the Company that is a Significant
Subsidiary or any group of Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary;
and the order or decree remains unstayed and in effect for
60 consecutive days;
(9) except as permitted by this Indenture, any Security
Document or any Lien purported to be granted thereby ceases for any
reason to be fully enforceable and perfected, and such event
continues for 30 days after written notice to the Company by the
Trustee or the Holders of at least 25% in aggregate principal amount
at maturity of the Notes then outstanding, voting as a single class;
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(10) the Company or any of its Restricted Subsidiaries, or
any Person acting on behalf of any of them, denies or disaffirms, in
writing, any obligation of the Company or any of its Restricted
Subsidiaries set forth in or arising under any Security Document; or
(11) except as permitted by this Indenture, any Note
Guarantee is held in any judicial proceeding to be unenforceable or
invalid or shall cease for any reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor,
shall deny or disaffirm its obligations under its Note Guarantee.
Section 6.02 Acceleration.
In the case of an Event of Default specified in clause (7) or (8) of
Section 6.01 hereof, with respect to the Company, any Restricted Subsidiary of
the Company that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, all outstanding
Notes will become due and payable immediately without further action or notice.
If any other Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount at maturity of the then outstanding
Notes may declare all the Notes to be due and payable immediately.
If an Event of Default occurs and the Notes become or are declared
due and payable, the Company will be required to repay 100% of the Accreted
Value of the Notes, plus accrued and unpaid interest and Liquidated Damages, if
any, thereon to the date of the Event of Default. The Holders of a majority in
aggregate principal amount at maturity of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest or premium that has become due solely because of the
acceleration) have been cured or waived.
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, premium and
Liquidated Damages, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note 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. All remedies are
cumulative to the extent permitted by law.
Section 6.04 Waiver of Past Defaults.
Holders of a majority in aggregate principal amount at maturity of
the then outstanding Notes by notice to the Trustee may on behalf of the Holders
of all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium and Liquidated Damages, if any, or interest
on, the Notes (including in connection with an offer to purchase). Upon any such
waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Default or
impair any right consequent thereon.
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Section 6.05 Control by Majority.
Holders of a majority in principal amount at maturity of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability.
Section 6.06 Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(1) the Holder of a Note gives to the Trustee written
notice of a continuing Event of Default;
(2) the Holders of at least 25% in principal amount at
maturity of the then outstanding Notes make a written request to the
Trustee to pursue the remedy;
(3) such Holder of a Note or Holders of Notes offer and,
if requested, provide to the Trustee indemnity satisfactory to the
Trustee 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 and, if requested,
the provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount at maturity of the then outstanding Notes do not
give the Trustee a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights
of another Holder of a Note or to obtain a preference or priority over another
Holder of a Note.
Section 6.07 Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal, premium and Liquidated
Damages, if any, and interest on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), 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;
provided that a Holder shall not have the right to institute any such suit for
the enforcement of payment if and to the extent that the institution or
prosecution thereof or the entry of judgment therein would, under applicable
law, result in the surrender, impairment, waiver or loss of the Lien of this
Indenture upon any property subject to such Lien.
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 is authorized to recover judgment in its own name and
as trustee of an express trust against the Company for the whole amount of
principal of, premium and Liquidated Damages, if any, and interest remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
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Section 6.09 Trustee May File Proofs of Claim.
The Trustee is authorized to 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 (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property, to
participate as a member, voting or otherwise, of any official committee of
creditors appointed in such matter and shall be entitled and empowered to
collect, receive and distribute any money or other property payable or
deliverable on any such claims and any custodian in any such judicial proceeding
is hereby authorized by each Holder to make such payments to the Trustee, and in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To
the extent that the payment of any such compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 7.07 hereof out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money,
securities and other properties that the Holders may be entitled to receive in
such proceeding whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Notes or the rights of any Holder, or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
Section 6.10 Priorities.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for
amounts due under Section 7.07 hereof, including payment of all
compensation, expenses and liabilities incurred, and all advances
made, by the Trustee and the costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on
the Notes for principal, premium and Liquidated Damages, if any, and
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal,
premium and Liquidated Damages, if any and interest, respectively;
and
Third: to the Company or to such party as a court of
competent jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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 a 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.
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This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of
a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
ARTICLE 7.
TRUSTEE
Section 7.01 Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee will exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its 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 duties of the Trustee will be determined solely by
the express provisions of this Indenture and the Trustee need perform
only those duties that are specifically set forth in this Indenture
and no others, 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 will examine the certificates
and opinions to determine whether or not they conform to the
requirements of this Indenture but need not confirm or investigate
the accuracy of mathematical calculations or other facts stated
therein or otherwise verify the contents thereof.
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee will not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee will 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 hereof.
(d) Whether or not therein expressly so provided, 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) No provision of this Indenture will require the Trustee to expend
or risk its own funds or incur any liability. The Trustee will be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder has offered to the Trustee security
and indemnity satisfactory to it against any loss, liability or expense.
(f) The Trustee will not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
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Section 7.02 Rights of Trustee.
(a) The Trustee may conclusively rely upon 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 or both. The Trustee will not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel will be
full and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and will not
be responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee will not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company will be sufficient if
signed by an Officer of the Company.
(f) The Trustee will be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless a written notice of any event which is in fact a
Default or an Event of Default is received at the Corporate Trust Office of the
Trustee.
(h) The Trustee and the Collateral Agent shall have no duty (i) to
cause the maintenance of any insurance, (ii) to see to the payment or discharge
of any tax levied against any part of the Collateral, or (iii) to see to the
payment of any assignment or other governmental charge or any Lien or
encumbrance of any kind owing with respect to or assessed or levied against any
part of the Collateral.
(i) For as long as the Person that serves as the Trustee hereunder
also serves as Collateral Agent, the protections, immunities and indemnities
afforded to that Person in its capacity as Trustee hereunder shall also be
afforded to such Person in its capacity as Collateral Agent.
Section 7.03 Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the Commission
for permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
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Section 7.04 Trustee's Disclaimer.
The Trustee will not be responsible for and makes no representation
as to the validity or adequacy of this Indenture, the Security Documents, the
Collateral or the Notes, it shall not be accountable for the Company's use of
the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it will not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it will not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05 Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee will mail to Holders of Notes a notice of
the Default or Event of Default within 90 days after it occurs. Except in the
case of a Default or Event of Default in payment of principal of, premium or
Liquidated Damages, if any, or interest on, any Note, the Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of the Holders
of the Notes.
Section 7.06 Reports by Trustee to Holders of the Notes.
(a) Within 60 days after each April 1 beginning with the April 1
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee will mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA ss. 313(a) (but if no
event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
will comply with TIA ss. 313(b)(2). The Trustee will also transmit by mail all
reports as required by TIA ss. 313(c).
(b) A copy of each report at the time of its mailing to the Holders
of Notes will be mailed by the Trustee to the Company and filed by the Trustee
with the Commission and each stock exchange on which the Notes are listed in
accordance with TIA ss. 313(d). The Company will promptly notify the Trustee
when the Notes are listed on any stock exchange.
Section 7.07 Compensation and Indemnity.
(a) The Company will pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder as
agreed to in writing. The Trustee's compensation will not be limited by any law
on compensation of a trustee of an express trust. The Company will reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses will include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
(b) The Company and the Guarantors will indemnify the Trustee against
any and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company and the Guarantors (including this Section 7.07) and defending
itself against any claim (whether asserted by the Company, the Guarantors, any
Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee will notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company will not
73
relieve the Company or any of the Guarantors of their obligations hereunder. The
Company or such Guarantor will defend the claim and the Trustee will cooperate
in the defense. The Trustee may have separate counsel and the Company will pay
the reasonable fees and expenses of such counsel. Neither the Company nor any
Guarantor need pay for any settlement made without its consent, which consent
will not be unreasonably withheld.
(c) The obligations of the Company and the Guarantors under this
Section 7.07 will survive the satisfaction and discharge of this Indenture.
(d) To secure the Company's and the Guarantors' payment obligations
in this Section 7.07, the Trustee will have a Lien prior to the Notes on all
money or property held or collected by the Trustee, except that held in trust to
pay principal and interest on particular Notes. Such Lien will survive the
satisfaction and discharge of this Indenture.
(e) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
(f) The Trustee will comply with the provisions of TIA ss. 313(b)(2)
to the extent applicable.
Section 7.08 Replacement of Trustee.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee will become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign in writing at any time upon 30 days' prior
notice to the Company and be discharged from the trust hereby created by so
notifying the Company. The Holders of a majority in principal amount of the then
outstanding Notes may remove the Trustee by so notifying the Trustee and the
Company in writing. The Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10 hereof;
(2) the Trustee is adjudged a bankrupt or an insolvent or
an order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(3) a custodian or public officer takes charge of the
Trustee or its property; or
(4) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company will promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount at maturity of the then outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.
(d) If a successor Trustee does not take office within 60 days after
the retiring Trustee resigns or is removed, the retiring Trustee, the Company,
or the Holders of at least 10% in principal amount at maturity of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
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(e) If the Trustee, after written request by any Holder who has been
a Holder for at least six months, fails to comply with Section 7.10, such Holder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
(f) A successor Trustee will deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee will become effective, and the
successor Trustee will have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee will mail a notice of its succession
to Holders. The retiring Trustee will promptly transfer all property held by it
as Trustee to the successor Trustee, provided all sums owing to the Trustee
hereunder have been paid and subject to the Lien provided for in Section 7.07
hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof will continue for the
benefit of the retiring Trustee.
Section 7.09 Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act will be the
successor Trustee.
Section 7.10 Eligibility; Disqualification.
There will at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture will always have a Trustee who satisfies the
requirements of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA
ss. 310(b).
Section 7.11 Preferential Collection of Claims Against Company.
The Trustee is subject to 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 therein.
ARTICLE 8.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01 Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at its option, at any time, elect to have either
Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance
with the conditions set forth below in this Article 8.
Section 8.02 Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company and each of the Guarantors will,
subject to the satisfaction of the conditions set forth in Section 8.04 hereof,
be deemed to have been discharged from their obligations with respect to all
outstanding Notes (including the Note Guarantees) on the date the conditions set
forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose,
Legal Defeasance means that the Company and the Guarantors will be deemed to
75
have paid and discharged the entire Indebtedness represented by the outstanding
Notes (including the Note Guarantees), which will thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in clauses (1) and (2) below, and to have
satisfied all their other obligations under such Notes, the Note Guarantees and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which will survive until otherwise terminated or discharged
hereunder:
(1) the rights of Holders of outstanding Notes to receive
payments in respect of the principal of, or interest, premium or
Liquidated Damages, if any, on, such Notes when such payments are due
from the trust referred to in Section 8.04 hereof;
(2) the Company's obligations with respect to such Notes
under Article 2 and Section 4.02 hereof;
(3) the rights, powers, trusts, duties and immunities of
the Trustee hereunder and the Company's and the Guarantors'
obligations in connection therewith; and
(4) this Article 8.
Subject to compliance with this Article 8, the Company may exercise
its option under this Section 8.02 notwithstanding the prior exercise of its
option under Section 8.03 hereof.
Section 8.03 Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and the Guarantors will, subject to
the satisfaction of the conditions set forth in Section 8.04 hereof, be released
from each of their obligations under the covenants contained in Sections 4.07,
4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20 and 4.21
hereof and clause (4) of Section 5.01 hereof with respect to the outstanding
Notes on and after the date the conditions set forth in Section 8.04 hereof are
satisfied (hereinafter, "Covenant Defeasance"), and the Notes will thereafter be
deemed not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but will continue to be deemed "outstanding" for
all other purposes hereunder (it being understood that such Notes will not be
deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes and Note
Guarantees, the Company and the Guarantors may omit to comply with and will have
no liability in respect of any term, condition or limitation set forth in any
such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply will not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes and Note Guarantees will be unaffected thereby. In
addition, upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03 hereof, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, Sections 6.01(3) through 6.01(5)
and 6.01(11) hereof will not constitute Events of Default.
