Exhibit 4.6
EXECUTION COPY
▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, INC.
Company
SUPREME MUNSINGWEAR CANADA, INC.
SUPREME INTERNATIONAL CORPORATION DE MEXICO, S.A. DE C.V.
BBI RETAIL LLC
▇▇▇▇▇▇▇ APPAREL CORP.
Subsidiary Guarantors
and
STATE STREET BANK AND TRUST COMPANY
Trustee
_______________
Indenture
Dated as of March 22, 2002
_______________
9 1/2% Senior Secured Notes due 2009
9 1/2% Series B Senior Secured Notes due 2009
▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, INC.
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture, dated as of March 22, 2002
-------------------------------------------------
Trust Indenture Indenture
Act Section Section
---------------------------------------------------
(S) 310(a)(1)............................ 608
(a)(2)................................... 608
(b)...................................... 608
(S) 312(c)............................... 701
(S) 313(a)............................... 703
(S) 314(a)(4)............................ 1007
(c)(1)................................... 102
(c)(2)................................... 102
(e)...................................... 102
(S) 315(b)............................... 601
(S) 316(a)(last sentence)................ 101 ("Outstanding")
(a)(1)(A)................................ 502, 512
(a)(1)(B)................................ 513
(b)...................................... 508
(c)...................................... 104(d)
(S) 317(a)(1)............................ 503
(a)(2)................................... 504
(b)...................................... 1003
(S) 318(a)............................... 111
_________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
TABLE OF CONTENTS
Page
PARTIES................................................................................... 1
RECITALS OF THE COMPANY................................................................... 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.......................................................... 1
SECTION 102. Compliance Certificates and Opinions................................. 25
SECTION 103. Form of Documents Delivered to Trustee............................... 25
SECTION 104. Acts of Holders...................................................... 26
SECTION 105. Notices, Etc., to Trustee, Company and any Guarantor................. 27
SECTION 106. Notice to Holders; Waiver............................................ 27
SECTION 107. Effect of Headings and Table of Contents............................. 28
SECTION 108. Successors and Assigns............................................... 28
SECTION 109. Separability Clause.................................................. 28
SECTION 110. Benefits of Indenture................................................ 28
SECTION 111. Governing Law........................................................ 28
SECTION 112. Legal Holidays....................................................... 29
SECTION 113. Trust Indenture Act Controls......................................... 29
SECTION 114. No Recourse Against Others........................................... 29
SECTION 115. Counterparts......................................................... 29
SECTION 116. Appointment of Agent For Service..................................... 29
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally...................................................... 30
SECTION 202. Form of Trustee's Certificate of Authentication...................... 31
SECTION 203. Restrictive Legends.................................................. 31
SECTION 204. Form of Certificate to be Delivered After the Offshore Note
Exchange Date........................................................ 34
ARTICLE THREE
THE NOTES
SECTION 301. Amount............................................................... 35
SECTION 302. Denominations........................................................ 35
SECTION 303. Execution, Authentication, Delivery and Dating....................... 35
SECTION 304. Temporary Notes...................................................... 37
SECTION 305. Registration, Registration of Transfer and Exchange.................. 37
SECTION 306. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, Lost and Stolen Notes.......................... 38
SECTION 307. Payment of Interest; Interest Rights Preserved....................... 39
SECTION 308. Persons Deemed Owners................................................ 40
SECTION 309. Cancellation......................................................... 40
SECTION 310. Computation of Interest.............................................. 41
SECTION 311. Book Entry Provisions for Global Notes............................... 41
i
SECTION 312. Transfer Provisions.................................................. 42
SECTION 313. Form of Accredited Investor Certificate.............................. 50
SECTION 314. Form of Regulation S Certificate..................................... 53
SECTION 315. Form of Rule 144A Certificate........................................ 55
SECTION 316. CUSIP Numbers........................................................ 56
SECTION 317. Issuance of Additional Notes......................................... 56
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.............................. 56
SECTION 402. Application of Trust Money........................................... 58
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.................................................... 58
SECTION 502. Acceleration of Maturity; Rescission and Annulment................... 60
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee.............................................................. 61
SECTION 504. Trustee May File Proofs of Claim..................................... 61
SECTION 505. Trustee May Enforce Claims Without Possession of Notes............... 62
SECTION 506. Application of Money Collected....................................... 62
SECTION 507. Limitation on Suits.................................................. 63
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest................................................. 63
SECTION 509. Restoration of Rights and Remedies................................... 64
SECTION 510. Rights and Remedies Cumulative....................................... 64
SECTION 511. Delay or Omission Not Waiver......................................... 64
SECTION 512. Control by Holders................................................... 64
SECTION 513. Waiver of Past Defaults.............................................. 65
SECTION 514. Waiver of Stay or Extension Laws..................................... 65
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.................................. 65
SECTION 602. Notice of Defaults................................................... 67
SECTION 603. Certain Rights of Trustee............................................ 67
SECTION 604. Trustee Not Responsible for Recitals or Issuance of Notes............ 68
SECTION 605. May Hold Notes....................................................... 69
SECTION 606. Money Held in Trust.................................................. 69
SECTION 607. Compensation and Reimbursement....................................... 69
SECTION 608. Corporate Trustee Required; Eligibility.............................. 70
SECTION 609. Resignation and Removal; Appointment of Successor.................... 70
SECTION 610. Acceptance of Appointment by Successor............................... 71
SECTION 611. Merger, Conversion, Consolidation or Succession to Business.......... 72
SECTION 612. Appointment of Authenticating Agent.................................. 72
ii
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses....................... 74
SECTION 702. Disclosure of Names and Addresses of Holders......................... 74
SECTION 703. Reports by Trustee................................................... 74
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms................. 75
SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on Certain
Terms................................................................ 76
SECTION 803. Successor Substituted................................................ 77
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders................... 77
SECTION 902. Supplemental Indentures with Consent of Holders...................... 78
SECTION 903. Execution of Supplemental Indentures................................. 79
SECTION 904. Effect of Supplemental Indentures.................................... 79
SECTION 905. Conformity with Trust Indenture Act.................................. 79
SECTION 906. Reference in Notes to Supplemental Indentures........................ 79
SECTION 907. Notice of Supplemental Indentures.................................... 79
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and Interest.................. 80
SECTION 1002. Pledge and Grant of Security Interest in Collateral.................. 80
SECTION 1003. Maintenance of Office or Agency...................................... 81
SECTION 1004. Money for Notes Payments to Be Held in Trust......................... 82
SECTION 1005. Corporate Existence.................................................. 83
SECTION 1006. Payment of Taxes and Other Claims.................................... 83
SECTION 1007. Maintenance of Properties............................................ 84
SECTION 1008. Statement by Officers as to Default.................................. 84
SECTION 1009. Statement by the Company and ▇▇▇▇▇▇▇ as to Collateral Fair
Market Value......................................................... 85
SECTION 1010. Limitation on Indebtedness........................................... 85
SECTION 1011. Limitation on Restricted Payments.................................... 85
SECTION 1012. Limitation on Issuances and Sales of Preferred Stock by
Restricted Subsidiaries.............................................. 88
SECTION 1013. Limitation on Transactions with Affiliates........................... 88
SECTION 1014. Limitation on Liens.................................................. 89
SECTION 1015. Purchase of Notes upon Change in Control............................. 89
SECTION 1016. Limitation on Sale of Assets......................................... 91
SECTION 1017. Limitation of Sale of Collateral..................................... 93
SECTION 1018. Limitations on Guarantees of Indebtedness by Restricted
Subsidiaries......................................................... 94
SECTION 1019. Limitation on Dividends and Other Payment Restrictions Affecting
Restricted Subsidiaries.............................................. 95
iii
SECTION 1020. Limitation on Sale and Leaseback Transactions........................ 95
SECTION 1021. Limitation on Unrestricted Subsidiaries.............................. 96
SECTION 1022. Reports.............................................................. 97
SECTION 1023. Waiver of Certain Covenants.......................................... 97
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Redemption........................................................... 98
SECTION 1102. Applicability of Article............................................. 98
SECTION 1103. Election to Redeem; Notice to Trustee................................ 98
SECTION 1104. Selection by Trustee of Notes to Be Redeemed......................... 98
SECTION 1105. Notice of Redemption................................................. 99
SECTION 1106. Deposit of Redemption Price.......................................... 100
SECTION 1107. Notes Payable on Redemption Date..................................... 100
SECTION 1108. Notes Redeemed in Part............................................... 100
ARTICLE TWELVE
RANKING OF NOTES
SECTION 1201. Notes Senior Secured Indebtedness of Company......................... 101
SECTION 1202. Note Guarantee Senior Secured Indebtedness of ▇▇▇▇▇▇▇................ 101
SECTION 1203. Note Guarantee Senior Indebtedness of Subsidiary Guarantors.......... 101
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. Note Guarantees...................................................... 101
SECTION 1302. Severability......................................................... 103
SECTION 1303. Restricted Subsidiaries.............................................. 103
SECTION 1304. Limitation of Subsidiary Guarantors' Liability....................... 103
SECTION 1305. Contribution......................................................... 104
SECTION 1306. Subrogation.......................................................... 104
SECTION 1307. Reinstatement........................................................ 104
SECTION 1308. Release of a Subsidiary Guarantor.................................... 105
SECTION 1309. Benefits Acknowledged................................................ 105
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
Defeasance........................................................... 105
SECTION 1402. Defeasance and Discharge............................................. 105
SECTION 1403. Covenant Defeasance.................................................. 106
SECTION 1404. Conditions to Defeasance or Covenant Defeasance...................... 106
SECTION 1405. Deposited Money and Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions................................ 108
SECTION 1406. Reinstatement........................................................ 108
iv
TESTIMONIUM
SIGNATURES AND SEALS
EXHIBIT A - FORM OF NOTE
v
INDENTURE, dated as of March 22, 2002, among ▇▇▇▇▇ INTERNATIONAL INC,
a corporation duly organized and existing under the laws of the State of Florida
(herein called the "Company"), having its principal office at ▇▇▇▇ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and its subsidiaries, SUPREME MUNSINGWEAR CANADA,
INC., a corporation organized under the laws of Canada, SUPREME INTERNATIONAL
CORPORATION DE MEXICO, S.A. DE C.V., a corporation organized under the laws of
Mexico, BBI RETAIL LLC, a Florida limited liability company, and ▇▇▇▇▇▇▇ APPAREL
CORP., a Delaware corporation ("▇▇▇▇▇▇▇") and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of and issuance of its 9
1/2% Senior Secured Notes due 2009 (the "Initial Notes") and its 9 1/2% Series B
Senior Secured Notes due 2009 (the "Exchange Notes" and, together with the
Initial Notes and the Additional Notes (as defined herein) the "Notes"), of
substantially the tenor and amount hereinafter set forth, and to provide
therefor the Company has duly authorized the execution and delivery of this
Indenture.
Each Subsidiary Guarantor (as defined herein) has duly authorized the
execution and delivery of this Indenture.
Upon the issuance of the Exchange Notes, or the effectiveness of the
Shelf Registration Statement (as defined herein), this Indenture will be subject
to, and shall be governed by the provisions of the Trust Indenture Act of 1939,
as amended, that are required to be part of or deemed to be part of and to
govern the indentures qualified thereunder.
All things necessary have been done to make the Notes, when duly
executed and duly issued by the Company and authenticated and delivered
hereunder by the Trustee or the Authenticating Agent, the valid obligations of
the Company and to make this Indenture a valid agreement of the Company, in
accordance with their and its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Notes
by the Holders (as defined herein) thereof, it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the Notes, as
follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
--------------------------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
1
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in Section 311 of the Trust Indenture Act,
shall have the meanings assigned to them in the rules of the Commission
adopted under the Trust Indenture Act;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP (as defined herein); and
(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Accredited Investor Certificate" means a certificate substantially in
the form set forth in Section 313.
"Acquired Indebtedness" means Indebtedness (as defined herein) of a
Person (as defined herein) (a) existing at the time such Person becomes a
Restricted Subsidiary (as defined herein) or is merged into or consolidated with
the Company or any of its Restricted Subsidiaries or (b) assumed in connection
with the acquisition of assets from such Person. Acquired Indebtedness shall be
deemed to be incurred on the date of the related acquisition of assets from any
Person or the date the acquired Person becomes a Restricted Subsidiary.
"Acquisition Indebtedness" means Indebtedness of a Person incurred in
connection with or in contemplation of (i) an investment by the Company or any
of its Restricted Subsidiaries in any other Person pursuant to which such Person
becomes a Restricted Subsidiary or shall be merged into or consolidated with the
Company or any of its Restricted Subsidiaries, (ii) an acquisition by the
Company or any of its Restricted Subsidiaries of the property and assets of any
Person other than the Company or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person or
(iii) the purchase by the Company or any of its Restricted Subsidiaries from a
third party of any licenses, trademarks, service marks, trade names or other
intellectual property rights of such third party; provided, however, that
Indebtedness incurred in a transaction or series of related transactions, which
transactions have a Fair Market Value (as defined herein) of less than $5.0
million will not be considered to be Acquisition Indebtedness.
"Act" when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Collateral" means, at any relevant date, additional
Collateral (as defined herein) that (i) has a Collateral Fair Market Value (as
defined herein), that, together with the Collateral Fair Market Value of
existing Collateral, shall exceed the aggregate principal amount of Outstanding
Notes (as defined herein) on such date by 100%, and (ii) are free and clear of
all Liens (as defined herein) other than Liens permitted by paragraph (b) in the
definition of "Permitted Liens" (as defined herein).
"Additional Notes" means any Notes issued by the Company pursuant to
Section 317.
2
"Adjusted Net Assets" has the meaning specified in Section 1305.
"Affiliate" means, with respect to any specified Person, (a) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person or (b) any other Person that
owns, directly or indirectly, 5% or more of such specified Person's Capital
Stock (as defined herein) or any executive officer or director of any such
specified Person or other Person or, with respect to any natural Person, any
Person having a relationship with such Person by blood, marriage or adoption not
more remote than first cousin. For the purposes of this definition, "control,"
when used with respect to any specified Person, means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent Members" has the meaning specified in Section 311.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (a) any
Capital Stock of any Restricted Subsidiary; (b) all or substantially all of the
properties and assets of the Company or its Restricted Subsidiaries; (c) all or
substantially all of the properties and assets of any division or line of
business of the Company or any Restricted Subsidiary, other than in the ordinary
course of business or (d) any other properties or assets of the Company or any
Restricted Subsidiary outside of the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties or assets (i) that is governed by the provisions of
Article Eight, (ii) between or among the Company and Wholly Owned Restricted
Subsidiaries (as defined herein) in accordance with the terms of the Indenture,
(iii) in compliance with Section 1011, (iv) that consists of grants by the
Company or its Restricted Subsidiaries in the ordinary course of business of
licenses or sub-licenses to use any of the intellectual property rights of the
Company or its Restricted Subsidiaries, (v) that constitute Collateral, or (vi)
having a Fair Market Value of less than $750,000 in any given fiscal year.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Notes.
"Average Life" means, as of the date of determination with respect to
any Indebtedness, the quotient obtained by dividing (a) the sum of the products
of (i) the number of years from the date of determination to the date or dates
of each successive scheduled principal payment (including, without limitation,
any sinking fund requirements) of such Indebtedness multiplied by (ii) the
amount of each such principal payment by (b) the sum of all such principal
payments.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of
1978, as amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
3
"Board of Directors" means, with respect to any Person, the board of
directors of such Person or any duly authorized committee of such board.
"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such 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, and delivered to the
Trustee.
"Business Day" when used with respect to any Place of Payment (as
defined herein) or any other particular location referred to in this Indenture
or in the Notes, means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment or
other location, as the case may be, are authorized or obligated by law,
regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, partnership interests (whether general or limited), participations,
rights in or other equivalents (however designated) of such Person's equity, and
any other interest or participation that confers the right to receive a share of
the profits and losses, or distributions of assets of, such Person and any
rights (other than debt securities convertible into Capital Stock), warrants or
options exchangeable for or convertible into such Capital Stock, whether now
outstanding or issued after the Issuance Date.
"Capitalized Lease Obligation" means, with respect to any Person, any
obligation of such Person under a lease of (or other agreement conveying the
right to use) any property (whether real, personal or mixed) that is required to
be classified and accounted for as a capital lease obligation under GAAP, and,
for the purpose of this Indenture, the amount of such obligation at any date
shall be the capitalized amount thereof at such date, determined in accordance
with GAAP.
"Cash Equivalents" means: (a) any evidence of Indebtedness with a
maturity of one year or less issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof); (b) certificates of deposit or acceptances with a
maturity of one year or less of any financial institution that is a member of
the Federal Reserve System having combined capital and surplus and undivided
profits of not less than $500 million; (c) commercial paper with a maturity of
one year or less issued by a Corporation (as defined herein) that is not an
Affiliate of the Company and is organized under the laws of any state of the
United States or the District of Columbia and rated at least A-1 by S&P (as
defined herein) or any successor rating agency or at least P-1 by ▇▇▇▇▇'▇ (as
defined herein) or any successor rating agency; (d) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (a) and (b) above; and (e) demand and time deposits with a
domestic commercial bank that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $500
million.
"Change in Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders (as defined
herein), is or becomes the "beneficial owner" (as
4
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person
shall be deemed to have "beneficial ownership" of all securities that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 35% of
the total voting power of all outstanding Voting Stock of the Company and either
(x) the Permitted Holders beneficially own, directly or indirectly, in the
aggregate Voting Stock of the Company that represents a lesser percentage of the
aggregate ordinary voting power of all classes of the Voting Stock of the
Company, voting together as a single class, than such other person or group and
are not entitled (by voting power, contract or otherwise) to elect directors of
the Company having a majority of the total voting power of the Board of
Directors, or (y) such other person or group is entitled to elect directors of
the Company having a majority of the total voting power of the Board of
Directors; (b) the Company consolidates with, or merges with or into, another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, the Company, in any such event pursuant to a transaction
in which the outstanding Voting Stock (as defined herein) of the Company is
converted into or exchanged for cash, securities or other property, other than
any such transaction (i) where the outstanding Voting Stock of the Company is
not converted or exchanged at all (except to the extent necessary to reflect a
change in the jurisdiction of incorporation of the Company) or is converted into
or exchanged for (A) Voting Stock (other than Redeemable Capital Stock, as
defined herein) of the surviving or transferee Corporation or (B) Voting Stock
(other than Redeemable Capital Stock) of the surviving or transferee Corporation
and cash, securities and other property (other than Capital Stock of the
surviving or transferee Corporation) in an amount that could be paid by the
Company as a Restricted Payment as described under Section 1011 and (ii)
immediately after such transaction, no "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of all
outstanding Voting Stock of the surviving or transferee Corporation and either
(x) the Permitted Holders beneficially own, directly or indirectly, in the
aggregate Voting Stock of the Company that represents a lesser percentage of the
aggregate ordinary voting power of all classes of the Voting Stock of the
Company, voting together as a single class, than such other person or group and
are not entitled (by voting power, contract or otherwise) to elect directors of
the Company having a majority of the total voting power of the Board of
Directors, or (y) such other person or group is entitled to elect directors of
the Company having a majority of the total voting power of the Board of
Directors; (c) during any consecutive two year period, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election to such Board of Directors, or
whose nomination for election by the stockholders of the Company, was approved
by a vote of 66/% of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of the Company then in office; or (d) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction which complies with Article Eight.
"Change in Control Offer" has the meaning specified in Section 1015.
5
"Change in Control Purchase Date" has the meaning specified in Section
1015.
"Change in Control Purchase Price" has the meaning specified in
Section 1015.
"Collateral" means:
(a) Trademarks (as defined herein);
(b) Licenses (as defined herein);
(c) any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation,
misuse or breach with respect to the Collateral with the right, but not the
obligation, to sue for and collect, or otherwise recover, such damages; and
(d) all proceeds of collateral for, and supporting obligations
relating to, any and all of the Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property of
the types described in the foregoing clauses (a) through (c) and, to the
extent not otherwise included, all (i) payments under insurance with
respect to the Collateral (whether or not the Collateral Agent (as defined
herein) is the loss payee thereof), or any damages, indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with respect
to any of the foregoing Collateral and (ii) cash proceeds of the foregoing
Collateral.
"Collateral Agent" means State Street Bank and Trust Company, a
Massachusetts trust company, as collateral agent under the Security Agreement
and its assigns or successors.
"Collateral Fair Market Value" means, the value of the items of
Collateral concerned, that is determined in good faith and evidenced by a
resolution of the Board of Directors of the Company and filed with the Trustee,
which determination shall be based on the written opinion of a qualified
independent valuation firm prepared contemporaneously with and attached to such
resolution.
"Collateral Sale" means any sale, issuance, conveyance, transfer or
other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of
Collateral. For the purposes of this definition, the term "Collateral Sale"
shall not include:
(a) the transfer of Collateral between or among the Company and its
Wholly Owned Restricted Subsidiaries that are duly organized and validly
existing under the laws of the United States of America in accordance with
the terms of the Indenture, provided, that the transferee becomes a party
to the Security Agreement and the transfer is made subject to the security
interest held by the Collateral Agent on behalf of the holders of the
Notes;
(b) the transfer or assignment of license agreements or the right to
receive royalties or payments under such license agreements to a Foreign
Subsidiary (as defined
6
herein), provided, that the payments due each year under all the license
agreements or rights so transferred shall not, in the aggregate, exceed 30%
of the total payment due under all the licenses of the Company and its
Restricted Subsidiaries in such year;
(c) any licensing of the Collateral in the ordinary course of
business; and
(d) any licensing of the Collateral that is reasonably required in
order to enable the lenders to the Company and its Restricted Subsidiaries
to sell or liquidate inventory in which such lenders have a security
interest to satisfy any outstanding Indebtedness to such lenders of the
Company or such Restricted Subsidiaries.
"Collateral Sale Proceeds" means with respect to any Collateral Sale,
the proceeds thereof in the form of cash or Cash Equivalents including payments
in respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel and investment banks) related to such Collateral Sale, (ii)
provisions for all taxes payable as a result of such Collateral Sale and (iii)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Collateral Sale and retained by the Company or
any Restricted Subsidiary, as the case may be, after such Collateral Sale, all
as reflected in an Officers' Certificate delivered to the Trustee.
"Collateral Sale Proceeds Offer" has the meaning set forth in Section
1017.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Operating Officer, its Chief
Financial Officer, any Vice President, its Treasurer or an Assistant Treasurer,
and delivered to the Trustee.
"Consolidated Adjusted Net Income" means, for any period, the
consolidated net income (or loss) of the Company and all Restricted Subsidiaries
for such period as determined in accordance with GAAP, adjusted, to the extent
included in calculating such net income, by excluding, without duplication, (a)
all extraordinary gains or losses (net of taxes, fees and expenses relating
thereto), (b) all gains or losses (net of taxes, fees and expenses relating
thereto) attributable to asset dispositions other than in the ordinary course of
business, (c) the portion of net income of any Person (other than the Company or
a Restricted Subsidiary), including Unrestricted Subsidiaries, in which the
Company or any Restricted Subsidiary has an ownership interest, except to the
extent of the amount of dividends or other distributions actually paid to the
7
Company or any Restricted Subsidiary in cash dividends or cash distributions
during such period, (d) the net income of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such Restricted Subsidiary is not at the date of determination (regardless of
any waiver) permitted, 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 such Restricted Subsidiary or its
stockholders, and (e) for purposes of calculating Consolidated Adjusted Net
Income under Section 1011, any net income (or loss) from any Restricted
Subsidiary while it was an Unrestricted Subsidiary at any time during such
period other than any amounts actually received from such Restricted Subsidiary
during such period; provided that, if any Restricted Subsidiary is not a Wholly
Owned Restricted Subsidiary, Consolidated Adjusted Net Income will be reduced
(to the extent not otherwise reduced in accordance with GAAP) by an amount equal
to (A) the amount of the Consolidated Adjusted Net Income otherwise attributable
to such Restricted Subsidiary multiplied by (B) the quotient of (1) the number
of shares of outstanding common stock of such Restricted Subsidiary not owned on
the last day of such period by the Company or any of its Restricted Subsidiaries
divided by (2) the total number of shares of outstanding common stock of such
Restricted Subsidiary on the last day of such period.
