Exhibit 4.2
EXECUTION COPY
MICHAEL FOODS ACQUISITION CORP.
11 3/4% SENIOR SUBORDINATED NOTES DUE 2011
INDENTURE
Dated as of March 27, 2001
BNY MIDWEST TRUST COMPANY
Trustee
CROSS-REFERENCE TABLE*
Trust Indenture Act Indenture
Section Section
310(a)(1) ......................................................... 7.10
(a)(2) ......................................................... 7.10
(a)(5) ......................................................... 7.10
(b) ............................................................ 7.10
(c) ............................................................ N.A.
311(a) ............................................................ 7.11
(b) ............................................................ 7.11
312(a) ............................................................ 2.05
(b) ............................................................ 12.03
(c) ............................................................ 12.03
313(a) ............................................................ 7.06
(b)(2) ......................................................... 7.06
(c) ............................................................ 7.06
12.02
(d) ............................................................ 7.06
314(a) ............................................................ 4.03
12.05
(c)(1) ......................................................... 12.04
(c)(2) ......................................................... 12.04
(e) ............................................................ 12.05
316(a)(last sentence) ............................................. 2.09
(a)(1)(A) ...................................................... 6.05
(a)(1)(B) ...................................................... 6.04
317(a)(1) ......................................................... 6.08
*This Cross-Reference Table is not part of this Indenture.
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TABLE OF CONTENTS
Table of Contents
Page
Article 1 DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.............................................10
Section 1.02. Other Definitions.......................................34
Section 1.03. Incorporation by Reference of Trust Indenture Act.......35
Section 1.04. Rules of Construction...................................35
Article 2 THE NOTES
Section 2.01. Form and Dating.........................................36
Section 2.02. Execution and Authentication............................36
Section 2.03. Registrar and Paying Agent..............................37
Section 2.04. Paying Agent to Hold Money in Trust.....................37
Section 2.05. Holder Lists............................................38
Section 2.06. Transfer and Exchange...................................38
Section 2.07. Replacement Notes.......................................50
Section 2.08. Outstanding Notes.......................................50
Section 2.09. Treasury Notes..........................................51
Section 2.10. Temporary Notes.........................................51
Section 2.11. Cancellation............................................51
Section 2.12. Defaulted Interest......................................52
Section 2.13. CUSIP Numbers...........................................52
Article 3 REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee......................................52
Section 3.02. Selection of Notes to Be Redeemed.......................52
Section 3.03. Notice of Redemption....................................53
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Section 3.04. Effect of Notice of Redemption..........................54
Section 3.05. Deposit of Redemption Price.............................54
Section 3.06. Notes Redeemed in Part..................................54
Section 3.07. Optional Redemption.....................................54
Section 3.08. Mandatory Redemption....................................55
Section 3.09. Offer to Purchase.......................................55
Article 4 COVENANTS
Section 4.01. Payment of Notes........................................57
Section 4.02. Maintenance of Office or Agency.........................58
Section 4.03. Reports.................................................58
Section 4.04. Compliance Certificate..................................59
Section 4.05. Taxes...................................................59
Section 4.06. Stay, Extension and Usury Laws..........................60
Section 4.07. Restricted Payments.....................................60
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries.................................64
Section 4.09. Incurrence of Indebtedness and Issuance
of Preferred Stock .....................................65
Section 4.10. Asset Sales.............................................69
Section 4.11. Transactions with Affiliates............................71
Section 4.12. Liens...................................................73
Section 4.13. Corporate Existence.....................................73
Section 4.14. Offer to Repurchase upon Change of Control..............73
Section 4.15. Limitation on Other Senior Subordinated Debt............74
Section 4.16. Sale and Leaseback Transactions.........................75
Section 4.17. Limitation on Issuances of Guarantees of Indebtedness...75
Section 4.18. Additional Guarantees...................................75
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Section 4.19. Business Activities.....................................76
Section 4.20. Designation of Restricted and Unrestricted Subsidiaries.76
Article 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets............76
Section 5.02. Successor Corporation Substituted...................77
Article 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default...................................78
Section 6.02. Acceleration........................................80
Section 6.03. Other Remedies......................................80
Section 6.04. Waiver of Past Defaults.............................81
Section 6.05. Control by Majority.................................81
Section 6.06. Limitation on Suits.................................82
Section 6.07. Rights of Holders of Notes to Receive Payment.......82
Section 6.08. Collection Suit by Trustee..........................82
Section 6.09. Trustee May File Proofs of Claim....................82
Section 6.10. Priorities..........................................83
Section 6.11. Undertaking for Costs...............................83
Article 7 TRUSTEE
Section 7.01. Duties of Trustee...................................84
Section 7.02. Rights of Trustee...................................85
Section 7.03. Individual Rights of Trustee........................86
Section 7.04. Trustee's Disclaimer................................86
Section 7.05. Notice of Defaults..................................86
Section 7.06. Reports by Trustee to the Holders of the Notes......86
Section 7.07. Compensation and Indemnity..........................86
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Section 7.08. Replacement of Trustee..............................87
Section 7.09. Successor Trustee by Merger, etc....................88
Section 7.10. Eligibility; Disqualification.......................89
Section 7.11. Preferential Collection of Claims Against Company...89
Article 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance..........................................89
Section 8.02. Legal Defeasance and Discharge......................89
Section 8.03. Covenant Defeasance.................................90
Section 8.04. Conditions to Legal Defeasance or Covenant