Section 8.04 Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance
under either Section 8.02 or 8.03 hereof:
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(1) the Company must irrevocably deposit with the Trustee,
in trust, for the benefit of the Holders, cash in United States
dollars, non-callable Government Securities, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants, to pay
the principal of, premium and Liquidated Damages, if any, and
interest on, the outstanding Notes on the stated date for payment
thereof or on the applicable redemption date, as the case may be, and
the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(2) in the case of an election under Section 8.02 hereof,
the Company must deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that:
(A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling;
or
(B) 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 Holders of the
outstanding Notes will not recognize income, gain or loss
for Federal income tax purposes as a result of such Legal
Defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not
occurred;
(3) in the case of an election under Section 8.03 hereof,
the Company must deliver to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Notes will not recognize income, gain or loss for
Federal income tax purposes as a result of such Covenant Defeasance
and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Covenant Defeasance had not occurred;
(4) no Default or Event of Default shall have occurred and
be continuing on the date of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied
to such deposit);
(5) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under,
any material agreement or instrument (other than this Indenture) to
which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound;
(6) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other
creditors of the Company with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(7) the Company must deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
The Note Liens will be released in whole as provided in Section 13.04
upon a Legal Defeasance or Covenant Defeasance in accordance with the provisions
described in this Article 8.
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Section 8.05 Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying trustee, collectively for purposes of this Section 8.05, the
"Trustee") pursuant to Section 8.04 hereof in respect of the outstanding Notes
will be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium and Liquidated Damages, if
any, and interest, but such money need not be segregated from other funds except
to the extent required by law.
The Company will pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable
Government Securities deposited pursuant to Section 8.04 hereof or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Notwithstanding anything in this Article 8 to the contrary, the
Trustee will deliver or pay to the Company from time to time upon the request of
the Company any money or non-callable Government Securities held by it as
provided in Section 8.04 hereof which, in the opinion of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee (which may be the opinion delivered under
Section 8.04(1) hereof), are in excess of the amount thereof that would then be
required to be deposited to effect an equivalent Legal Defeasance or Covenant
Defeasance.
Section 8.06 Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, premium or
Liquidated Damages, if any, or interest on, any Note and remaining unclaimed for
two years after such principal, premium or Liquidated Damages, if any, or
interest has become due and payable shall be paid to the Company on its request
or (if then held by the Company) will be discharged from such trust; and the
Holder of such Note will thereafter be permitted to look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, will thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which will not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
Section 8.07 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or non-callable Government Securities in accordance with Section 8.02 or
8.03 hereof, as the case may be, by reason of any order or judgment of any court
or governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and the Guarantors' obligations under this
Indenture, the Notes and the Note Guarantees will be revived and reinstated as
though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium or
Liquidated Damages, if any, or interest on, any Note following the reinstatement
of its obligations, the Company will be subrogated to the rights of the Holders
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of such Notes to receive such payment from the money and/or Government
Securities held by the Trustee or Paying Agent.
ARTICLE 9.
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01 Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture, the Note
Guarantees, the Security Documents or the Notes without the consent of any
Holder of a Note:
(1) to cure any ambiguity, defect or inconsistency;
(2) to provide for uncertificated Notes in addition to or
in place of certificated Notes;
(3) to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to
the Company or a Guarantor pursuant to Article 5 or Article 10
hereof;
(4) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect in any material respect the rights hereunder of any
Holder of the Notes;
(5) to comply with requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the
TIA;
(6) to make, complete or confirm any grant of Collateral
permitted or required by this Indenture or any of the Security
Documents or any release of Collateral that becomes effective as set
forth in this Indenture or any of the Security Documents;
(7) to conform the text of this Indenture, the Note
Guarantees, the Security Documents or the Notes to any provision of
the Description of Notes contained in the Offering Circular to the
extent that such provision in the Description of Notes was intended
to be a verbatim recitation of a provision of this Indenture, the
Note Guarantees, the Security Documents or the Notes;
(8) as provided in clause (2) under Section 12.07(a);
(9) to provide for the issuance of Additional Notes in
accordance with the limitations set forth in this Indenture as of the
date hereof; or
(10) to allow any Guarantor to execute a supplemental
indenture and/or a Note Guarantee;
provided that the Company has delivered to the Trustee an Opinion of Counsel and
an Officers' Certificate stating that such amendment or supplement complies with
the provisions of this Section.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee will join with the Company and the Guarantors in the
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execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee will not be
obligated to enter into such amended or supplemental Indenture that affects its
own rights, duties or immunities under this Indenture or otherwise.
Section 9.02 With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the
Guarantors and the Trustee may amend or supplement this Indenture (including,
without limitation, Section 3.09, 4.10 and 4.15 hereof), the Note Guarantees,
the Security Documents and the Notes with the consent of the Holders of at least
a majority in principal amount at maturity of the Notes (including, without
limitation, Additional Notes, if any) then outstanding (including, without
limitation, consents obtained in connection with a tender offer or exchange
offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07
hereof, any existing Default or Event of Default (other than a Default or Event
of Default in the payment of the principal of, premium or Liquidated Damages, if
any, or interest on the Notes, except a payment default resulting from an
acceleration that has been rescinded) or compliance with any provision of this
Indenture, the Note Guarantees, the Security Documents or the Notes may be
waived with the consent of the Holders of a majority in principal amount at
maturity of the then outstanding Notes (including, without limitation, consents
obtained in connection with a tender offer or exchange offer for, or purchase
of, the Notes). Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02 hereof, the Trustee will
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but will not be
obligated to, enter into such amended or supplemental indenture.
It is not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment or
waiver, but it is sufficient if such consent approves the substance thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company will mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, will not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount at maturity of the Notes
then outstanding may waive compliance in a particular instance by the Company
with any provision of this Indenture or the Notes. However, without the consent
of each Holder affected, an amendment or waiver under this Section 9.02 may not
(with respect to any Notes held by a non-consenting Holder):
(1) reduce the principal amount at maturity of Notes whose
Holders must consent to an amendment, supplement or waiver;
(2) reduce the principal of or change the fixed maturity
of any Note or alter or waive any of the provisions with respect to
the redemption of the Notes, except as provided above with respect to
Sections 3.09, 4.10 and 4.15 hereof;
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(3) reduce the rate of or change the time for payment of
interest, including default interest, on any Note;
(4) waive a Default or Event of Default in the payment of
principal of, or premium or Liquidated Damages, if any, or interest
on, the Notes (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount at
maturity of the then outstanding Notes and a waiver of the payment
default that resulted from such acceleration);
(5) make any Note payable in money other than that stated
in the Notes;
(6) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of
Notes to receive payments of principal of, or interest, premium or
Liquidated Damages, if any, on the Notes;
(7) release any Collateral from the Liens created by the
Security Documents except as specifically provided for in this
Indenture and the Security Documents;
(8) waive any redemption payment with respect to any Note
(other than a payment required by Sections 3.09. 4.10 or 4.15
hereof);
(9) release any Guarantor from any of its obligations
under its Note Guarantee or this Indenture, except in accordance with
the terms of this Indenture; or
(10) make any change in the preceding amendment and waiver
provisions.
In addition, no amendment or supplement to Article 12 will:
(1) become effective at any time prior to the Discharge of
Credit Agreement Obligations, unless such amendment or supplement is
consented to in a writing signed by the Credit Agreement Agent
pursuant to the terms of the Credit Agreement; or
(2) impose any obligation upon the Collateral Agent or
adversely affect the rights of the Collateral Agent in its individual
capacity without the consent of the Collateral Agent.
Section 9.03 Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes will be
set forth in a amended or supplemental Indenture that complies with the TIA as
then in effect.
Section 9.04 Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
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Section 9.05 Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall, upon receipt of an
Authentication Order, authenticate new Notes that reflect the amendment,
supplement or waiver.
Failure to make the appropriate notation or issue a new Note will not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06 Trustee to Sign Amendments, etc.
The Trustee will sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company may not sign an indenture amendment or supplemental indenture until
the Board of Directors approves it. In executing any amended or supplemental
indenture, the Trustee will be entitled to receive and (subject to Section 7.01
hereof) will be fully protected in relying upon, in addition to the documents
required by Section 12.04 hereof, an Officers' Certificate and an Opinion of
Counsel stating that: (i) the amended or supplemental indenture has been duly
authorized, executed and delivered and is enforceable in accordance with its
terms (subject to customary exceptions); and (ii) such amended or supplemental
indenture is in compliance with the TIA.
ARTICLE 10.
NOTE GUARANTEES
Section 10.01 Guarantee.
(a) Subject to this Article 10, each of the Guarantors hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes or the obligations of the Company hereunder or thereunder, that:
(1) the principal of, premium and Liquidated Damages, if
any, and interest on, the Notes will be promptly paid in full when
due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes,
if any, if lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be promptly paid
in full or performed, all in accordance with the terms hereof and
thereof; and
(2) in case of any extension of time of payment or renewal
of any Notes or any of such other obligations, that same will be
promptly paid in full when due or performed in accordance with the
terms of the extension or renewal, whether at stated maturity, by
acceleration or otherwise.
Failing payment when due of any amount so guaranteed or any
performance so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately. Each Guarantor agrees that
this is a guarantee of payment and not a guarantee of collection.
(b) The Guarantors hereby agree that their obligations hereunder are
unconditional, irrespective of the validity, regularity or enforceability of the
Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance (other than complete performance)
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which might otherwise constitute a legal or equitable discharge or defense of a
guarantor. Each Guarantor, to the extent permitted by law, hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Note Guarantee will not be discharged except by complete
performance of the obligations contained in the Notes and this Indenture.
(c) If any Holder or the Trustee is required by any court or
otherwise to return to the Company, the Guarantors or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by either to the Trustee or such Holder, this
Note Guarantee, to the extent theretofore discharged, will be reinstated in full
force and effect.
(d) Each Guarantor agrees that it will not be entitled to any right
of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until payment in full of all obligations guaranteed hereby.
Each Guarantor further agrees that, as between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (1) the maturity of the
obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of this Note Guarantee, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (2) in the event of any declaration of acceleration of
such obligations as provided in Article 6 hereof, such obligations (whether or
not due and payable) will forthwith become due and payable by the Guarantors for
the purpose of this Note Guarantee. The Guarantors will have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Note Guarantee.
Section 10.02 Limitation on Guarantor Liability.
Each Guarantor, and by its acceptance of Notes, each Holder, hereby
confirms that it is the intention of all such parties that the Note Guarantee of
such Guarantor not constitute a fraudulent transfer or conveyance for purposes
of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar federal or state law to the extent applicable to any
Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders
and the Guarantors hereby irrevocably agree that the obligations of such
Guarantor will be limited to the maximum amount that will, after giving effect
to such maximum amount and all other contingent and fixed liabilities of such
Guarantor that are relevant under such laws, and after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article 10, result in the obligations of such Guarantor
under its Note Guarantee not constituting a fraudulent transfer or conveyance.
Section 10.03 Execution and Delivery of Note Guarantee.
To evidence its Note Guarantee set forth in Section 10.01, each
Guarantor hereby agrees that a notation of such Note Guarantee substantially in
the form attached as Exhibit E hereto will be endorsed by an Officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture will be executed on behalf of such Guarantor by one of its Officers.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 10.01 will remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
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If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee will be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication
thereof hereunder, will constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any Domestic
Restricted Subsidiary after the date of this Indenture, if required by Section
4.18 hereof, the Company will cause such Domestic Restricted Subsidiary to
comply with the provisions of Section 4.18 hereof and this Article 10, to the
extent applicable.
Section 10.04 Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 10.05, no Guarantor may sell
or otherwise dispose of all or substantially all of its assets to, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person, other than the Company or another Guarantor,
unless:
(1) immediately after giving effect to such transaction,
no Default or Event of Default exists; and
(2) either:
(a) subject to Section 10.05 hereof, the Person
acquiring the property in any such sale or disposition or
the Person formed by or surviving any such consolidation
or merger unconditionally assumes all the obligations of
that Guarantor, pursuant to agreements in form and
substance reasonably satisfactory to the Trustee, under
this Indenture, the Registration Rights Agreement, the
Security Documents and the Note Guarantee on the terms set
forth herein or therein; and
(b) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable
provisions of this Indenture, including without
limitation, Section 4.10 hereof.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by the
Guarantor, such successor Person will succeed to and be substituted for the
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued will in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes will prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or will prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
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Section 10.05 Releases Following Sale of Assets.
In the event of any sale or other disposition of all or substantially
all of the assets of any Guarantor, by way of merger, consolidation or
otherwise, or a sale or other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either before or after giving
effect to such transactions) a Restricted Subsidiary of the Company, then such
Guarantor (in the event of a sale or other disposition, by way of merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all or substantially all of the assets of such Guarantor) will be
released and relieved of any obligations under its Note Guarantee; provided that
the Net Proceeds of such sale or other disposition are applied in accordance
with the applicable provisions of this Indenture, including without limitation
Section 4.10 hereof. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee will
execute at the Company's expense any documents reasonably required in order to
evidence the release of any Guarantor from its obligations under its Note
Guarantee without recourse, representation, warranty or liability of any kind.