"Consolidated Fixed Charge Coverage Ratio" of the Company means, for
any period, the ratio of (a) the sum of Consolidated Adjusted Net Income and, to
the extent deducted in computing Consolidated Adjusted Net Income, Consolidated
Interest Expense, Consolidated Income Tax Expense and Consolidated Non-Cash
Charges, in each case, for such period to (b) the sum of (i) Consolidated
Interest Expense for such period and (ii) the aggregate amount of dividends and
other distributions paid, accrued or scheduled to be paid or accrued in respect
of Redeemable Capital Stock of the Company or any Restricted Subsidiary for such
period, in each case after giving pro forma effect to (A) the incurrence of the
Indebtedness giving rise to the need to make such calculation and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred, and the
application of the net proceeds occurred, on the first day of such period, (B)
the incurrence, repayment or retirement of any other Indebtedness by the Company
and its Restricted Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired on the first day of such period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average daily balance
of such Indebtedness during such period) and (C) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any company, entity or business acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first day
of such period, as if such acquisition or disposition occurred on the first day
of such period.
"Consolidated Income Tax Expense" means, for any period, the provision
for federal, state, local and foreign income taxes of the Company and all
Restricted Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, without
duplication, (1) the sum of (a) the interest expense of the Company and its
Restricted Subsidiaries for such period, including, without limitation, (i)
amortization of debt discount, (ii) the net cost of Interest Rate Agreements
(including amortization of discounts) (as defined herein), (iii) the interest
8
portion of any deferred payment obligation, (iv) all commissions, discounts and
other fees and charges owed with respect to the letter of credit, bankers'
acceptance financing or similar facilities and (v) amortization of debt issuance
costs, plus (b) the interest component of Capitalized Lease Obligations paid,
accrued and/or scheduled to be paid or accrued by the Company and its Restricted
Subsidiaries during such period, plus (c) one-third of lease rental payments in
connection with operating leases paid, accrued and/or scheduled to be paid or
accrued during such period, in each case as determined on a consolidated basis
in accordance with GAAP; provided that (x) the Consolidated Interest Expense
attributable to interest on any Indebtedness computed on a pro forma basis and
(A) bearing a floating interest rate shall be computed as if the rate in effect
on the date of computation had been the applicable rate for the entire period
and (B) which was not outstanding during the period for which the computation is
being made but which bears, at the option of the Company, a fixed or floating
rate of interest, shall be computed by applying at the option of the Company,
either the fixed or floating rate, and (y) in making such computation, the
Consolidated Interest Expense attributable to interest on any Indebtedness under
a revolving credit facility computed on a pro forma basis shall be computed
based upon the average daily balance of such Indebtedness during the applicable
period.
"Consolidated Non-Cash Charges" means, for any period, the aggregate
depreciation, amortization and other non-cash expenses of the Company and any
Restricted Subsidiary reducing Consolidated Adjusted Net Income for such period,
determined on a consolidated basis in accordance with GAAP (excluding any such
non-cash charge that requires an accrual of or reserve for cash charges for any
future period or constituting an extraordinary item or loss).
"Corporate Trust Office" means the principal corporate trust office of
the Trustee, at which at any particular time its corporate trust business shall
be administered, which office on the date of execution of this Indenture is
located at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇.
"Corporation" includes corporations, associations, companies and
business trusts.
"Currency Agreements" means any spot or forward foreign exchange
agreements and currency swap, currency option or other similar financial
agreements or arrangements entered into by the Company or any of its Restricted
Subsidiaries designed to protect against or manage exposure to fluctuations in
foreign currency exchange rates.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time
or both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means The Depository Trust Company, its nominees and
successors.
"Designation Amount" has the meaning specified in Section 1021.
9
"Disinterested Director" means, with respect to any transaction or
series of transactions in respect of which the Board of Directors is required to
deliver a resolution of the Board of Directors under this Indenture, a member of
the Board of Directors who does not have any material direct or indirect
financial interest in or with respect to such transaction or series of
transactions.
"Dollar" or "$" means a dollar or other equivalent unit in such coin
or currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"Event of Default" has the meaning specified in Section 501.
"Excess Proceeds" has the meaning specified in Section 1016.
"Excess Proceeds Offer" has the meaning specified in Section 1016.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" has the meaning stated in the first recital of this
Indenture and refers to any Exchange Notes containing terms substantially
identical to the Initial Notes (except that (i) such Exchange Notes shall not
contain terms with respect to transfer restrictions and shall be registered
under the Securities Act, and (ii) certain provisions relating to an increase in
the stated rate of interest thereon shall be eliminated) that are issued and
exchanged for the Initial Notes or Additional Notes in accordance with the
Exchange Offer, as provided for in the Registration Rights Agreement and this
Indenture.
"Exchange Offer" means the offer by the Company to the Holders of the
Initial Notes to exchange all of the Initial Notes for Exchange Notes, as
provided for in the Registration Rights Agreement (as defined herein).
"Exchange Offer Registration Statement" means the Exchange Offer
Registration Statement as defined in the Registration Rights Agreement.
"Fair Market Value" means, with respect to any asset or property, the
sale value that would be obtained in an arm's-length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy.
"Foreign Subsidiary" means a Wholly-Owned Restricted Subsidiary that
is not organized under the laws of the United States of America.
"Funding Guarantor" has the meaning specified in Section 1305.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, that
are in effect on the Issuance Date.
"Guarantee" means, as applied to any obligation, (a) a guarantee
(other than by endorsement of negotiable instruments for collection in the
ordinary course of business), direct
10
or indirect, in any manner, of any part or all of such obligation and (b) an
agreement, direct or indirect, contingent or otherwise, the practical effect of
which is to assure in any way the payment or performance (or payment of damages
in the event of nonperformance) of all or any part of such obligation,
including, without limiting the foregoing, the payment of amounts drawn down by
letters of credit. A Guarantee shall include, without limitation, any agreement
to maintain or preserve any Person's financial condition or to cause any other
Person to achieve certain levels of operating results; provided that no license
or sub-license entered into in the ordinary course of business between the
Company or any Restricted Subsidiary (other than with an Affiliate thereof)
shall be deemed to be a Guarantee as a result of any minimum royalty or revenue
provisions with which the Company or such Restricted Subsidiary must comply.
"Holder" means the Person in whose name a Note is registered in the
Note Register.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all liabilities of such Person for borrowed money (including overdrafts) or
for the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities incurred in the ordinary course
of business, but including, without limitation, all obligations, contingent or
otherwise, of such Person in connection with any letters of credit and
acceptances issued under letter of credit facilities, acceptance facilities or
other similar facilities, (b) all obligations of such Person evidenced by bonds,
notes, debentures or other similar instruments, (c) all indebtedness of such
Person created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even if the rights
and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), but excluding
trade payables arising in the ordinary course of business, (d) all Capitalized
Lease Obligations of such Person, (e) all obligations of such Person under or in
respect of Interest Rate Agreements or Currency Agreements, (f) all Indebtedness
referred to in (but not excluded from) the preceding clauses of other Persons
and all dividends of other Persons, the payment of which is secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or with respect to property
(including, without limitation, accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness (the amount of such obligation being deemed to be the
lesser of the Fair Market Value of such property or asset or the amount of the
obligation so secured), (g) all guarantees by such Person of Indebtedness
referred to in this definition of any other Person, and (h) all Redeemable
Capital Stock of such Person valued at the greater of its voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends.
For purposes hereof, the "maximum fixed repurchase price" of any Redeemable
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Redeemable Capital Stock as if such
Redeemable Capital Stock were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Indenture, and if such price is
based upon, or measured by, the fair market value of such Redeemable Capital
Stock, such fair market value shall be determined in good faith by the board of
directors of the issuer of such Redeemable Capital Stock.
11
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Initial Notes" has the meaning specified in the first recital to this
Indenture.
"Initial Purchaser" means First Union Securities, Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or (7)
of Regulation D under the Securities Act.
"Interest Payment Date" when used with respect to any Note, means the
Stated Maturity of an installment of interest on such Note.
"Interest Rate Agreements" means any interest rate protection
agreements and other types of interest rate hedging agreements (including,
without limitation, interest rate swaps, caps, floors, collars and similar
agreements) designed to protect against or manage exposure to fluctuations in
interest rates.
"Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee or other extension of credit or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued or owned by,
any other Person and all other items that would be classified as investments on
a balance sheet prepared in accordance with GAAP. "Investments" shall exclude
extensions of trade credit on commercially reasonable terms in accordance with
normal trade practices.
"Issuance Date" means March 22, 2002, the date on which the Notes are
originally issued under the Indenture.
"▇▇▇▇▇▇▇" has the meaning specified in the first paragraph of this
Indenture until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "▇▇▇▇▇▇▇" shall mean
such successor Person.
"Lease" means the Master Agreement dated August 28, 1997, as amended
as of the Issuance Date, among the Company, as lessee and guarantor, SUP Joint
Venture, as lessor, Suntrust Bank, a Georgia banking Corporation, as a lender
and as agent, and Israel Discount Bank Limited, Miami Agency, as lender, and the
related Lease Agreement (Land), Lease Agreement (Building), Loan Agreement,
Guaranty and Security Agreement and Financing Statement (all as defined in the
Master Agreement) dated as of August 28, 1997, as amended as of the Issuance
Date, and any renewal, replacement or extension thereof on terms similar to
those in effect on the Issuance Date; provided that any such renewal,
replacement or extension will not increase the amount of the Guarantee by the
Company of the obligations of the lessor under the Lease or the rental
obligations of the Company at the expiration of the term of the Lease Agreement
(Building) and Lease Agreement (Land) as of the date of such renewal,
replacement or extension.
12
"Letter of Credit Facilities" means letters of credit entered into by
the Company in the ordinary course of business, as the same may be amended,
supplemented or otherwise modified including any refinancing, refunding,
replacement or extension thereof.
"Licenses" means all agreements, permits, consents, orders and
franchises, in each case relating to the Trademarks (as herein defined), and all
proceeds, income, royalties and other payments now or hereafter due and/or
payable with respect thereto, subject, in each case, to the terms of such
agreements, permits, authorizations and franchises.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation, assignment for
security, claim, or preference or priority or other encumbrance upon or with
respect to any property of any kind, real or personal, movable or immovable, now
owned or hereafter acquired. A Person shall be deemed to own subject to a Lien
any property which such Person has acquired or holds subject to the interest of
a vendor or lessor under any conditional sale agreement (other than a
consignment), capital lease or other title retention agreement.
"Maturity" means, with respect to any Note, the date on which any
principal of such Note becomes due and payable as provided in such Note or in
this Indenture, whether at the Stated Maturity with respect to such principal or
by declaration of acceleration, call for redemption or purchase or otherwise.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"Net Cash Proceeds" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel and investment banks) related to such Asset Sale, (ii)
provisions for all taxes payable as a result of such Asset Sale, (iii) payments
made to retire Indebtedness where payment of such Indebtedness is secured by the
assets or properties the subject of such Asset Sale, (iv) amounts required to be
paid to any Person (other than the Company or any Restricted Subsidiary) owning
a beneficial interest in the assets subject to the Asset Sale and (v)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee.
"Non-Registration Opinion and Supporting Evidence" has the meaning
specified in Section 312.
"Non-U.S. Person" means a person who is not a U.S. person as defined
in Regulation S.
"Note Amount" has the meaning specified in Section 1016.
13
"Note Guarantee" means any Guarantee of the obligations of the Company
under the Indenture and the Notes by any Restricted Subsidiary in accordance
with the provisions of the Indenture.
"Note Portion of Excess Proceeds" has the meaning specified in Section
1016.
"Note Register" and "Note Registrar" have the respective meanings
specified in Section 305.
"Notes" has the meaning stated in the first recital of this Indenture
and more particularly means any Notes (including Additional Notes) authenticated
and delivered under this Indenture.
"Offer Date" has the meaning specified in Section 1016.
"Offered Price" has the meaning specified in Section 1016.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee.
"Offshore Global Note" has the meaning set forth in Section 201.
"Offshore Note Exchange Date" has the meaning set forth in Section
201.
"Offshore Physical Note" has the meaning set forth in Section 201.
"Opinion of Counsel" means a written opinion of outside legal counsel,
which and who may be outside counsel for the Company, and who shall be
reasonably acceptable to the Trustee.
"Other Debt" has the meaning specified in Section 1016.
"Outstanding," when used with respect to Notes, means, as of the date
of determination, all Notes theretofore authenticated and delivered under this
Indenture, except:
(i) Notes theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Notes, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust
by the Company (if the Company shall act as its own Paying Agent) for
the Holders of such Notes; provided that, if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
14
(iii) Notes, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article Fourteen; and
(iv) Notes which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture, other than any such Notes in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Notes are held by a bona fide purchaser
in whose hands such Notes are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Notes have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, and for the
purpose of making the calculations required by Trust Indenture Act Section 313,
Notes owned by the Company or any other obligor upon the Notes or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding (provided that in connection with any offer by the Company or any
obligor to purchase the Notes, Notes tendered for purchase will be deemed to be
Outstanding and held by the tendering Holder until the date of purchase), except
that, in determining whether the Trustee shall be protected in making such
calculation or in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Notes which a Responsible Officer of
the Trustee actually knows to be so owned shall be so disregarded. Notes so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
to act with respect to such Notes and that the pledgee is not the Company or any
other obligor upon the Notes or any Affiliate of the Company or such other
obligor.
"Pari Passu Indebtedness" means (a) with respect to the Notes,
Indebtedness that ranks pari passu in right of payment to the Notes and (b) with
respect to any Note Guarantee, Indebtedness that ranks pari passu in right of
payment to such Note Guarantee.
"Paying Agent" means any Person (including the Company acting as
Paying Agent) authorized by the Company to pay the principal of (or premium, if
any, on) or interest on any Notes on behalf of the Company.
"Permitted Holders" means, as of the date of determination, (a) ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, their spouses, their respective lineal
descendants and the spouses of such lineal descendants, (b) any Person
controlled by any of the Persons included in the foregoing clause (a) (as the
term "controlled" is defined under the definition of "Affiliate"), (c) trusts
for the benefit of any of the Persons included in the foregoing clause (a), and
(d) any charitable foundation a majority of whose members, trustees or
directors, as the case may be, are Persons included in the foregoing clause (a).
"Permitted Indebtedness" means any of the following:
(a) Indebtedness of the Company and the Subsidiary Guarantors under
the Senior Credit Facility in an aggregate principal amount at any one time
outstanding not to
15
exceed the greater of (I) $60 million; and (II) the sum of (1) 85% of
Eligible Receivables (as defined in clauses (a) through (o) of the
definition thereof contained in the Senior Credit Facility on the Issuance
Date), plus (2) 90% of Eligible Factoring Credit Balances (as defined in
clauses (a) through (c) of the definition thereof contained in the Senior
Credit Facility on the Issuance Date) plus (3) the lesser of (i) 60% of the
lesser of cost (computed on a first-in-first-out basis) and Fair Market
Value of Eligible Inventory (as defined in clauses (a) through (e) and (g)
through (i) of the definition thereof contained in the Senior Credit
Facility on the Issuance Date) and (ii) $30.0 million, minus (4) the full
amount of all outstanding letters of credit issued pursuant to, or
authorized under, the Senior Credit Facility for the account of the Company
or the Restricted Subsidiaries which are not fully secured by cash
collateral;
(b) Indebtedness of the Company with respect to any letters of credit
under the Letter of Credit Facilities in an aggregate principal amount at
any one time outstanding not to exceed $60 million;
(c) Indebtedness of the Company pursuant to the Notes (other than any
Additional Notes) or of any Restricted Subsidiary pursuant to a Subsidiary
Guarantee (other than a Guarantee of Additional Notes);
(d) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the Issuance Date (other than Indebtedness under the Senior
Credit Facility, the Letter of Credit Facilities and the Lease);
(e) Indebtedness of the Company owing to any Wholly Owned Restricted
Subsidiary; provided that any Indebtedness of the Company owing to any such
Restricted Subsidiary is unsecured and is subordinated in right of payment
from and after such time as the Notes shall become due and payable (whether
at Stated Maturity, acceleration or otherwise) to the payment and
performance of the Company's obligations under the Notes; provided further
that any disposition, pledge or transfer of any such Indebtedness to a
Person (other than a disposition, pledge or transfer to the Company or
another Wholly Owned Restricted Subsidiary) shall be deemed to be an
incurrence of such Indebtedness by the Company not permitted by this clause
(e);
(f) Indebtedness of a Restricted Subsidiary owing to the Company or to
another Wholly Owned Restricted Subsidiary; provided that any such
Indebtedness of any Subsidiary Guarantor is subordinated in right of
payment to the Subsidiary Guarantee of such Subsidiary Guarantor; provided
further that any disposition, pledge or transfer of any such Indebtedness
to a Person (other than a disposition, pledge or transfer to the Company or
a Wholly Owned Restricted Subsidiary) shall be deemed to be an incurrence
of such Indebtedness by such Restricted Subsidiary not permitted by this
clause (f);
(g) guarantees of any Restricted Subsidiary made in accordance with
the provisions of Section 1018;
(h) obligations of the Company or any Subsidiary Guarantor entered
into in the ordinary course of business (i) pursuant to Interest Rate
Agreements designed to
16
protect the Company or any Restricted Subsidiary against fluctuations in
interest rates in respect of Indebtedness of the Company or any Restricted
Subsidiary, which obligations do not exceed the aggregate principal amount
of such Indebtedness and (ii) pursuant to Currency Agreements entered into
by the Company or any of its Restricted Subsidiaries in respect of its (x)
assets or (y) obligations, as the case may be, denominated in a foreign
currency;
(i) Indebtedness of the Company or any Subsidiary Guarantor in respect
of purchase money obligations, Capitalized Lease Obligations of the Company
or any Guarantor and Subordinated Indebtedness of the Company or any
Guarantor in an aggregate amount which does not exceed $5.0 million at any
one time outstanding;
(j) Indebtedness of the Company or any Subsidiary Guarantor consisting
of guarantees, indemnities or obligations in respect of purchase price
adjustments in connection with the acquisition or disposition of assets,
including, without limitation, shares of Capital Stock of Restricted
Subsidiaries;
(k) Indebtedness of the Company or any Subsidiary Guarantor
represented by (x) letters of credit for the account of the Company or any
Restricted Subsidiary or (y) other obligations to reimburse third parties
pursuant to any surety bond or other similar arrangements, which letters of
credit or other obligations, as the case may be, are intended to provide
security for workers' compensation claims, payment obligations in
connection with self-insurance or other similar requirements in the
ordinary course of business;
(l) the guarantee of the obligations of the lessor under the Lease;
and
(m) any renewals, extensions, substitutions, refinancings or
replacements (each, for purposes of this clause, a "refinancing") of any
Indebtedness, referred to in clause (c) or (d) of this definition,
including any successive refinancings, so long as (i) any such new
Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced, plus the lesser of the amount of any premium
required to be paid in connection with such refinancing pursuant to the
terms of the Indebtedness refinanced or the amount of any premium
reasonably determined as necessary to accomplish such refinancing, (ii) in
the case of any refinancing by the Company of Pari Passu Indebtedness (as
herein defined) or Subordinated Indebtedness (as herein defined), such new
Indebtedness is made pari passu with or subordinate to the Notes at least
to the same extent as the Indebtedness being refinanced, (iii) in the case
of any refinancing by any Subsidiary Guarantor of Pari Passu Indebtedness
or Subordinated Indebtedness, such new Indebtedness is made pari passu with
or subordinate to the Guarantee of such Subsidiary Guarantor at least to
the same extent as the Indebtedness being refinanced, (iv) such new
Indebtedness has an Average Life longer than the Average Life of the Notes
and a final Stated Maturity later than the final Stated Maturity of the
Notes and (v) Indebtedness of the Company or a
17
Subsidiary Guarantor may only be refinanced with Indebtedness of the
Company or a Subsidiary Guarantor and Indebtedness of a Restricted
Subsidiary that is not a Subsidiary Guarantor may only be refinanced with
Indebtedness of such Restricted Subsidiary.
"Permitted Investments" means any of the following:
(a) Investments in Cash Equivalents;
(b) Investments in the Company or any Restricted Subsidiary;
(c) intercompany Indebtedness to the extent permitted under the
following clause (e) or (f) of the definition of Permitted Indebtedness;
(d) Investments in an amount not to exceed an aggregate of $5 million
at any one time outstanding;
(e) Investments by the Company or any Restricted Subsidiary in
another Person, if as a result of such Investment (i) such other Person
becomes a Wholly Owned Restricted Subsidiary or (ii) such other Person is
merged or consolidated with or into, or transfers or conveys all or
substantially all of its assets to, the Company or a Wholly Owned
Restricted Subsidiary;
(f) bonds, notes, debentures and other securities received as
consideration for Assets Sales to the extent permitted under Section 1016;
(g) any loans or other advances made pursuant to any employee benefit
plans (including plans for the benefit of directors) or employment
agreements or other compensation arrangements (including for the purchase
of Capital Stock of the Company by employees), in each case as approved by
the Board of Directors of the Company, in an aggregate amount at any one
time outstanding not to exceed $1 million; or
(h) negotiable instruments held for deposit or collection in the
ordinary course of business, except to the extent they would constitute
Investments in Affiliates.
"Permitted Liens" means:
(a) Liens existing on the date of this Indenture;
(b) Liens securing Indebtedness that is permitted to be incurred
under Section 1010;
(c) Liens on any property or assets of a Restricted Subsidiary
granted in favor of the Company or any Wholly Owned Restricted Subsidiary;
(d) Liens securing the Notes and any Subsidiary Guarantee;
(e) Liens securing Acquired Indebtedness created prior to (and not in
connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Restricted Subsidiary; provided that
such Lien does not extend to any
18
property and assets acquired in connection with the incurrence of such
Acquired Indebtedness;
(f) Liens securing Indebtedness permitted to be incurred under
Interest Rate Agreements or otherwise incurred to hedge interest rate risk;
(g) Liens for taxes, assessments, governmental charges or claims that
have not yet become delinquent or are being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted
and for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(h) statutory and common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen or other similar
Liens arising in the ordinary course of business and with respect to
amounts not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(i) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security;
(j) Liens incurred or deposits made to secure the performance of
tenders, bids, trade contracts, leases, statutory or regulatory
obligations, bankers' acceptances, surety and appeal bonds, government
contracts, performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive of
obligations for the payment of borrowed money);
(k) easements, rights-of-way, municipal and zoning ordinances and
similar charges, encumbrances, title defects or other irregularities that
do not materially interfere with the ordinary course of business of the
Company or any of its Restricted Subsidiaries;
(l) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Company and its
Restricted Subsidiaries, taken as a whole;
(m) Liens (including extensions and renewals thereof) upon real or
personal property, provided that:
(i) such Lien is created solely for the purpose of securing
Indebtedness incurred in accordance with Section 1010 (A) to finance
the cost (including the cost of improvement or construction) of the
item of property or assets subject thereto and such Lien is created
prior to, at the time of, or within six months after the later of the
acquisition, the completion of construction or the commencement of
full operation of such property; or (B) to refinance any Indebtedness
previously so secured; and
19
(ii) the principal amount of the Indebtedness secured by such
▇▇▇▇ does not exceed 100% of such costs.
(n) any interest or title of a lessor in the property subject to any
Capitalized Lease Obligation or operating lease;
(o) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(p) Liens arising from any judgment, decree or order of any court
against the Company or any Restricted Subsidiary, so long as the Lien is
adequately bonded and any appropriate legal proceedings which may have been
duly initiated for the review of such judgment, decree or order shall not
have been finally terminated or the period within which such proceedings
may be initiated shall have expired;
(q) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such
letters of credit and the products and proceeds thereof;
(r) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business in accordance with the past practices of the Company and its
Restricted Subsidiaries prior to the date of the Indenture;
(s) Liens on shares of Capital Stock of any Unrestricted Subsidiary
to secure Indebtedness of such Unrestricted Subsidiary; and
(t) Any extension, renewal or replacement, in whole or in part, of
any Lien described in the foregoing clauses (a) to (s); provided that such
extension, renewal or replacement does not extend to any additional
property or assets.
"Person" means any individual, Corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Physical Notes" has the meaning set forth in Section 201.
"Place of Payment" means the office or agency maintained by the
Company where the principal of (and premium, if any, on) and interest on the
Notes are payable as specified in Section 1003.
"Predecessor Note" of any particular Note, means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Note shall be deemed to evidence the same
debt as the mutilated, destroyed, lost or stolen Note.
20
"Preferred Stock" means, with respect to any Person, Capital Stock of
any class or classes (however designated) of such Person which is preferred as
to the payment of dividends or distributions, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of such
Person, over the Capital Stock of any other class of such Person whether now
outstanding, or issued after the Issuance Date, and including, without
limitation, all classes and series of preferred or preference stock of such
Person.
"Private Placement Legend" has the meaning set forth in Section 203.
"Public Equity Offering" means an offer and sale of common stock
(which is Qualified Capital Stock) of the Company made on a primary basis by the
Company pursuant to a registration statement that has been declared effective by
the Commission pursuant to the Securities Act (other than a registration
statement on Form S-8 or otherwise relating to equity securities issuable under
any employee benefit plan of the Company).