Defeasance..........................................90
Section 8.05. Deposited Money and Cash Equivalents to be Held
in Trust; Other Miscellaneous Provisions............92
Section 8.06. Repayment to Company................................92
Section 8.07. Reinstatement.......................................92
Article 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.................93
Section 9.02. With Consent of Holders of Notes....................94
Section 9.03. Compliance with Trust Indenture Act.................95
Section 9.04. Revocation and Effect of Consents...................95
Section 9.05. Notation on or Exchange of Notes....................96
Section 9.06. Trustee to Sign Amendments, etc.....................96
Section 9.07. Payments for Consent................................96
Article 10 SUBORDINATION
Section 10.01. Agreement to Subordinate............................97
Section 10.02. Liquidation; Dissolution; Bankruptcy................97
Section 10.03. Default on Designated Senior Debt...................97
Section 10.04. Acceleration of Securities..........................98
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Section 10.05. When Distribution Must Be Paid Over.................98
Section 10.06. Notice by the Company...............................99
Section 10.07. Subrogation.........................................99
Section 10.08. Relative Rights.....................................99
Section 10.09. Subordination May Not Be Impaired by the Company...100
Section 10.10. Distribution or Notice to Representative...........100
Section 10.11. Rights of Trustee and Paying Agent.................100
Section 10.12. Authorization to Effect Subordination..............100
Article 11 NOTE GUARANTEES
Section 11.01. Guarantee..........................................101
Section 11.02. Subordination of Note Guarantee....................102
Section 11.03. Limitation on Guarantor Liability..................102
Section 11.04. Execution and Delivery of Note Guarantee...........102
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.103
Section 11.06. Releases Following Sale of Assets..................104
Article 12 MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.......................104
Section 12.02. Notices............................................105
Section 12.03. Communication by Holders of Notes with
Other Holders of Notes ............................106
Section 12.04. Certificate and Opinion as to Conditions Precedent.106
Section 12.05. Statements Required in Certificate or Opinion......107
Section 12.06. Rules by Trustee and Agents........................107
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.........................107
Section 12.08. Governing Law......................................108
Section 12.09. No Adverse Interpretation of Other Agreements......108
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Section 12.10. Successors.........................................108
Section 12.11. Severability.......................................108
Section 12.12. Counterpart Originals..............................108
Section 12.13. Table of Contents, Headings, etc...................108
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EXHIBITS
Exhibit A FORM OF NOTE
Exhibit B FORM OF CERTIFICATE OF TRANSFER
Exhibit C FORM OF CERTIFICATE OF EXCHANGE
Exhibit D FORM OF IAI CERTIFICATE
Exhibit E FORM OF NOTE GUARANTEE
Exhibit F FORM OF SUPPLEMENTAL INDENTURE
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INDENTURE dated as of March 27, 2001 among Michael Foods Acquisition
Corp., a Minnesota corporation (the "Company"), the Guarantors and BNY Midwest
Trust Company, an Illinois banking corporation, as trustee (the "Trustee").
The Company (and, upon consummation of the Merger, Michael Foods)
and the Trustee agree as follows for the benefit of each other and for the equal
and ratable benefit of the 11 3/4% Senior Subordinated Notes due 2011 (the
"Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a global note in the form of Exhibit A
hereto bearing the Global Note Legend and the Private Placement Legend and
deposited with or on behalf of, and registered in the name of, the Depositary or
its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold in reliance on Rule 144A.
"Acquired Debt" means, with respect to any specified Person (i)
Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person, and (ii) Indebtedness secured by a Lien encumbering any asset
acquired by such specified Person.
"Additional Notes" means up to $100 million in aggregate principal
amount of Notes (other than the Initial Notes) issued under this Indenture in
accordance with Sections 2.02 and 4.09 hereof.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control,"
as used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" shall have
correlative meanings.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or
exchange of or for beneficial interests in any Global Note, the rules and
procedures of the Depositary, Euroclear and Clearstream that apply to such
transfer or exchange.
"Asset Acquisition" means (a) an Investment by the Company or any of
its Restricted Subsidiaries in any other Person if, as a result of such
Investment, such Person shall
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become a Restricted Subsidiary of the Company, or shall be merged with or into
the Company or any Restricted Subsidiary of the Company, or (b) the acquisition
by the Company or any Restricted Subsidiary of the Company of all or
substantially all of the assets of any other Person or any division or line of
business of any other Person.
"Asset Sale" means: (i) the sale, lease, conveyance or other
disposition of any assets or rights; provided that the sale, lease, conveyance
or other disposition of all or substantially all of the assets of the Company
and its Restricted Subsidiaries taken as a whole will be governed by Sections
4.14 and/or 5.01 hereof and not by Section 4.10 hereof; (ii) the issuance or
sale of Equity Interests by any of the Company's Restricted Subsidiaries or the
sale of Equity Interests in any of its Subsidiaries; and (iii) the sale or other
disposition for cash of the common units of the limited liability company formed
to hold the dairy products business of the Company and its Restricted
Subsidiaries (the "Dairy LLC") that are owned indirectly by the members of
M-Foods Investors LLC.
Notwithstanding the foregoing, the following items shall not be
deemed to be
Asset Sales:
(i) any single transaction or series of related transactions that
involves assets having a fair market value of less than $5.0 million;
(ii) a transfer of assets between or among the Company and its
Restricted Subsidiaries;
(iii) an issuance of Equity Interests by a Restricted Subsidiary to
the Company or to another Restricted Subsidiary;
(iv) the sale, or lease, as the case may be, of equipment,
inventory, or other assets in the ordinary course of business, including
leases with a duration of no greater than twenty-four months with respect
to facilities which are temporarily not in use or pending their
disposition;
(v) the sale or other disposition of cash or Cash Equivalents;
(vi) a Restricted Payment or Permitted Investment that is permitted
by Section 4.07 hereof;
(vii) the licensing of intellectual property to third Persons on
customary terms as determined by the Board of Directors in good faith;
(viii) any sale of accounts receivable, or participations therein,
in connection with any Qualified Receivables Transaction; and
(ix) the sale of non voting common equity interest of the Dairy LLC
to a limited liability company whose members are the members of M-Foods
Investors LLC.