Additionally, a Guarantor will be released and relieved of any
obligations under its Note Guarantee if the Company designates any Restricted
Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with
the applicable provisions of this Indenture.
Any Guarantor not released from its obligations under its Note
Guarantee will remain liable for the full amount of principal of and interest on
the Notes and for the other obligations of any Guarantor under this Indenture as
provided in this Article 10.
ARTICLE 11.
SATISFACTION AND DISCHARGE
Section 11.01 Satisfaction and Discharge.
This Indenture will be discharged and will cease to be of further
effect as to all Notes issued hereunder, when:
(1) either:
(a) all Notes that have been authenticated
(except lost, stolen or destroyed Notes that have been
replaced or paid and Notes for whose payment money has
theretofore been deposited in trust and thereafter repaid
to the Company) have been delivered to the Trustee for
cancellation; or
(b) all Notes that have not been delivered to
the Trustee for cancellation have become due and payable
by reason of the making of a notice of redemption or
otherwise or will become due and payable within one year
and the Company or any Guarantor has irrevocably deposited
or caused to be deposited with the Trustee as trust funds
in trust solely for the benefit of the Holders, cash in
U.S. dollars, non-callable Government Securities, or a
combination thereof, in such amounts as will be sufficient
without consideration of any reinvestment of interest, to
pay and discharge the entire indebtedness on the Notes not
delivered to the Trustee for cancellation for principal,
premium and Liquidated Damages, if any, and accrued
interest to the date of maturity or redemption;
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(2) no Default or Event of Default has occurred and is
continuing on the date of such deposit or will occur as a result of
such deposit and such deposit will not result in a breach or
violation of, or constitute a default under, any other instrument to
which the Company or any Guarantor is a party or by which the Company
or any Guarantor is bound;
(3) the Company or any Guarantor has paid or caused to be
paid all sums payable by it under this Indenture; and
(4) the Company has delivered irrevocable instructions to
the Trustee under this Indenture to apply the deposited money toward
the payment of the Notes at maturity or the redemption date, as the
case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
Notwithstanding the satisfaction and discharge of this Indenture, if
money has been deposited with the Trustee pursuant to subclause (b) of clause
(1) of this Section, the provisions of Section 11.02 and Section 8.06 will
survive. In addition, nothing in this Section 11.01 will be deemed to discharge
those provisions of Section 7.07 hereof, that, by their terms, survive the
satisfaction and discharge of this Indenture.
Section 11.02 Application of Trust Money.
Subject to the provisions of Section 8.06, all money and non-callable
Government Securities deposited with the Trustee pursuant to Section 11.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
If the Trustee or Paying Agent is unable to apply any money or
Government Securities in accordance with Section 11.01 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 and any Guarantor's obligations under this Indenture and the Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 11.01; provided that if the Company has made any payment of principal
of, premium, if any, or interest on, any Notes because of the reinstatement of
its obligations, the Company shall be subrogated to the rights of the Holders of
such Notes to receive such payment from the money or Government Securities held
by the Trustee or Paying Agent.
ARTICLE 12.
RANKING OF NOTE LIENS
Section 12.01 Agreement for the Benefit of Holders of Priority.
The Trustee and the Collateral Agent agree, and each Holder of Notes
by accepting a Note agrees, that (1) the Note Liens are, to the extent and in
the manner provided in this Article 12, junior and subordinate in ranking to all
Priority Liens, whenever granted, upon any present or future Collateral, but
only to the extent the Priority Liens secure Priority Lien Obligations, and the
Priority Liens, whenever granted, upon any present or future Collateral to the
extent, and only to the extent, securing the Priority Lien Obligations will be
86
prior and senior to the Note Liens and (2) that such agreements as to the
ranking of the Note Liens:
(a) are enforceable by the holders of Priority
Liens; and
(b) will remain enforceable by the holders of
Priority Liens until the Discharge of the Priority Lien
Obligations.
Section 12.02 Ranking.
Notwithstanding (a) anything to the contrary contained in the Note
Documents, (b) the time, order or method of attachment of the Note Liens or the
Priority Liens, (c) the time or order of filing or recording of financing
statements or other documents filed or recorded to perfect any Lien upon any
Collateral, (d) the time of taking possession or control over any Collateral,
(e) the rules for determining priority under the Uniform Commercial Code or any
other law governing relative priorities of secured creditors, (f) that any
Priority Lien may not have been perfected, (g) that any Priority Lien may be or
have become subordinated, by equitable subordination or otherwise, to any other
Lien, or (h) any other circumstance of any kind or nature whatsoever, whether
similar or dissimilar to any of the foregoing, the Note Liens will in all
circumstances be junior and subordinate in ranking to all Priority Liens,
whenever granted, upon any present or future Collateral, but only to the extent
such Priority Liens secure Priority Lien Obligations, and the Priority Liens,
whenever granted, upon any present or future Collateral to the extent the
Priority Liens secure the Priority Lien Obligations will be prior and superior
to the Note Liens.
Section 12.03 Collateral Sharing with Additional Notes.
Any Additional Notes issued under this Indenture and permitted to be
incurred under the Credit Agreement and by Section 4.09 hereof will be treated
as Note Obligations for all purposes under this Indenture and the Security
Documents.
Section 12.04 Restriction on Enforcement of Note Liens.
(a) Until Discharge of Credit Agreement Obligations, the
holders of Priority Liens will have the exclusive right to manage,
perform and enforce the terms of the Priority Lien Documents with
respect to all Collateral and to exercise and enforce all privileges
and rights thereunder as permitted by the Priority Lien Documents and
applicable law, including, without limitation, the exclusive right to
take any actions to enforce, collect or realize upon any Collateral.
Subject to Section 12.14 and the second set of clauses (1) through
(4) below, the Trustee and Holders of Notes will not authorize or
instruct the Collateral Agent, and the Collateral Agent will not, and
will not authorize or direct any Person acting for it, the Trustee or
any holder of Note Obligations, to exercise any right or remedy with
respect to any Collateral (including any right of set-off) or take
any action to enforce, collect or realize upon any Collateral,
including without limitation, any right, remedy or action to:
(1) take possession of or control over any Collateral;
(2) exercise any collection rights in respect of any
Collateral or retain any proceeds of accounts and other obligations
receivable paid to it directly by any account debtor;
(3) exercise any right of set-off against any property
subject to any Priority Lien;
87
(4) foreclose upon any Collateral or take or accept any
transfer of title in lieu of foreclosure upon any Collateral;
(5) enforce any claim to the proceeds of insurance upon any
Collateral;
(6) deliver any notice, claim or demand relating to the
Collateral to any Person (including any securities intermediary,
depositary bank or landlord) in the possession or control of any
Collateral or acting as bailee, custodian or agent for any holder of
Priority Liens in respect of any Collateral;
(7) otherwise enforce any remedy available upon default for
the enforcement of any Lien upon the Collateral;
(8) deliver any notice or commence any proceeding for any
of the foregoing purposes; or
(9) seek relief in any Insolvency or Liquidation
Proceeding permitting it to do any of the foregoing,
except that, in any event, any such right or remedy may be exercised and any
such action may be taken, authorized or instructed:
(1) without any condition or restriction whatsoever, at any
time after the Discharge of Credit Agreement Obligations;
(2) as necessary to redeem any Collateral in a creditor's
redemption permitted by law or to deliver any notice or demand
necessary to enforce (subject to the prior Discharge of Credit
Agreement Obligations) any right to claim, take or receive proceeds
of Collateral remaining after Discharge of Credit Agreement
Obligations in the event of foreclosure or other enforcement of any
prior Lien;
(3) as necessary to perfect a Lien upon any Collateral by
any method of perfection except through possession or control; or
(4) as necessary to prove, preserve or protect (but not
enforce) the Note Liens,
in each case, subject to the provisions of the Security Documents.
(b) None of the rights and remedies otherwise available to the
holders of Priority Liens in respect of the foreclosure or other enforcement of
Priority Liens and none of the other rights and remedies of the holders of
Priority Liens and Priority Lien Obligations under the Priority Lien Documents
will be impaired, restricted or affected by this Article 12.
(c) Until the Discharge of Credit Agreement Obligations:
(1) the Credit Agreement Agent will have the sole right to
adjust settlement of all insurance claims and condemnation awards in
the event of any covered loss, theft, destruction or condemnation of
any Collateral and all claims under insurance constituting
Collateral;
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(2) all proceeds of insurance on or constituting
Collateral and all condemnation awards resulting from a taking of any
Collateral will inure to the benefit of, and will be paid to, the
holders of the Priority Liens; and
(3) the Collateral Agent will co-operate, if necessary and
as reasonably requested by the Credit Agreement Agent, in effecting
the payment of insurance proceeds to the Credit agreement Agent.
(d) Subject to Section 12.14 (other than clauses (4) and (5) of
Section 12.14), until the Discharge of Credit Agreement Obligations, none of the
Holders of Notes, the Trustee or the Collateral Agent will:
(1) request judicial relief, in an Insolvency or
Liquidation Proceeding or in any other court, that would hinder,
delay, limit or prohibit the lawful exercise or enforcement of any
right or remedy otherwise available to the holders of Priority Liens
in respect of Priority Liens or that would limit, invalidate, avoid
or set aside any Priority Lien or Priority Lien Security Document or
subordinate the Priority Liens to the Note Liens or grant the
Priority Liens equal ranking to the Note Liens;
(2) oppose or otherwise contest any motion for relief from
the automatic stay or from any injunction against foreclosure or
enforcement of Priority Liens made by any holder of Priority Liens in
any Insolvency or Liquidation Proceeding;
(3) oppose or otherwise contest any lawful exercise by any
holder of Priority Liens of the right to credit bid Priority Lien
Debt at any sale in foreclosure of Priority Liens; or
(4) oppose or otherwise contest any other request for
judicial relief made in any court by any holder of Priority Liens
relating to the lawful enforcement of any Priority Lien.
(e) Except for payments received free from the Priority Liens as
provided in this Section, all proceeds of Collateral received by the Trustee or
the Collateral Agent at any time prior to the Discharge of Credit Agreement
Obligations will be held by the Trustee or the Collateral Agent for account of
the holders of Priority Liens and remitted to the Credit Agreement Agent upon
demand by the Credit Agreement Agent. To the extent provided by applicable law,
the Note Liens will remain attached to and, subject to this Article 12,
enforceable against all proceeds so held or remitted.
(f) Except for payments that are made from or constitute proceeds of
property subject to Priority Liens and that are received by the Trustee or the
Collateral Agent or any holder of Note Obligations at any time prior to the
Discharge of Credit Agreement Obligations and after (i) the commencement of any
Insolvency or Liquidation Proceeding in respect of the Company or the grantor of
any Priority Lien or (ii) the Trustee and the Collateral Agent have received
written notice from the Credit Agreement Agent stating that (A) the Priority
Lien Debt has become due and payable in full (whether at maturity, upon
acceleration or otherwise) or (B) the holders of Priority Liens have become
entitled to, and desire to, enforce any or all of the Priority Liens by reason
of a default under Priority Lien Documents:
(1) no payment of money (or the equivalent of money) made
by the Company or a Guarantor to the Trustee, the Collateral Agent,
any Holder of Notes or any other holder of Note Obligations
(including, without limitation, payments and prepayments made for
application to Note Obligations and all other payments and deposits
made pursuant to any provision of this Indenture, any other Note
Document and the Intercreditor Agreement and excluding any redemption
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or repurchases of Notes prior to the Maturity Date to the extent
prohibited by the Priority Lien Documents as in effect on the date
hereof) will in any event be subject to the foregoing provisions of
this Section 12.04 or otherwise affected by any of the provisions of
Section 12.14; and
(2) all payments permitted to be received under Section
12.04(f)(1) will be received by the Trustee, the Collateral Agent,
the Holders of Notes and the other holders of Note Obligation free
from the Priority Liens and all other Liens thereon except the Note
Liens.
Section 12.05 Insolvency or Liquidation Proceedings.