"QIB" means a "Qualified Institutional Buyer" within the meaning of
Rule 144A under the Securities Act.
"Qualified Capital Stock" of any Person means any and all Capital
Stock of such Person other than Redeemable Capital Stock.
"Redeemable Capital Stock" means any class or series of Capital Stock
that, either by its terms, by the terms of any security into which it is
convertible or exchangeable or by contract or otherwise, is, or upon the
happening of an event or passage of time would be, required to be redeemed prior
to the final Stated Maturity of the Notes or is redeemable at the option of the
holder thereof at any time prior to such final Stated Maturity, or is
convertible into or exchangeable for debt securities at any time prior to such
final Stated Maturity.
"Redemption Date," when used with respect to any Note to be redeemed,
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights
Agreement dated as of March 22, 2002, among the Company, the Subsidiary
Guarantors and the Initial Purchaser.
"Registration Statement" means the Registration Statement as defined
in the Registration Rights Agreement.
"Regular Record Date" has the meaning specified in Section 301.
"Resale Restriction Termination Date" has the meaning specified in
Section 313.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Section 314.
21
"Responsible Officer," when used with respect to the Trustee, means
any vice president, any assistant secretary, any assistant treasurer, any trust
officer or assistant trust officer, 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 Payments" has the meaning specified in Section 1011.
"Restricted Subsidiary" means any Subsidiary other than an
Unrestricted Subsidiary.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Certificate" means a certificate substantially in the form
set forth in Section 315.
"S&P" means Standard and Poor's Ratings Group, a division of ▇▇▇▇▇▇-
▇▇▇▇, Inc. and its successors.
"Sale and Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property or asset in connection with the leasing of such
property or asset to the seller or transferor.
"Securities Act" means Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Security Agreement" means the Pledge and Security Agreement dated as
of March 22, 2002 among the Company, ▇▇▇▇▇▇▇ and State Street Bank and Trust
Company, as Collateral Agent, as may be amended from time to time.
"Senior Credit Facility" means the Amended and Restated Loan and
Security Agreement dated as of March 26, 1999 among the Company and certain of
its Subsidiaries, as borrowers, Bank of America, N.A., as agent, and the banks
party thereto from time to time, together with the related documents thereto
(including, without limitation, any guarantee agreements permitted under this
Indenture and security documents), in each case as such agreements may be
amended (including any amendment and restatement thereof), supplemented or
otherwise modified from time to time, including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including,
subject to the covenants of this Indenture, adding Subsidiaries of the Company
as additional borrowers or guarantors thereunder) all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement in
compliance with this Indenture.
"Shelf Registration Statement" means the Shelf Registration Statement
as defined in the Registration Rights Agreement.
22
"Significant Subsidiary" means any Restricted Subsidiary of the
Company that, together with its Subsidiaries, (i) for the most recent fiscal
year of the Company, accounted for more than 10% of the consolidated revenues of
the Company and its Restricted Subsidiaries, (ii) as of the end of such fiscal
year, was the owner of more than 10% of the consolidated assets of the Company
and its Restricted Subsidiaries, all as set forth on the most recently available
consolidated financial statements of the Company for such fiscal year or (iii)
was organized or acquired after the beginning of such fiscal year and would have
been a Significant Subsidiary if it had been owned during the entire fiscal
year.
"Special Record Date" for the payment of any Defaulted Interest on the
Notes means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" means, when used with respect to any Note or any
installment of interest thereon, the date specified in such Note as the fixed
date on which the principal of such Note or such installment of interest is due
and payable, and, when used with respect to any other Indebtedness, means the
date specified in the instrument governing such Indebtedness as the fixed date
on which the principal of such Indebtedness, or any installment of interest
thereon, is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or a
Subsidiary Guarantor that is expressly subordinated in right of payment to the
Notes or the Note Guarantee of such Subsidiary Guarantor, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries or by the Company and one or more
other Subsidiaries.
"Subsidiary Guarantor" means each of Supreme Munsingwear Canada, Inc.,
Supreme International Corporation de Mexico, S.A. de C.V., BBI Retail LLC,
▇▇▇▇▇▇▇ and any Restricted Subsidiary that incurs a Note Guarantee; provided
that, upon the release and discharge of any Person from its Note Guarantee in
accordance with the Indenture, such Person shall cease to be a Subsidiary
Guarantor.
"Surviving Entity" has the meaning set forth in Section 801.
"Trademarks" means all trademarks, service marks, collective marks,
trade dress, logos, designs, slogans, domain names, trade names, business names,
corporate names and other source identifiers, whether or not registered, whether
currently in use or not, including, without limitation, all common law rights
and registrations and applications for registration thereof, and all other marks
registered in or applied for with the U.S. Patent and Trademark Office or in any
office or agency of any state or territory of the United States or any foreign
country (but excluding any United States intent-to-use trademark application to
the extent that, and solely during the period in which, the grant of a security
interest therein would impair the validity and enforceability of such intent-to-
use trademark applications under applicable law) and all rights provided by
international treaties and conventions, all extensions and renewals of any of
the foregoing, together in each case with the goodwill of the business connected
therewith and
23
symbolized thereby, and all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such grantor accruing thereunder
or pertaining hereto.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939
as in force at the date as of which this Indenture was executed, except as
provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder.
"United States" means the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"Unrestricted Subsidiary" means each Subsidiary of the Company
designated as such pursuant to and in compliance with Section 1021.
"U.S. Global Note" has the meaning set forth in Section 201.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the timely payment of which its
full faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the timely payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S.
Government Obligation or a specific payment of principal of or interest on any
such U.S. Government Obligation held by such custodian for the account of the
holder of such depository receipt; provided that (except as required by law)
such custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific payment
of principal of or interest on the U.S. Government Obligation evidenced by such
depository receipt.
"U.S. Physical Note" has the meaning set forth in Section 201.
"Vice President," when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
"Voting Stock" means any class or classes of Capital Stock pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock of
any other class or classes shall have, or might have, voting power by reason of
the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means any Restricted Subsidiary,
all of the outstanding Capital Stock (other than directors' qualifying shares or
shares of foreign
24
Restricted Subsidiaries required to be owned by foreign nationals pursuant to
applicable law) of which are owned by the Company or by one or more other Wholly
Owned Restricted Subsidiaries or by the Company and one or more other Wholly
Owned Restricted Subsidiaries.
SECTION 102. Compliance Certificates and Opinions.
---------------------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company, the Subsidiary
Guarantors and any other obligor on the Notes (if applicable) shall, at the
request of the Trustee, furnish to the Trustee an Officers' Certificate in form
and substance reasonably acceptable to the Trustee stating that all conditions
precedent, if any, provided for in this Indenture (including any covenant
compliance with which constitutes a condition precedent) relating to the
proposed action have been complied with and, at the request of the Trustee, an
Opinion of Counsel to the effect that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of any such
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Each certificate or opinion with respect to compliance with a covenant
or condition provided for in this Indenture (other than pursuant to Section
1008) shall include:
(1) a statement that each individual or firm signing such certificate
or opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual or such
firm, he or it has made such examination or investigation as is necessary
to enable him or it to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual or such firm, such covenant or condition has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
-----------------------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any
Subsidiary Guarantor or other obligor on the Notes may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the
25
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company, any
Subsidiary Guarantor or other obligor on the Notes stating that the information
with respect to such factual matters is in the possession of the Company, any
Subsidiary Guarantor or other obligor on the Notes, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
------------------------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents
duly appointed in writing. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a
capacity other than his individual capacity, such certificate or affidavit
shall also constitute sufficient proof of authority. The fact and date of
the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The principal amount and serial numbers of Notes held by any
Person, and the date of holding the same, shall be proved by the Note
Register.
(d) If the Company shall solicit from the Holders of Notes any
request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by or pursuant to Board Resolution,
fix in advance a record date for the determination of Holders entitled to
give such request, demand, authorization, direction, notice, consent,
waiver or other Act, but the Company shall have no obligation to do so.
26
Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a
date not earlier than the date 30 days prior to the first solicitation of
Holders generally in connection therewith and not later than the date such
solicitation is completed. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may
be given before or after such record date, but only the Holders of record
at the close of business on such record date shall be deemed to be Holders
for the purposes of determining whether Holders of the requisite proportion
of Outstanding Notes have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Notes shall be computed as of
such record date; provided that no such authorization, agreement or consent
by the Holders on such record date shall be deemed effective unless it
shall become effective pursuant to the provisions of this Indenture not
later than eleven months after the record date.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Note shall bind every future
Holder of the same Note and the Holder of every Note issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee
or the Company or any Subsidiary Guarantor in reliance thereon, whether or
not notation of such action is made upon such Note.
SECTION 105. Notices, Etc., to Trustee, Company and any
--------------------------------------------------------
Guarantor.
----------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other documents provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or any Subsidiary
Guarantor or any other obligor on the Notes shall be sufficient for every
purpose hereunder if made, given, furnished or delivered in writing and
mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to or with the Trustee at its Corporate Trust Office, Attention:
▇▇▇▇▇▇▇▇ ▇▇▇▇, or
(2) the Company or any Subsidiary Guarantor by the Trustee or by any
Holder shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or delivered in
writing, or mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to the Company or such Subsidiary Guarantor addressed to
it at the address of its principal office, for the attention of the Chief
Financial Officer, specified in the first paragraph of this Indenture or at
any other address previously furnished in writing to the Trustee by the
Company or such Subsidiary Guarantor.
SECTION 106. Notice to Holders; Waiver.
----------------------------------------
Where this Indenture provides for notice of any event to Holders of
Notes by the Company or the Trustee, such notice shall be sufficiently given
(unless otherwise herein
27
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at its address as it appears in the
Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
In case, by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause, it shall be impractical to mail
notice of any event to Holders when such notice is required to be given pursuant
to any provision of this Indenture, then any manner of giving such notice as
shall be satisfactory to the Trustee shall be deemed to be sufficient giving of
such notice for every purpose hereunder.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Effect of Headings and Table of Contents.
-------------------------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 108. Successors and Assigns.
-------------------------------------
All covenants and agreements in this Indenture by the Company and the
Subsidiary Guarantors shall bind their successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause.
----------------------------------
In case any provision in this Indenture or in any Note shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture.
------------------------------------
Nothing in this Indenture or in the Notes, express or implied, shall
give to any Person, other than the parties hereto, any Authenticating Agent, any
Paying Agent, any Notes Registrar and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 111. Governing Law.
----------------------------
This Indenture and the Notes shall be governed by and construed in
accordance with the law of the State of New York. Upon the effectiveness of the
Shelf Registration
28
Statement or the consummation of the Exchange Offer, this Indenture will be
subject to the provisions of the Trust Indenture Act that are required to be
part of this Indenture and shall, to the extent applicable, be governed by such
provisions.
SECTION 112. Legal Holidays.
-----------------------------
In any case where any Interest Payment Date, Redemption Date, or
Stated Maturity or Maturity of any Note shall not be a Business Day at any Place
of Payment, then (notwithstanding any other provision of this Indenture or of
any Note) payment of principal (and premium, if any) or interest need not be
made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date or Redemption Date or at the Stated
Maturity or Maturity; provided that no interest shall accrue for the period from
and after such Interest Payment Date, Redemption Date, Stated Maturity or
Maturity, as the case may be.
SECTION 113. Trust Indenture Act Controls.
-------------------------------------------
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the provision required by the TIA shall control. If any provision of this
Indenture modifies or excludes any provision of the TIA that may be so modified
or excluded, the latter provision shall be deemed to apply to this Indenture as
so modified or excluded, as the case may be.
SECTION 114. No Recourse Against Others.
-----------------------------------------
A director, officer, employee or stockholder, as such, of the Company
or any Guarantor shall not have any liability for any obligations of the Company
or such Guarantor under the Notes, any Note Guarantee or this Indenture, as
applicable, or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note and the related Note
Guarantee, each Holder shall waive and release all such liability. The waiver
and release shall be part of the consideration for the issue of the Notes and
the Note Guarantees.
SECTION 115. Counterparts.
---------------------------
This Indenture may be executed in any number of counterparts, each of
which shall be original; but such counterparts shall together constitute but one
and the same instrument.
SECTION 116. Appointment of Agent For Service.
-----------------------------------------------
By the execution of this Indenture, each of Supreme Munsingwear
Canada, Inc., Supreme International Corporation de Mexico, S.A. de C.V., BBI
Retail LLC and ▇▇▇▇▇▇▇ hereby designates the Company as its authorized agent
upon which process may be served in any legal action or proceeding, including
with respect to any state or federal securities laws, that may be instituted in
any federal court of the United States or the court of any state thereof and
arising out of or relating to this Indenture. Service of process upon such agent
at ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
shall be deemed in every respect effective service of process upon Supreme
Munsingwear Canada, Inc., Supreme International Corporation de Mexico, S.A. de
C.V., BBI Retail LLC and ▇▇▇▇▇▇▇ as applicable, in any such legal action or
29
proceeding and each of Supreme Munsingwear Canada, Inc., Supreme International
Corporation de Mexico, S.A. de C.V., BBI Retail LLC and ▇▇▇▇▇▇▇ hereby submits
to the nonexclusive jurisdiction of any such court in which any such legal
action or proceeding is so instituted and waives, to the extent it may
effectively do so, any objection it may have now or hereafter to the laying of
the venue of any such legal action or proceeding. Such appointment shall be
irrevocable so long as the Holders or the Trustee shall have any rights pursuant
to the terms of this Indenture. Each of Supreme Munsingwear Canada, Inc.,
Supreme International Corporation de Mexico, S.A. de C.V., BBI Retail LLC and
▇▇▇▇▇▇▇ further agrees to take any and all action, including the execution and
filing of any and all such documents and instruments, as may be necessary to
continue such designation and appointment of such agent.
ARTICLE TWO
NOTE FORMS
SECTION 201. Forms Generally.
------------------------------
The Initial Notes shall be known as the "9 1/2% Senior Secured Notes
due 2009" and the Exchange Notes shall be known as the "9 1/2% Series B Senior
Secured Notes due 2009," in each case, of the Company. The Notes and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in Exhibit A hereto and in this Article, respectively, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers of the Company executing
such Notes, as evidenced by their execution of the Notes. Any portion of the
text of any Note may be set forth on the reverse thereof, with an appropriate
reference thereto on the face of the Note. Each Note shall be dated the date of
its authentication.
The definitive Notes shall be printed, lithographed or engraved on
steel-engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Notes, as evidenced by their
execution of such Notes.
Initial Notes offered and sold in reliance on Rule 144A under the
Securities Act shall be issued initially in the form of a single permanent
global Note in substantially the form set forth in Exhibit A and contain each of
the legends set forth in Section 203 (the "U.S. Global Note"), registered in the
name of the nominee of the Depositary, deposited with the Trustee, as custodian
for the Depositary or its nominee, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of the U.S. Global Note may from time to time be increased or decreased
by adjustments made on the records of the Trustee, as custodian for the
Depositary or its nominee, as hereinafter provided.
Initial Notes offered and sold in offshore transactions in reliance on
Regulation S under the Securities Act shall be issued initially in the form of a
single temporary global Note in substantially the form set forth in Exhibit A
and contain the legends set forth in Section 203 (the "Temporary Offshore Global
Note"), registered in the name of the nominee of the Depositary, deposited with
the Trustee, as custodian for the Depositary or its nominee, duly executed by
the Company and authenticated by the Trustee as hereinafter provided. At any
time following 41
30
days after the date hereof (the "Offshore Note Exchange Date"), upon receipt by
the Trustee and the Company of a certificate substantially in the form set forth
in Section 204, a single permanent global Note substantially in the form of
Exhibit A hereto (the "Permanent Offshore Global Note"; and together with the
Temporary Offshore Global Note, the "Offshore Global Note") duly executed by the
Company and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depositary, and the Note
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the Temporary Offshore Global Note in an amount equal to the
principal amount of the beneficial interest in the Temporary Offshore Global
Note transferred. The aggregate principal amount of the Offshore Global Note may
from time to time be increased or decreased by adjustments made in the records
of the Trustee, as custodian for the Depositary or its nominee, as herein
provided. Initial Notes issued pursuant to Section 305 in exchange for or upon
transfer of beneficial interests in the U.S. Global Note or the Offshore Global
Note shall be in the form of U.S. Physical Notes or in the form of permanent
certificated Notes substantially in the form set forth in Exhibit A (the
"Offshore Physical Notes"), respectively, as hereinafter provided.
Initial Notes which are offered and sold to Institutional Accredited
Investors which are not QIBs (excluding Non-U.S. Persons) or issued pursuant to
a change in the Depositary's status as a "Clearing Agency" registered under the
Exchange Act or as a result of the occurrence and continuation of an Event of
Default with respect to the Notes shall be issued in the form of permanent
certificated Notes in substantially the form set forth in Exhibit A and contain
the Private Placement Legend as set forth in Section 203 (the "U.S. Physical
Notes").
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes." The U.S. Global Note
and the Offshore Global Note are sometimes collectively referred to as the
"Global Notes."
Exchange Notes shall be issued substantially in the form set forth in
Exhibit A.
SECTION 202. Form of Trustee's Certificate of Authentication.
--------------------------------------------------------------
Subject to Section 611, the Trustee's certificate of authentication
shall be in substantially the following form:
This is one of the Notes referred to in the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
Dated: __________ By:_________________________________
Authorized Signatory
SECTION 203. Restrictive Legends.
----------------------------------
Unless and until (i) an Initial Note is sold pursuant to an effective
Shelf Registration Statement or (ii) an Initial Note is exchanged for an
Exchange Note in an Exchange Offer pursuant to an effective Exchange Offer
Registration Statement, in each case pursuant to
31
the Registration Rights Agreement, (A) each U.S. Global Note and U.S. Physical
Note shall bear the following legend set forth below (the "Private Placement
Legend") on the face thereof and (B) the Offshore Physical Notes and the
Temporary Offshore Global Note shall bear the Private Placement Legend on the
face thereof until the Offshore Note Exchange Date and receipt by the Company
and the Trustee of a certificate substantially in the form provided in Section
204:
THE NOTES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER
THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN 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 AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")), (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUB-PARAGRAPH
(a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE NOTES 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 OR (C) IT IS NOT A U.S. PERSON AND IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION, (2) AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH NOTE PRIOR TO THE DATE WHICH IS TWO YEARS AFTER
THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS NOTE (OR ANY
PREDECESSOR OF THIS NOTE) ONLY (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE NOTES
ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A INSIDE THE UNITED STATES, TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) OUTSIDE THE UNITED
STATES PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS IN AN OFFSHORE
TRANSACTION WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT,
(E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUB-
PARAGRAPH (a)(1), (a)(2), (a)(3) OR (a)(7) OF RULE 501 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THE NOTES 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 OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE
32
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (II) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE OTHER SIDE OF THIS
NOTE IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRUSTEE. AS USED
HEREIN, THE TERMS "UNITED STATES," "OFFSHORE TRANSACTION," AND "U.S.
PERSON" HAVE THE RESPECTIVE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.
Each Global Note, whether or not an Initial Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTIONS 311 AND 312 OF THE INDENTURE.
33
SECTION 204. Form of Certificate to be Delivered After the
------------ ---------------------------------------------
Offshore Note Exchange Date.
------------------------------
On or after May 2, 2002
STATE STREET BANK AND TRUST COMPANY
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, Corporate Trust Division
New York, NY 10006
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Re: ▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, INC. (the "Company")
9 1/2% Senior Secured Notes due 2009 (the "Notes")
Ladies and Gentlemen:
This letter relates to $_______ principal amount of Notes represented
by the temporary offshore global note certificate (the "Temporary Offshore
Global Note"). Pursuant to Section [201] [203] of the Indenture dated as of
March 22, 2002 (the "Indenture") relating to the Notes, we hereby certify that
(1) we are the beneficial owner of such principal amount of Notes represented by
the Temporary Offshore Global Note and (2) we are a Non-U.S. Person to whom the
Notes could be transferred in accordance with Rule 904 of Regulation S
promulgated under the Securities Act of 1933, as amended (the "Regulation S").
[Accordingly, you are hereby requested to exchange the Temporary Offshore Global
Note for an unlegended Permanent Offshore Global Note representing the
undersigned's interest in the principal amount of Notes represented by the
Temporary Offshore Global Note, all in the manner provided for in the
Indenture.] [Accordingly, you are hereby requested to issue an Offshore Physical
Note representing the undersigned's interest in the principal amount of Notes
represented by the Temporary Offshore Global Note, all in the manner provided by
the Indenture.]
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of ▇▇▇▇▇▇]
By: _______________________________
Authorized Signature
34
ARTICLE THREE
THE NOTES
SECTION 301. Amount.
---------------------
The aggregate principal amount of Notes which may be authenticated and
delivered under this Indenture is limited to $75,000,000, except for Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Section 303, 304, 305, 306, 311,
312, 906, 1015, 1016, 1017 or 1108 or pursuant to an Exchange Offer.
The Initial Notes shall be known and designated as the 9 1/2% Senior
Secured Notes due 2009" and the Exchange Notes shall be known and designated as
the 9 1/2% Series B Senior Secured Notes due 2009," in each case, of the
Company. The Stated Maturity of the Notes shall be March 15, 2009, and they
shall bear interest at the rate of 9 1/2% per annum from March 22, 2002 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable on September 15, 2002 and semiannually thereafter on March
15 and September 15 in each year, until the principal thereof is paid in full
and to the Person in whose name the Note (or any predecessor Note) is registered
at the close of business on the March 1 or September 1 immediately preceding
such Interest Payment Date (each, a "Regular Record Date"). Interest will be
computed on the Notes as specified in Section 310 hereof.
The principal of (and premium, if any) and interest on the Notes shall
be payable at the office or agency of the Company maintained for such purpose in
The City of New York, or at such other office or agency of the Company as may be
maintained for such purpose; provided, however, that, at the option of the
Company, interest may be paid (a) by check mailed to addresses of the Persons
entitled thereto as such addresses shall appear on the Note Register or (b) by
wire transfer to an account located in the United States maintained by the
payee.
Holders shall have the right to require the Company to purchase their
Notes, in whole or in part, in the event of a Change in Control pursuant to
Section 1015. The Notes shall be subject to repurchase pursuant to an Excess
Proceeds Offer as provided in Section 1016 and a Collateral Sale Proceeds Offer
as provided in Section 1017.
The Notes shall be redeemable as provided in Article Eleven and in the
Notes. The due and punctual payment of principal of, and premium, if any, and
interest on the Notes payable by the Company is irrevocably and unconditionally
guaranteed, to the extent set forth herein, by each of the Subsidiary
Guarantors.
SECTION 302. Denominations.
----------------------------
The Notes shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
-------------------------------------------------------------
The Notes shall be executed on behalf of the Company by its Chairman
of the Board, its Chief Executive Officer, its President, its Chief Operating
Officer, its Chief Financial
35
Officer or a Vice President. The signature of any of these officers on the Notes
may be the manual or facsimile signatures of the present or any future such
authorized officer and may be imprinted or otherwise reproduced on the Notes.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
On the Issuance Date, the Company shall deliver the Initial Notes in
the aggregate principal amount of $57,000,000 executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Notes, directing the Trustee to authenticate the Notes and
certifying that all conditions precedent to the issuance of Notes contained
herein have been fully complied with, and the Trustee in accordance with such
Company Order shall authenticate and deliver such Initial Notes. At any time
and from time to time after the Issuance Date, the Company may deliver
Additional Notes executed by the Company to the Trustee for authentication,
together with a Company Order for the authentication and delivery of such
Additional Notes, directing the Trustee to authenticate the Additional Notes and
certifying that the issuance of such Additional Notes is in compliance with
Article Ten hereof and that all other conditions precedent to the issuance of
Notes contained herein have been fully complied with, and the Trustee in
accordance with such Company Order shall authenticate and deliver such
Additional Notes; provided that the aggregate principal amount of the Initial
Notes issued on the Issuance Date and the aggregate principal amount of any
Additional Notes shall not exceed $75,000,000. On Company Order, the Trustee
shall authenticate for original issue Exchange Notes in an aggregate principal
amount not to exceed $57,000,000 plus the aggregate principal amount of any
Additional Notes issued; provided that such Exchange Notes shall be issuable
only upon the valid surrender for cancellation of Initial Notes and any
Additional Notes of a like aggregate principal amount in accordance with an
Exchange Offer or Shelf Registration Statement pursuant to the Registration
Rights Agreement and a Company Order for the authentication and delivery of such
Exchange Notes and certifying that all conditions precedent to the issuance of
such Exchange Notes have been complied with (including the effectiveness of the
Registration Statement related thereto). In each case, the Trustee shall be
entitled to receive an Officers' Certificate and an Opinion of Counsel of the
Company that it may reasonably request in connection with such authentication of
Notes. Such order shall specify the amount of Notes to be authenticated and the
date on which the original issue of Notes is to be authenticated.