"Attributable Debt" in respect of a sale and leaseback transaction
means, at the time of determination, the present value of the obligation of the
lessee for net rental payments
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during the remaining term of the lease included in such sale and leaseback
transaction, including any period for which such lease has been extended or may,
at the option of the lessor, be extended. Such present value shall be calculated
using a discount rate equal to the rate of interest implicit in such transaction
determined in accordance with GAAP.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal or
state law for the relief of debtors.
"Beneficial Owner" has the meaning assigned to such term in Rule
13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular "person" (as that term is used in Section
13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial
ownership of all securities that such "person" has the right to acquire by
conversion or exercise of other securities, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent
condition. The terms "Beneficially Owns" and "Beneficially Owned" shall have a
corresponding meaning.
"Board of Directors" means (i) with respect to a corporation, the
board of directors of the corporation; (ii) with respect to a partnership, the
Board of Directors of the general partner of the partnership; and (iii) with
respect to any other Person, the board or committee of such Person serving a
similar function.
"Borrowing Base" means, as of any date, an amount equal to:
(i) 80% of the face amount of all accounts receivable owned by the
Company and its Restricted Subsidiaries as of the end of the most recent
fiscal quarter preceding such date that were not more than 90 days past
due; plus
(ii) 50% of the book value of all inventory owned by the Company and
its Restricted Subsidiaries of the end of the most recent fiscal quarter
preceding such date; all calculated on a consolidated basis and in
accordance with GAAP.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease Obligation" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at that time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate
stock, (ii) in the case of an association or a business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of corporate stock, (iii) in the case of a
partnership or limited liability company, partnership or membership
interests (whether general or limited), and (iv) any other interest or
participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
"Cash Equivalents" means (i) United States dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or
12
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than six
months from the date of acquisition, (iii) certificates of deposit and
eurodollar time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case, with institutional lenders having capital
and surplus in excess of $500.0 million, a Thomson Bank Watch Rating of "B" or
better and chartered or organized in the United States, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) above entered into with any
financial institution meeting the qualifications specified in clause (iii)
above, (v) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Rating Services and in each case
maturing within six months after the date of acquisition, and (vi) money market
funds at least 95% of the assets of which constitute Cash Equivalents of the
kinds described in clauses (i) through (v) of this definition.
"Change of Control" means the occurrence of any of the following:
(i) the direct or indirect sale, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or a series of related
transactions, of all or substantially all of the properties or assets of the
Parent and its Restricted Subsidiaries or the Company and its Restricted
Subsidiaries, in each case, taken as a whole, to any "person" (as that term is
used in Section 13(d)(3) of the Exchange Act) other than the Principals or the
Related Parties of the Principals, (ii) the adoption of a plan relating to the
liquidation or dissolution of the Parent or the Company, (iii) the consummation
of any transaction (including, without limitation, any merger or consolidation)
(a) prior to a Public Equity Offering by the Company or the Parent, the result
of which is that the Principals and their Related Parties become the "Beneficial
Owner" (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act) of less than 50% of the Voting Stock of the Company or the Parent (measured
by voting power rather than the number of shares) or (b) after a Public Equity
Offering of the Company or the Parent, any "person" or "groups" (as such terms
are used in Sections 13(d) and 14(d) of the Exchange Act), other than the
Principals and their Related Parties, becomes the beneficial owner (as defined
above), directly or indirectly, of 35% or more of the Voting Stock of the
Company or the Parent, as the case may be, and such person is or becomes,
directly or indirectly, the beneficial owner of a greater percentage of the
voting power of the Voting Stock of the Company or the Parent, as the case may
be, calculated on a fully diluted basis, than the percentage beneficially owned
by the Principals and their Related Parties; (iv) the first day on which a
majority of the members of the Board of Directors of the Parent or the Company
are not Continuing Directors, or (v) the Parent or the Company consolidates
with, or merges with or into, any Person, or any Person consolidates with, or
merges with or into, the Parent or the Company, in any such event pursuant to a
transaction in which any of the outstanding Voting Stock of the Parent, the
Company or such other Person is converted into or exchanged for cash, securities
or other property, other than any such transaction where (A) the Voting Stock of
the Parent or the Company outstanding immediately prior to such transaction is
converted into or exchanged for Voting Stock (other than Disqualified Stock) of
the surviving or transferee Person constituting a majority of the outstanding
shares of such Voting Stock of such surviving or transferee Person (immediately
after giving effect to such issuance) and (B) immediately after such
transaction, (a) prior to a Public Equity Offering of the Parent or the Company,
the Principals and their Related Parties become the "beneficial owner" (as
defined above) of not less than 50% of the Voting Stock of the surviving or
transferee Person or (b) after a Public Equity Offering of the Parent or the
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Company, no "person" or "group" (as such terms are used in Section 13(d) and
14(d) of the Exchange Act), other than the Principals and their Related Parties,
becomes, directly or indirectly, the beneficial owner of 35% or more of the
Voting Stock of the Parent or the Company, as the case may be, and such person
is or becomes, directly or indirectly, the beneficial owner of a greater
percentage of the voting power of the Voting Stock of the Parent or the Company,
as the case may be, calculated on a fully diluted basis, than the percentage
beneficially owned by the Principals and their Related Parties.