(a) The provisions of Article 12 will be applicable both before and
after the filing of any petition by or against any Obligor under any insolvency
or bankruptcy law and all converted or succeeding cases in respect thereof, and
all references herein to any Obligor shall be deemed to apply to the trustee for
such Obligor and such Obligor as a debtor-in-possession. The relative rights of
secured creditors in or to any distributions from or in respect of any
Collateral or proceeds of Collateral shall continue after the filing of such
petition on the same basis as prior to the date of such filing, subject to any
court order approving the financing of, or use of cash collateral by any Obligor
as debtor-in-possession. If, in any Insolvency or Liquidation Proceeding and
prior to the Discharge of Credit Agreement Obligations, all of the Lenders (or
such number of the Lenders as may have the power to bind all of them):
(1) consent to any order for use of cash collateral or
agree to the extension of any Priority Lien Debt to any Obligor to
the extent permitted by clause (1) or clause (10) of the definition
of "Permitted Debt," as well as all Hedging Obligations permitted to
be incurred by clause (7) of the definition of "Permitted Debt;"
(2) consent to any order granting any priming lien,
replacement lien, cash payment or other relief on account of Priority
Lien Obligations as adequate protection (or its equivalent) for the
interests of the holders of Priority Liens in the property subject to
such Priority Liens; or
(3) consent to any order relating to a sale of assets of
the Company or any Guarantor that:
(i) provides, to the extent the sale is to be
free and clear of Liens, that all Priority Liens and Note
Liens shall attach to the proceeds of the sale; and
(ii) grants Credit Bid Rights to the Holders of
Notes,
then, so long as none of the Lenders, the Credit Agreement Agent or any
representative acting for one or more of the Lenders in any respect opposes or
otherwise contests any request made by the holders of Note Obligations for the
grant to the Collateral Agent, for the benefit of the holders of Note
Obligations and as adequate protection (or its equivalent) for the Collateral
Agent's interest in the Collateral under the Note Liens, of a junior lien upon
any property upon which a Lien is (or is to be) granted under such order to
secure the Priority Lien Obligations, co-extensive in all respects with, but
subordinated (as set forth in this Article 12) in all respects to, such Lien and
all Priority Liens upon such property, the Holders of Notes, the Trustee and the
Collateral Agent will not oppose or otherwise contest the entry of such order,
except that any such order approving a sale of assets or the bidding procedures
for any sale of assets may be opposed or otherwise contested by them based on
any ground that may be asserted by a holder of unsecured claims.
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(b) The Holders of Notes, the Trustee and the Collateral Agent will
not file or prosecute in any Insolvency or Liquidation Proceeding any motion for
adequate protection (or any comparable request for relief) based upon their
interests in the Collateral under the Note Liens, except that:
(1) they may freely seek and obtain relief:
(A) granting a junior lien co-extensive in all respects
with, but subordinated (as set forth in this Article 12) in all
respects to, all Liens granted in such Insolvency or Liquidation
Proceeding to the holders of Priority Lien Debt; or
(B) in connection with the confirmation of any plan of
reorganization or similar dispositive restructuring plan; and
(2) they may freely seek and obtain any relief upon a
motion for adequate protection (or any comparable relief), without
any condition or restriction whatsoever, at any time after the
Discharge of Credit Agreement Obligations.
(c) If, in any Liquidation or Insolvency Proceeding, debt obligations
of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed, both on account of Priority Lien Debt and on account of
the Notes, then, to the extent the debt obligations distributed on account of
the Priority Lien Debt and on account of the Notes are secured by Liens upon the
same property, the provisions of this Article 12 will survive the distribution
of such debt obligations pursuant to such plan and will apply with like effect
to the Liens securing such debt obligations.
(d) The Holders of Notes, the Trustee and the Collateral Agent will
not assert or enforce, at any time prior to the Discharge of Credit Agreement
Obligations, any claim under ss.506(c) of the United States Bankruptcy Code
senior to or on a parity with the Priority Liens for costs or expenses of
preserving or disposing of any Collateral.
Section 12.06 Release of Collateral or Note Guarantees upon Sale or
Other Disposition.
(a) If, at any time prior to the Discharge of Credit Agreement
Obligations, the Credit Agreement Agent certifies to the Trustee and the
Collateral Agent that:
(1) any specified Collateral, or all Capital Stock owned
by the Company and its Subsidiaries in a Subsidiary which, directly
or indirectly through another Subsidiary, owns such Collateral, is
sold, transferred or otherwise disposed of:
(A) by the owner of such Collateral to a Person other than
the Company or a Restricted Subsidiary of the Company in a
transaction permitted under the Credit Agreement and this Indenture;
or
(B) by the holder of any Priority Lien securing
Obligations under the Credit Agreement in a foreclosure or other
enforcement proceeding or by an Obligor in lieu of a sale by the
holders of the Priority Lien Obligations in a foreclosure or
enforcement proceeding; provided, however, that the Credit Agreement
Agent shall remit to the Collateral Agent the proceeds, if any, of
such distribution remaining after payment in full of the Priority
Lien Obligations or as ordered by a court of competent jurisdiction;
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and
(2) all Liens upon such Collateral (not including the
proceeds payable to the Credit Agreement Agent) securing Obligations
under the Credit Agreement will be forever released and discharged
upon such sale, transfer or other disposition,
then (whether or not any Insolvency or Liquidation Proceeding is pending at the
time) the Note Liens upon such Collateral (not including the proceeds payable to
the Collateral Agent pursuant to clause (1)(B) above) will automatically be
released and discharged as and when and to the extent such Liens securing
Obligations under the Credit Agreement are released and discharged.
(b) If, at any time prior to the Discharge of Credit Agreement
Obligations, the Credit Agreement Agent certifies to the Trustee and the
Collateral Agent that:
(1) all or substantially all Capital Stock owned by the
Company and its Restricted Subsidiaries in any Subsidiary of the
Company (a "Sold Subsidiary") is sold, transferred or otherwise
disposed of (whether directly by transfer of Capital Stock issued by
the Sold Subsidiary or indirectly by transfer of Capital Stock of
other Subsidiaries which, directly or indirectly, own Capital Stock
issued by the Sold Subsidiary):
(A) by the owner of such Capital Stock to a Person other
than the Company or a Restricted Subsidiary of the Company in a
transaction permitted under the Credit Agreement and this Indenture;
or
(B) by the holder of any Priority Lien securing
Obligations under the Credit Agreement in a foreclosure or other
enforcement proceeding or by an Obligor in lieu of a sale by the
holders of the Priority Lien Obligations in a foreclosure or
enforcement proceeding; provided, however, that the Credit Agreement
Agent shall remit to the Collateral Agent the proceeds, if any, of
such distribution remaining after payment in full of the Priority
Lien Obligations or as ordered by a court of competent jurisdiction;
and
(2) all guarantees of Obligations under the Credit
Agreement made by the Sold Subsidiary and all Liens upon property of
the Sold Subsidiary securing Obligations under the Credit Agreement
(not including the proceeds payable to the Credit Agreement Agent)
will be forever released and discharged upon such sale, transfer or
other disposition,
then (whether or not any Insolvency or Liquidation Proceeding is pending at the
time) the Note Guarantee made by such Subsidiary and all Note Liens upon the
property of such Subsidiary will automatically be released and discharged as and
when and to the extent such guarantees of Obligations under the Credit Agreement
(not including the proceeds payable to the Collateral Agent pursuant to clause
1(B) above) and Liens securing Obligations under the Credit Agreement are
released and discharged.
(c) Upon delivery to the Trustee and Collateral Agent of a
certificate of the Credit Agreement Agent stating that any release of Note Liens
has become effective pursuant to Section 12.06(a) or 12.06(b), the Collateral
Agent will promptly execute and deliver an instrument confirming such release on
customary terms and without any recourse, representation, warranty or liability
whatsoever. If the Collateral Agent unreasonably fails to do so, the Credit
Agreement Agent is hereby irrevocably authorized and empowered, with full power
of substitution, to execute and deliver such instrument in the name of the
Collateral Agent.
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Section 12.07 Amendment of Security Documents.
(a) Prior to the Discharge of Credit Agreement Obligations:
(1) The Collateral Agent will not enter into, and the
Trustee and the Holders of Notes will not authorize or direct, any
amendment of or supplement to any Security Document relating to any
Collateral that would make such Security Document inconsistent in any
material respect with the comparable provisions of the Priority Lien
Security Documents upon such Collateral and no such amendment or
supplement will be enforceable.
(2) Without the consent of any Holder of Notes, the
Trustee or the Collateral Agent, any amendment, waiver or consent
agreed to, upon any terms and conditions, by the Company or any other
Obligor and the Credit Agreement Agent in respect of any provision of
any Priority Lien Security Document, except to the extent
effectuating or relating to any release of Liens, will automatically
apply, on the same terms and subject to the same conditions, to the
comparable provision of the applicable Security Document, effective
upon the delivery by the Credit Agreement Agent of written notice of
such amendment, waiver or consent, and the terms and conditions
thereof, to the Trustee and the Collateral Agent, if the notice
states that such amendment, waiver or consent has become effective as
to such agreement and is, pursuant to this Section 12.07(a)(2),
likewise effective as to the comparable provision of the comparable
Security Document. Such amendment, waiver or consent need not
otherwise be confirmed by the Trustee, the Collateral Agent or any
Holder of Notes, in order to be effective.
For the purposes of Section 12.07(a)(1), (i) no inconsistency reflected in the
Security Documents delivered in connection with the issuance of the Notes, as
compared with the comparable provisions of the applicable Priority Lien Security
Documents then in effect, will be subject to the provisions of Section
12.07(a)(1), and (ii) any provision granting rights or powers to the Collateral
Agent that are not granted to the holders of Priority Liens securing Priority
Lien Debt outstanding under the Credit Agreement will constitute a material
inconsistency.
(b) No amendment, supplement, waiver or change otherwise permitted by
this Indenture in respect of the Priority Lien Documents will be prohibited or
in any manner restricted or affected by, or by reason of, the provisions of this
Article 12.
Section 12.08 Waiver of Certain Subrogation, Marshalling, Appraisal and
Valuation Rights.
(a) To the fullest extent permitted by law, the Holders of Notes, the
Trustee and the Collateral Agent agree not to assert or enforce at any time
prior to the Discharge of Credit Agreement Obligations:
(1) any right of subrogation to the rights or interests of
holders of Priority Liens or Priority Lien Obligations outstanding
under the Credit Agreement (or any claim or defense based upon
impairment of any such right of subrogation);
(2) any right of marshalling accorded to a junior
lienholder, as against the holders of Priority Liens securing
Obligations under the Credit Agreement (as priority lienholders),
under equitable principles; or
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(3) any statutory right of appraisal or valuation accorded
under any applicable state law to a junior lienholder in a proceeding
to foreclose a Priority Lien securing Obligations under the Credit
Agreement.
(b) Without in any way limiting the generality of the foregoing,
each holder of Priority Lien Obligations or Priority Liens may at any time and
from time to time, without the consent of or notice to any holder of Note
Obligations, or Note Liens, without incurring any responsibility or liability to
any holder of Note Obligations, or Note Liens and without in any manner
prejudicing, affecting or impairing the ranking agreements and other obligations
set forth in this Article 12:
(1) make loans and advances to the Company or any of its
Subsidiaries or issue, guaranty or obtain letters of credit for
account of the Company or any of its Subsidiaries or otherwise extend
credit to the Company or any of its Subsidiaries, in any amount
(subject to the provisions of this Indenture relating to the maximum
amount of the Priority Lien Debt) and on any terms, whether pursuant
to a commitment or as a discretionary advance and whether or not any
default or event of default or failure of condition is then
continuing;
(2) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, compromise, accelerate,
extend or refinance, any Priority Lien Obligations or any agreement,
guaranty, Lien or obligation of the Company or any of its
Subsidiaries or any other person or entity in any manner related
thereto, or otherwise amend, supplement or change in any manner any
Priority Lien Obligations or Priority Liens or any such agreement,
guaranty, lien or obligation;
(3) increase or reduce the amount of any Priority Lien
Obligation (subject to the provisions of this Indenture relating to
the maximum amount of the Priority Lien Debt) or the interest,
premium, fees or other amounts payable in respect thereof;
(4) release or discharge any Priority Lien Obligation or
any guaranty thereof or any agreement or obligation of the Company or
any of its Subsidiaries or any other person or entity with respect
thereto;
(5) take or fail to take any Priority Lien or any other
collateral security for any Priority Lien Obligation or take or fail
to take any action which may be necessary or appropriate to ensure
that any Priority Lien or any other Lien upon any property is duly
enforceable or perfected or entitled to priority as against any other
Lien or to ensure that any proceeds of any property subject to any
Lien are applied to the payment of any Priority Lien Obligation or
any other obligation secured thereby;
(6) release, discharge or permit the lapse of any or all
Priority Liens or any other Liens upon any property at any time
securing any Priority Lien Obligation;
(7) exercise or enforce, in any manner, order or sequence,
or fail to exercise or enforce, any right or remedy against the
Company or any other Obligor or any collateral security or any other
person, entity or property in respect of any Priority Lien Obligation
or any Priority Lien or other Lien securing any Priority Lien
Obligation or any right or power under this Article 12, and apply any
payment or proceeds of collateral in any order of application; or
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(8) sell, exchange, release, foreclose upon or otherwise
deal with any property that may at any time be subject to any
Priority Lien or any other Lien securing any Priority Lien
Obligation.