Each Note shall be dated the date of its authentication.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Note a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Note shall be conclusive evidence, and the only evidence,
that such Note has been duly authenticated and delivered hereunder and is
entitled to the benefits of this Indenture.
36
In case the Company or any Subsidiary Guarantor, pursuant to Article
Eight, shall be consolidated or merged with or into any other Person or shall
convey, transfer, lease or otherwise dispose of its properties and assets
substantially as an entirety to any Person, and the successor Person resulting
from such consolidation, or surviving such merger, or into which the Company or
such Subsidiary Guarantor shall have been merged, or the Person which shall have
received a conveyance, transfer, lease or other disposition as aforesaid, shall
have executed an indenture supplemental hereto with the Trustee pursuant to
Article Eight, any of the Notes authenticated or delivered prior to such
consolidation, merger, conveyance, transfer, lease or other disposition may,
from time to time, at the request of the successor Person, be exchanged for
other Notes executed in the name of the successor Person with such changes in
phraseology and form as may be appropriate, but otherwise in substance of like
tenor as the Notes surrendered for such exchange and of like principal amount;
and the Trustee, upon Company Request of the successor Person, shall
authenticate and deliver Notes as specified in such request for the purpose of
such exchange. If Notes shall at any time be authenticated and delivered in any
new name of a successor Person pursuant to this Section 303 in exchange or
substitution for or upon registration of transfer of any Notes, such successor
Person, at the option of the Holders but without expense to them, shall provide
for the exchange of all Notes at the time Outstanding for Notes authenticated
and delivered in such new name.
SECTION 304. Temporary Notes.
------------------------------
Pending the preparation of definitive Notes, the Company may execute,
and upon Company Order the Trustee shall authenticate and deliver, temporary
Notes which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Notes in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Notes may determine, as conclusively evidenced by their execution
of such Notes.
If temporary Notes are issued, the Company will cause definitive Notes
to be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes, upon
surrender of the temporary Notes at the office or agency of the Company in a
Place of Payment, without charge to the Holder. Upon surrender for cancellation
of any one or more temporary Notes, the Company shall execute and, upon Company
Order, the Trustee shall authenticate and deliver in exchange therefor a like
principal amount of definitive Notes of authorized denominations. Until so
exchanged the temporary Notes shall in all respects be entitled to the same
benefits under this Indenture as definitive Notes.
SECTION 305. Registration, Registration of Transfer and Exchange.
------------------------------------------------------------------
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register for the Notes (the register maintained in the Corporate
Trust Office of the Trustee and in any other office or agency of the Company in
a Place of Payment being herein sometimes collectively referred to as the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Notes and of transfers of
Notes. The Note Register shall be in written form or any other form capable of
being converted
37
into written form within a reasonable time. At all reasonable times, the Note
Register shall be open to inspection by the Trustee. The Trustee is hereby
initially appointed as note registrar (the Trustee in such capacity, together
with any successor of the Trustee in such capacity, the "Note Registrar") for
the purpose of registering Notes and transfers of Notes as herein provided.
Upon surrender for registration of transfer of any Note at the office
or agency in a Place of Payment, the Company shall execute, and the Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes, of any authorized denomination or
denominations and of a like aggregate principal amount and tenor.
At the option of the Holder, Notes may be exchanged for other Notes,
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange (including an exchange of Initial Notes
for Exchange Notes), the Company shall execute, and the Trustee shall
authenticate and deliver the Notes which the Holder making the exchange is
entitled to receive; provided that no exchange of Initial Notes for Exchange
Notes shall occur until a Registration Statement shall have been declared
effective by the Commission, the Trustee shall have received an Officers'
Certificate confirming that the Registration Statement has been declared
effective by the Commission and the Initial Notes to be exchanged for the
Exchange Notes shall be cancelled by the Trustee.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer, in form
satisfactory to the Company and the Note Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange or redemption of Notes, but the Company may require payment by the
Holder of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Section 303, 304, 906, 1015, 1016, 1017
or 1108 not involving any transfer.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Notes.
----------------------------------------------------------
If any mutilated Note is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and deliver in exchange therefor a
new Note of like tenor and principal amount and bearing a number not
contemporaneously outstanding, or, in case any such mutilated Note has become or
is about to become due and payable, the Company in its discretion may, instead
of issuing a new Note, pay such Note.
If there shall be delivered to the Company, any Subsidiary Guarantor
and to the Trustee (i) evidence to their satisfaction of the destruction, loss
or theft of any Note and (ii) such security or indemnity as may be required by
them to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company, any Subsidiary Guarantor or the
38
Trustee that such Note has been acquired by a bona fide purchaser, the Company
shall execute and upon Company Order the Trustee shall authenticate and deliver,
in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and
principal amount and bearing a number not contemporaneously outstanding, or, in
case any such destroyed, lost or stolen Note has become or is about to become
due and payable, the Company in its discretion may, instead of issuing a new
Note, pay such Note.
Upon the issuance of any new Note under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) in connection therewith.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note, shall constitute an original
additional contractual obligation of the Company, any Subsidiary Guarantor and
any other obligor upon the Notes, whether or not the mutilated, destroyed, lost
or stolen Note shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 307. Payment of Interest; Interest Rights Preserved.
-------------------------------------------------------------
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name such Note (or one or more Predecessor Notes) is registered at the close of
business on the Regular Record Date for such interest at the Place of Payment;
provided, however, that each installment of interest on any Note may at the
Company's option be paid (i) by mailing a check for such interest, payable to or
upon the written order of the Person entitled thereto pursuant to Section 308,
to the address of such Person as it appears on the Note Register or (ii) by wire
transfer to an account located in the United States maintained by the payee.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such defaulted interest and, if applicable, interest on
such defaulted interest (to the extent lawful) at the rate specified in the
Notes (such defaulted interest and, if applicable, interest thereon herein
collectively called "Defaulted Interest") may be paid by the Company, at its
election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Note
39
and the date of the proposed payment (the "Special Record Date"), and at
the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be given in the manner provided in Section 106, not less than
10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been
so given, such Defaulted Interest shall be paid to the Persons in whose
name the Registered Notes (or their respective Predecessor Notes) are
registered at the close of business on such Special Record Date and shall
no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Notes may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause,
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Note delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Note shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Note.
SECTION 308. Persons Deemed Owners.
------------------------------------
Prior to due presentment of a Note for registration of transfer, the
Company, any Subsidiary Guarantor, the Trustee and any agent of the Company, any
Subsidiary Guarantor or the Trustee may treat the Person in whose name such Note
is registered as the owner of such Note for the purpose of receiving payment of
principal of (and premium, if any, on) and (subject to Sections 305 and 307)
interest on such Note and for all other purposes whatsoever, whether or not such
Note be overdue, and none of the Company, any Subsidiary Guarantor, the Trustee
or any agent of the Company, any Subsidiary Guarantor or the Trustee shall be
affected by notice to the contrary.
SECTION 309. Cancellation.
---------------------------
All Notes surrendered for payment, redemption, repayment at the option
of the Holder, registration of transfer or exchange shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Notes so
delivered to the Trustee shall be promptly
40
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Notes previously authenticated and delivered hereunder which
the Company may have acquired in any manner whatsoever, and may deliver to the
Trustee (or to any other Person for delivery to the Trustee) for cancellation
any Notes previously authenticated hereunder which the Company has not issued
and sold, and all Notes so delivered shall be promptly cancelled by the Trustee.
If the Company shall so acquire any of the Notes, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Notes held by the Trustee
shall be disposed of by the Trustee in accordance with its customary procedures
unless by Company Order the Company shall direct that cancelled Notes be
returned to it.
SECTION 310. Computation of Interest.
--------------------------------------
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months.
SECTION 311. Book Entry Provisions for Global Notes.
-----------------------------------------------------
(a) Each Global Note initially shall (i) be registered in the name of
the Depositary for such Global Notes or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii)
bear legends as set forth in Section 203.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note, and the
Depositary may be treated by the Company, the Subsidiary Guarantors, the Trustee
and any agent of the Company, the Subsidiary Guarantors or the Trustee as the
absolute owner of such Global Note for all purposes whatsoever. Notwithstanding
the foregoing, nothing herein shall prevent the Company, the Subsidiary
Guarantors, the Trustee or any agent of the Company, the Subsidiary Guarantors
or the Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note. The registered holder
of a Global Note may grant proxies and otherwise authorize any person, including
Agent Members and persons that may hold interests through Agent Members, to take
any action which a Holder is entitled to take under this Indenture or the Notes.
(b) Interests of beneficial owners in a Global Note may be transferred
in accordance with the applicable rules and procedures of the Depositary
and the provisions of Section 312. Transfers of a Global Note shall be
limited to transfers of such Global Note in whole, but not in part, to the
Depositary, its successors or their respective nominees, except (i) as
otherwise set forth in Section 312 and (ii) U.S. Physical Notes or Offshore
Physical Notes shall be transferred to all beneficial owners in exchange
for their beneficial interests in the U.S. Global Note or the Offshore
Global Note, respectively, in the event that the Depositary notifies the
Company that it is unwilling or unable to continue as Depositary for the
applicable Global Note or the Depositary ceases to be a
41
"Clearing Agency" registered under the Exchange Act and a successor
depositary is not appointed by the Company within 90 days or an Event of
Default has occurred and is continuing and the Note Registrar has received
a request from the Depositary. In connection with a transfer of an entire
Global Note to beneficial owners pursuant to clause (ii) of this paragraph
(b), the applicable Global Note shall be deemed to be surrendered to the
Trustee for cancellation, and the Company shall execute, and the Trustee
shall authenticate and deliver, to each beneficial owner identified by the
Depositary in exchange for its beneficial interest in the applicable Global
Note, an equal aggregate principal amount at maturity of U.S. Physical
Notes (in the case of the U.S. Global Note) or Offshore Physical Notes (in
the case of the Offshore Global Note), as the case may be, of authorized
denominations.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in
the other Global Note will, upon transfer, cease to be an interest in such
Global Note and become an interest in the other Global Note and,
accordingly, will thereafter be subject to all transfer restrictions, if
any, and other procedures applicable to beneficial interests in such other
Global Note for as long as it retains such an interest.
(d) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) of this Section shall,
unless such exchange is made on or after the Resale Restriction Termination
Date (as defined below) and except as otherwise provided in Section 312,
bear the Private Placement Legend.
SECTION 312. Transfer Provisions.
----------------------------------
Unless and until (i) an Initial Note is sold pursuant to an effective
Registration Statement, or (ii) an Initial Note is exchanged for an Exchange
Note in the Exchange Offer pursuant to an effective Registration Statement, in
each case, pursuant to the Registration Rights Agreement, the following
provisions shall apply:
(a) General. The provisions of this Section 312 shall apply to all
-------
transfers involving any Physical Note and any beneficial interest in any
Global Note.
(b) Certain Definitions. As used in this Section 312 only, "delivery"
-------------------
of a certificate by a transferee or transferor means the delivery to the
Note Registrar by such transferee or transferor of the applicable
certificate duly completed; "holding" includes both possession of a
Physical Note and ownership of a beneficial interest in a Global Note, as
the context requires; "transferring" a Global Note means transferring that
portion of the principal amount of the transferor's beneficial interest
therein that the transferor has notified the Note Registrar that it has
agreed to transfer; and "transferring" a Physical Note means transferring
that portion of the principal amount thereof that the transferor has
notified the Note Registrar that it has agreed to transfer.
As used in this Indenture, "Accredited Investor Certificate" means a
certificate substantially in the form set forth in Section 313; "Regulation
S Certificate" means a certificate substantially in the form set forth in
Section 314; "Rule 144A Certificate"
42
means a certificate substantially in the form set forth in Section 315; and
"Non-Registration Opinion and Supporting Evidence" means a written opinion
of counsel reasonably acceptable to the Company to the effect that, and
such other certification or information as the Company may reasonably
require to confirm that, the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act.
(c) [Intentionally Omitted]
(d) Deemed Delivery of a Rule 144A Certificate in Certain
-----------------------------------------------------
Circumstances. A Rule 144A Certificate, if not actually delivered, will be
-------------
deemed delivered if (A) (i) the transferor advises the Company and the
Trustee in writing that the relevant offer and sale were made in accordance
with the provisions of Rule 144A (or, in the case of a transfer of a
Physical Note, the transferor checks the box provided on the Physical Note
to that effect) and (ii) the transferee advises the Company and the Trustee
in writing that (x) it and, if applicable, each account for which it is
acting in connection with the relevant transfer, is a qualified
institutional buyer within the meaning of Rule 144A, (y) it is aware that
the transfer of Notes to it is being made in reliance on the exemption from
the provisions of Section 5 of the Securities Act provided by Rule 144A,
and (z) prior to the proposed date of transfer it has been given the
opportunity to obtain from the Company the information referred to in Rule
144A(d)(4), and has either declined such opportunity or has received such
information (or, in the case of a transfer of a Physical Note, the
transferee signs the certification provided on the Physical Note to that
effect); or (B) the transferor holds the U.S. Global Note and is
transferring to a transferee that will take delivery in the form of the
U.S. Global Note.
(e) Procedures and Requirements.
---------------------------
1. If the proposed transfer occurs prior to the Offshore Note
Exchange Date, and the proposed transferor holds:
(A) a U.S. Physical Note which is surrendered to the Note
Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers an Accredited Investor Certificate and, if
required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (x) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (y) cancel such surrendered U.S. Physical Note and
(z) deliver a new U.S. Physical Note to such transferee duly
registered in the name of such transferee in principal
amount equal to the principal amount being transferred of
such surrendered U.S. Physical Note;
43
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the Note
Registrar shall (x) cancel such surrendered U.S. Physical
Note, (y) record an increase in the principal amount of the
U.S. Global Note equal to the principal amount being
transferred of such surrendered U.S. Physical Note and (z)
notify the Depositary in accordance with the procedures of
the Depositary that it approves of such transfer; or
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the Note Registrar shall (x) cancel such surrendered
U.S. Physical Note, (y) record an increase in the principal
amount of the Temporary Offshore Global Note equal to the
principal amount being transferred of such surrendered U.S.
Physical Note and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of
such transfer.
In any of the cases described in this Section 312(e)(1)(A), the
Note Registrar shall deliver to the transferor a new U.S.
Physical Note in principal amount equal to the principal amount
not being transferred of such surrendered U.S. Physical Note, as
applicable.
(B) the U.S. Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the U.S. Global Note in an amount equal to the beneficial
interest therein being transferred, (y) deliver a new U.S.
Physical Note to such transferee duly registered in the name
of such transferee in principal amount equal to the amount
of such decrease and (z) notify the Depositary in accordance
with the procedures of the Depositary that it approves of
such transfer;
(ii) delivers (or is deemed to have delivered pursuant
to clause (d) above) a Rule 144A Certificate and the
proposed
44
transferee is or is acting through an Agent Member and
requests that the proposed transferee receive a beneficial
interest in the U.S. Global Note, then the transfer shall be
effected in accordance with the procedures of the Depositary
therefor; or
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the Note Registrar shall (w) register such transfer in
the name of such transferee and record the date thereof in
its books and records, (x) record a decrease in the
principal amount of the U.S. Global Note in an amount equal
to the beneficial interest therein being transferred, (y)
record an increase in the principal amount of the Temporary
Offshore Global Note equal to the amount of such decrease
and (z) notify the Depositary in accordance with the
procedures of the Depositary that it approves of such
transfer.
(C) the Temporary Offshore Global Note, and the proposed
transferee or transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the Note Registrar
shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) deliver a
new U.S. Physical Note to such transferee duly registered in
the name of such transferee in principal amount equal to the
amount of such decrease and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the Note
Registrar shall (x) record a decrease in the principal
amount of the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Note
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer; or
45
(iii) delivers a Regulation S Certificate and the
proposed transferee is or is acting through an Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Temporary Offshore Global Note,
then the transfer shall be effected in accordance with the
procedures of the Depositary therefor; provided, however,
that until the Offshore Note Exchange Date occurs,
beneficial interests in the Offshore Global Note may be held
only in or through accounts maintained at the Depositary by
Euroclear or Cedel (or by Agent Members acting for the
account thereof), and no person shall be entitled to effect
any transfer or exchange that would result in any such
interest being held otherwise than in or through such an
account.
2. If the proposed transfer occurs on or after the Offshore
Note Exchange Date and the proposed transferor holds:
(A) a U.S. Physical Note, which is surrendered to the Note
Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the procedures set
forth in Section 312(e)(1)(A)(i) shall apply;
(ii) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests that the proposed transferee receive a
beneficial interest in the Offshore Global Note, then the
procedures set forth in Section 312(e)(1)(A)(ii) shall
apply; or
(iii) delivers a Regulation S Certificate, then the
Note Registrar shall cancel such surrendered U.S. Physical
Note and at the direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Note to
such transferee in principal amount equal to the
principal amount being transferred of such surrendered
U.S. Physical Note, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
46
principal amount of the Offshore Global Note equal to
the principal amount being transferred of such
surrendered U.S. Physical Note and notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
In any of the cases described in this Section
312(e)(2)(A)(i), (ii) or (iii)(x), the Note Registrar shall
deliver to the transferor a new U.S. Physical Note in
principal amount equal to the principal amount not being
transferred of such surrendered U.S. Physical Note, as
applicable.
(B) the U.S. Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers an Accredited Investor Certificate and,
if required by the Company, a Non-Registration Opinion and
Supporting Evidence, or delivers (or is deemed to have
delivered pursuant to clause (d) above) a Rule 144A
Certificate and the proposed transferee requests delivery in
the form of a U.S. Physical Note, then the procedures set
forth in Section 312(e)(1)(B)(i) shall apply; or
(ii) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests that the proposed transferee receive a
beneficial interest in the U.S. Global Note, then the
procedures set forth in Section 312(e)(1)(B)(ii) shall
apply; or
(iii) delivers a Regulation S Certificate, then the
Note Registrar shall (x) record a decrease in the principal
amount of the U.S. Global Note in an amount equal to the
beneficial interest therein being transferred, (y) notify
the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer and (z) at the
direction of the transferee, either:
(x) register such transfer in the name of such
transferee, record the date thereof in its books and
records and deliver a new Offshore Physical Note to
such transferee in principal amount equal to the amount
of such decrease, or
(y) if the proposed transferee is or is acting
through an Agent Member, record an increase in the
principal amount of the Offshore Global Note equal to
the amount of such decrease.
47
(C) an Offshore Physical Note which is surrendered to the
Note Registrar, and the proposed transferee or transferor, as
applicable:
(i) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests delivery in the form of the U.S. Global
Note, then the Note Registrar shall (x) cancel such
surrendered Offshore Physical Note, (y) record an increase
in the principal amount of the U.S. Global Note equal to the
principal amount being transferred of such surrendered
Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer;
(ii) where the proposed transferee is or is acting
through an Agent Member, requests that the proposed
transferee receive a beneficial interest in the Offshore
Global Note, then the Note Registrar shall (x) cancel such
surrendered Offshore Physical Note, (y) record an increase
in the principal amount of the Offshore Global Note equal to
the principal amount being transferred of such surrendered
Offshore Physical Note and (z) notify the Depositary in
accordance with the procedures of the Depositary that it
approves of such transfer; or
(iii) does not make a request covered by Section
312(e)(2)(C)(i) or Section 312(e)(2)(C)(ii), then the Note
Registrar shall (x) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (y) cancel such surrendered Offshore Physical Note
and (z) deliver a new Offshore Physical Note to such
transferee duly registered in the name of such transferee in
principal amount equal to the principal amount being
transferred of such surrendered Offshore Physical Note.
In any of the cases described in this Section 312(e)(2)(C),
the Note Registrar shall deliver to the transferor a new
Offshore Physical Note in principal amount equal to the
principal amount not being transferred of such surrendered
Offshore Physical Note, as applicable.
(D) the Offshore Global Note, and the proposed transferee or
transferor, as applicable:
(i) delivers (or is deemed to have delivered
pursuant to clause (d) above) a Rule 144A Certificate and
the proposed transferee is or is acting through an Agent
Member and requests delivery in the form of the U.S. Global
Note, then the Note
48
Registrar shall (x) record a decrease in the principal
amount of the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) record an
increase in the principal amount of the U.S. Global Note
equal to the amount of such decrease and (z) notify the
Depositary in accordance with the procedures of the
Depositary that it approves of such transfer;
(ii) where the proposed transferee is or is acting
through an Agent Member, requests that the proposed
transferee receive a beneficial interest in the Offshore
Global Note, then the transfer shall be effected in
accordance with the procedures of the Depositary therefor;
or
(iii) does not make a request covered by Section
312(e)(2)(D)(i) or Section 312(e)(2)(D)(ii), then the Note
Registrar shall (w) register such transfer in the name of
such transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the Offshore Global Note in an amount equal to the
beneficial interest therein being transferred, (y) deliver a
new Offshore Physical Note to such transferee duly
registered in the name of such transferee in principal
amount equal to the amount of such decrease and (z) notify
the Depositary in accordance with the procedures of the
Depositary that it approves of such transfer.
(f) Execution, Authentication and Delivery of Physical Notes. In any
--------------------------------------------------------
case in which the Note Registrar is required to deliver a Physical Note to
a transferee or transferor, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, such Physical Note.
(g) Certain Additional Terms Applicable to Physical Notes. Any
-----------------------------------------------------
transferee entitled to receive a Physical Note may request that the
principal amount thereof be evidenced by one or more Physical Notes in any
authorized denomination or denominations and the Note Registrar shall
comply with such request if all other transfer restrictions are satisfied.
(h) Transfers Not Covered by Section 312(e). The Note Registrar shall
---------------------------------------
effect and record, upon receipt of a written request from the Company so to
do, a transfer not otherwise permitted by Section 312(e), such recording to
be done in accordance with the otherwise applicable provisions of Section
312(e), upon the furnishing by the proposed transferor or transferee of a
Non-Registration Opinion and Supporting Evidence.
(i) General. By its acceptance of any Note bearing the Private
-------
Placement Legend, each Holder of such Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such Note only as
provided in the Indenture. The Note Registrar shall not register a
transfer of any Note unless such transfer complies with the restrictions
with
49
respect thereto set forth in this Indenture. The Note Registrar shall not
be required to determine (but may rely upon a determination made by the
Company) the sufficiency or accuracy of any such certifications, legal
opinions, other information or document.
(j) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Note
Registrar shall deliver Notes that do not bear the Private Placement
Legend. Upon the transfer, exchange or replacement of Notes bearing the
Private Placement Legend, the Note Registrar shall deliver only Notes that
bear the Private Placement Legend unless (i) the requested transfer is at
least two years after the original issue date of the Initial Note (with
respect to any Physical Note), (ii) there is delivered to the Note
Registrar an Opinion of Counsel reasonably satisfactory to the Company and
the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with
the provisions of the Securities Act or (iii) such Notes are exchanged for
Exchange Notes pursuant to an Exchange Offer.
SECTION 313. Form of Accredited Investor Certificate.
------------------------------------------------------
Transferee Letter of Representation
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, INC.
c/o State Street Bank And Trust Company
as Trustee
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Ladies and Gentlemen:
In connection with our proposed purchase of $_________ aggregate
principal amount of the 9 1/2% Senior Secured Notes due 2009 (the "Notes") of
▇▇▇▇▇ ▇▇▇▇▇ International, Inc. (the "Company"), we confirm that:
1. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act of
1933, as amended (the "Securities Act")) purchasing for our own account or
for the account of such an institutional "accredited investor," and we are
acquiring the Notes for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act or other applicable securities law and we 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.