"Clearstream" means Clearstream Banking, societe anonyme.
"Collateral Agent" means BNY, as Collateral Agent under the Pledge
Agreement.
"Company" means Michael Foods Acquisition Corp., a Minnesota
corporation, and, upon consummation of the Merger, Michael Foods.
"Consolidated Cash Flow" means, with respect to any specified Person
for any period, the Consolidated Net Income of such Person for such period plus
(i) provision for taxes based on income or profits of such Person and its
Restricted Subsidiaries for such period, to the extent that such provision for
taxes was deducted in computing such Consolidated Net Income; plus (ii)
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether or not paid or accrued and whether or not capitalized
(including, without limitation, amortization of debt issuance costs and original
issue discount, non-cash interest payments, the interest component of any
deferred payment obligations, the interest component of all payments associated
with Capital Lease Obligations, imputed interest with respect to Attributable
Debt, commissions, discounts and other fees and charges incurred in respect of
letter of credit or bankers' acceptance financings, and net of the effect of all
payments made or received pursuant to Hedging Obligations), to the extent that
any such expense was deducted in computing such Consolidated Net Income; plus
(iii) depreciation, amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash expenses (excluding any such non-cash
expense to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense that was
paid in a prior period) of such Person and its Restricted Subsidiaries for such
period to the extent that such depreciation, amortization and other non-cash
expenses were deducted in computing such Consolidated Net Income; plus (iv) one
time nonrecurring costs and expenses of the Company and its Subsidiaries
incurred in connection with the Merger Agreement (including fees paid to the
Equity Sponsors in connection with the Merger); minus (v) non-cash items
increasing such Consolidated Net Income for such period, excluding any items
which represent the reversal of any accrual of, or cash reserve for, anticipated
cash charges in any prior period.
Notwithstanding the preceding, the provision for taxes based on the
income or profits of, and the depreciation and amortization and other non-cash
expenses of, a Restricted Subsidiary of the Company shall be added to
Consolidated Net Income to compute Consolidated Cash Flow of the Company only to
the extent that a corresponding amount would be permitted at the date of
determination to be dividended to the Company by such Restricted Subsidiary
without prior governmental approval (that has not been obtained), and without
direct or indirect restriction pursuant to the terms of its charter and all
agreements, instruments, judgments,
14
decrees, orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any specified
Person for any period, the aggregate of the Net Income of such Person and its
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that:
(i) the Net Income of any Person that is not a Restricted Subsidiary
or that is accounted for by the equity method of accounting shall be
included only to the extent of the amount of dividends or distributions
paid in cash to the specified Person or a Wholly Owned Restricted
Subsidiary thereof;
(ii) the Net Income of any Restricted Subsidiary shall be excluded
to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental
approval (that has not been obtained) or, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Restricted Subsidiary or its stockholders;
(iii) the Net Income (or loss) of any Person acquired in a pooling
of interests transaction for any period prior to the date of such
acquisition shall be excluded;
(iv) the cumulative effect of a change in accounting principles
shall be excluded;
(v) the Net Income (or loss) of any Unrestricted Subsidiary shall be
excluded, whether or not distributed to the specified Person or one of its
Subsidiaries;
(vi) any increase in cost of sales as a result of the step-up in
inventory valuation arising from applying the purchase method of
accounting in accordance with GAAP in connection with any acquisition
consummated after the Merger Date, net of taxes, shall be excluded; and
(vii) non-cash charges relating to employee benefit or other
management compensation plans of the Company or any of its Restricted
Subsidiaries or any non-cash compensation charge arising from any grant of
stock, stock options or other equity-based awards, of the Company or any
of its Restricted Subsidiaries (excluding any, in each case, non-cash
charge to the extent that it represents an accrual of or reserve for cash
expenses in any future period or amortization of a prepaid cash expense
incurred in a prior period) in each case, to the extent that such non-cash
charges are deducted in computing such Consolidated Net Income shall be
excluded.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company or the Parent, as the case may
be, who: (i) was a member of such Board of Directors on the date hereof or the
Date of the Merger; or (ii) was nominated for election or elected to such Board
of Directors with the approval of a majority of the
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Continuing Directors who were members of such Board at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of
the Trustee specified in Section 11.02 hereof or such other address as to which
the Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, to be dated
as of the Merger Date, by and among the Company, Holdings, the guarantor
subsidiaries named therein, Bank of America, N.A., as Agent and the other
Lenders named therein providing for up to $370 million in term loan borrowings
and $100 million of revolving credit borrowings, including any related notes,
guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time including any agreement extending the
maturity of, refinancing, replacing or otherwise restructuring (including
increasing the amount of available borrowings thereunder or 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 and whether by the same or any other agent, lender or group of
lenders.
"Credit Facilities" means, one or more debt facilities (including,
without limitation, the Credit Agreement) or commercial paper facilities, in
each case with banks or other institutional lenders providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders or to special purpose entities formed to borrow from
such lenders against such receivables) or letters of credit, in each case, as
amended, restated, modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
"Custodian" means the Trustee, as custodian with respect to the
Notes in global form, or any successor entity thereto.
"Dairy LLC" has the meaning set forth in the definition of "Asset
Sale".
"Default" means any event that is, or with the passage of time or
the giving of notice or both would be, an Event of Default.