(c) No exercise, delay in exercising or failure to exercise any right
arising under this Article 12, no act or omission of any holder of Priority
Liens or Priority Lien Obligations in respect of the Company or any of its
Restricted Subsidiaries or any other person or entity or any collateral security
for any Priority Lien Obligation or any right arising under this Article 12, no
change, impairment, or suspension of any right or remedy of any holder of any
Priority Liens or Priority Lien Obligations, and no other lawful act, failure to
act, circumstance, occurrence or event which, but for this provision, would or
could act as a release or exoneration of any obligation under this Article 12
will in any way affect, decrease, diminish or impair any of the ranking
agreements and other obligations of the Holders of Notes, the Trustee and the
Collateral Agent set forth in this Article 12.
(d) The Lenders, the Credit Agreement Agent and the other holders of
Priority Liens or Priority Lien Obligations will not have any duty whatsoever,
express or implied, fiduciary or otherwise, to any holder of Note Obligations or
Note Liens.
(e) To the maximum extent permitted by law, each of the Holders of
Notes, the Trustee and the Collateral Agent waives any claim it may have against
the Lenders, the Credit Agreement Agent or any other holder of Priority Liens or
Priority Lien Obligations with respect to or arising out of any action or
failure to act or any error of judgment or negligence on the part of the
Lenders, the Credit Agreement Agent or any other holder of Priority Liens or
Priority Lien Obligations or their respective directors, officers, employees or
agents with respect to any exercise of rights or remedies in respect of the
Priority Liens or the Priority Lien Obligations or under the Priority Lien
Documents or any transaction relating to the Collateral. Neither any Lender nor
any Credit Agreement Agent nor any other holder of Priority Liens or Priority
Lien Obligations nor any of their respective directors, officers, employees or
agents will be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so, except to the extent arising out of the
gross negligence or willful misconduct of such Lender, Credit Agreement Agent or
other holder or its directors, officers, employees or agents, or will be under
any obligation to sell or otherwise dispose of any Collateral upon the request
of the Company or any other Obligor or upon the request of any holder of Note
Obligations, or Note Liens or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
(f) The holders of Priority Liens and Priority Lien Obligations, on
the one hand, and the holders of Note Obligations, or Note Liens, on the other
hand, shall each be responsible for keeping themselves informed of the financial
condition of the Company and its Subsidiaries and all other circumstances
bearing upon the risk of nonpayment of the Priority Lien Obligations or Note
Obligations. The holders of Priority Liens and Priority Lien Obligations and the
Credit Agreement Agent shall have no duty to advise the Trustee or any holder of
Note Obligations, Note Liens of information regarding such condition or
circumstances or as to any other matter. If any holder of Priority Liens or
Priority Lien Obligations or the Credit Agreement Agent, in its sole discretion,
undertakes at any time or from time to time to provide any such information to
the Trustee or any holder of Note Obligations, or Note Liens, it shall be under
no obligation to provide any similar information on any subsequent occasion, to
provide any additional information, to undertake any investigation, or to
disclose any information which, pursuant to accepted or reasonable commercial
finance practice, it wishes to maintain confidential.
Section 12.09 Limitation on Certain Relief and Defenses.
(a) No action taken or omitted for the benefit of the holders of
Priority Liens by the Company or any of its Subsidiaries in breach of any
covenant set forth in this Indenture will constitute a defense to the
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enforcement of the provisions of this Article 12 by such holders in accordance
with the terms of this Article 12, if, when such action was taken or omitted,
such holders received and in good faith relied on an Officers' Certificate or
Opinion of Counsel to the effect that such action was permitted under this
Indenture.
(b) The Note Liens will not be forfeited, invalidated, discharged or
otherwise affected or impaired by any breach of any obligation of the Holders of
Notes, the Trustee or the Collateral Agent set forth in this Article 12.
Section 12.10 Reinstatement.
(a) If the payment of any amount applied to any Priority Lien
Obligations secured by any Priority Liens is later avoided or rescinded
(including by settlement of any claim for avoidance or rescission) or otherwise
set aside, then:
(1) to the fullest extent lawful, all claims for the
payment of such amount as Priority Lien Obligations and, to the
extent securing such claims, all such Priority Liens will be
reinstated and entitled to the benefits of this Article 12; and
(2) if a Discharge of Credit Agreement Obligations became
effective prior to such reinstatement, the contractual priority of
the Priority Liens so reinstated, as set forth in Section 12.02, will
be concurrently reinstated on the date and to the extent such
Priority Liens are reinstated, beginning on such date but only
prospectively (and not retroactively), as though no Priority Lien
Obligations or Priority Liens had been outstanding at any time prior
to such date, and will remain effective until the claims secured by
the reinstated Priority Liens are paid in full in cash.
(b) If a Discharge of Credit Agreement Obligations results from the
retirement of the Priority Lien Obligations under the Credit Agreement by
voluntary payment or prepayment in full at any time when no Default or Event of
Default exists, without the Priority Lien Debt being replaced at such time by
new Priority Lien Debt, and if the Company thereafter, at any time when no
Default or Event of Default exists, obtains a new Credit Facility constituting
Priority Lien Debt and providing or committing to provide at such time loans or
letters of credit or other extensions of credit to the Company in an aggregate
amount not less than 10% of the aggregate amount of Indebtedness then permitted
to be incurred by the first paragraph of Section 4.09, then:
(1) the Company may reinstate the obligations of the
Holders of Notes, the Trustee and the Collateral Agent under this
Article 12 that were terminated as a result of such Discharge of
Credit Agreement Obligations, but only as to Collateral that is or
becomes subject to Liens securing the new Credit Facility and only
for the benefit of the holders of Priority Lien Obligations under the
new Credit Facility, by delivering to the Trustee and the Collateral
Agent, before any credit is extended under the new Credit Facility,
an Officers' Certificate:
(A) describing the new Credit Facility and the collateral
security therefore and the Credit Agreement Agent thereunder;
(B) certifying that all extensions of credit under the new
Credit Facility will constitute Priority Lien Debt and that no
Default or Event of Default existed at the time of such Discharge of
Credit Agreement Obligations, exists on the date of the Officers'
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Certificate or will exist after giving effect to the first extension
of credit under the new Credit Facility; and
(C) stating that the new Credit Facility will constitute a
new Credit Agreement for the purposes of this Article 12 and the
definitions of defined terms used in this Article 12,
and thereupon
(2) the new Credit Facility shall become a Credit
Agreement for the purposes of this Article 12 and the obligations of
the Holders of Notes, the Trustee and the Collateral Agent under this
Article 12 that were terminated as a result of such Discharge of
Credit Agreement Obligations shall be reinstated for the benefit
solely of the Lenders and Credit Agreement Agent under the new Credit
Facility beginning on the date of the first extension of credit under
the new Credit Facility, but only prospectively (and not
retroactively), as though no other Priority Lien Debt or Priority
Liens had been outstanding at any time prior to the date of such
reinstatement.
(c) No:
(1) action to enforce Note Liens at any time prior to the
date of any reinstatement pursuant to Section 12.10(a) or 12.10(b);
(2) receipt or collection of Collateral or any other
property by the Holders of Notes, the Trustee or the Collateral Agent
at any time prior to the date of any such reinstatement;
(3) application of any Collateral or other property to the
payment of Note Obligations at any time prior to the date of any such
reinstatement; or
(4) other action taken or omitted by the Holders of Notes,
the Trustee or the Collateral Agent or other event occurring at any
time prior to the date of any such reinstatement,
will, if it was permitted at such time under this Article 12 without giving
effect to any subsequent reinstatement under Section 12.10(a) or 12.10(b),
constitute a breach of any obligation of the Holders of Notes, the Trustee or
the Collateral Agent under this Article 12 or give rise to any right, claim or
interest whatsoever enforceable by any holder of Priority Liens or Priority Lien
Obligations or by any other Person.
Section 12.11 Amendment; Waiver.
(a) No amendment or supplement to the provisions of this Article 12
will:
(1) be effective unless set forth in a writing signed by
the Trustee with the consent of the holders of at least a majority in
principal amount at maturity of the Notes (including, without
limitation, Additional Notes);
(2) become effective at any time prior to the Discharge of
Credit Agreement Obligations unless such amendment or supplement is
consented to in a writing signed by the Credit Agreement Agent acting
upon the direction or with the consent of the holders of the
applicable percentage (as required under the Credit Agreement) in
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principal amount of all Priority Lien Debt then outstanding or
committed under the Credit Agreement, voting as a single class.
Any such amendment or supplement that:
(A) imposes any obligation upon the Company or
adversely affects the rights of the Company under Section
12.03 will become effective only with the consent of the
Company; or
(B) imposes any obligation upon the Collateral
Agent or adversely affects the rights of the Collateral
Agent in its individual capacity at any time when the
Trustee is not the Collateral Agent will become effective
only with the consent of the Collateral Agent.
(b) No waiver of any of the provisions of this Article 12 will in any
event be effective unless set forth in a writing signed and consented to, as
required for an amendment under Section 12.11, by the party to be bound thereby.
Section 12.12 Enforcement.
(a) The provisions of this Article 12 are intended for the sole
benefit of, and may be enforced solely by, the holders of Priority Liens and
Priority Lien Obligations granted and outstanding from time to time; provided,
however, the provisions of Section 12.03 are intended for the sole benefit of
the Company and may be enforced by the Company solely upon the terms and
conditions set forth in Section 12.03; provided further, however, the definition
of "Priority Lien Debt" is intended for the benefit of both the holders of
Priority Liens and Priority Lien Obligations granted and outstanding from time
to time and the Company.
(b) The obligations of the Holders of Notes, the Trustee and the
Collateral Agent set forth in Sections 12.04, 12.05, 12.06, 12.07, 12.08 and
12.10:
(1) are intended for the sole benefit of the Lenders and
may be enforced only by the Lenders or by the Credit Agreement Agent;
and
(2) will terminate, unconditionally and (subject only to
Section 12.09(b)) forever, upon either of (a) the Discharge of Credit
Agreement Obligations or (b) the release of the Note Liens in whole
as provided under Section 13.04.
(d) No right to enforce the ranking agreements or any other
obligation set forth in this Article 12 may be impaired by any act or failure to
act by the Company, the Trustee or any Holder of Notes or by the failure of the
Company, the Trustee or any Holder of Notes to comply with this Indenture.
(e) The obligations of the Holders of Notes, the Trustee and the
Collateral Agent under this Article 12 are continuing obligations that may be
terminated only by an amendment that becomes effective as set forth in Section
12.11.
(f) Except for the Persons identified in this Section, to the extent
and as to the obligations set forth in this Section, no other Person will be
entitled to rely on, have the benefit of or enforce the lien ranking agreements
or any other obligation set forth in this Article 12.
98
Section 12.13 Notes, Note Guarantees and Other Note Obligations Not
Subordinated.
The provisions of this Article 12 are intended solely to set forth
the relative ranking, as Liens, of the Note Liens as against the Priority Liens.
Neither the Notes, the Note Guarantees and other Note Obligations nor the
exercise or enforcement of any right or remedy for the payment or collection
thereof are intended to be, or will ever be by reason of the provisions of this
Article 12, in any respect subordinated, deferred, postponed, restricted or
prejudiced.
Section 12.14 Relative Rights.
This Article 12 defines the relative rights, as lienholders, of
holders of Note Liens and holders of Priority Liens. Nothing in this Indenture
will:
(1) impair, as between the Company and Holders of Notes,
the obligation of the Company, which is absolute and unconditional,
to pay principal of, premium and interest and Liquidated Damages, if
any, on the Notes in accordance with their terms or to perform any
other obligation of the Company or any other Obligor under the Note
Documents;
(2) affect the relative rights of Holders of Notes and
creditors of the Company or any of its Restricted Subsidiaries (other
than holders of Priority Liens);
(3) restrict the right of any Holder of Notes to ▇▇▇ for
payments that are then due and owing (but not enforce any judgment in
respect thereof against any Collateral other than any other action
not specifically prohibited by Sections 12.04 or 12.05);
(4) prevent the Trustee, the Collateral Agent or any
Holder of Notes from exercising against the Company or any other
Guarantor any of its other available remedies upon a Default or Event
of Default not specifically prohibited by Sections 12.04 or 12.05; or
(5) restrict the right of the Trustee, the Collateral
Agent or any Holder of Notes to take any lawful action in an
Insolvency or Liquidation Proceeding not specifically prohibited by
Sections 12.04 or 12.05.