2. We understand and acknowledge that the Notes have not been
registered under the Securities Act, or any other applicable securities law
and may not be offered, sold or otherwise transferred except in compliance
with the registration requirements of
50
the Securities Act or any other applicable securities law, or pursuant to
an exemption therefrom, and in each case in compliance with the conditions
for transfer set forth below. We agree on our own behalf and on behalf of
any investor account for which we are purchasing Notes to offer, sell or
otherwise transfer such Notes prior to the date which is two years after
the later of the date of original issue and the last date on which the
Company or any affiliate of the Company was the owner of such Notes (or any
predecessor thereto) (the "Resale Restriction Termination Date") only (a)
to the Company or any subsidiary thereof, (b) pursuant to a registration
statement which has been declared effective under the Securities Act, (c)
for so long as the Notes are eligible for resale pursuant to Rule 144A
under the Securities Act ("Rule 144A"), to a person we reasonably believe
is a "Qualified Institutional Buyer" within the meaning of Rule 144A (a
"QIB") that purchases for its own account or for the account of a QIB and
to whom notice is given that the transfer is being made in reliance on Rule
144A, (d) pursuant to offers and sales to non-U.S. persons that occur
outside the United States within the meaning of Regulation S under the
Securities Act, (e) to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (a)(2),(a)(3) or (a)(7) of Rule 501 under
the Securities Act that is acquiring the Notes 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 or (f) pursuant to any
other available exemption from the registration requirements of the
Securities Act, subject in each of the foregoing cases to any requirement
of law that the disposition of our property or the property of such
investor account or accounts be at all times within our or their control
and to compliance with any applicable state securities laws. The foregoing
restrictions on resale will not apply subsequent to the Resale Restriction
Termination Date. If any resale or other transfer of the Notes is proposed
to be made pursuant to clause (f) above prior to the Resale Restriction
Termination Date, the transferor shall deliver to the trustee (the
"Trustee") under the Indenture pursuant to which the Notes are issued a
letter from the transferee substantially in the form of this letter, which
shall provide, among other things, that the transferee is a person or
entity as defined in paragraph 1 of this letter and that it is acquiring
such Notes for investment purposes and not for distribution in violation of
the Securities Act. We acknowledge that the Company and the Trustee reserve
the right prior to any offer, sale or other transfer of the Notes pursuant
to clauses (d), (e) or (f) above prior to the Resale Restriction
Termination Date to require the delivery of an opinion of counsel,
certifications and/or other information satisfactory to the Company and the
Trustee.
3. We are acquiring the Notes purchased by us for our own account or
for one or more accounts as to each of which we exercise sole investment
discretion.
4. 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 proceeding or official
inquiry with respect to the matters covered hereby.
51
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Very truly yours,
(Name of Purchaser)
By:________________________________
Date:______________________________
Upon transfer, the Notes would be registered in the name of the new
beneficial owner as follows:
Name Address Taxpayer ID Number
---- ------- ------------------
Date of this Certificate: ____________, 200_
52
SECTION 314. Form of Regulation S Certificate.
-----------------------------------------------
Regulation S Certificate
------------------------
To: State Street Bank and Trust Company,
as Trustee (the "Trustee")
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Re: ▇▇▇▇▇ ▇▇▇▇▇ International, Inc. (the "Company")
9 1/2% Senior Secured Notes due 2009 (the "Notes")
--------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of $_______ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Regulation S ("Regulation S") under the Securities Act of 1933,
as amended (the "Securities Act"), and accordingly, we hereby certify as
follows:
1. The offer of the Notes was not made to a person in the United
States (unless such person or the account held by it for which it is acting
is excluded from the definition of "U.S. person" pursuant to Rule 902(o) of
Regulation S under the circumstances described in Rule 902(i)(3) of
Regulation S) or specifically targeted at an identifiable group of U.S.
citizens abroad.
2. Either (a) at the time the buy order was originated, the buyer was
outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our
behalf knows that the transaction was pre-arranged with a buyer in the
United States.
3. Neither we, any of our affiliates, nor any person acting on our or
their behalf has made any directed selling efforts in the United States in
contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable.
4. The proposed transfer of Notes is not part of a plan or scheme to
evade the registration requirements of the Securities Act.
5. If we are a dealer or a person receiving a selling concession or
other fee or remuneration in respect of the Notes, and the proposed
transfer takes place before the Offshore Note Exchange Date referred to in
the Indenture, dated as of March 22, 2002, among the Company, the
Subsidiary Guarantors thereunder and the Trustee, or we are an officer or
director of the Company or a distributor, we certify that the proposed
transfer is being made in accordance with the provisions of Rules 903 and
904(c) of Regulation S.
53
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby. Terms used in this certificate have
the meanings set forth in Regulation S.
Very truly yours,
[NAME OF SELLER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: ____________, 200_
54
SECTION 315. Form of Rule 144A Certificate.
-------------------------------------------
Rule 144A Certificate
---------------------
To: State Street Bank and Trust Company
as Trustee (the "Trustee")
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇
Re: ▇▇▇▇▇ ▇▇▇▇▇ International, Inc. (the "Company")
9 1/2% Senior Secured Notes due 2009 (the "Notes")
Ladies and Gentlemen:
In connection with our proposed sale of $______ aggregate principal
amount of Notes, we confirm that such sale has been effected pursuant to and in
accordance with Rule 144A ("Rule 144A") under the Securities Act of 1933, as
amended (the "Securities Act"). We are aware that the transfer of Notes to us
is being made in reliance on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A. Prior to the date of this Certificate
we have been given the opportunity to obtain from the Company the information
referred to in Rule 144A(d)(4), and have either declined such opportunity or
have received such information.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF PURCHASER]
By:__________________________
Name:
Title:
Address:
Date of this Certificate: _____________, 200_
55
SECTION 316. CUSIP Numbers.
---------------------------
The Company in issuing the Notes may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers, and, if so, the Trustee shall
use such "CUSIP" numbers in addition to serial numbers in notices of redemption,
repurchase or other notices to Holders as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such CUSIP numbers either as printed on the Notes or as contained
in any notice of a redemption or repurchase and that reliance may be placed only
on the serial or other identification numbers printed on the Notes, and any such
redemption or repurchase 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 numbers.
SECTION 317. Issuance of Additional Notes.
------------------------------------------
The Company may, subject to Article Ten of this Indenture, issue
additional Notes having identical terms and conditions to the Initial Notes
issued on the Issuance Date (the "Additional Notes"); provided that the
aggregate principal amount of Initial Notes issued on the Issuance Date and the
aggregate principal amount of Additional Notes issued under this Indenture shall
not exceed $75,000,000. The Initial Notes issued on the Issuance Date and any
Additional Notes subsequently issued shall be treated as a single class for all
purposes under this Indenture. Exchange Notes issued in exchange for Initial
Notes issued on the Issuance Date and Exchange Notes issued for any Additional
Notes subsequently issued shall be treated as a single class for all purposes
under this Indenture.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
-----------------------------------------------------
This Indenture shall, upon Company Request, cease to be of further
effect with respect to Notes (except as to any surviving rights of registration
of transfer or exchange of Notes expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture when
(1) either
(A) all Notes theretofore authenticated and delivered (other
than (i) Notes which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, and
(ii) Notes for whose payment money has theretofore been deposited
in trust with the Trustee or any Paying Agent or segregated and
held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 1004) have
been delivered to the Trustee for cancellation; or
56
(B) all Notes and, in the case of (i) or (ii) below, not
theretofore delivered to the Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) if redeemable at the option of the Company, are to
be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense,
of the Company,
and the Company or any Subsidiary Guarantor, in the
case of (i), (ii) or (iii) above, has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in
trust for such purpose an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest on the Notes to
the date of such deposit (in the case of Notes which have
become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) no Default or Event of Default with respect to this Indenture or
the Notes shall have occurred and be continuing on the date of such deposit
or shall occur as a result of such deposit and such deposit will not result
in a breach or violation of, or constitute a default under, any other
instrument or agreement to which the Company or any Guarantor is a party or
by which it is bound;
(3) the Company or any Subsidiary Guarantor has paid or caused to be
paid all other sums payable hereunder by the Company or any Subsidiary
Guarantor;
(4) the Company has delivered irrevocable instructions to the Trustee
to apply the deposited money toward the payment of such Notes at maturity
or the Redemption Date, as the case may be; and
(5) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations of
the Company to any Authenticating Agent under Section 612 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1004 shall survive.
57
SECTION 402. Application of Trust Money.
----------------------------------------
Subject to the provisions of the last paragraph of Section 1004, all
money deposited with the Trustee pursuant to Section 401 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 in
accordance with Section 401 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
Subsidiary Guarantor's obligations under this Indenture and the Notes shall be
revived and reinstated as though no deposit had occurred pursuant to Section
401; 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 held by the Trustee or Paying
Agent.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
-------------------------------
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest on any Note when it becomes
due and payable and continuance of such default for a period of 30 days;
(2) default in the payment of the principal of, or premium, if any, on
any Note at its Maturity (upon acceleration, optional redemption, required
purchase or otherwise);
(3) default in the performance, or breach, of the provisions of
Article Eight, the failure to make or consummate a Change in Control Offer
in accordance with Section 1015, the failure to make or consummate an
Excess Proceeds Offer in accordance with Section 1016 or the failure to
make or consummate a Collateral Sale Proceeds Offer in accordance with the
provisions of Section 1017;
(4) default in the performance of the Company's and ▇▇▇▇▇▇▇'▇
obligation under the provisions of Section 1002 and the Security Agreement,
to pledge Additional Collateral and the continuance of such default for a
period of 30 days;
(5) default in the performance, or breach, of any covenant or
agreement of the Company or any Subsidiary Guarantor contained in this
Indenture or any Note Guarantee
58
(other than a default in the performance, or breach, of a covenant or
warranty which is specifically dealt with in clause (1), (2) or (3) of this
Section 501) and continuance of such default or breach for a period of 30
days after written notice shall have been given to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of all Outstanding Notes;
(6) (a) one or more defaults in the payment of principal of or
premium, if any, on Indebtedness of the Company or any Restricted
Subsidiary aggregating $10 million or more, when the same becomes due and
payable at the Stated Maturity thereof, and such default or defaults shall
have continued after any applicable grace period and shall not have been
cured or waived or (b) Indebtedness of the Company or any Restricted
Subsidiary aggregating $10 million or more shall have been accelerated or
otherwise declared due and payable, or required to be prepaid or
repurchased (other than by regularly scheduled required prepayment) prior
to the Stated Maturity thereof;
(7) one or more judgments or orders shall be rendered against the
Company or any Restricted Subsidiary for the payment of money, either
individually or in an aggregate amount, in excess of $10 million and shall
not be discharged and either (a) an enforcement proceeding shall have been
commenced by any creditor upon such judgment or order or (b) there shall
have been a period of 60 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, was not in effect;
(8) any Note Guarantee of a Significant Subsidiary ceases to be in
full force and effect or is declared null and void or any Note Guarantees
of Significant Subsidiaries is found to be invalid or any Subsidiary
Guarantor which is a Significant Subsidiary denies that it has any further
liability under any Note Guarantee, or gives notice to such effect (other
than by reason of the termination of this Indenture or the release of any
such Note Guarantee in accordance with this Indenture);
(9) the Company or any of its Significant Subsidiaries 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) admits in writing that it is generally not
paying its debts (other than debts which are the subject of a bona fide
dispute) as they become due; or
(10) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that remains unstayed and in effect for 60 days and:
(A) is for relief against the Company or any of its Significant
Subsidiaries in an involuntary case; (B) appoints a Custodian of the
Company or any of its Significant Subsidiaries or for all or substantially
all of the property of the Company or any of its Significant Subsidiaries;
or (C) orders the liquidation of the Company or any of its Significant
Subsidiaries; provided that clauses (A), (B) and (C) shall not apply to an
Unrestricted Subsidiary, unless such action or proceeding has a material
adverse effect on the interests of the Company or any Restricted
Subsidiary.
59
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
----------------------------------------------------------------
If an Event of Default (other than an Event of Default specified in
clause (9) or (10) of Section 501) occurs and is continuing, then in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Notes by written notice to the Company (and to the
Trustee if such notice is given by the Holders), may, and the Trustee, upon the
written request of such Holders, shall declare the principal of, premium, if
any, and accrued interest on all of the Outstanding Notes to be due and payable
immediately. Upon any such declaration all such amounts payable in respect of
the Notes shall become immediately due and payable. If an Event of Default
specified in clause (9) or (10) of Section 501 occurs and is continuing, then
the principal of, premium, if any, and accrued interest on all of the
Outstanding Notes shall ipso facto become and be immediately due and payable
without any declaration or other act on the part of the Trustee or any Holder.
At any time after a declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter provided in this Article, the Holders of a majority
in aggregate principal amount of the Outstanding Notes, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest on all Outstanding Notes,
(ii) all unpaid principal of (and premium, if any, on)
any Outstanding Notes that has become due otherwise than by
such declaration of acceleration together with interest on
such unpaid principal at the rate borne by such Notes,
(iii) to the extent that payment of such interest is
lawful, interest on overdue interest and overdue principal
at the rate borne by such Notes, and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
(2) all Events of Default, other than the non-payment of amounts of
principal (or premium, if any, on) or interest on Notes which have become
due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
60
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
---------------------------------------------------------------------
Trustee.
-------
The Company covenants that if
(1) default is made in the payment of any installment of interest on
any Note when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Note at the Maturity thereof,
then the Company will, upon demand of the Trustee, pay to the Trustee for the
benefit of the Holders of such Notes, the whole amount then due and payable on
such Notes for principal (and premium, if any) and interest, and interest on any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall be legally enforceable, upon any overdue installment of interest,
at the rate borne by such Notes, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any Subsidiary Guarantor (in accordance with the
applicable Note Guarantee) or any other obligor upon such Notes and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company, any Subsidiary Guarantor or any other obligor upon
such Notes, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights or the rights of the
Holders under this Indenture or the Note Guarantees by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
such rights, including seeking recourse against any Subsidiary Guarantor,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy, including, without limitation, seeking recourse against
any Subsidiary Guarantor.
SECTION 504. Trustee May File Proofs of Claim.
----------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including any
Subsidiary Guarantor, upon the Notes or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal, premium, if any,
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
61
(i) to file and prove a claim for the whole amount of principal
(and premium, if any) and interest owing and unpaid in respect of the
Notes, to take such other actions (including participating as a
member, voting or otherwise, of any official committee of creditors
appointed in such matter) and to file such 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 of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due 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 607.
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 thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding; provided, however, that the
Trustee may, on behalf of such Holders, vote for the election of a trustee in
bankruptcy or other similar official.
SECTION 505. Trustee May Enforce Claims Without Possession of Notes.
--------------------------------------------------------------------
All rights of action and claims under this Indenture, the Notes or the
Note Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Notes or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Notes in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
--------------------------------------------
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article shall be applied in the following order, at the date or dates
fixed by the Trustee and, in case of the distribution of such money on account
of principal (or premium, if any) or interest, upon presentation of the Notes
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
First: To the payment of all amounts due the Trustee under Section
-----
607;
Second: To the payment of the amounts then due and unpaid for
------
principal of (and premium, if any, on) and interest on the Notes in respect
of which or for the benefit of
62
which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Notes for principal (and premium, if any) and interest, respectively; and
Third: The balance, if any, to the Person or Persons entitled thereto,
-----
including the Company or any other obligor on the Notes, as their interests
may appear or as a court of competent jurisdiction may direct; provided
that all sums due and owing to the Holders and the Trustee have been paid
in full as required by this Indenture.
SECTION 507. Limitation on Suits.
---------------------------------
No Holder of any Note shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Notes shall have made a written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name
as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 30-day period by the Holders of a majority in
principal amount of the Outstanding Notes;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture, any Note or any Note Guarantee to affect, disturb or
prejudice the rights of any other Holders, or to obtain or to seek to obtain
priority or preference over any other of such Holders or to enforce any right
under this Indenture, any Note or any Note Guarantee, except in the manner
herein provided and for the equal and ratable benefit of all Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
-----------------------------------------------------------------
Premium and Interest.
--------------------
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment, as provided herein (including, if applicable, Article Eleven) and in
such Note of the principal of (and premium, if any, on) and (subject to Section
307) interest on, such Note on the respective Stated Maturities expressed in
such Note (or, in the case of redemption, on the Redemption Date) and to
institute
63
suit for the enforcement of any such payment, and such rights shall not be
impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
------------------------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or any Note Guarantee and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, any
Subsidiary Guarantor, any other obligor on the Notes, the Trustee and the
Holders of Notes shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of the Trustee and
the Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
--------------------------------------------
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes in the last paragraph of
Section 306, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Notes is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
------------------------------------------
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
--------------------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Notes shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) subject to Section 315 of the Trust Indenture Act, the Trustee may
take any other action deemed proper by the Trustee which is not
inconsistent with such direction, and
64
(3) the Trustee need not take any action which might involve it in
personal liability or that the Trustee determines in good faith is unjustly
prejudicial to the Holders of Notes not consenting, it being understood
that, subject to Section 601, the Trustee shall have no duty to ascertain
whether or not such actions or forbearances are unjustly prejudicial to
such holders.
SECTION 513. Waiver of Past Defaults.
-------------------------------------------
Subject to Sections 508, 902 and the last paragraph of Section 502,
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes) may on behalf of the Holders of all the Notes
waive any past default hereunder and its consequences under this Indenture or
any Note Guarantee, except a default
(1) in respect of the payment of the principal of (or premium, if
any, on) or interest on any Note, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected.
Upon any such waiver, any 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 and the Note Guarantees; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 514. Waiver of Stay or Extension Laws.
----------------------------------------------------
Each of the Company, the Subsidiary Guarantors and any other obligor
on the Notes covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which would prohibit or forgive the Company, any
Subsidiary Guarantor or any such obligor from paying all or any portion of the
principal of, premium, if any, or interest on the Notes contemplated herein or
in the Notes or which may affect the covenants or the performance of this
Indenture; and each of the Company, the Subsidiary Guarantors and any other
obligor on the Notes (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
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
-------------------------------------------------------
(a) Except during the continuance of a Default or an Event of
Default,
65
1. the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
2. in the absence of bad faith or willful misconduct on its
part, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such
certificates or opinions, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture, but not to verify the contents thereof.
(b) In case a Default or an Event of Default has occurred and is
continuing of which a Responsible Officer of the Trustee has actual
knowledge or of which written notice of such Default or Event of Default
shall have been given to the Trustee by the Company, any other obligor of
the Notes or by any Holder, the Trustee shall exercise such of the rights
and powers vested in it by this Indenture, and use the same degree of care
and skill in their exercise, as a prudent Person would exercise or use
under the circumstances in the conduct of such ▇▇▇▇▇▇'s own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that
1. this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section;
2. the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
3. the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in aggregate principal
amount of the Outstanding Notes relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under
this Indenture; and
4. no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
66
SECTION 602. Notice of Defaults.
---------------------------------
Within ten days after the earlier of receipt from the Company of
notice of the occurrence of any Default or Event of Default hereunder or the
date when such Default or Event of Default becomes known to the Trustee, the
Trustee shall transmit, in the manner and to the extent provided in TIA Section
313(c), notice of such Default or Event of Default hereunder known to the
Trustee, unless such Default or Event of Default shall have been cured or
waived; provided, however, that, except in the case of a Default or Event of
Default in the payment of the principal of (or premium, if any, on) or interest
on any Note, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interest of the Holders.
SECTION 603. Certain Rights of Trustee.
----------------------------------------
Subject to the provisions of TIA Sections 315(a) through 315(d)
(determined as if the TIA were applicable to this Indenture at all times):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, request and rely upon an Officers' Certificate;
(4) before the Trustee acts or refrains from acting, the Trustee may
consult with counsel of its selection and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Notes pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
67
inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within
the discretion or rights or powers conferred upon it by this Indenture;
(9) the Trustee shall not be required to give any bond or surety in
respect of the performance of its powers and duties hereunder;
(10) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty; and
(11) except for a default under Sections 501(1) or (2) hereof, or any
other event of which the Trustee has "actual knowledge" and which event,
with the giving of notice or the passage of time or both, would constitute
an Event of Default under this Indenture, the Trustee shall not be deemed
to have notice of any default or Event of Default unless specifically
notified in writing of such event by the Company or the Holders of not less
than 25% in aggregate principal amount of the Notes then outstanding; as
used herein, the term "actual knowledge" means the actual fact or statement
of knowing, without any duty to make any investigation with regard thereto.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
SECTION 604. Trustee Not Responsible for Recitals or Issuance of
------------------------------------------------------------------
Notes.
-----
The recitals contained herein and in the Notes, except for the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Notes, except that the
Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Notes and perform its obligations hereunder and that
the statements made by it in its Statement of Eligibility on Form T-1 supplied
to the Company are true and accurate, subject to the qualifications set forth
therein. Neither the Trustee nor any Authenticating Agent shall be accountable
for the use or application by the Company of Notes or the proceeds thereof.
68
SECTION 605. May Hold Notes.
-----------------------------
The Trustee, any Authenticating Agent, any Paying Agent, any Note
Registrar or any other agent of the Company or of the Trustee, in its individual
or any other capacity, may become the owner or pledgee of Notes and, subject to
TIA Sections 310(b) and 311, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Note Registrar or such other agent.
SECTION 606. Money Held in Trust.
----------------------------------
All money received by the Trustee shall, until used or applied as
herein provided, be held in trust hereunder for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
---------------------------------------------
The Company agrees:
(1) to pay to the Trustee from time to time such compensation as
shall be agreed in writing between the Company and the Trustee for all
services rendered by it hereunder (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel and costs and expenses of
collection), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee or any predecessor Trustee and
its agents for, and to hold it harmless against, any and all loss,
liability, damage, claim or expense, including taxes (other than taxes
based on the income of the Trustee) incurred without negligence or bad
faith on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against, or investigating, any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any, on) or interest
on particular Notes.
69
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(9) or Section 501(10), the
expenses (including the reasonable charges and expenses of its counsel) of and
the compensation of the Trustee for the services are intended to constitute
expenses of administration under any applicable Federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Corporate Trustee Required; Eligibility.
------------------------------------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as Trustee under TIA Section 310(a)(1) and which shall have an
office in The City of New York, and shall have a combined capital and surplus of
at least $50,000,000. If the Trustee does not have an office in The City of New
York, the Trustee may appoint an agent in The City of New York reasonably
acceptable to the Company to conduct any activities which the Trustee may be
required under this Indenture to conduct in The City of New York. If such
Corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this Article.
SECTION 609. Resignation and Removal; Appointment of Successor.
----------------------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 610.
(b) The Trustee may resign at any time with respect to the Notes by
giving written notice thereof to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by
written instrument executed by authority of the Board of Directors, a copy
of which shall be delivered to the resigning Trustee and a copy to the
successor trustee. If the instrument of acceptance by a successor Trustee
required by Section 610 shall not have been delivered to the Trustee within
30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the Notes.
(c) The Trustee may be removed at any time with respect to the Notes
by Act of the Holders of not less than a majority in principal amount of
the Outstanding Notes, delivered to the Trustee and to the Company. If the
instrument of acceptance by a successor Trustee required by Section 610
shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the Trustee being removed may petition
any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Notes.
70
(d) If at any time:
1. the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Note for at least six
months, or
2. the Trustee shall cease to be eligible under Section 608 and
shall fail to resign after written request therefor by the Company or
by any ▇▇▇▇▇▇ who has been a bona fide Holder of a Note for at least
six months, or
3. the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a Custodian of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company, by a Board Resolution, may remove the
Trustee with respect to all Notes, or (ii) subject to TIA Section 315(e), any
Holder who has been a bona fide Holder of a Note for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all Notes
and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Notes, the Company, by a Board Resolution, shall
promptly appoint a successor Trustee. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Notes shall be appointed by Act of
the Holders of a majority in aggregate principal amount of the Outstanding
Notes delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Trustee with respect to the Notes and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Notes shall have been so appointed by
the Company or the Holders and accepted appointment in the manner
hereinafter provided, any Holder who has been a bona fide Holder of a Note
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Notes.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Notes and each appointment of a
successor Trustee with respect to the Notes to the Holders of Notes in the
manner provided for in Section 106. Each notice shall include the name of
the successor Trustee with respect to the Notes and the address of its
Corporate Trust Office.
SECTION 610. Acceptance of Appointment by Successor.
-----------------------------------------------------
(a) Each successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall
71
become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee and shall
duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all rights, powers and trusts referred
to in paragraph (a) of this Section.
(c) No successor Trustee shall accept its appointment unless at the
time of such acceptance, such successor Trustee shall be qualified and
eligible under this Article.
SECTION 611. Merger, Conversion, Consolidation or Succession to
-----------------------------------------------------------------
Business.
--------
Any Corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any Corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
Corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
Corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Notes shall have been authenticated, but
not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes. In case at that time
any of the Notes shall not have been authenticated, any successor Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor Trustee. In all such cases such certificates shall
have the full force and effect which this Indenture provides that the
certificate of authentication of the Trustee shall have; provided, however, that
the right to adopt the certificate of authentication of any predecessor Trustee
or to authenticate Notes in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
SECTION 612. Appointment of Authenticating Agent.
--------------------------------------------------
At any time when any of the Notes remain Outstanding, the Trustee may
appoint an Authenticating Agent or Agents with respect to the Notes which shall
be authorized to act on behalf of the Trustee to authenticate Notes and the
Trustee shall give written notice of such appointment to all Holders of Notes
with respect to which such Authenticating Agent will serve, in the manner
provided for in Section 106. Notes so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, and a copy of such instrument shall be promptly furnished to the
Company. Wherever reference is made in this Indenture to the authentication
72
and delivery of Notes by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a Corporation organized and doing business under the laws of the United
States of America, any state thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such Corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect specified in this Section.