"Definitive Note" means a certificated Note registered in the name
of the Holder thereof and issued in accordance with Section 2.06 hereof, in the
form of Exhibit A hereto, except that such Note shall not bear the Global Note
Legend and shall not have the "Schedule of Exchanges of Interests in the Global
Note" attached thereto.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.03 hereof as
the Depositary with respect to the Notes, and any and all successors thereto
appointed as depositary hereunder and having become such pursuant to the
applicable provision of this Indenture.
"Designated Non-cash Consideration" means the fair market value of
non-cash consideration (as determined in good faith by the principal financial
officer of the Company) received by the Company or any of its Restricted
Subsidiaries in connection with an Asset Sale
16
that is so designated as Designated Non-cash Consideration pursuant to an
Officers' Certificate, setting forth the basis of such valuation, less the
amount of cash or Cash Equivalents received in connection with a subsequent sale
of such Designated Non-cash Consideration.
"Designated Senior Debt" means (i) any Indebtedness outstanding
under the Credit Agreement; and (ii) any other Senior Debt permitted hereunder
the principal amount of which that is committed and available to be drawn on is
$25.0 million or more and that has been designated by the Company as "Designated
Senior Debt." For purposes of determining whether a particular issue of Senior
Debt may qualify as "Designated Senior Debt," the principal amount of one or
more issues of Senior Debt owing to a common lender (or its Affiliates) may be
aggregated.
"Disqualified Stock" means any Capital Stock that, by its terms (or
by the terms of any security into which it is convertible, or for which it is
exchangeable, in each case at the option of the holder thereof), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
date on which the Notes mature; provided that if such Capital Stock is issued to
any employee or to any plan for the benefit of employees of the Company or any
of its Subsidiaries or by any such plan to such employees, such Capital Stock
shall not constitute Disqualified Stock solely because it may be required to be
repurchased by the Company or such Subsidiary in order to satisfy applicable
statutory or regulatory obligations; and provided, further, that any Capital
Stock that would constitute Disqualified Stock solely because the holders
thereof have the right to require the Company to repurchase such Capital Stock
upon the occurrence of a change of control or an asset sale shall not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Company
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 4.07.
"Domestic Subsidiary" means any Restricted Subsidiary that was
formed under the laws of the United States or any state thereof or the District
of Columbia or that guarantees or otherwise provides direct credit support for
any Indebtedness of the Company.
"Egg Products Division" means those operations and Subsidiaries of
the Company and its Restricted Subsidiaries engaged in the egg products
business.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Equity Offering" means an offering of the Equity Interests (other
than Disqualified Stock) of the Company or the Parent, other than public
offerings with respect to the Equity Interests registered on Form S-8.
"Equity Sponsors" means Vestar and GHJ&M.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
17
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Notes" means the Notes issued in the Exchange Offer in
accordance with Section 2.06(f) hereof.
"Exchange Offer" has the meaning set forth in the Registration
Rights Agreement.
"Exchange Offer Registration Statement" has the meaning set forth in
the Registration Rights Agreement.
"Excluded Contributions" means the net cash proceeds received by the
Company after the date of this Indenture from (a) contributions to its common
equity capital and (b) the sale (other than to a Subsidiary or to any management
equity plan or stock option plan or any other management or employee benefit
plan or agreement of the Company or any of its Subsidiaries) of Capital Stock
(other than Disqualified Stock) of the Company, in each case designated within
60 days of the receipt of such net cash proceeds as Excluded Contributions
pursuant to an Officers' Certificate, the cash proceeds of which are excluded
from the calculation set forth in clause (iii) of the second paragraph of
Section 4.07.
"Existing Indebtedness" means (a) Indebtedness of Michael Foods and
its Subsidiaries (other than Indebtedness under the Credit Agreement) to be
assumed in connection with the Merger in an aggregate amount not to exceed $8.3
million, until such amounts are repaid and (b) the 7.58% Notes; provided that
such 7.58% Notes are repaid within 35 days of the Merger Date.
"Fixed Charges" means, with respect to any specified Person for any
period, the sum, without duplication, of: (i) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued, including, without limitation, amortization of debt issuance costs and
original issue discount, noncash interest payments, the interest component of
any deferred payment obligations, the interest component of all payments
associated with Capital Lease Obligations, imputed interest with respect to
Attributable Debt, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net of the
effect of all payments made or received pursuant to Hedging Obligations; plus
(ii) the consolidated interest of such Person and its Restricted Subsidiaries
that was capitalized during such period; plus (iii) any interest expense on
Indebtedness of another Person that is Guaranteed by such Person or one of its
Restricted Subsidiaries or secured by a Lien on assets of such Person or one of
its Restricted Subsidiaries, whether or not such Guarantee or Lien is called
upon; plus (iv) the product of (a) all dividends, whether paid or accrued and
whether or not in cash, on any series of preferred stock of such Person or any
of its Restricted Subsidiaries, other than dividends on Equity Interests payable
solely in Equity Interests of the Company (other than Disqualified Stock) or to
the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the
numerator of which is one and the denominator of which is one minus the then
current combined federal, state and local statutory tax rate of such Person,
expressed as a decimal, in each case, on a consolidated basis and in accordance
with GAAP.
18
"Fixed Charge Coverage Ratio" means, with respect to any specified
Person for any period, the ratio of the Consolidated Cash Flow of such Person
for such period to the Fixed Charges of such Person for such period. In the
event that the specified Person or any of its Restricted Subsidiaries incurs,
assumes, Guarantees, repays, repurchases or redeems any Indebtedness or issues,
repurchases or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated and on or
prior to the date on which the event for which the calculation of the Fixed
Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge
Coverage Ratio shall be calculated giving pro forma effect to such incurrence,
assumption, Guarantee, repayment, repurchase or redemption of Indebtedness, or
such issuance, repurchase or redemption of preferred stock, and the use of the
proceeds therefrom as if the same had occurred at the beginning of the
applicable four-quarter reference period.