If the Company or any Restricted Subsidiary fails because of this
Article 12 to perform any obligation binding upon it under any Note Document,
the failure is still a Default or Event of Default.
ARTICLE 13.
COLLATERAL AND SECURITY
Section 13.01 Security Documents.
(a) The payment of the principal of and interest and premium and
Liquidated Damages, if any, on, the Notes and the payment and performance of all
Note Obligations are secured as provided in the Security Documents which the
Company and the Guarantors have entered into simultaneously with the execution
and delivery of this Indenture and will be secured by all Security Documents
hereafter delivered as required or permitted by this Indenture.
(b) The Company will, and will cause each of the Guarantors to, do or
cause to be done all acts and things which may be required, or which the
Collateral Agent from time to time may reasonably request, to assure and confirm
that the Collateral Agent holds, for the benefit of the holders of Note
99
Obligations duly created, enforceable and perfected Liens upon the Collateral as
contemplated by this Indenture and the Security Documents; provided that, with
respect to Liens on deposit accounts, as defined in Article 9 of the New York
Uniform Commercial Code, the Company and the Guarantors will be required to use
their commercially reasonable best efforts to perfect the Liens on such deposit
accounts.
Section 13.02 Collateral Agent.
(a) The Trustee will act as Collateral Agent.
(b) The Collateral Agent is authorized and empowered to appoint one
or more co-Collateral Agents as it deems necessary or appropriate.
(c) Neither the Trustee nor the Collateral Agent nor any of their
respective officers, directors, employees, attorneys or agents will be
responsible for the existence, genuineness, value or protection of any
Collateral, for the legality, enforceability, effectiveness or sufficiency of
the Security Documents, for the creation, perfection, priority, sufficiency or
protection of any Note Lien, or for any failure to demand, collect, foreclose or
realize upon or otherwise enforce any of the Note Liens or Security Documents or
for any delay in doing so.
(d) The Collateral Agent will be subject to such directions as may be
given it by the Trustee from time to time as required or permitted by this
Indenture. Except as directed by the Trustee and as required or permitted by
this Indenture, the Collateral Agent will not be obligated:
(1) to act upon directions purported to be delivered to it
by any other Person;
(2) to foreclose upon or otherwise enforce any Note Lien;
or
(3) to take any other action whatsoever with regard to any
or all of the Note Liens, Security Documents or Collateral.
(e) The Collateral Agent will be accountable only for amounts that it
actually receives as a result of the enforcement of the Note Liens or Security
Documents.
(f) In acting as Collateral Agent or co-Collateral Agent, the
Collateral Agent and each co-Collateral Agent may rely upon and enforce each and
all of the rights, powers, immunities, indemnities and benefits of the Trustee
under Article 7.
(g) Each successor Trustee will become the successor Collateral Agent
as and when the successor Trustee becomes the Trustee.
Section 13.03 Authorization of Actions to Be Taken.
(a) Each Holder of Notes, by its acceptance thereof, consents and
agrees to the terms of each Security Document and Intercreditor Agreement, as
originally in effect and as amended, supplemented or replaced from time to time
in accordance with its terms or the terms of this Indenture, authorizes and
directs the Trustee and the Collateral Agent to enter into the Security
Documents, authorizes and empowers the Trustee to direct the Collateral Agent to
enter into, and the Collateral Agent to execute and deliver, each Intercreditor
Agreement, and authorizes and empowers the Trustee and the Collateral Agent to
bind the Holders of Notes and other holders of Note Obligations as set forth in
100
the Security Documents and each Intercreditor Agreement and to perform its
obligations and exercise its rights and powers thereunder.
(b) The Collateral Agent and the Trustee are authorized and empowered
to receive for the benefit of the Holders of Notes any funds collected or
distributed under the Security Documents and to make further distributions of
such funds to the Holders of Notes according to the provisions of this
Indenture.
(c) Subject to the provisions of Section 7.01 and 7.02 and Article
12, the Trustee may, in its sole discretion and without the consent of the
Holders of Notes, direct, on behalf of the Holders of Notes, the Collateral
Agent to take all actions it deems necessary or appropriate in order to:
(1) foreclose upon or otherwise enforce any or all of the
Note Liens;
(2) enforce any of the terms of the Security Documents; or
(3) collect and receive payment of any and all Note
Obligations.
The Trustee is authorized and empowered to institute and maintain, or direct the
Collateral Agent to institute and maintain, such suits and proceedings as it may
deem expedient to protect or enforce the Note Liens or the Security Documents or
to prevent any impairment of Collateral by any acts that may be unlawful or in
violation of the Security Documents or this Indenture, and such suits and
proceedings as the Trustee or the Collateral Agent may deem expedient to
preserve or protect its interests and the interests of the Holders of Notes in
the Collateral, including power to institute and maintain suits or proceedings
to restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of Holders of Notes, the Trustee or the Collateral Agent.
Section 13.04 Release of Note Liens.
(a) The Note Liens will be released in whole:
(1) upon payment in full of the principal of, and accrued
and unpaid interest, premium and Liquidated Damages, if any, on the
Notes and payment in full of all other Note Obligations that are due
and payable at or prior to the time such principal, accrued and
unpaid interest, premium and Liquidated Damages, if any, are paid;
(2) upon satisfaction and discharge of this Indenture in
accordance with the terms hereof; or
(3) upon a Legal Defeasance or Covenant Defeasance in
accordance with the provisions of Section 8.01, 8.02, 8.03 and 8.04.
(b) The Note Liens will be released in part with respect to any asset
constituting Collateral:
(1) upon delivery by the Company to the Trustee and the
Collateral Agent of an Officers' Certificate certifying that the
asset has been sold or otherwise disposed of by the Company or a
Guarantor to a Person other than the Company or a Guarantor in a
transaction permitted by this Indenture, at the time of such sale or
disposition;
101
(2) upon delivery by the Company to the Trustee and the
Collateral Agent of an Officers' Certificate certifying that the
asset is owned or has been acquired by a Guarantor that has been
released from its Note Guarantee (including by virtue of a Subsidiary
Guarantor becoming an Unrestricted Subsidiary); or
(3) at any time prior to the Discharge of Credit Agreement
Obligations, upon delivery of the required certification to the
Trustee and the Collateral Agent by the Credit Agreement Agent in
accordance with the provisions of Section 12.06.
The Trustee will, if such instruments and confirmation are reasonably
satisfactory to the Trustee and Collateral Agent, instruct the Collateral Agent
to execute and deliver, and the Collateral Agent will promptly execute and
deliver, such instruments.
(c) All instruments effectuating or confirming any release of any
Note Liens will have the effect solely of releasing such Note Liens as to the
Collateral described therein, on customary terms and without any recourse,
representation, warranty or liability whatsoever.
(d) The Trustee and Collateral Agent are not required to serve, file,
register or record any instrument releasing Collateral.
(e) The Company will bear and pay all costs and expenses associated
with any release of Note Liens pursuant to Section 13.06 or this Section 13.04,
including all reasonable fees and disbursements of any attorneys or
representatives acting for the Trustee or for the Collateral Agent.
ARTICLE 14.
MISCELLANEOUS
Section 14.01 Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA ss.318(c), the imposed duties will control.
Section 14.02 Notices.
Any notice or communication by the Company, any Guarantor or the
Trustee to the others is duly given if in writing and delivered in Person or
mailed by first class mail (registered or certified, return receipt requested),
telex, telecopier or overnight air courier guaranteeing next day delivery, to
the others' address:
If to the Company and/or any Guarantor:
Barney's Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
102
With a copy to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to the Trustee or Collateral Agent:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
With a copy to:
Winston & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
The Company, any Guarantor or the Trustee, by notice to the others,
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
will be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
All notices and communications to the Trustee or Collateral Agent shall be
deemed duly given and effective only upon receipt.
Any notice or communication to a Holder will be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication will also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it will not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it will
mail a copy to the Trustee and each Agent at the same time.
103
Section 14.03 Communication by Holders of Notes with Other Holders of
Notes.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA ss.
312(c).
Section 14.04 Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take
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 (which must include the
statements set forth in Section 14.05 hereof) stating that, in the
opinion of the signers, all conditions precedent and covenants, if
any, provided for in this Indenture relating to the proposed action
have been satisfied; and
(2) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which must include the statements set
forth in Section 14.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 14.05 Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA ss. 314(a)(4)) must comply with the provisions of TIA
ss. 314(e) and must include:
(1) a statement that the Person 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 Person, he or
she has made such examination or investigation as is necessary to
enable him or her to express an informed opinion as to whether or not
such covenant or condition has been satisfied; and
(4) a statement as to whether or not, in the opinion of
such Person, such condition or covenant has been satisfied.
Section 14.06 Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting
of Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
Section 14.07 No Personal Liability of Directors, Officers, Employees
and Stockholders.
No past, present or future director, officer, employee, incorporator
or stockholder of the Company or any Guarantor, as such, will have liability for
any obligations of the Company or the Guarantors under the Notes, this
Indenture, the Note Guarantees, the Security Documents or for any claim based
on, in respect of, or by reason of, such obligations or their creation. Each
Holder of Notes by accepting a Note waives and releases all such liability. The
104
waiver and release are part of the consideration for issuance of the Notes. The
waiver may not be effective to waive liabilities under the Federal securities
laws.
Section 14.08 Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO
CONSTRUE THIS INDENTURE, THE NOTES, THE SECURITY DOCUMENTS AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 14.09 No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan
or debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
Section 14.10 Successors.
All agreements of the Company in this Indenture and the Notes will
bind its successors. All agreements of the Trustee in this Indenture will bind
its successors. All agreements of each Guarantor in this Indenture will bind its
successors, except as otherwise provided in Section 10.05.
Section 14.11 Severability.
In case any provision in this Indenture or in the Notes is invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions will not in any way be affected or impaired thereby.
Section 14.12 Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each
signed copy will be an original, but all of them together represent the same
agreement.
Section 14.13 Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and will in no
way modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
105
SIGNATURES
Dated as of April 1, 2003
COMPANY:
BARNEY'S, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
GUARANTORS:
BARNEYS NEW YORK, INC.
BARNEYS AMERICA, INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
▇▇▇▇▇ ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
TRUSTEE:
WILMINGTON TRUST COMPANY, AS TRUSTEE
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signer
EXHIBIT A
[Face of Note]
--------------------------------------------------------------------------------
[INSERT ORIGINAL ISSUE DISCOUNT LEGEND HERE.]
CUSIP/ISIN _________
9.000% Senior Secured Notes due 2008
No. ___ $_________
BARNEY'S, INC.
promises to pay to CEDE & CO.
----------
or registered assigns,
the principal sum of
-----------------------------------------------------------
Dollars on April 1, 2008.
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: April 1, 2003
BARNEY'S, INC.
By:
-----------------------------
Name:
Title:
This is one of the Notes referred to in the within-mentioned Indenture:
WILMINGTON TRUST COMPANY,
as Trustee
By:
----------------------------------------------------
Authorized Signatory
--------------------------------------------------------------------------------
A-1
[Back of Note]
9.000% Senior Secured Notes due 2008
[Insert the Global Note Legend, if applicable pursuant to the provisions of the
Indenture]
[Insert the Private Placement Legend, if applicable pursuant to the provisions
of the Indenture]
[Insert the Unit Legend, if applicable pursuant to the provisions of the
Indenture]
Capitalized terms used herein have the meanings assigned to them in
the Indenture referred to below unless otherwise indicated.
(1) INTEREST. Barney's, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 9.000% per
annum from April 1, 2003 until maturity and shall pay the Liquidated Damages, if
any, payable pursuant to the Registration Rights Agreement referred to below.
The Company will pay interest and Liquidated Damages, if any, semi-annually in
arrears on April 1 and October 1 of each year, or if any such day is not a
Business Day, on the next succeeding Business Day (each, an "Interest Payment
Date"). Interest on the Notes will accrue from the most recent date to which
interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided further that
the first Interest Payment Date shall be October 1, 2003. The Company will pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
will pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any, (without regard to any applicable grace periods) from time to time on
demand at the same rate to the extent lawful. Interest will be computed on the
basis of a 360-day year of twelve 30-day months.
(2) METHOD OF PAYMENT. The Company will pay interest on the Notes
(except defaulted interest) and Liquidated Damages, if any, to the Persons who
are registered Holders of Notes at the close of business on the March 15 or
September 15 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes will be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the Company maintained
for such purpose, or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders at their
addresses set forth in the register of Holders; provided that payment by wire
transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages, if any, on, all
Global Notes and all other Notes the Holders of which will have provided wire
transfer instructions to the Company or the Paying Agent. Such payment will be
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts.