Any Corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any Corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such Corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give written notice of
such appointment to all Holders of Notes, in the manner provided for in Section
106. Any successor Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time such compensation for its services under this Section as shall be agreed in
writing between the Company and such Authenticating Agent.
If an appointment is made pursuant to this Section, the Notes may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
73
This is one of the Notes designated therein referred to in the within-
mentioned Indenture.
STATE STREET BANK AND TRUST
COMPANY as Trustee
By: __________________________
as Authenticating Agent
By: __________________________
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses.
-------------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 10 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request, a
list of similar form and content to that in Subsection (a) hereof as of a
date not more than 15 days prior to the time such list is furnished;
provided, however, that if and so long as the Trustee shall be the Note
Registrar, no such list need be furnished.
SECTION 702. Disclosure of Names and Addresses of Holders.
-----------------------------------------------------------
Every Holder of Notes, by receiving and holding the same, agrees with
the Company and the Trustee that none of the Company or the Trustee or any agent
of either of them shall be held accountable by reason of the disclosure of any
such information as to the names and addresses of the Holders in accordance with
TIA Section 312, regardless of the source from which such information was
derived, and that the Trustee shall not be held accountable by reason of mailing
any material pursuant to a request made under TIA Section 312(b).
SECTION 703. Reports by Trustee.
---------------------------------
Within 60 days after January 1 of each year commencing with the first
January 1 after the first issuance of Notes pursuant to this Indenture, the
Trustee shall transmit to the Holders of Notes (with a copy to the Company at
the Place of Payment), in the manner and to the extent provided in TIA Section
313(c), a brief report dated as of such January 1 if required by TIA Section
313(a).
74
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
-------------------------------------------------------------------
The Company will not, in a single transaction or through a series of
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets to any other Person or Persons or permit any of its
Restricted Subsidiaries to enter into any such transaction or series of
transactions if such transaction or series of transactions, in the aggregate,
would result in a sale, assignment, conveyance, transfer, lease or other
disposition of all or substantially all of the properties and assets of the
Company and its Restricted Subsidiaries on a consolidated basis to any other
Person or Persons, unless at the time and immediately after giving effect
thereto:
(a) either (1) the Company shall be the continuing Corporation or (2)
the Person (if other than the Company) formed by such consolidation or into
which the Company or such Restricted Subsidiary is merged or the Person
that acquires by sale, assignment, conveyance, transfer, lease or
disposition all or substantially all of the properties and assets of the
Company and its Restricted Subsidiaries on a consolidated basis (the
"Surviving Entity") (i) will be a Corporation duly organized and validly
existing under the laws of the United States of America, any state thereof
or the District of Columbia and (ii) will expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustees, in form
reasonably satisfactory to the Trustee, the Company's obligation for the
due and punctual payment of the principal of (and premium, if any) and
interest on all the Notes and the performance and observance of every
covenant of this Indenture on the part of the Company to be performed or
observed;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Company or any Restricted Subsidiary incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing;
(c) immediately after giving effect to such transaction or series of
transactions on a pro forma basis (on the assumption that the transaction
or series of transactions occurred on the first day of the four-quarter
period immediately prior to the consummation of such transaction or series
of transactions with the appropriate adjustments with respect to the
transaction or series of transactions being included in such pro forma
calculation), the Company (or the Surviving Entity if the Company is not
the continuing obligor under this Indenture) could incur at least $1.00 of
additional Indebtedness (other than Permitted Indebtedness) pursuant to
Section 1010;
(d) each Subsidiary Guarantor, if any, unless it is the other party
to the transactions described above, shall have by supplemental indenture
confirmed that its Note Guarantee will apply to such Person's obligations
hereunder and under the Notes;
75
(e) if any of the property or assets of the Company or any of its
Restricted Subsidiaries would thereupon become subject to any Lien, the
provisions of Section 1014 are complied with; and
(f) the Company or the Surviving Entity shall have delivered to the
Trustee, in form and substance reasonably satisfactory to the Trustee, an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
other disposition, and if a supplemental indenture is required in
connection with such transaction, such supplemental indenture, comply with
this Section 801 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
SECTION 802. Subsidiary Guarantors May Consolidate, Etc., Only on
-------------------------------------------------------------------
Certain Terms.
-------------
Each Subsidiary Guarantor, if any (other than any Subsidiary whose
Note Guarantee is being released pursuant to the provisions of Section 1308 as a
result of such transaction), will not, and the Company will not permit a
Subsidiary Guarantor to, in a single transaction or through a series of related
transactions, merge or consolidate with or into any other Corporation or other
entity (other than the Company or any Subsidiary Guarantor), or sell, assign,
convey, transfer, lease or otherwise dispose of its properties and assets on a
consolidated basis substantially as an entirety to any entity (other than the
Company or any Subsidiary Guarantor) unless at the time and after giving effect
thereto:
(a) either (1) such Subsidiary Guarantor shall be the continuing
Corporation or (2) the Person (if other than such Subsidiary Guarantor)
formed by such consolidation or into which such Subsidiary Guarantor is
merged or the entity which acquires by sale, assignment, conveyance,
transfer, lease or other disposition of all or substantially all of the
properties and assets of such Subsidiary Guarantor, as the case may be,
shall be a Corporation organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia, and shall
expressly assume by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, all
obligations of such Subsidiary Guarantor under the Notes and this
Indenture;
(b) immediately before and immediately after giving effect to such
transaction or series of transactions on a pro forma basis (and treating
any obligation of the Company or such Subsidiary Guarantor incurred in
connection with or as a result of such transaction or series of
transactions as having been incurred at the time of such transaction), no
Default or Event of Default shall have occurred and be continuing; and
(c) such Subsidiary Guarantor or such Person shall have delivered to
the Trustee an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, sale, assignment, conveyance,
transfer, lease or disposition and, if a supplemental indenture is required
in connection with such transaction, such supplemental indenture comply
with this Section 802 and that all conditions precedent herein provided for
relating to such transaction have been satisfied.
76
SECTION 803. Successor Substituted.
------------------------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Subsidiary Guarantor in accordance with Sections
801 and 802, the successor Person formed by such consolidation or into which the
Company or such Subsidiary Guarantor, as the case may be, is merged or the
successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company or such Subsidiary Guarantor, as the case
may be, under this Indenture and/or the Note Guarantees, as the case may be,
with the same effect as if such successor had been named as the Company or such
Subsidiary Guarantor, as the case may be, herein and/or the Note Guarantees, as
the case may be. When a successor assumes all the obligations of its
predecessor hereunder, the Notes or a Note Guarantee, as the case may be, the
predecessor shall be released from all obligations; provided that in the case of
a transfer by lease, the predecessor shall not be released from the payment of
principal and interest or other obligations on the Notes or a Note Guarantee, as
the case may be.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
-----------------------------------------------------------------
Without the consent of any Holders, the Company or any Subsidiary
Guarantor, when authorized by or pursuant to a Board Resolution, and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to evidence the succession of another Person to the Company, a
Subsidiary Guarantor or any other obligor on the Notes, and the assumption
by any such successor of the covenants of the Company or such obligor or
Subsidiary Guarantor contained herein and in the Notes and in any Note
Guarantee in accordance with Article Eight;
(2) to add to the covenants of the Company, any Subsidiary Guarantor
or any other obligor upon the Notes for the benefit of the Holders or to
surrender any right or power conferred upon the Company, or any Guarantor
or any other obligor on the Notes, as applicable, herein, in the Notes or
in any Note Guarantee;
(3) to cure any ambiguity, or to correct or supplement any provision
herein, in the Notes or in any Note Guarantee which may be defective or
inconsistent with any other provision herein, in the Notes or in any Note
Guarantee or to make any other provisions with respect to matters or
questions arising under this Indenture, the Notes or any Note Guarantee;
provided that, in each case, such provisions shall not adversely affect the
interests of the Holders;
(4) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act;
(5) to add a Subsidiary Guarantor of the Notes under this Indenture;
77
(6) to evidence and provide for the acceptance of the appointment of
a successor Trustee under this Indenture; or
(7) to mortgage, pledge, hypothecate or grant a security interest in
favor of the Trustee for the benefit of the Holders as additional security
for the payment and performance of the Company's and any Subsidiary
Guarantor's obligations under this Indenture, in any property, or assets,
including any of which are required to be mortgaged, pledged or
hypothecated, or in which a security interest is required to be granted to
the Trustee pursuant to this Indenture or otherwise.
SECTION 902. Supplemental Indentures with Consent of Holders.
--------------------------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of all Outstanding Notes that are affected thereby, by Act of
said Holders delivered to the Company, the Subsidiary Guarantors and the
Trustee, the Company and the Subsidiary Guarantors, when authorized by or
pursuant to their respective Board Resolutions, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of Notes
under this Indenture; provided, however, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, or reduce the principal amount
thereof or the rate of interest thereon or any premium payable upon the
redemption thereof, or change the coin or currency in which the principal
of any Note or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(2) amend, change or modify any of the provisions of Section 1015 or
Section 1016 including any definitions relating thereto in any manner
materially adverse to the Holders;
(3) reduce the percentage in principal amount of Outstanding Notes,
the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(4) modify any provisions of this Section, Section 1023 or Section
513, except to increase the percentage in principal amount of the
Outstanding Notes required to take any of the actions described therein or
to provide that certain additional provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Note affected thereby;
78
(5) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Subsidiary Guarantor of any of
their rights or obligations under this Indenture;
(6) amend or modify any of the provisions of Article Thirteen in any
manner adverse to the Holders; or
(7) modify any of the provisions of this Indenture relating to the
security interests of the Holders in the Collateral, the ranking of the
Notes or the Company's and the Subsidiary Guarantor's obligations to secure
the Notes, in a manner adverse to the Holders.
SECTION 903. Execution of Supplemental Indentures.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and shall be fully protected in relying upon, an Opinion of Counsel stating that
the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
------------------------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore or thereafter authenticated and delivered hereunder shall
be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
--------------------------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Notes to Supplemental Indentures.
------------------------------------------------------------
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Notes so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
SECTION 907. Notice of Supplemental Indentures.
------------------------------------------------
Promptly after the execution by the Company, any Subsidiary Guarantor
and the Trustee of any supplemental indenture pursuant to the provisions of
Section 902, the Company shall give notice thereof to the Holders of each
Outstanding Note affected, in the manner
79
provided for in Section 106, setting forth in general terms the substance of
such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, If Any, and
--------------------------------------------------------------
Interest.
--------
The Company covenants and agrees for the benefit of the Holders of
Notes that it will duly and punctually pay the principal of (and premium, if
any, on) and interest on the Notes in accordance with the terms of the Notes and
this Indenture.
SECTION 1002. Pledge and Grant of Security Interest in
------------------------------------------------------------
Collateral.
----------
(a) On the Issuance Date, the Company and ▇▇▇▇▇▇▇ shall (i) enter
into the Security Agreement, as Debtors, and (ii) for so long as the Notes
are outstanding, each of the Company and ▇▇▇▇▇▇▇ shall comply in all
respects with the terms of the Security Agreement, including without
limitation, the obligation to, as and when required, (a) grant for the
equal and ratable benefit of the Holders of the Notes a security interest
in the Company's and ▇▇▇▇▇▇▇'▇ right, title and interest in and to the
Collateral, (b) pledge Additional Collateral, and (c) to deliver
certificates of Collateral Fair Market Value.
(b) The Company and ▇▇▇▇▇▇▇ shall do or cause to be done all such
acts and things as may be necessary or proper, or as may be required by the
provisions of the Security Agreement, to assure and confirm to the Trustee
the security interest in the Collateral, so as to render the same available
for the security and benefit of this Indenture and the Notes secured
hereby, according to the intent and purposes herein expressed. Each of the
Company and ▇▇▇▇▇▇▇ shall take, or shall cause to be taken, upon request of
the Trustee, any and all actions reasonably required to cause the Security
Agreement to create and maintain, as security for the obligations of the
Company and the Subsidiary Guarantors under this Indenture and the Notes,
valid and enforceable first priority liens in and on the Collateral, in
favor of the Collateral Agent, superior to and prior to the rights of third
Persons and subject to no other Liens other than Liens pursuant to
paragraph (b) of the definition of Permitted Liens.
(c) The Collateral shall be held for the equal and ratable benefit of
the Holders without preference, priority or distinction of any thereof over
any other by reason of difference in time of issuance, sale or otherwise,
as security for the Notes.
(d) The Company shall be obligated to pledge, or cause its
Subsidiaries to pledge, Additional Collateral:
1. within 20 Business Days after the last day of every other
fiscal year, beginning January 31, 2004, where the Collateral Fair
Market Value on such date does not exceed the aggregate principal
amount of Notes outstanding on such date by 100%;
80
2. within 20 Business Days after the closing of the sale,
transfer or other disposition of any license agreement by a grantor of
Collateral to a Foreign Subsidiary if the amount that is equal to (i)
the Collateral Fair Market Value (as certified on a date with six
months prior to such closing date) minus (ii) the Collateral Fair
Market Value of all the license agreements released by the Collateral
Agent from the security interests granted under the Security Agreement
on such closing date does not exceed the aggregate principal amount of
Notes outstanding on such closing date by 100%;
3. within 20 Business Days after the closing of a Collateral
Sale Proceeds Offer whereby (a) less than 100% in aggregate principal
amount of the Notes have been purchased and (b) on such closing date,
the amount that is equal to (i) the Collateral Fair Market Value (as
certified on a date within six months of such closing date) minus (ii)
the Collateral Sale Proceeds used in the Collateral Sale Proceeds
Offer, does not exceed the aggregate principal amount of Notes
outstanding on such closing date by 100%; and
4. within 20 Business Days after the closing date of an
Additional Notes offering if the Collateral Fair Market Value on a
date within six months of such closing date does not exceed the
aggregate principal amount of the Notes and Additional Notes
outstanding on such closing date by 100%.
(e) In the event a Subsidiary of the Company that is not a party to
the Security Agreement shall become obligated to pledge Additional
Collateral, such Subsidiary shall execute and deliver such documents, in
form satisfactory to the Trustee and Collateral Agent, to become a party to
the Security Agreement and providing for the grant of a first priority
security interest in the Additional Collateral to the Collateral Agent and
deliver to the Trustee and Collateral Agent an Opinion of Counsel
reasonably satisfactory to such Trustee and Collateral Agent to the effect
that such documents have been duly executed and delivered by such
Subsidiary and is in compliance with the terms of the Indenture and the
Security Agreement.
(f) The release of any item of Collateral pursuant to the Security
Agreement shall not be deemed to impair the security under this Indenture
in contravention of the provisions hereof, if and to the extent the item of
Collateral is released pursuant to this Indenture and the Security
Agreement.
(g) In the event that this Indenture shall be satisfied and
discharged in accordance with Articles 4 or 14 herein, the Trustee shall,
on behalf of the Holders, disclaim and give up any and all rights it has in
or to the Collateral.
SECTION 1003. Maintenance of Office or Agency.
---------------------------------------------------
The Company will maintain in The City of New York an office or agency
where Notes may be presented or surrendered for payment (the "Place of
Payment"), where Notes may be surrendered for registration of transfer or
exchange and where notices and demands to or upon
81
the Company in respect of the Notes and this Indenture may be served. The
Company hereby designates the Corporate Trust Office as the Place of Payment.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of the Place of Payment. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive such respective presentations, surrenders, notices and demands.
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 any such designation;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in
accordance with the requirements set forth above for Notes for such purposes.
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.
SECTION 1004. Money for Notes Payments to Be Held in Trust.
----------------------------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to the Notes, it will, on or before each due date of the principal of
(and premium, if any) or interest on any of the Notes, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the
Notes, it will, prior to or on each due date of the principal of (and premium,
if any, on) or interest on any Notes, deposit with a Paying Agent a sum in same
day funds (or New York Clearing House funds if such deposit is made prior to the
date on which such deposit is required to be made) sufficient to pay the
principal (and premium, if any) or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal, premium or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its action or failure so to act.
The Company will cause each Paying Agent (other than the Trustee) to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) and interest on the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Notes) in the making of any payment of principal of
(and premium, if any) or interest on the Notes; and
82
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Note and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Note shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment to the Company, may at the expense of the
Company cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in the Borough of Manhattan, The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 1005. Corporate Existence.
--------------------------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence and that of each Subsidiary and the corporate rights (charter and
statutory), licenses and franchises of the Company and each Subsidiary;
provided, however, that, subject to the other provisions of this Indenture, the
Company shall not be required to preserve any such existence (except the
Company), right, license or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof is not, and will not be, disadvantageous in any material respect to the
Holders.
SECTION 1006. Payment of Taxes and Other Claims.
----------------------------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary and (b)
all lawful claims for labor, materials and supplies, which, if unpaid, would by
law become a material liability or lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or
83
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Company) are being maintained in
accordance with GAAP.
SECTION 1007. Maintenance of Properties.
-------------------------------------------
The Company will cause all material properties owned by the Company or
any Restricted Subsidiary or used or held for use in the conduct of its business
or the business of any Restricted Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company or any of its Restricted
Subsidiaries from discontinuing the maintenance of any of such properties if
such discontinuance is, in the judgment of the Company, desirable in the conduct
of its business or the business of any Restricted Subsidiary and not adverse in
any material respect to the Holders.
SECTION 1008. Statement by Officers as to Default.
-----------------------------------------------------
(a) The Company and each Subsidiary Guarantor will deliver to the
Trustee, within 45 days after the end of each fiscal quarter and within 120
days after the end of each fiscal year, an Officers' Certificate stating
that a review of the activities of the Company or the Subsidiary Guarantor,
as the case may be, during the preceding quarter or the preceding fiscal
year, as the case may be, has been made under the supervision of the
signing officers with a view to determining whether it has kept, observed,
performed and fulfilled, and has caused each of its Restricted Subsidiaries
to keep, observe, perform and fulfill its obligations under this Indenture
and further stating, as to each such officer signing such certificate,
that, to the best of his or her knowledge, the Company during such
preceding quarter or the preceding fiscal year, as the case may be, has
kept, observed, performed and fulfilled, and has caused each of its
Subsidiaries to keep, observe, perform and fulfill each and every such
covenant contained in this Indenture and no Default or Event of Default
occurred during such quarter or year, as the case may be, and at the date
of such certificate there is no Default or Event of Default which has
occurred and is continuing or, if such signers do know of such Default or
Event of Default, the certificate shall describe its status, with
particularity and that, to the best of his or her knowledge, no event has
occurred and remains by reason of which payments on the 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 each is
taking or proposes to take with respect thereto. The Officers' Certificate
shall also notify the Trustee should the Company elect to change the manner
in which it fixes its fiscal year-end. For purposes of this Section
1008(a), such compliance shall be determined without regard to any period
of grace or requirement of notice under this Indenture.
(b) When any Default or Event of Default has occurred and is
continuing under this Indenture, or if the trustee for or the holder of any
other evidence of
84
Indebtedness of the Company or any Restricted Subsidiary gives any notice
or takes any other action with respect to a claimed default (other than
with respect to Indebtedness in the principal amount of less than
$10,000,000), the Company shall deliver to the Trustee by registered or
certified mail or by telegram, telex or facsimile transmission an Officers'
Certificate specifying such event, notice or other action within five
Business Days of its occurrence.
SECTION 1009. Statement by the Company and ▇▇▇▇▇▇▇ as to Collateral
-----------------------------------------------------
Fair Market Value.
-----------------
The Company shall, within 20 Business Days after the last day of every
other fiscal year beginning January 31, 2004, deliver to the Trustee an
Officer's Certificate stating the Collateral Fair Market Value of the Collateral
as of the last day of such fiscal year.
SECTION 1010. Limitation on Indebtedness.
-------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary
to, create, issue, assume, Guarantee or in any manner become directly or
indirectly liable for the payment of, or otherwise incur (collectively,
"incur"), any Indebtedness (including any Acquired Indebtedness), other than
Permitted Indebtedness; provided, however, that (i) the Company and any
Subsidiary Guarantor may incur Indebtedness (other than Acquisition
Indebtedness) if at the time of such incurrence the Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness, taken as one period, would have been at least
equal to 2:1; and (ii) the Company and any Subsidiary Guarantor may incur
Acquisition Indebtedness if at the time of such incurrence the Consolidated
Fixed Charge Coverage Ratio for the four full fiscal quarters immediately
preceding the incurrence of such Indebtedness, taken as one period, would have
been at least equal to 2.25:1.
SECTION 1011. Limitation on Restricted Payments.
--------------------------------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly:
1. declare or pay any dividend on, or make any distribution to
holders of, any shares of the Capital Stock of the Company or any
Restricted Subsidiary (other than dividends or distributions payable
solely in shares of Qualified Capital Stock of the Company or in
options, warrants or other rights to acquire such shares of Qualified
Capital Stock) (other than the declaration or payment of dividends or
distributions to the extent declared or paid to the Company or any
Restricted Subsidiary);
2. purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any shares of Capital Stock of the Company or
any Affiliate of the Company (other than Capital Stock of any Wholly
Owned Restricted Subsidiary) or any options, warrants or other rights
to acquire such shares of Capital Stock;
3. make any principal payment on, or repurchase, redeem,
defease or otherwise acquire or retire for value, prior to any
scheduled principal payment,
85
sinking fund payment or maturity, any Subordinated Indebtedness of the
Company or any Restricted Subsidiary; or
4. make any Investment (other than any Permitted Investment) in any
Person (such payments or other actions described in (but not excluded from)
clauses 1 through 4 are collectively referred to as "Restricted Payments"),
unless at the time of, and immediately after giving effect to, the proposed
Restricted Payment (the amount of any such Restricted Payment, if other
than cash, being the Fair Market Value of the assets to be transferred) (1)
no Default or Event of Default shall have occurred and be continuing, (2)
the Company could incur at least $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to Section 1010 and (3) the aggregate
amount of all Restricted Payments declared or made after the Issuance Date
shall not exceed the sum of:
(A) 50% of the Consolidated Adjusted Net Income of the Company
accrued on a cumulative basis during the period beginning on the
Issuance Date and ending on the last day of the Company's last fiscal
quarter ending prior to the date of such proposed Restricted Payment
(or, if such aggregate cumulative Consolidated Adjusted Net Income
shall be a loss, minus 100% of such loss), plus
(B) the aggregate net cash proceeds received after the Issuance
Date by the Company from the issuance or sale (other than to any
Subsidiary) of shares of Qualified Capital Stock of the Company
(including upon the exercise of options, warrants or rights) or
warrants, options or rights to purchase shares of Qualified Capital
Stock of the Company, plus
(C) the aggregate net cash proceeds received after the Issuance
Date by the Company from the issuance or sale (other than to any
Subsidiary) of debt securities or Redeemable Capital Stock that have
been converted into or exchanged for Qualified Capital Stock of the
Company, to the extent such securities were originally sold for cash,
together with the aggregate net cash proceeds received by the Company
(other than from a Subsidiary) in connection with such conversion or
exchange, plus
(D) to the extent that any Investment constituting a Restricted
Payment that was made after the Issuance Date is sold or is otherwise
liquidated or repaid, an amount (to the extent not included in
Consolidated Adjusted Net Income) equal to the lesser of (x) the cash
proceeds with respect to such Investment (less the cost of the
disposition of such Investment and net of taxes) and (y) the initial
amount of such Investment, plus
(E) so long as the Designation (as defined below) thereof was
treated as a Restricted Payment that was made after the Issuance Date,
with respect to any Unrestricted Subsidiary that has been redesignated
as a
86
Restricted Subsidiary after the Issuance Date in accordance with
Section 1021, the Fair Market Value of the Company's interest in
such Subsidiary at the time of such redesignation; provided that
such amount shall not in any case exceed the Designation Amount
with respect to such Restricted Subsidiary upon its Designation,
minus the Designation Amount (measured as of the date of
Designation) with respect to any Restricted Subsidiary which has
been designated as an Unrestricted Subsidiary after the date of
the Indenture in accordance with Section 1021, plus
(F) $1 million.