In addition, for purposes of calculating the Fixed Charge Coverage
Ratio:
(i) the Recapitalization, Investments, acquisitions, dispositions,
mergers, consolidations and discontinued operations (as determined in
accordance with GAAP) that have been made by the Company or any Restricted
Subsidiary of the Company during the four-quarter reference period or
subsequent to such reference period and on or prior to or simultaneously
with the Calculation Date shall be calculated on a pro forma basis
including Pro Forma Cost Savings assuming that the Recapitalization and
all such Investments, acquisitions, dispositions, mergers, consolidations
and discontinued operations (and the change in any associated fixed charge
obligations and the change in EBITDA resulting therefrom) had occurred on
the first day of the four-quarter reference period. If since the beginning
of such period any Person (that subsequently became a Restricted
Subsidiary of the Company or was merged with or into the Company or any
Restricted Subsidiary of the Company since the beginning of such period)
shall have made any Investment, acquisition, disposition, merger,
consolidation or discontinued operation that would have required
adjustment pursuant to this definition, then the Fixed Charge Coverage
Ratio shall be calculated giving pro forma effect thereto for such period
as if such Investment, acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable
four-quarter period; and
(ii) in calculating Fixed Charges attributable to interest on any
Indebtedness computed on a pro forma basis, (a) interest on outstanding
Indebtedness determined on a fluctuating basis as of the Calculation Date
and which will continue to be so determined thereafter and shall be deemed
to have accrued at a fixed rate per annum equal to the rate of interest on
such Indebtedness in effect on the Calculation Date; (b) if interest on
any Indebtedness actually incurred on the Calculation Date may optionally
be determined at an interest rate based upon a factor of a prime or
similar rate, a eurocurrency interbank offered rate, or other rates, then
the interest rate in effect on the Calculation Date will be deemed to have
been in effect during the four-quarter period; and (c) notwithstanding
clause (a) above, interest on Indebtedness determined on a fluctuating
basis, to the extent such interest is covered by agreements relating to
interest rate swaps, caps or collars, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreement.
19
For purposes of this definition, whenever pro forma effect is to be
given to a transaction, the pro forma calculations shall be made in good faith
by a responsible financial or accounting officer of the Company.
"Foreign Borrowing Base" means, as of any date, an amount equal to:
(i) 80% of the face amount of all accounts receivable owned by the
Foreign Restricted Subsidiaries as of the end of the most recent fiscal
quarter preceding such date that were not more than 90 days past due; plus
(ii) 50% of the book value of all inventory owned by the Foreign
Restricted Subsidiaries as of the end of the most recent fiscal quarter
preceding such date; all calculated on a consolidated basis and in
accordance with GAAP.
"Foreign Restricted Subsidiary" means any Restricted Subsidiary of
the Company incorporated in any jurisdiction outside the United States.
"GHJ&M" means Golden Hawn Johnson & Morrison.
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect as of the date hereof.
"Global Notes" means, individually and collectively, each of the
Restricted Global Notes and the Unrestricted Global Notes, issued in accordance
with certain sections of this Indenture.
"Global Note Legend" means the legend set forth in Section
2.06(g)(ii), which is required to be placed on all Global Notes issued under
this Indenture.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantee" means a guarantee other than by endorsement of
negotiable instruments for collection in the ordinary course of business, direct
or indirect, in any manner including, without limitation, by way of a pledge of
assets or through letters of credit or reimbursement agreements in respect
thereof, of all or any part of any Indebtedness.
"Guarantors" means:
(i) each direct or indirect Domestic Subsidiary of the Company; and
(ii) any other subsidiary that executes a Note Guarantee in
accordance with the provisions hereof;
20
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified Person,
the obligations of such Person under (i) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, and (ii) other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates.
"Holder" means a Person in whose name a Note is registered.
"Holdings" means M-Foods Holdings, Inc., a Delaware corporation and
the immediate parent of the Company.
"Immaterial Guarantor" means any Guarantor that is an Immaterial
Subsidiary.
"Immaterial Subsidiary" means any Subsidiary of the Company that has
less than $100,000 in total assets.
"IAI Global Note" means the global Note substantially in the form of
Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend
and deposited with or on behalf of and registered in the name of the Depositary
or its nominee that will be issued in a denomination equal to the outstanding
principal amount of the Notes sold to Institutional Accredited Investors.
"Indebtedness" means, with respect to any specified Person, any
indebtedness of such Person, whether or not contingent, in respect of:
(i) borrowed money;
(ii) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(iii) banker's acceptances;
(iv) representing Capital Lease Obligations;
(v) the balance deferred and unpaid of the purchase price of any
property, except any such balance that constitutes an accrued expense or
trade payable; or
(vi) representing any Hedging Obligations,
if and to the extent any of the preceding items (other than letters of credit
and Hedging Obligations) would appear as a liability upon a balance sheet of the
specified Person prepared in accordance with GAAP. In addition, the term
"Indebtedness" includes all Indebtedness of others secured by a Lien on any
asset of the specified Person (whether or not such Indebtedness is assumed by
the specified Person) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be:
21
(i) the accreted value thereof, in the case of any Indebtedness
issued with original issue discount; and
(ii) the principal amount thereof, together with any interest
thereon that is more than 30 days past due, in the case of any other
Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Indirect Participant" means a Person who holds a beneficial
interest in a Global Note through a Participant.
"Initial Notes" means $200.0 million in aggregate principal amount
of Notes originally issued under this Indenture on the date hereof.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act, who are not also QIBs.