(3) PAYING AGENT AND REGISTRAR. Initially, Wilmington Trust Company,
the Trustee under the Indenture, will act as Paying Agent and Registrar. The
A-2
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
(4) INDENTURE. The Company issued the Notes under an Indenture dated
as of April 1, 2003 (the "Indenture") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939, as
amended (15 U.S. Code ▇▇.▇▇. 77aaa-77bbbb). The Notes are subject to all such
terms, and Holders are referred to the Indenture and such Act for a statement of
such terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. The Notes are secured by second-priority security interests in the
assets of the Company and the Guarantors that secure Priority Lien Obligations
and will be subordinate to Priority Liens and certain purchase money security
interests.
(5) OPTIONAL REDEMPTION.
(a) On or after April 1, 2006, the Company may, at its
option, redeem some or all of the Notes upon not less than 30 nor
more than 60 days' notice at the redemption price of 109.894% of the
Accreted Value of the Notes on the redemption date, and on or after
April 1, 2007, the Company may, at its option, redeem some or all of
the Notes upon not less than 30 nor more than 60 days' notice at the
redemption price of 100% of the principal amount at maturity of the
Notes, in each case, plus accrued and unpaid interest and Liquidated
Damages, if any, on the Notes redeemed, to the applicable redemption
date.
(b) At any time prior to April 1, 2005, the Company may on
any one or more occasions redeem up to 35% of the aggregate principal
amount at maturity of Notes issued under the Indenture at a
redemption price equal to 113.192% of the Accreted Value thereof on
the date of redemption, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the
net cash proceeds of an offering of Equity Interests (other than
Disqualified Stock) of the Company or a contribution to the Company's
common equity capital made with the net cash proceeds of a concurrent
offering of Equity Interests by Holdings; provided that: (1) at least
65% of the aggregate principal amount at maturity of Notes issued
under the Indenture remains outstanding immediately after the
occurrence of such redemption (excluding Notes held by the Company
and its Subsidiaries); and (2) the redemption occurs within 60 days
of the date of the closing of any such offering.
(6) MANDATORY REDEMPTION.
The Company will not be required to make mandatory redemption
payments with respect to the Notes.
(7) REPURCHASE AT OPTION OF HOLDER.
(a) Upon the occurrence of a Change of Control, the
Company will make an offer (a "Change of Control Offer") to each
Holder to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of each Holder's Notes at a purchase price equal
to 101% of the Accreted Value thereof on the date of repurchase, plus
accrued and unpaid interest and Liquidated Damages, if any, on the
Notes repurchased to the date of repurchase (the "Change of Control
Payment"). Within 20 days following any Change of Control, the
Company will mail a notice to each Holder setting forth the
procedures governing the Change of Control Offer as required by the
Indenture.
A-3
(b) Any Net Proceeds from Asset Sales that are not applied
or invested as provided in the second paragraph of Section 4.10 of
the Indenture (other than the $10.0 million referred to in clause (1)
of such paragraph) will constitute "Excess Proceeds." Within 30 days
after the date that the aggregate amount of Excess Proceeds exceeds
$2.5 million, the Company will make an Asset Sale Offer to all
Holders of Notes and all holders of other Indebtedness that is pari
passu with the Notes containing provisions similar to those set forth
in the Indenture with respect to offers to purchase or redeem with
the proceeds of sales of assets to purchase the maximum Accreted
Value of Notes and such other pari passu Indebtedness that may be
purchased out of the Excess Proceeds. The offer price in any Asset
Sale Offer will be payable in cash and equal to 100% of the Accreted
Value thereof on the date of repurchase, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the date of
repurchase, in accordance with the procedures set forth in the
Indenture. If any Excess Proceeds remain after consummation of an
Asset Sale Offer, the Company (or the Restricted Subsidiary, as the
case may be) may use those Excess Proceeds for any purpose not
otherwise prohibited by the Indenture. If the aggregate Accreted
Value of Notes and other pari passu Indebtedness tendered into such
Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee
will select the Notes and such other pari passu Indebtedness to be
purchased on a pro rata basis. Upon completion of each Asset Sale
Offer, the amount of Excess Proceeds will be reset at zero.
(c) Within 120 days after the end of each of the Company's
fiscal years (beginning with the fiscal year ending January 31,
2004), the Company shall offer to Holders to purchase that portion of
the Notes at 103% of their Accreted Value that may be purchased with
50% of the Company's Excess Cash Flow for each such fiscal year,
subject to terms of any Credit Facility.
(d) Holders of Notes that are the subject of an offer to
purchase will receive a Change of Control Offer, an Asset Sale Offer
or Excess Cash Flow Offer, as applicable, from the Company prior to
any related purchase date and may elect to have such Notes purchased
by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
(8) 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 whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest shall cease to accrue on
Notes or portions thereof called for redemption.
(9) DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
(10) PERSONS DEEMED OWNERS. The registered Holder of a Note will be
treated as its owner for all purposes under the Indenture.
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(11) AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions,
the Indenture, the Note Guarantees, the Security Documents or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount at maturity of the then outstanding Notes (including
Additional Notes, if any), and, subject to Sections 6.04 and 6.07 of the
Indenture, any existing Default or Event of Default (other than a Default or
Event of Default in the payment of the principal of, premium or Liquidated
Damages, if any, or interest on the Notes, except a payment default resulting
from an acceleration that has been rescinded) or compliance with any provision
of the Indenture, the Note Guarantees, Security Documents or the Notes may be
waived with the consent of the Holders of a majority in principal amount at
maturity of the then outstanding Notes (including Additional Notes, if any).
Without the consent of any Holder of a Note, the Indenture, the Note Guarantees
or the Notes may be amended or supplemented to cure any ambiguity, defect or
inconsistency; to provide for uncertificated Notes in addition to or in place of
certificated Notes; to provide for the assumption of the Company's or a
Guarantor's obligations to the Holders of the Notes by a successor to the
Company or a Guarantor pursuant to Article 5 or Article 10 of the Indenture; to
make any change that would provide any additional rights or benefits to the
Holders of the Notes or that does not adversely affect in any material respect
the rights under the Indenture of any Holder of the Notes; to comply with
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA; to make, complete or confirm any grant of
Collateral permitted or required by the Indenture or any of the Security
Documents or any release of Collateral that becomes effective as set forth in
the Indenture or any of the Security Documents; to conform the text of the
Indenture, the Note Guarantees, the Security Documents or the Notes to any
provision of the Description of Notes contained in the Offering Circular to the
extent that such provision was intended to be a verbatim recitation of a
provision of the Indenture, the Note Guarantees, the Security Documents or the
Notes; as provided in clause (2) under Section 12.07(a) of the Indenture; to
provide for the issuance of Additional Notes in accordance with the limitations
set forth in the Indenture as of the date thereof; or to allow any Guarantor to
execute a supplemental indenture and/or a Note Guarantee with respect to the
Notes.
(12) DEFAULTS AND REMEDIES. Each of the following is an Event of
Default: (i) the Company defaults for 30 days in the payment when due of
interest on, or Liquidated Damages with respect to, the Notes; (ii) the Company
defaults in the payment when due (at maturity, upon redemption or otherwise) of
the principal of, or premium, if any, on the Notes; (iii) the Company or any of
its Restricted Subsidiaries fails to comply with the provisions of Section 3.09,
4.10, 4.15 or 5.01 of the Indenture; (iv) the Company or any of its Restricted
Subsidiaries fails to comply with any of the other agreements in the Indenture,
the Notes or the Security Documents for 60 days after notice to the Company or
such Restricted Subsidiary by the Trustee or the Holders of at least 25% in
aggregate principal amount at maturity of the Notes then outstanding; (v) a
default occurs under any mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any Indebtedness for
money borrowed by the Company or any of its Restricted Subsidiaries (or the
payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists, or is created
after the date of the Indenture, if that default: (A) is caused by a failure to
pay principal of, or interest or premium, if any, on such Indebtedness prior to
the expiration of the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or (B) results in the acceleration of such
Indebtedness prior to its express maturity, and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $5.0 million or more at any one
time; (vi) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company or
any of its Restricted Subsidiaries, which judgment or judgments are not paid,
A-5
discharged or stayed for a period of 60 days; provided that the aggregate of all
such undischarged judgments exceeds $5.0 million (that are not covered by a
reputable and solvent third-party insurer as to which such insurer has not
disclaimed coverage); (vii) the Company, any Restricted Subsidiary of the
Company that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary pursuant to or
within the meaning of 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 all or substantially
all of its property, (D) makes a general assignment for the benefit of its
creditors, or (E) generally is not paying its debts as they become due; (viii) a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that: (A) is for relief against the Company, any Restricted Subsidiary of
the Company that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary in an involuntary
case; (B) appoints a custodian of the Company, any Restricted Subsidiary of the
Company that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary or for all or
substantially all of the property of the Company, any Restricted Subsidiary of
the Company that is a Significant Subsidiary or any group of Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary; or (C) orders the
liquidation of the Company, any Restricted Subsidiary of the Company that is a
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary; and, in the case of either (A), (B)
or (C) of this clause (viii), the order or decree remains unstayed and in effect
for 60 consecutive days; (ix) except as permitted by the Indenture, any security
document or any Lien purported to be granted thereby ceases for any reason to be
fully enforceable and perfected, and such event continues for 30 days after
written notice to the Company by the Trustee or the Holders of at least 25% in
aggregate principal amount at maturity of the Notes then outstanding, voting as
a single class; (x) the Company or any of its Restricted Subsidiaries, or any
Person acting on behalf of any of them, denies or disaffirms, in writing, any
obligation of the Company or any of its Restricted Subsidiaries set forth in or
arising under any security document; or (xi) except as permitted by the
Indenture, any Note Guarantee is held in any judicial proceeding to be
unenforceable or invalid or shall cease for any reason to be in full force and
effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall
deny or disaffirm its obligations under its Note Guarantee.
(13) TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
(14) NO RECOURSE AGAINST OTHERS. A director, officer, employee,
incorporator or stockholder of the Company or any of the Guarantors, as such,
will not have any liability for any obligations of the Company or such Guarantor
under the Notes, the Note Guarantees, the Indenture, the Security Documents or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes. The waiver may not be effective to waive liabilities under the
Federal securities laws.
(15) AUTHENTICATION. This Note will not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
(16) ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
A-6
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
(17) ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND
RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes will have all the rights set forth in the Registration Rights
Agreement dated as of April 1, 2003, among the Company, the Guarantors and the
other parties named on the signature pages thereof.
(18) 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 Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Barney's, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
A-7
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to: ____________________________
(Insert assignee's legal name)
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
--------------------------------------------------------
to transfer this Note 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 face of this Note)
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-8
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10, Section 4.15 or Section 4.23 of the Indenture, check
the appropriate box below:
[ ] Section 4.10 [ ] Section 4.15 [ ] Section 4.23
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10, Section 4.15 or Section 4.23 of the Indenture,
state the amount you elect to have purchased:
$---------------
Date: _______________
Your Signature:
-----------------------------
(Sign exactly as your name
appears on the face of this
Note)
Tax Identification No.:
----------------------
Signature Guarantee*: _________________________
* Participant in a recognized Signature Guarantee Medallion Program (or
other signature guarantor acceptable to the Trustee).
A-9
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*
The following exchanges of a part of this Global Note for an interest
in another Global Note or for a Definitive Note, or exchanges of a part of
another Global Note or Definitive Note for an interest in this Global Note, have
been made:
Principal Amount
Amount of decrease in Amount of increase in at maturity of this
Principal Amount Principal Amount Global Note following Signature of authorized
at maturity of at maturity of such decrease officer of Trustee or
Date of Exchange this Global Note this Global Note (or increase) Custodian
---------------- ---------------- ---------------- ------------- ---------
* This schedule should be included only if the Note is issued in global form.
A-10
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Barney's, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: 9.000% Senior Secured Notes due 2008
Reference is hereby made to the Indenture, dated as of April 1, 2003
(the "Indenture"), among Barney's, Inc., as issuer (the "Company"), the
Guarantors named on the signature pages thereto and Wilmington Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
___________________, (the "Transferor") owns and proposes to transfer
the Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount at maturity of $___________ in such Note[s] or interests (the
"Transfer"), to ___________________________ (the "Transferee"), as further
specified in Annex A hereto. In connection with the Transfer, the Transferor
hereby certifies that:
[CHECK ALL THAT APPLY]
1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The
Transfer is being effected pursuant to and in accordance with Rule 144A under
the Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
the Transferor hereby further certifies that the beneficial interest or
Definitive Note is being transferred to a Person that the Transferor reasonably
believed and believes is purchasing the beneficial interest or Definitive Note
for its own account, or for one or more accounts with respect to which such
Person exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule 144A in
a transaction meeting the requirements of Rule 144A and such Transfer is in
compliance with any applicable blue sky securities laws of any state of the
United States. Upon consummation of the proposed Transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the 144A Global Note and/or the Definitive Note and
in the Indenture and the Securities Act.