(b) Even if the Company and its Restricted Subsidiaries are not in
compliance with paragraph (a) of this Section 1011, the Company and its
Restricted Subsidiaries may take the following actions so long as (with
respect to clauses 2, 3, 4, 5 and 6 below) at the time of and after giving
effect thereto no Default or Event of Default shall have occurred and be
continuing:
1. the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration the payment of
such dividend would have complied with the provisions of paragraph (a)
of this covenant;
2. the purchase, redemption or other acquisition or retirement
for value of any shares of Capital Stock of the Company in exchange
for, or out of the net cash proceeds of a substantially concurrent
issuance and sale (other than to a Subsidiary) of, shares of Qualified
Capital Stock of the Company;
3. the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness in exchange for,
or out of the net cash proceeds of a substantially concurrent issuance
and sale (other than to a Subsidiary) of, shares of Qualified Capital
Stock of the Company;
4. the purchase of any Subordinated Indebtedness at a purchase
price not greater than 101% of the principal amount thereof in the
event of a Change in Control in accordance with provisions similar to
those of Section 1015; provided that prior to such purchase the
Company has made the Change in Control Offer as provided in Section
1015 and has purchased all Notes validly tendered for payment in
connection with such Change in Control Offer;
5. the purchase, redemption, defeasance or other acquisition or
retirement for value of any Subordinated Indebtedness (other than
Redeemable Capital Stock) in exchange for, or out of the net cash
proceeds of a substantially concurrent incurrence (other than to a
Subsidiary) of, new Subordinated Indebtedness of the Company or the
Restricted Subsidiary whose Subordinated Indebtedness is being
purchased, redeemed, defeased, acquired or retired, so long as (A) the
principal amount of such new Subordinated Indebtedness does not exceed
the principal amount (or, if such Subordinated Indebtedness being
87
refinanced provides for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration
thereof, such lesser amount as of the date of determination) of the
Indebtedness being so purchased, redeemed, defeased, acquired or
retired, plus either the amount of any premium required to be paid in
connection with such refinancing pursuant to the terms of such
Indebtedness being refinanced or the amount of any premium reasonably
determined by the Company as necessary to accomplish such refinancing,
plus, in either case, the amount of reasonable expenses of the Company
incurred in connection with such refinancing, (B) such new
Subordinated Indebtedness is subordinated to the Notes to the same
extent as such Indebtedness so purchased, redeemed, defeased, acquired
or retired and (C) such new Indebtedness has an Average Life longer
than the Average Life of the Notes and no scheduled principal payment
prior to the 91st day after the final Stated Maturity of principal of
the Notes; and
6. purchases or redemptions of Capital Stock (including cash
settlements of stock options) held by employees, officers or directors
of the Company or any of its Subsidiaries upon their death, disability
or termination of employment with the Company or one of its
Subsidiaries; provided that such payments shall not exceed $1 million
in any fiscal year in the aggregate or $3 million in the aggregate
during the term of the Notes.
The actions described in clauses 1, 2, 3, 4 and 6 of this paragraph
(b) shall be Restricted Payments that shall be permitted to be taken in
accordance with this paragraph (b) but shall reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of paragraph
(a)(4) of this Section 1011 and the actions described in clause 5 of this
paragraph (b) shall be Restricted Payments that shall be permitted to be taken
in accordance with this paragraph (b) and shall not reduce the amount that would
otherwise be available for Restricted Payments under clause (3) of paragraph
(a)(4) of this Section 1011.
SECTION 1012. Limitation on Issuances and Sales of Preferred
----------------------------------------------------------------
Stock by Restricted Subsidiaries.
--------------------------------
The Company (i) shall not permit any Restricted Subsidiary to issue
any Preferred Stock (other than to the Company or a Wholly Owned Restricted
Subsidiary) and (ii) shall not permit any Person (other than the Company or a
Wholly Owned Restricted Subsidiary) to own any Preferred Stock of any Restricted
Subsidiary.
SECTION 1013. Limitation on Transactions with Affiliates.
------------------------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, enter into or suffer to exist any transaction or
series of related transactions (including, without limitation, the sale,
purchase, exchange or lease of assets, property or services) with, or for the
benefit of, any Affiliate of the Company or any Restricted Subsidiary (other
than the Company or a Wholly Owned Restricted Subsidiary) (collectively,
"Interested Persons"), unless (i) such transaction or series of transactions are
on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would have
88
been able to be obtained in an arm's-length transaction with third parties that
are not Interested Persons, (ii) with respect to any transaction or series of
related transactions involving aggregate consideration equal to or greater than
$1 million, the Company has delivered an Officers' Certificate to the Trustee
certifying that such transaction or series of transactions complies with clause
(i) above, (iii) with respect to any transaction or series of related
transactions involving aggregate consideration equal to or greater than $5
million, such transaction or series of related transactions (x) has been
approved by the Board of Directors of the Company (including a majority of the
Disinterested Directors of the Company) or (y) the Company has obtained a
written opinion from a nationally recognized investment banking or valuation
firm certifying that such transaction or series of related transactions is fair
to the Company or its Restricted Subsidiary, as the case may be, from a
financial point of view and (iv) with respect to any transaction or series of
related transactions involving aggregate consideration equal to or greater than
$10 million, the Company has obtained a written opinion from a nationally
recognized investment banking or valuation firm certifying that such transaction
or series of transactions is fair to the Company or its Restricted Subsidiaries,
as the case may be, from a financial point of view; provided, however, that this
Section 1013 shall not restrict (1) the Company from paying regular compensation
and fees to directors of the Company or any Restricted Subsidiary who are not
employees of the Company or any Restricted Subsidiary which are reasonable and
customary for comparable companies in the same industry, (2) loans and advances
to officers, directors and employees of the Company or any Restricted Subsidiary
in the ordinary course of business in accordance with the past practices of the
Company or any Restricted Subsidiary not to exceed $1 million in the aggregate
outstanding at any time, (3) any transactions made in compliance with Section
1011, and (4) the performance of any written agreement as in effect on the
Issuance Date.
SECTION 1014. Limitation on Liens.
-------------------------------------
(a) Except for the Permitted Liens, the Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, create,
incur, assume or suffer to exist any Lien securing Pari Passu Indebtedness
or Subordinated Indebtedness on or with respect to any of its property or
assets, including any shares of stock or indebtedness of any Restricted
Subsidiary, whether owned at the Issuance Date or thereafter acquired, or
any income, profits or proceeds therefrom, or assign or otherwise convey
any right to receive income thereon, unless (x) in the case of any Lien
securing Pari Passu Indebtedness, the Notes or the Note Guarantee of such
Restricted Subsidiary, as the case may be, are secured by a Lien on such
property, assets or proceeds that is senior in priority to or pari passu
with such Lien and (y) in the case of any Lien securing Subordinated
Indebtedness, the Notes or the Subsidiary Guarantee of such Restricted
Subsidiary, as the case may be, are secured by a Lien on such property,
assets or proceeds that is senior in priority to such Lien.
SECTION 1015. Purchase of Notes upon Change in Control.
----------------------------------------------------------
(a) If a Change in Control shall occur at any time, then each Holder
of Notes will have the right to require that the Company purchase such
Holder's Notes, in whole or in part in integral multiples of $1,000, at a
purchase price (the "Change in Control Purchase Price") in cash in an
amount equal to 101% of the principal amount thereof,
89
plus accrued interest, if any, to the date of purchase (the "Change in
Control Purchase Date"), pursuant to the offer described below (the "Change
in Control Offer") and the other procedures set forth in this Indenture.
(b) Within 30 days following any Change in Control, the Company shall
notify the Trustee thereof and give written notice of such Change in
Control to each Holder of Notes by first-class mail, postage prepaid, at
the address of such Holder appearing in the Note Register, stating, among
other things, (i) the Change in Control Purchase Price and the Change in
Control Purchase Date, which shall be a Business Day no earlier than 30
days nor later than 60 days from the date such notice is mailed, or such
later date as is necessary to comply with requirements under the Exchange
Act or any applicable securities laws or regulations; (ii) that any Note
not tendered will continue to accrue interest; (iii) that, unless the
Company defaults in the payment of the Change in Control Purchase Price,
any Notes accepted for payment pursuant to the Change in Control Offer
shall cease to accrue interest after the Change in Control Purchase Date;
(iv) that Holders electing to have any Notes purchased pursuant to a Change
in Control Offer shall be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Notes
completed, to the Paying Agent at the address specified in the notice prior
to the close of business on the third Business Day preceding the Change in
Control Purchase Date; (v) that Holders shall be entitled to withdraw their
election if the Paying Agent receives, not later than the close of business
on the second Business Day preceding the Change in Control Purchase 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 its election to have such Notes
purchased; (vi) that Holders whose Notes are being purchased only in part
shall be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered, which unpurchased portion must be equal
to $1,000 in principal amount or an integral multiple thereof; (vii) the
instructions that the Holders of Notes must follow in order to tender their
Notes; and (viii) the circumstances and relevant facts regarding such
Change in Control.
(c) The Company shall comply with the requirements of the tender
offer rules, including Rule 14e-1 under the Exchange Act, and any other
applicable securities laws and regulations in connection with a Change in
Control Offer.
(d) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or permit to exist or become effective any
restriction (other than restrictions existing under the Senior Credit
Facility or under Indebtedness as in effect on the Issuance Date) that
would materially impair the ability of the Company to make a Change in
Control Offer to purchase the Notes or, if such Change in Control Offer is
made, to pay for the Notes tendered for purchase.
(e) Prior to complying with the provisions of this Section 1015, but
in any event within 30 days following a Change in Control, the Company
shall either terminate all commitments and repay in full all Indebtedness
under the Senior Credit Facility or obtain the requisite consents, if any,
under the Senior Credit Facility to permit the purchase of the Notes as
provided for under this Section 1015.
90
SECTION 1016. Limitation on Sale of Assets.
----------------------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, consummate any Asset Sale unless (i)
the consideration received by the Company or such Restricted Subsidiary for
such Asset Sale is not less than the fair market value of the assets sold
(as determined by the Board of Directors of the Company, whose
determination shall be conclusive and evidenced by a Board Resolution) and
(ii) at least 75% of such consideration consists of cash or Cash
Equivalents; provided, however, that (A) the amount of any Indebtedness of
a Restricted Subsidiary that is not a Guarantor of any Indebtedness of the
Company (other than Subordinated Indebtedness) or Indebtedness of any
Subsidiary Guarantor (other than Subordinated Indebtedness) that is assumed
by the transferee in such Asset Sale and from which the Company and the
Restricted Subsidiaries are fully released shall be deemed to be cash for
purposes of determining the percentage of cash consideration received by
the Company and its Restricted Subsidiaries (excluding any liabilities that
are incurred in connection with or in anticipation of such Asset Sale) and
(B) any securities, notes or other similar obligations received by the
Company or such Restricted Subsidiary from such transferee that are
converted, sold or exchanged within 30 days of the related Asset Sale into
cash or Cash Equivalents (to the extent of the cash or Cash Equivalents
received) shall be deemed to be cash for purposes of determining the
percentage of cash consideration received by the Company or the Restricted
Subsidiaries.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may use the Net Cash Proceeds thereof, within 365 days
after such Asset Sale, to (i) permanently repay or prepay any then
outstanding Indebtedness of the Company or any Subsidiary Guarantor, or any
Restricted Subsidiary that is not a Guarantor, in each case other than
Subordinated Indebtedness or Pari Passu Indebtedness that is not secured
(and to correspondingly reduce commitments with respect thereto) or (ii)
invest (or enter into a legally binding agreement to invest) in other
properties or assets to replace the properties or assets that were the
subject of the Asset Sale or in properties and assets that will be used in
businesses of the Company or its Restricted Subsidiaries, as the case may
be, existing at the time such assets are sold. If any such legally binding
agreement to invest such Net Cash Proceeds is terminated, then the Company
may, within 90 days of such termination or within 365 days of such Asset
Sale, whichever is later, invest such Net Cash Proceeds as provided in
clause (i) or (ii) (without regard to the parenthetical contained in such
clause (ii)) above. The amount of such Net Cash Proceeds not so used as set
forth above in this paragraph (b) shall constitute "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds exceeds $5 million,
the Company shall, within 30 Business Days, make an offer to purchase (an
"Excess Proceeds Offer") from all holders of Notes, on a pro rata basis,
the aggregate principal amount of Notes as can be purchased with the Note
Portion of Excess Proceeds (defined below) at a price in cash equal to 100%
of the aggregate principal amount of the Notes plus accrued and unpaid
interest, if any (the "Offered Price"), to the date such Excess Proceeds
Offer is consummated (the "Offer Date"). To the extent that the aggregate
principal amount of Notes validly tendered and not withdrawn pursuant to an
Excess Proceeds Offer is less than the Note Portion of Excess Proceeds, the
Company may use
91
such surplus for general corporate purposes. If the aggregate principal
amount of Notes validly tendered and not withdrawn by holders thereof
exceeds the amount of Notes that can be purchased with the Note Portion of
Excess Proceeds, Notes to be purchased will be selected pro rata based on
the aggregate principal amount of Notes tendered by each holder. Upon
completion of an Excess Proceeds Offer, the amount of Excess Proceeds shall
be reset to zero.
In the event that any other secured indebtedness of the Company that
ranks pari passu with the Notes (the "Other Debt") requires an offer to purchase
to be made to repurchase such Other Debt upon the consummation of an Asset Sale,
the Company may apply the Excess Proceeds otherwise required to be applied to an
Excess Proceeds Offer to offer to purchase such Other Debt and to an Excess
Proceeds Offer so long as the amount of such Excess Proceeds applied to purchase
the Notes is not less than the Note Portion of Excess Proceeds. With respect to
any Excess Proceeds, the Company shall make the Excess Proceeds Offer in respect
thereof at the same time as the analogous offer to purchase is made pursuant to
any Other Debt and the purchase date in respect thereof shall be the same as the
purchase date in respect of any Other Debt.
For purpose of this Section 1016, "Note Portion of Excess Proceeds"
means (1) if no Other Debt is being offered to be purchased, the amount of the
Excess Proceeds and (2) if Other Debt is being offered to be purchased, the
amount of the Excess Proceeds equal to the product of (z) the Excess Proceeds
and (y) a fraction the numerator of which is the aggregate principal amount of
the Outstanding Notes (the "Note Amount") and the denominator of which is the
sum of the Note Amount and the aggregate principal amount (or accreted value in
the case of original issue discount Other Debt) as of the relevant purchase date
of all outstanding Other Debt for which an offer to purchase is being made in
compliance with this Section 1016.
(d) Whenever the Excess Proceeds received by the Company exceed
$10,000,000, such Excess Proceeds shall be set aside by the Company in a
separate account pending (i) deposit with the Trustee or a Paying Agent of
the amount required to purchase the Notes tendered in an Excess Proceeds
Offer, (ii) delivery by the Company of the Offered Price to the holders of
the Notes tendered in an Excess Proceeds Offer and (iii) application, as
set forth above, of Excess Proceeds for any lawful purposes. Such Excess
Proceeds may be invested in Cash Equivalents, provided that the maturity
date of any investment shall not be later than the Offer Date. The Company
shall be entitled to any interest or dividends accrued, earned or paid on
such Cash Equivalents.
(e) If the Company becomes obligated to make an Excess Proceeds Offer
pursuant to clause (c) above, the Notes shall be purchased by the Company,
at the option of the Holders thereof, in whole or in part in integral
multiples of $1,000, on a date that is not earlier than 30 days and not
later than 60 days from the date the notice is given to holders, or such
later date as may be necessary for the Company to comply with the
requirements under the Exchange Act, subject to proration in the event the
amount of Excess Proceeds is less than the aggregate Offered Price of all
Notes tendered.
(f) Within 15 days after the obligation of the Company to make an
Excess Proceeds Offer arises, the Company shall notify the Trustee thereof
and give written
92
notice of such Excess Proceeds Offer to each Holder of Notes by first-class
mail, postage prepaid, at the address of such Holder appearing in the Note
Register, stating, (i) the Offered Price and the Offer Date, which shall be
a Business Day no earlier than 30 days nor later than 60 days from the date
such notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act or any applicable securities laws or
regulations; (ii) that any Note not tendered will continue to accrue
interest; (iii) that, unless the Company defaults in the payment of the
Offered Price, any Notes accepted for payment pursuant to the Excess
Proceeds Offer shall cease to accrue interest after the date of purchase;
(iv) that Holders electing to have any Notes purchased pursuant to an
Excess Proceeds Offer shall be required to surrender the Notes, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent at the address specified in the notice
prior to the close of business on the third Business Day preceding the
Offer Date; (v) that Holders shall be entitled to withdraw their election
if the Paying Agent receives, not later than the close of business on the
second Business Day preceding the Offer 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 its election to have such Notes purchased; (vi) that Holders
whose Notes are being purchased only in part shall be issued new Notes
equal in principal amount to the unpurchased portion of the Notes
surrendered, which unpurchased portion must be equal to $1,000 in principal
amount or an integral multiple thereof; (vii) the instructions that the
Holders of Notes must follow in order to tender their Notes; and (viii) the
circumstances and relevant facts regarding such Excess Proceeds Offer.
(g) The Company shall comply with any applicable securities laws,
including Section 14(e) of, and Rule 14e-1 under, the Exchange Act, and any
other applicable Federal or state securities laws and regulations and any
applicable requirements of any securities exchange on which the Notes are
listed.
SECTION 1017. Limitation of Sale of Collateral.
--------------------------------------------------
(a) The Company will not, and will not permit any Restricted
Subsidiary to, engage in any Collateral Sale unless (i) the consideration
received by the Company or such Restricted Subsidiary for such Collateral
Sale is not less than the Collateral Fair Market Value and (ii) 100% of
such consideration consists of cash or Cash Equivalents; provided, however,
that any securities, notes or other similar obligations received by the
Company or such Restricted Subsidiary from such transferee that are
converted within 30 days of the related Collateral Sale into cash or Cash
Equivalents (to the extent of the cash or Cash Equivalents received) shall
be deemed to be cash for purposes of determining the percentage of cash
consideration received by the Company or the Restricted Subsidiaries.
(b) If the Company or any Restricted Subsidiary engages in a
Collateral Sale, subject to paragraph (c) below, the Company shall pledge
the Collateral Sale Proceeds to the Collateral Agent as Additional
Collateral.
(c) When the aggregate amount of Collateral Sale Proceeds exceeds
$5.0 million, the Company shall use the Collateral Sale Proceeds thereof,
within 30 Business
93
Days, to make an offer to purchase (a "Collateral Sale Proceeds Offer")
from all holders of Notes, on a pro rata basis, that aggregate principal
amount of Notes as can be purchased with the Collateral Sale Proceeds at a
price in cash equal to 100% of the aggregate principal amount of the Notes
plus accrued and unpaid interest, if any, to the date such Collateral Sale
Proceeds Offer is consummated. To the extent that the aggregate principal
amount of Notes validly tendered and not withdrawn pursuant to a Collateral
Sale Proceeds Offer is less than the Collateral Sale Proceeds, the Company
shall pledge such surplus as Additional Collateral. If the aggregate
principal amount of Notes validly tendered and not withdrawn by Holders
thereof exceeds the amount of Notes that can be purchased with the
Collateral Sale Proceeds, Notes to be purchased will be selected pro rata
based on the aggregate principal amount of Notes tendered by each Holder.
In the event that the Company makes a Collateral Sale Proceeds Offer,
the Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act, and any other applicable Federal or state securities laws and
regulations and any applicable requirements of any securities exchange on which
the Notes are listed.
SECTION 1018. Limitations on Guarantees of Indebtedness by
--------------------------------------------------------------
Restricted Subsidiaries.
-----------------------
(a) The Company will not permit any Restricted Subsidiary that is not
a Guarantor, directly or indirectly, to Guarantee, assume or in any other
manner become liable with respect to any Indebtedness of the Company or any
other Restricted Subsidiary unless (i) (A) such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture, in form
satisfactory to the Trustee, providing for a Guarantee on the same terms as
the Guarantee of such Indebtedness of the obligations under the Notes and
this Indenture by such Restricted Subsidiary and delivers to such Trustee
an Opinion of Counsel reasonably satisfactory to such Trustee to the effect
that such supplemental indenture has been duly executed and delivered by
such Restricted Subsidiary and is in compliance with the terms of this
Indenture and (B) with respect to any Guarantee of Subordinated
Indebtedness, any such Guarantee shall be subordinated to such Restricted
Subsidiary's Note Guarantee at least to the same extent as such
Subordinated Indebtedness is subordinated to the Notes and (ii) such
Restricted Subsidiary waives and will not in any manner whatsoever claim or
take the benefit or advantage of, any rights of reimbursement, indemnity or
subrogation or any other rights against the Company or any other Restricted
Subsidiary as a result of any payment by such Restricted Subsidiary under
its Note Guarantee.
(b) Notwithstanding the foregoing, any Guarantee of the Notes created
pursuant to the provisions described in the foregoing paragraph (a) will
provide by its terms that it will be automatically and unconditionally
released and discharged upon (i) any sale, exchange or transfer to any
Person not an Affiliate of the Company of all of the Company's Capital
Stock in, or all or substantially all the assets of, the applicable
Subsidiary Guarantor (which sale, exchange or transfer is otherwise in
compliance with this Indenture) or (ii) the release by the holders of the
Indebtedness of the Company
94
described in the preceding paragraph of their Guarantee by such Restricted
Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness), at a time when (A) no other
Indebtedness of the Company has been Guaranteed by such Restricted
Subsidiary or (B) the holders of all such other Indebtedness which is
Guaranteed by such Restricted Subsidiary also release their Guarantee by
such Restricted Subsidiary (including any deemed release upon payment in
full of all obligations under such Indebtedness).
SECTION 1019. Limitation on Dividends and Other Payment
-------------------------------------------------------------
Restrictions Affecting Restricted Subsidiaries.
----------------------------------------------
The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise,
or make any other distributions on or in respect of its Capital Stock to the
Company or any other Restricted Subsidiary, (b) pay any Indebtedness owed to the
Company or any other Restricted Subsidiary, (c) make loans or advances to the
Company or any other Restricted Subsidiary, (d) transfer any of its properties
or assets to the Company or any other Restricted Subsidiary (other than
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture that would not materially adversely affect the Company's
ability to satisfy its obligations under the Notes and this Indenture) or (e)
guarantee any Indebtedness of the Company or any other Restricted Subsidiary,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) customary provisions restricting subletting or assignment
of any lease or assignment of any other contract to which the Company or any
Restricted Subsidiary is a party or to which any of their respective properties
or assets are subject, (iii) any agreement or other instrument of a Person
acquired by the Company or any Restricted Subsidiary in existence at the time of
such acquisition (but not created in contemplation thereof), which encumbrance
or restriction is not applicable to any Person, or the properties or assets of
any Person, other than the Person, or the property or assets of the Person, so
acquired, (iv) encumbrances and restrictions in effect on the Issuance Date
pursuant to the Senior Credit Facility and its related documentation, (v) any
encumbrance or restriction contained in contracts for sales of assets permitted
by Section 1016 with respect to the assets to be sold pursuant to such contracts
and (vi) any encumbrance or restriction existing under any agreement that
extends, renews, refinances or replaces the agreements containing the
encumbrances or restrictions in the foregoing clauses (iii) and (iv); provided
that the terms and conditions of any such encumbrances or restrictions are not
materially less favorable to the Holders than those under or pursuant to the
agreement so extended, renewed, refinanced or replaced.
SECTION 1020. Limitation on Sale and Leaseback Transactions.
-----------------------------------------------------------------
The Company will not, and will not permit any Restricted Subsidiary
to, directly or indirectly, enter into any Sale and Leaseback Transaction with
respect to any property or assets (whether now owned or hereafter acquired),
unless (i) the sale or transfer of such property or assets to be leased is
treated as an Asset Sale and the Company complies with Section 1016 and (ii) the
Company or such Restricted Subsidiary would be permitted to incur Indebtedness
95
under Section 1010 in the amount of the Capitalized Lease Obligations incurred
in respect of such Sale and Leaseback Transaction.
SECTION 1021. Limitation on Unrestricted Subsidiaries.
-----------------------------------------------------------
(a) The Board of Directors of the Company may designate any
Subsidiary (other than a Subsidiary Guarantor) to be an "Unrestricted
Subsidiary" (a "Designation") only if:
1. no Default shall have occurred and be continuing at the time
of or after giving effect to such designation;
2. the Company would be permitted to make an Investment (other
than a Permitted Investment) at the time of Designation (assuming the
effectiveness of such designation) pursuant to paragraph (a) of
Section 1011 in an amount (the "Designation Amount") equal to the
greater of (1) the net book value on such date of the Company's
interest in such Subsidiary calculated in accordance with GAAP or (2)
the Fair Market Value on such date of the Company's interest in such
Subsidiary as determined in good faith by the Company's Board of
Directors;
3. the Company would be permitted under this Indenture to incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness)
pursuant to Section 1010 at the time of such designation (assuming the
effectiveness of such designation); and
4. such Unrestricted Subsidiary does not own any Capital Stock
in any Restricted Subsidiary of the Company which is not
simultaneously being designated an Unrestricted Subsidiary.
In the event of any such Designation, the Company shall be deemed to
have made an Investment constituting a Restricted Payment pursuant to Section
1011 for all purposes of this Indenture in an amount equal to the greater of (1)
the net book value of the Company's interest in such Subsidiary calculated in
accordance with GAAP or (2) the Fair Market Value of the Company's interest in
such Subsidiary as determined in good faith by the Board of Directors of the
Company.