"Investments" means, with respect to any Person, all direct or
indirect investments by such Person in other Persons (including Affiliates) in
the forms of loans (including Guarantees or other obligations), advances or
capital contributions (excluding commission, travel and similar advances to
officers and employees made consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness, Equity Interests or other
securities, together with all items that are or would be classified as
investments on a balance sheet prepared in accordance with GAAP. If the Company
or any Restricted Subsidiary of the Company sells or otherwise disposes of any
Equity Interests of any direct or indirect Restricted Subsidiary of the Company
such that, after giving effect to any such sale or disposition, such Person is
no longer a Restricted Subsidiary of the Company, the Company shall be deemed to
have made a Restricted Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such Restricted
Subsidiary not sold or disposed of in an amount determined as provided in the
final paragraph of Section 4.07 hereof. The acquisition by the Company or any
Restricted Subsidiary of the Company of a Person that holds an Investment in a
third Person shall be deemed to be an Investment by the Company or such
Restricted Subsidiary in such third Person in an amount equal to the fair market
value of the Investment held by the acquired Person in such third Person in an
amount determined as provided in the final paragraph of Section 4.07 hereof.
"Issue Date" means the date on which the initial $200.0 million in
aggregate principal amount of the Notes were originally issued under this
Indenture.
"Legal Holiday" means a Saturday, a Sunday or a day on which
commercial banks in The City of New York or at a place of payment are authorized
or required by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
22
"Letter of Transmittal" means the letter of transmittal to be
prepared by the Company and sent to all Holders of the Notes for use by such
Holders in connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law,
including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.
"Liquidated Damages" means the additional amounts (if any) payable
by the Company in the event of a Registration Default under, and as defined in,
the Registration Rights Agreement.
"Merger" means the merger of Michael Foods Acquisition Corp. with
and into Michael Foods in accordance with the terms of the Merger Agreement.
"Merger Agreement" means the Agreement and Plan of Merger, dated as
of December 21, 2000 by and among Holdings, Michael Foods Acquisition Corp.
(f/k/a Protein Acquisition Corp.) and Michael Foods, as amended on March 6,
2001.
"Merger Date" means the date of the consummation of the Merger
pursuant to the terms of the Merger Agreement.
"Michael Foods" means Michael Foods, Inc. a Minnesota corporation.
"Net Income" means, with respect to any specified Person, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however (i) any
gain (or loss), together with any related provision for taxes on such gain (or
loss), realized in connection with: (a) any Asset Sale (without reference to the
$5.0 million limitation); or (b) the disposition of any securities by such
Person or any of its Restricted Subsidiaries or the extinguishment of any
Indebtedness of such Person or any of its Restricted Subsidiaries; and (ii) any
extraordinary gain (or loss), together with any related provision for taxes on
such extraordinary gain (or loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries or the holders of the common
equity units of Dairy LLC in respect of any Asset Sale (including, without
limitation, any cash received upon the sale or other disposition of any
Designated Non-cash Consideration or other non-cash consideration received in
any Asset Sale), net of the direct costs relating to such Asset Sale or
disposition of such Designated Non-cash Consideration or other non-cash
consideration, including, without limitation, legal, accounting and investment
banking fees, and sales commissions, and any relocation expenses incurred as a
result thereof (including the amount of taxes payable by any Person resulting
from an Asset Sale of units in Dairy LLC, which amount of taxes shall be deemed
to be for each such Person the amount of tax calculated by applying the highest
federal, New York State and City individual income tax rates applicable to the
type of income realized from such Asset Sale), in each case, after taking into
account any available tax credits or
23
deductions and any tax sharing arrangements, and amounts required to be applied
to the repayment of Indebtedness (other than revolving credit Indebtedness,
unless there is a required reduction in commitments), secured by a Lien on the
asset or assets that were the subject of such Asset Sale and any reserve for
adjustment in respect of (1) the sale price of such asset or assets established
in accordance with GAAP and (2) any liabilities associated with such asset or
assets and retained by the Company after such sale or other disposition thereof,
including, without limitation, pension and other post-employment benefit
liabilities and liabilities related to environmental matters or against any
indemnification obligations associated with such transaction.
"Non-Recourse Debt" means Indebtedness:
(i) as to which neither the Company nor any of its Restricted
Subsidiaries (a) provides credit support of any kind (including any
undertaking, agreement or instrument that would constitute Indebtedness),
(b) is directly or indirectly liable as a guarantor or otherwise, or (c)
constitutes the lender;
(ii) no default with respect to which (including any rights that the
holders thereof may have to take enforcement action against an
Unrestricted Subsidiary) would permit upon notice, lapse of time or both
any holder of any other Indebtedness (other than the Notes) of the Company
or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable
prior to its stated maturity; and
(iii) as to which the lenders have been notified in writing that
they will not have any recourse to the stock or assets of the Company or
any of its Restricted Subsidiaries.
"Non-U.S. Person" means a Person who is not a U.S. Person.
"Note Guarantee" means the Guarantee by each Guarantor of the
Company's payment obligations under this Indenture and on the Notes, executed
pursuant to the provisions of this Indenture.
"Notes" has the meaning assigned to it in the preamble to this
Indenture. The Initial Notes and the Additional Notes, if any are issued, shall
be treated as a single class for all purposes under this Indenture.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Vice-President of such Person.
24
"Officers' Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company, one of whom must be the principal
executive officer, the principal financial officer, the treasurer, or the
principal accounting officer of the Company, that meets the requirements of
Section 12.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel that meets
the requirements of Section 12.05 hereof. The counsel may be an employee of or
counsel to the Company.