2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO
REGULATION S. The Transfer is being effected pursuant to and in accordance with
Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor
hereby further certifies that (i) the Transfer is not being made to a Person in
the United States and (x) at the time the buy order was originated, the
Transferee was outside the United States or such Transferor and any Person
acting on its behalf reasonably believed and believes that the Transferee was
outside the United States or (y) the transaction was executed in, on or through
the facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act and (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act. Upon consummation of the proposed transfer in accordance with
B-1
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A
BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY
PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) [ ] such Transfer is being effected pursuant to and in
accordance with Rule 144 under the Securities Act;
or
(b) [ ] such Transfer is being effected to the Company or
a subsidiary thereof;
or
(c) [ ] such Transfer is being effected pursuant to an
effective registration statement under the Securities Act and in
compliance with the prospectus delivery requirements of the
Securities Act;
or
(d) [ ] such Transfer is being effected to an
Institutional Accredited Investor and pursuant to an exemption from
the registration requirements of the Securities Act other than Rule
144A, Rule 144 or Rule 904, and the Transferor hereby further
certifies that it has not engaged in any general solicitation within
the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial
interests in a Restricted Global Note or Restricted Definitive Notes
and the requirements of the exemption claimed, which certification is
supported by (1) a certificate executed by the Transferee in the form
of Exhibit D to the Indenture and (2) if such Transfer is in respect
of a principal amount of Notes at the time of transfer of less than
$250,000, an Opinion of Counsel provided by the Transferor or the
Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance
with the Securities Act. Upon consummation of the proposed transfer
in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend
printed on the IAI Global Note and/or the Definitive Notes and in the
Indenture and the Securities Act.
4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL
INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE.
(a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer
is being effected pursuant to and in accordance with Rule 144 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
B-2
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The
Transfer is being effected pursuant to and in accordance with Rule 903 or Rule
904 under the Securities Act and in compliance with the transfer restrictions
contained in the Indenture and any applicable blue sky securities laws of any
state of the United States and (ii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act. Upon consummation of the proposed
Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Definitive Note will no longer be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the Restricted Global Notes, on Restricted Definitive Notes and in the
Indenture.
(c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration requirements of the Securities Act other than Rule 144, Rule
903 or Rule 904 and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any State of the
United States and (ii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:
---------------------------------------
Name:
Title:
Dated: _______________________
B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) [ ] a beneficial interest in the:
(i) [ ] 144A Global Note (CUSIP _________), or
(ii) [ ] Regulation S Global Note (CUSIP _________), or
(iii) [ ] IAI Global Note (CUSIP _________); or
(iv) [ ] Unrestricted Global Note (CUSIP _________); or
(b) [ ] a Restricted Definitive Note; or
(c) [ ] an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Barney's, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: 9.000% Senior Secured Notes due 2008
(CUSIP ____________)
Reference is hereby made to the Indenture, dated as of April 1, 2003
(the "Indenture"), among Barney's, Inc., as issuer (the "Company"), the
Guarantors named on the signature pages thereto and Wilmington Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
__________________________, (the "Owner") owns and proposes to
exchange the Note[s] or interest in such Note[s] specified herein, in the
principal amount at maturity of $____________ in such Note[s] or interests (the
"Exchange"). In connection with the Exchange, the Owner hereby certifies that:
1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL
INTERESTS IN AN UNRESTRICTED GLOBAL NOTE
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the Global
Notes and pursuant to and in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), (iii) the restrictions on transfer contained in
the Indenture and the Private Placement Legend are not required in order to
maintain compliance with the Securities Act and (iv) the beneficial interest in
an Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
C-1
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN
RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS
IN RESTRICTED GLOBAL NOTES
(a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED
GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO
BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
[Insert Name of Transferor]
Dated:______________
By:
-------------------------------
Name:
Title:
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EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Barney's, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: 9.000% Senior Secured Notes due 2008
Reference is hereby made to the Indenture, dated as of April 1, 2003
(the "Indenture"), among Barney's, Inc., as issuer (the "Company"), the
Guarantors named on the signature pages thereto and Wilmington Trust Company, as
trustee. Capitalized terms used but not defined herein shall have the meanings
given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount at maturity of:
(a) [ ] a beneficial interest in a Global Note, or
(b) [ ] a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any Person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
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3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:
------------------------------------
Name:
Title:
Dated: _______________________
D-2
EXHIBIT E
FORM OF NOTE GUARANTEE
For value received, each Guarantor (which term includes any successor
Person under the Indenture) has, jointly and severally, unconditionally
guaranteed, to the extent set forth in the Indenture and subject to the
provisions in the Indenture dated as of April 1, 2003 (the "Indenture") among
Barney's, Inc., (the "Company"), the Guarantors party thereto and Wilmington
Trust Company, as trustee (the "Trustee"), (a) the due and punctual payment of
the principal of, premium and Liquidated Damages, if any, and interest on the
Notes (as defined in the Indenture), whether at maturity, by acceleration,
redemption or otherwise, the due and punctual payment of interest on overdue
principal of and interest on the Notes, if any, if lawful, and the due and
punctual performance of all other obligations of the Company to the Holders or
the Trustee all in accordance with the terms of the Indenture and (b) in case of
any extension of time of payment or renewal of any Notes or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. The obligations of the Guarantors to the
Holders of Notes and to the Trustee pursuant to the Note Guarantee and the
Indenture are expressly set forth in Article 10 of the Indenture and reference
is hereby made to the Indenture for the precise terms of the Note Guarantee.
Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee, on behalf of such
Holder, to take such action as may be necessary or appropriate to effectuate the
subordination as provided in the Indenture and (c) appoints the Trustee
attorney-in-fact of such Holder for such purpose; provided, however, that the
Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated
and subject in right of payment upon any defeasance of this Note in accordance
with the provisions of the Indenture.
[NAME OF GUARANTOR(S)]
By:
--------------------------------
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of
________________, 200__, among __________________ (the "Guaranteeing
Subsidiary"), a subsidiary of Barney's, Inc. (or its permitted successor), a
Delaware corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and Wilmington Trust Company, as
trustee under the indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of April 1, 2003 providing for
the issuance of 9.000% Senior Secured Notes due 2008 of the Company (the
"Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's Obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. CAPITALIZED TERMS. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees
as follows:
(a) Along with all Guarantors named in the
Indenture, to jointly and severally guarantee to each
Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, the
Notes or the obligations of the Company hereunder or
thereunder, that:
(i) the principal of, and premium and Liquidated
Damages, if any, and interest on, the Notes will be
promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the
overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the Company to the
Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and
(ii) in case of any extension of time of payment
or renewal of any Notes or any of such other obligations,
that same will be promptly paid in full when due or
performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or
otherwise. Failing payment when due of any amount so
guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally
obligated to pay the same immediately.
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(b) The obligations hereunder shall be
unconditional, irrespective of the validity, regularity or
enforceability of the Notes or the Indenture, the absence
of any action to enforce the same, any waiver or consent by
any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other
circumstance (other than complete performance) which might
otherwise constitute a legal or equitable discharge or
defense of a Guarantor.
(c) The following is hereby waived to the extent
permitted by law: diligence, presentment, demand of
payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to
require a proceeding first against the Company, protest,
notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged
except by complete performance of the obligations contained
in the Notes and the Indenture, and the Guaranteeing
Subsidiary accepts all obligations of a Guarantor under the
Indenture.
(e) If any Holder or the Trustee is required by
any court or otherwise to return to the Company, the
Guarantors, or any custodian, trustee, liquidator or other
similar official acting in relation to either the Company
or the Guarantors, any amount paid by either to the Trustee
or such Holder, this Note Guarantee, to the extent
theretofore discharged, shall be reinstated in full force
and effect.
(f) The Guaranteeing Subsidiary shall not be
entitled to any right of subrogation in relation to the
Holders in respect of any obligations guaranteed hereby
until payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for
the purposes of this Note Guarantee, 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 the
Guarantors for the purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the
exercise of such right does not impair the rights of the
Holders under the Note Guarantee.
(i) Pursuant to Section 10.02 of the Indenture,
after giving effect to any maximum amount and all other
contingent and fixed liabilities that are relevant under
any applicable Bankruptcy or fraudulent conveyance laws,
and after giving effect to any collections from, rights to
receive contribution from or payments made by or on behalf
of any other Guarantor in respect of the obligations of
such other Guarantor under Article 10 of the Indenture,
this new Note Guarantee shall be limited to the maximum
amount permissible such that the obligations of such
Guarantor under this Note Guarantee will not constitute a
fraudulent transfer or conveyance.
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3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that
the Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
4. GUARANTEEING SUBSIDIARY mAY CONSOLIDATE, eTC. ON CERTAIN TERMS.
(a) The Guaranteeing Subsidiary may not sell or
otherwise dispose of all substantially all of its assets
to, or consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person) another Person,
other than the Company or another Guarantor unless:
(i) immediately after giving effect to such
transaction, no Default or Event of Default exists; and
(ii) either (A) subject to Sections 10.04 and
10.05 of the Indenture, the Person acquiring the property
in any such sale or disposition or the Person formed by or
surviving any such consolidation or merger unconditionally
assumes all the obligations of that Guarantor, pursuant to
a supplemental indenture in form and substance reasonably
satisfactory to the Trustee, under the Notes, the Indenture
and the Note Guarantee on the terms set forth herein or
therein; or (B) the Net Proceeds of such sale or other
disposition are applied in accordance with the applicable
provisions of the Indenture, including without limitation,
Section 4.10 thereof.
(b) In case of any such consolidation, merger,
sale or conveyance and upon the assumption by the successor
Person, by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of
the Note Guarantee endorsed upon the Notes and the due and
punctual performance of all of the covenants and conditions
of the Indenture to be performed by the Guarantor, such
successor Person shall succeed to and be substituted for
the Guarantor with the same effect as if it had been named
herein as a Guarantor. Such successor Person thereupon may
cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable under the Indenture
which theretofore shall not have been signed by the Company
and delivered to the Trustee. All the Note Guarantees so
issued shall in all respects have the same legal rank and
benefit under the Indenture as the Note Guarantees
theretofore and thereafter issued in accordance with the
terms of the Indenture as though all of such Note
Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 and
Section 10.05 of Article 10 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing
contained in the Indenture or in any of the Notes shall
prevent any consolidation or merger of a Guarantor with or
into the Company or another Guarantor, or shall prevent any
sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or
another Guarantor.
5. RELEASES.
(a) In the event of any sale or other disposition
of all or substantially all of the assets of any Guarantor,
by way of merger, consolidation or otherwise, or a sale or
other disposition of all of the Capital Stock of any
Guarantor, in each case to a Person that is not (either
before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, then such Guarantor
(in the event of a sale or other disposition, by way of
merger, consolidation or otherwise, of all of the Capital
F-3
Stock of such Guarantor) or the corporation acquiring the
property (in the event of a sale or other disposition of
all or substantially all of the assets of such Guarantor)
will be released and relieved of any obligations under its
Note Guarantee; provided that the Net Proceeds of such sale
or other disposition are applied in accordance with the
applicable provisions of the Indenture, including without
limitation Section 4.10 of the Indenture. Upon delivery by
the Company to the Trustee of an Officers' Certificate and
an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation
Section 4.10 of the Indenture, the Trustee shall execute at
the Company's expense any documents reasonably required in
order to evidence the release of any Guarantor from its
obligations under its Note Guarantee without recourse,
representation, warranty or liability of any kind.
(b) Any Guarantor not released from its
obligations under its Note Guarantee shall remain liable
for the full amount of principal of and interest on the
Notes and for the other obligations of any Guarantor under
the Indenture as provided in Article 10 of the Indenture.
6. NO RECOURSE AGAINST OTHERS. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the Commission that such a waiver is against public policy.
7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
8. COUNTERPARTS. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
9. EFFECT OF HEADINGS. The Section headings herein are for
convenience only and shall not affect the construction hereof.
10. THE TRUSTEE. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
F-4
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, 20___
[GUARANTEEING SUBSIDIARY]
By: _______________________________
Name:
Title:
BARNEY'S, INC.
By: _______________________________
Name:
Title:
[EXISTING GUARANTORS]
By: _______________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
as Trustee
By: _______________________________
Authorized Signatory
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