Neither the Company nor any Restricted Subsidiary shall at any time
(x) provide a Guarantee of, or similar credit support to, any Indebtedness of
any Unrestricted Subsidiary (including of any undertaking, agreement or
instrument evidencing such Indebtedness); provided that the Company may pledge
Capital Stock of any Unrestricted Subsidiary on a nonrecourse basis such that
the pledgee has no claim whatsoever against the Company other than to obtain
such pledged property, (y) be directly or indirectly liable for any Indebtedness
of any Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness that provides that the holder thereof may (upon notice, lapse of
time or both) declare a default thereon (or cause the payment thereof to be
accelerated or payable prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other Indebtedness that is
Indebtedness of an
96
Unrestricted Subsidiary (including any corresponding right to take enforcement
action against such Unrestricted Subsidiary).
(b) The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if:
1. no Default or Event of Default shall have occurred and be
continuing at the time of and after giving effect to such designation;
and
2. all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such designation would, if incurred
at such time, have been permitted to be incurred for all purposes
under this Indenture.
Any such designation as an Unrestricted Subsidiary or Restricted
Subsidiary by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a board resolution with the Trustee giving effect to such
designation.
SECTION 1022. Reports.
---------------------------
The Company shall file on a timely basis with the Commission, to the
extent such filings are accepted by the Commission and whether or not the
Company has a class of securities registered under the Exchange Act, the annual
reports, quarterly reports and other documents that the Company would be
required to file if it were subject to Section 13 or 15 of the Exchange Act.
The Company shall also (a) file with the Trustee, and provide to each Holder of
Notes at their respective addresses set forth in the Note Register, without cost
to such Holder, copies of such reports and documents within 15 days after the
date on which the Company files such reports and documents with the Commission
or the date on which the Company would be required to file such reports and
documents if the Company were so required, and (b) if filing such reports and
documents with the Commission is not accepted by the Commission or is prohibited
under the Exchange Act, supply at the Company's cost copies of such reports and
documents to any prospective Holder of Notes promptly upon written request. If
any Subsidiary Guarantor's financial statements would be required to be included
in the financial statements filed or delivered pursuant to this Indenture if the
Company were subject to Section 13 or 15(d) of the Exchange Act, the Company
shall include such Subsidiary Guarantor's financial statements in any filing or
delivery pursuant to this Indenture. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 1023. Waiver of Certain Covenants.
-----------------------------------------------
The Company and the Restricted Subsidiaries may omit in any particular
instance to comply with any term, provision or condition set forth in Sections
1008 to 1014, inclusive, and Sections 1018 to 1021, inclusive, if before or
after the time for such compliance the Holders of at least a majority in
aggregate principal amount of all Outstanding Notes affected by such term,
provision or covenant, by Act of such Holders, waive such compliance in such
instance
97
with such term, provision or condition, but no such waiver shall extend to or
affect such term, provision or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company, the Restricted Subsidiaries and the duties of the Trustee, as
applicable, in respect of any such term, provision or condition shall remain in
full force and effect.
ARTICLE ELEVEN
REDEMPTION OF NOTES
SECTION 1101. Redemption.
------------------------------
The Notes may or shall be, as the case may be, redeemed, as a whole or
from time to time in part, subject to the conditions and the Redemption Prices
specified in the form of Note, together with accrued and unpaid interest, if
any, to the Redemption Date (subject to the right of Holders of record on
relevant record dates to receive interest due on an Interest Payment Date), on
the Redemption Date.
SECTION 1102. Applicability of Article.
--------------------------------------------
Redemption of Notes at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with the terms of such Notes and in accordance with this Article
Eleven.
SECTION 1103. Election to Redeem; Notice to Trustee.
---------------------------------------------------------
The election of the Company to redeem any Notes pursuant to Section
1101 shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date and of
the principal amount of Notes to be redeemed and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the Notes
to be redeemed pursuant to Section 1104.
SECTION 1104. Selection by Trustee of Notes to Be Redeemed.
----------------------------------------------------------------
If less than all the Notes are to be redeemed, the particular Notes to
be redeemed shall be selected by the Trustee, from the Outstanding Notes not
previously called for redemption, in compliance with the requirements of the
principal national securities exchange, if any, on which such Notes are listed,
or, if such Notes are not so listed, by such other method as the Trustee shall
deem fair and appropriate (and in such manner as complies with applicable legal
requirements) and which may provide for the selection for redemption of portions
of the principal of Notes; provided, however, that no such partial redemption
shall reduce the portion of the principal amount of a Note not redeemed to less
than $1,000; provided further that any such redemption pursuant to the
provisions relating to a Public Equity Offering shall be made on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the procedures
of DTC or any other depositary). Notice of redemption shall be sent by first-
class mail at least 30 but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at its registered address. On and after the
Redemption Date, interest shall cease to accrue on Notes or
98
portions thereof called for redemption, unless the Company defaults in the
payment of the Redemption Price.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Notes selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to redemption of Notes shall relate, in the
case of any Note redeemed or to be redeemed only in part, to the portion of the
principal amount of such Note which has been or is to be redeemed.
SECTION 1105. Notice of Redemption.
----------------------------------------
Notice of redemption shall be given in the manner provided for in
Section 106 not less than 30 nor more than 60 days prior to the Redemption Date,
to each Holder of Notes to be redeemed. The Trustee shall give notice of
redemption in the Company's name and at the Company's expense; provided,
however, that the Company shall deliver to the Trustee, at least 45 days prior
to the Redemption Date, an Officers' Certificate requesting that the Trustee
give such notice and setting forth the information to be stated in such notice
as provided in the following items.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and the amount of accrued interest, if any,
to the Redemption Date payable as provided in Section 1107,
(3) if less than all Outstanding Notes are to be redeemed, the
identification of the particular Notes to be redeemed, as well as the
aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption,
(4) in case any Note is to be redeemed in part only, the notice which
relates to such Note shall state that on and after the Redemption Date,
upon surrender of such Note, the holder will receive, without charge, a new
Note or Notes of authorized denominations for the principal amount thereof
remaining unredeemed,
(5) that on the Redemption Date the Redemption Price (and accrued
interest, if any, to the Redemption Date payable as provided in Section
1107) will become due and payable upon each such Note, or the portion
thereof, to be redeemed, and, unless the Company defaults in making the
redemption payment, that interest on Notes called for redemption (or the
portion thereof) will cease to accrue on and after said date,
(6) the place or places where such Notes are to be surrendered for
payment of the Redemption Price and accrued interest, if any,
99
(7) the name and address of the Paying Agent,
(8) that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price,
(9) the CUSIP number, and that no representation is made as to the
accuracy or correctness of the CUSIP number, if any, listed in such notice
or printed on the Notes, and
(10) the paragraph of the Notes pursuant to which the Notes are to be
redeemed.
SECTION 1106. Deposit of Redemption Price.
-------------------------------------------
Prior to 10:00 A.M. on any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1004) an amount
of money sufficient to pay the Redemption Price of, and accrued interest on, all
the Notes which are to be redeemed on that date.
SECTION 1107. Notes Payable on Redemption Date.
------------------------------------------------
Notice of redemption having been given as aforesaid, the Notes so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified (together with accrued interest, if any, to
the Redemption Date), and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price, together with accrued interest, if any, to the Redemption
Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Notes, or one or more Predecessor Notes, registered as such at the close of
business on the relevant Regular Record Date or Special Record Date, as the case
may be, according to their terms and the provisions of Section 307.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate of interest set forth in the
Note.
SECTION 1108. Notes Redeemed in Part.
--------------------------------------
Any Note which is to be redeemed only in part (pursuant to the
provisions of this Article) shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or such ▇▇▇▇▇▇'s attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Note without service charge, a
new Note or Notes, of any authorized denomination as requested by such Holder,
in an aggregate principal amount equal to
100
and in exchange for the unredeemed portion of the principal of the Note so
surrendered, provided that each such new Note will be in a principal amount of
$1,000 or integral multiple thereof.
ARTICLE TWELVE
RANKING OF NOTES
SECTION 1201. Notes Senior Secured Indebtedness of Company.
------------------------------------------------------------
The Company covenants and agrees, that the Notes will be senior
secured obligations of the Company and will rank pari passu in right of payment
with all existing and future senior indebtedness of the Company and will rank
senior in right of payment to all existing and future subordinated indebtedness
of the Company. The Notes will be senior to all unsecured indebtedness of the
Company to the extent of the value of the Collateral securing the Notes.
SECTION 1202. Note Guarantee Senior Secured Indebtedness of ▇▇▇▇▇▇▇.
---------------------------------------------------------------------
▇▇▇▇▇▇▇ covenants and agrees, that its Note Guarantee will be a senior
secured obligation of ▇▇▇▇▇▇▇ and will rank pari passu in right of payment with
all existing and future senior indebtedness of ▇▇▇▇▇▇▇ and will rank senior in
right of payment to all existing and future subordinated indebtedness of
▇▇▇▇▇▇▇. The Notes will be effectively senior to all unsecured indebtedness of
▇▇▇▇▇▇▇ to the extent of the value of its Collateral securing the Notes.
SECTION 1203. Note Guarantee Senior Indebtedness of Subsidiary
---------------------------------------------------------------
Guarantors.
----------
With the exception of ▇▇▇▇▇▇▇, each Subsidiary Guarantor covenants and
agrees that its Note Guarantee ranks pari passu with all other existing and
future senior indebtedness of such Subsidiary Guarantor and ranks senior in
right of payment to all existing and future Subordinated Indebtedness of such
Subsidiary Guarantor.
ARTICLE THIRTEEN
GUARANTEES
SECTION 1301. Note Guarantees.
-------------------------------
Each Subsidiary Guarantor hereby jointly and severally, absolutely,
unconditionally and irrevocably guarantees the Notes and obligations of the
Company hereunder and thereunder, and guarantees to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee on behalf of such
Holder, that: (a) the principal of (and premium, if any) and interest on the
Notes will be paid in full when due, whether at Stated Maturity, by acceleration
or otherwise (including, without limitation, the amount that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Law), together with interest on the overdue principal, if any, and
interest on any overdue interest, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or of any such other obligations, the same will be paid in full when due
or performed in accordance with the terms of
101
the extension or renewal, whether at Stated Maturity, by acceleration or
otherwise, subject, however, in the case of clauses (a) and (b) above, to the
limitations set forth in Section 1304 hereof.
Each Subsidiary Guarantor hereby agrees that its obligations hereunder
shall be 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, any release of any other Subsidiary
Guarantor, the recovery of any judgment against the Company, any action to
enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a guarantor.
Each Subsidiary Guarantor hereby waives (to the extent permitted by
law) the benefits of diligence, presentment, demand for 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 or any other Person,
protest, notice and all demands whatsoever and covenants that the Note Guarantee
of such Subsidiary Guarantor shall not be discharged as to any Note except by
complete performance of the obligations contained in such Note, this Indenture
and such Note Guarantee. Each Subsidiary Guarantor acknowledges that the Note
Guarantee is a guarantee of payment and not of collection. Each of the
Subsidiary Guarantors hereby agrees that, in the event of a default in payment
of principal (or premium, if any) or interest on such Note, whether at its
Stated Maturity, by acceleration, purchase or otherwise, legal proceedings may
be instituted by the Trustee on behalf of, or by, the Holder of such Note,
subject to the terms and conditions set forth in this Indenture, directly
against each of the Subsidiary Guarantors to enforce such Subsidiary Guarantor's
Note Guarantee without first proceeding against the Company or any other
Subsidiary Guarantor. Each Subsidiary Guarantor agrees that if, after the
occurrence and during the continuance of an Event of Default, the Trustee or any
of the Holders are prevented by applicable law from exercising their respective
rights to accelerate the maturity of the Notes, to collect interest on the
Notes, or to enforce or exercise any other right or remedy with respect to the
Notes, such Guarantor will pay to the Trustee for the account of the Holders,
upon demand therefor, the amount that would otherwise have been due and payable
had such rights and remedies been permitted to be exercised by the Trustee or
any of the Holders.
If any Holder or the Trustee is required by any court or otherwise to
return to the Company or any Subsidiary Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to either the Company or
any Subsidiary Guarantor, any amount paid by any of them to the Trustee or such
Holder, the Note Guarantee of each of the Subsidiary Guarantors, to the extent
theretofore discharged, shall be reinstated in full force and effect. Each
Subsidiary Guarantor further agrees that, as between each Subsidiary Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) subject
to this Article Thirteen, the maturity of the obligations guaranteed hereby may
be accelerated as provided in Article Five hereof for the purposes of the Note
Guarantee of such Subsidiary Guarantor, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the obligations
Guaranteed hereby, and (y) in the event of any acceleration of such obligations
as provided in Article Five hereof, such obligations (whether or not due and
payable) shall forthwith become due and payable by each Subsidiary Guarantor for
the purpose of the Note Guarantee of such Subsidiary Guarantor.
102
Each Note Guarantee shall remain in full force and effect and continue
to be effective should any petition be filed by or against the Company for
liquidation or reorganization, should the Company become insolvent or make an
assignment for the benefit of creditors or should a receiver or trustee be
appointed for all or any significant part of the Company's assets, and shall, to
the fullest extent permitted by law, continue to be effective or be reinstated,
as the case may be, if at any time payment and performance of the Notes are,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee on the Notes, whether as a "voidable
preference", "fraudulent transfer" or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Notes shall, to the
fullest extent permitted by law, be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
SECTION 1302. Severability.
----------------------------
In case any provision of any Note Guarantee shall be invalid, illegal
or unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1303. Restricted Subsidiaries.
---------------------------------------
If the Company or any of its Restricted Subsidiaries acquires or forms
a Restricted Subsidiary, the Company may cause any such Restricted Subsidiary
(and any other Restricted Subsidiary as required pursuant to Section 1018 or any
other provision of this Indenture) to (i) execute and deliver to the Trustee a
supplemental indenture in accordance with the provisions of Article Nine of this
Indenture pursuant to which such Restricted Subsidiary shall guarantee all of
the obligations on the Notes, whether for principal, premium, if any, interest
(including interest accruing after the filing of, or which would have accrued
but for the filing of, a petition by or against the Company under Bankruptcy
Law, whether or not such interest is allowed as a claim after such filing in any
proceeding under such law) and other amounts due in connection therewith
(including any fees, expenses and indemnities), on a senior secured basis, and
(ii) deliver to such Trustee an Opinion of Counsel reasonably satisfactory to
such Trustee to the effect that such supplemental indenture has been duly
executed and delivered by such Restricted Subsidiary and is in compliance with
the terms of this Indenture. Upon the execution of any such supplemental
indenture, the obligations of the Subsidiary Guarantors and any such Restricted
Subsidiary under their respective Note Guarantees shall become joint and several
and each reference to the "Subsidiary Guarantor" in this Indenture shall,
subject to Section 1308, be deemed to refer to all Subsidiary Guarantors,
including such Restricted Subsidiary.
SECTION 1304. Limitation of Subsidiary Guarantors' Liability.
--------------------------------------------------------------
Each Subsidiary Guarantor and by its acceptance hereof each Holder
confirms that it is the intention of all such parties that the guarantee by each
such Subsidiary Guarantor pursuant to its Note Guarantee shall not constitute a
fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar federal or state law or the provisions of its local law
103
relating to fraudulent transfer or conveyance. To effectuate the foregoing
intention, the Holders and each such Subsidiary Guarantor hereby irrevocably
agree that the obligations of such Subsidiary Guarantor under its Note Guarantee
shall be limited to the maximum amount that will not, after giving effect to all
other contingent and fixed liabilities of such Subsidiary Guarantor and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Note Guarantee or pursuant to Section 1305
hereof, result in the obligations of such Subsidiary Guarantor under its Note
Guarantee constituting such fraudulent transfer or conveyance.
SECTION 1305. Contribution.
----------------------------
In order to provide for just and equitable contribution among the
Guarantors, the Subsidiary Guarantors agree, inter se, that in the event any
payment or distribution is made by any Subsidiary Guarantor (a "Funding
Guarantor") under a Note Guarantee, such Funding Guarantor shall be entitled to
a contribution from all other Subsidiary Guarantors in a pro rata amount based
on the Adjusted Net Assets (as defined below) of each Guarantor (including the
Funding Guarantor) for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Notes or any other Subsidiary Guarantor's obligations with respect to the Note
Guarantee of such Subsidiary Guarantor. "Adjusted Net Assets" of such
Subsidiary Guarantor at any date shall mean the lesser of (x) the amount by
which the fair value of the property of such Subsidiary Guarantor exceeds the
total amount of liabilities, including, without limitation, contingent
liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities under the Note
Guarantee of such Subsidiary Guarantor at such date and (y) the amount by which
the present fair salable value of the assets of such Subsidiary Guarantor at
such date exceeds the amount that will be required to pay the probable liability
of such Subsidiary Guarantor on its debts (after giving effect to all other
fixed and contingent liabilities incurred or assumed on such date), excluding
debt in respect of the Note Guarantee of such Subsidiary Guarantor, as they
become absolute and matured.
SECTION 1306. Subrogation.
---------------------------
Each Subsidiary Guarantor shall be subrogated to all rights of Holders
against the Company in respect of any amounts paid by any Subsidiary Guarantor
pursuant to the provisions of Section 1301; provided, however, that, if an Event
of Default has occurred and is continuing, no Subsidiary Guarantor shall be
entitled to enforce or receive any payments arising out of, or based upon, such
right of subrogation until all amounts then due and payable by the Company under
this Indenture or the Notes shall have been paid in full.
SECTION 1307. Reinstatement.
-----------------------------
Each Subsidiary Guarantor hereby agrees (and each Person who becomes a
Guarantor shall agree) that the Note Guarantee provided for in Section 1301
shall continue to be effective or be reinstated, as the case may be, if at any
time, payment, or any part thereof, of any obligations or interest thereon is
rescinded or must otherwise be restored by a Holder to the Company upon the
bankruptcy or insolvency of the Company or any Guarantor.
104
SECTION 1308. Release of a Subsidiary Guarantor.
-------------------------------------------------
(a) If no Default exists or would exist under this Indenture, the Note
Guarantee issued by any Subsidiary Guarantor under this Indenture shall be
automatically and unconditionally released and discharged (i) upon any
sale, exchange or transfer to any Person not an Affiliate of the Company or
a Restricted Subsidiary of all of the Company's Capital Stock in, or all or
substantially all the assets of, such Subsidiary Guarantor (which sale,
exchange or transfer is not prohibited by this Indenture) and (ii) so long
as such Subsidiary Guarantor is not otherwise required to provide a Note
Guarantee pursuant to Section 1018 or any other provision of this
Indenture.
(b) Concurrently with the discharge of the Notes under Section 401,
the defeasance of the Notes under Section 1402 hereof, or the covenant
defeasance of the Notes under Section 1403 hereof, the Guarantors shall be
released from all their obligations under their Note Guarantees under this
Article Thirteen.
SECTION 1309. Benefits Acknowledged.
-------------------------------------
Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
its guarantee and waivers pursuant to its Note Guarantee are knowingly made in
contemplation of such benefits.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Company's Option to Effect Defeasance or Covenant
----------------------------------------------------------------
Defeasance.
-----------
The Company may, at its option and at any time, effect defeasance of
the Notes under Section 1402, or covenant defeasance of the Notes under Section
1403, in accordance with the terms of the Notes and in accordance with this
Article.
SECTION 1402. Defeasance and Discharge.
----------------------------------------
Upon the Company's exercise under Section 1401 of the option
applicable to this Section 1402, the Company and the Subsidiary Guarantors shall
be deemed to have been discharged from their obligations with respect to the
Outstanding Notes and the Note Guarantees, respectively, on the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "defeasance").
For this purpose, such defeasance means that the Company and the Subsidiary
Guarantors shall be deemed to have paid and discharged the entire Indebtedness
represented by the Outstanding Notes, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under the Notes and this Indenture insofar as the Notes are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Notes to receive, solely from the trust fund
described in Section 1404 and as more fully set forth in such Section, payments
in respect of the principal of (and premium, if any) and interest on
105
such Notes when such payments are due, (B) the Company's obligations with
respect to such Notes under Sections 304, 305, 306, 1003 and 1004, (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder, and the
Company's obligations in connection therewith and (D) this Article Fourteen.
Subject to compliance with this Article Fourteen, the Company may exercise its
option under this Section 1402 notwithstanding the prior exercise of its option
under Section 1403 with respect to such Notes.
SECTION 1403. Covenant Defeasance.
-----------------------------------
Upon the Company's exercise under Section 1401 of the option
applicable to this Section 1403, the Company and the Subsidiary Guarantors shall
be released from their obligations under Section 801, 802 and Sections 1010
through 1021 with respect to the Outstanding Notes on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Notes shall thereafter be deemed not to be "Outstanding"
for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such covenants,
but shall continue to be deemed "Outstanding" for all other purposes hereunder.
For this purpose, such covenant defeasance means that, with respect to such
Outstanding Notes, the Company and any Subsidiary Guarantor, as applicable, may
omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such covenant or
by reason of reference in any such covenant to any other provision herein or in
any other document and such omission to comply shall not constitute a Default or
an Event of Default under Section 501(3) or 501(5) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Notes shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance.
---------------------------------------------------------------
The following shall be the conditions to application of either Section
1402 or Section 1403 to the Outstanding Notes:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 608 who shall agree to comply with the provisions of this
Article Fourteen applicable to it) as trust funds in trust for the purpose
of making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Notes, (A) an
amount in cash, or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment of principal (including any premium) and interest,
if any, on such Notes, money in an amount, or (C) a combination thereof, in
each case in such amounts as will be sufficient, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, the principal of (and premium, if any, on)
and interest on such Outstanding Notes on the Stated Maturity of such
principal (and premium, if any) or installment of interest; provided that
the Trustee (or such qualifying trustee) shall have been irrevocably
instructed to apply such
106
money or the proceeds of such U.S. Government Obligations to said payments
with respect to such Notes.
(2) No Default or Event of Default with respect to such Notes shall
have occurred and be continuing on the date of such deposit or, insofar as
paragraphs (9) and (10) of Section 501 are concerned, at any time during
the period ending on the 91st day after the date of such deposit (it being
understood that this condition shall not be deemed satisfied until the
expiration of such period).
(3) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any material agreement to which the Company or any Guarantor is a party or
by which it is bound.
(4) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since March 31, 2002, there has been a
change in the applicable federal income tax law or interpretation of such
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 defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance had not occurred.
(5) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such 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.
(6) In the case of defeasance under Section 1402 or covenant
defeasance under Section 1403, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that after the 91st day
following the deposit or after the date such opinion is delivered, the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(7) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of the Notes or any Note Guarantee over
the other creditors of either the Company or any Subsidiary Guarantor with
the intent of hindering, delaying or defrauding creditors of either the
Company or any Subsidiary Guarantor.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for
107
relating to either the defeasance under Section 1402 or the covenant
defeasance under Section 1403, as the case may be, have been complied with.
SECTION 1405. Deposited Money and Government Obligations to Be Held
--------------------------------------------------------------------
in Trust; Other Miscellaneous Provisions.
-----------------------------------------
Subject to the provisions of the last paragraph of Section 1004, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 1405, the "Trustee") pursuant to Sections 1404 and 1406 in respect of
such Outstanding Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Notes and this Indenture, to the payment,
either directly or through any Paying Agent (including the Company acting as its
own Paying Agent) as the Trustee may determine, to the Holders of such Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law. Money and U.S. Government Obligations so held in
trust are not subject to Article Twelve.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 1404 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 such Outstanding Notes.
Anything in this Article Fourteen to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations (or other property and any
proceeds therefrom) held by it as provided in Section 1404 which, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, are in excess of the
amount thereof which would then be required to be deposited to effect an
equivalent defeasance or covenant defeasance, as applicable, in accordance with
this Article.
SECTION 1406. Reinstatement.
-----------------------------
If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 1405 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under this Indenture and such Notes
shall be revived and reinstated as though no deposit had occurred pursuant to
Section 1402 or 1403, as the case may be, until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
1405; provided, however, that if the Company makes any payment of principal of
(or premium, if any) or interest on any such Note following 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 held by the Trustee or Paying
Agent.
108
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL, INC.
By_________________________________
Name:
Title:
SUPREME MUNSINGWEAR CANADA,
INC.
By_________________________________
Name:
Title:
SUPREME INTERNATIONAL
CORPORATION DE MEXICO, S.A.
DE C.V.
By_________________________________
Name:
Title:
BBI RETAIL LLC.
By_________________________________
Name:
Title:
▇▇▇▇▇▇▇ APPAREL CORP.
By_________________________________
Name:
Title:
109
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By_________________________________
Name:
Title:
110