"Parent" means any direct or indirect parent company of the Company.
"Participant" means, with respect to the Depositary, Euroclear or
Clearstream, a Person who has an account with the Depositary, Euroclear or
Clearstream, respectively (and, with respect to The Depository Trust Company,
shall include Euroclear and Clearstream).
"Permitted Business" means any business conducted or proposed to be
conducted as described in the Offering Memorandum) by the Company and its
Restricted Subsidiaries on the date hereof and other businesses reasonably
related or ancillary thereto.
"Permitted Investments" means:
(i) any Investment in the Company or in a Restricted Subsidiary of
the Company;
(ii) any Investment in Cash Equivalents;
(iii) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of the
Company; or
(b) such Person is merged, consolidated or amalgamated with
or into, or transfers or conveys substantially all of
its assets to, or is liquidated into, the Company or a
Restricted Subsidiary of the Company;
(iv) any Investment made as a result of the receipt of non-cash
consideration from an Asset Sale that was made pursuant to and in
compliance with Section 4.10 of this Indenture;
(v) any Investment the payment for which consists of Equity
Interests (other than Disqualified Stock) of the Company;
(vi) Hedging Obligations;
(vii) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to
25
subsequent changes in value), when taken together with all other
Investments made pursuant to this clause (vii) since the date hereof, not
to exceed $15 million;
(viii) any Investment of the Company or any of its Restricted
Subsidiaries or of Michael Foods and any of its Restricted Subsidiaries
existing on the date hereof;
(ix) loans to employees that are approved in good faith by a
majority of the Board of Directors of the Company in an amount not to
exceed $3.0 million outstanding at any time;
(x) any Investment acquired by the Company or any of its Restricted
Subsidiaries:
(a) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted
Subsidiary in connection with or as a result of a
bankruptcy, workout, reorganization or recapitalization
of the Company, or
(b) as a result of a foreclosure by the Company or any of
its Restricted Subsidiaries with respect to any secured
Investment or other transfer of title with respect to
any secured Investment in default;
(xi) Investments consisting of the licensing or contribution of
intellectual property pursuant to joint marketing arrangements with other
Persons;
(xii) Investments in joint ventures engaged in a Permitted Business
not in excess of $20.0 million in the aggregate outstanding at any one
time;
(xiii) Investments by the Company or a Restricted Subsidiary of the
Company in a Receivables Subsidiary or any Investment by a Receivables
Subsidiary in any other Person, in each case, in connection with a
Qualified Receivables Transaction; and
(xiv) Investments consisting of payments pursuant to the Technology
Agreement up to an aggregate under this clause (xiv) of $360,000 per fiscal
year.
"Permitted Junior Securities" means (i) Equity Interests in the
Company or any Guarantor; or (ii) debt securities that are subordinated to all
Senior Debt and any debt securities issued in exchange for Senior Debt at least
to the same extent as, or to a greater extent than, the Notes and the Note
Guarantees are subordinated to Senior Debt as provided hereunder.
"Permitted Liens" means:
(i) Liens on the assets of the Company and any Guarantor securing
Senior Debt that was permitted by the terms hereof to be incurred;
(ii) Liens in favor of the Company or any Restricted Subsidiary of
the Company;
26
(iii) Liens on property of a Person existing at the time such Person
is merged with or into or consolidated with the Company or any Restricted
Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not
extend to any assets other than those of the Person merged into or
consolidated with the Company or the Restricted Subsidiary;
(iv) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company; provided that
such Liens were in existence prior to the contemplation of such
acquisition and do not extend to any property other than the property so
acquired by the Company or the Restricted Subsidiary;
(v) Liens to secure Indebtedness (including Capital Lease
Obligations) permitted by clause (iv) of Section 4.09 covering only the
assets acquired with such Indebtedness;
(vi) Liens of the Company and its Restricted Subsidiaries and of
Michael Foods and its Restricted Subsidiaries existing on the date hereof;
(vii) Liens incurred in the ordinary course of business of the
Company or any Restricted Subsidiary of the Company with respect to
obligations that do not exceed $5.0 million at any one time outstanding;
(viii) Liens to secure the performance of statutory obligations,
surety or appeal bonds, performance bonds or other similar obligations
(exclusive of obligations for the payment of borrowed money) incurred in
the ordinary course of business;
(ix) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently concluded;
provided that any reserve or other appropriate provision as shall be
required in conformity with GAAP shall have been made therefor;
(x) Liens upon specific items of inventory or other goods and
proceeds of any Person securing such Person's obligations in respect of
bankers' acceptances issued or created for the account of such Person to
facilitate the purchase, shipment or storage of such inventory or other
goods;
(xi) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and other like Liens;
(xii) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security, including any Lien securing letters of
credit issued in the ordinary course of business consistent with past
practice in connection therewith;
(xiii) Liens to secure Indebtedness of any Foreign Restricted
Subsidiary permitted by clause (xvi) of Section 4.09 covering only the
assets of such Foreign Restricted Subsidiary; and
27
(xiv) Liens on assets of a Receivables Subsidiary arising in
connection with a Qualified Receivables Transaction.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or
the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of the Company or any of its
Restricted Subsidiaries (other than intercompany Indebtedness); provided
that:
(i) the principal amount (or accreted value, if applicable) of such
Permitted Refinancing Indebtedness does not exceed the principal amount
(or accreted value, if applicable) of the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus all accrued
interest thereon and the amount of any reasonably determined premium
necessary to accomplish such refinancing and such reasonable expenses
incurred in connection therewith);
(ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average
Life to Maturity equal to or greater than the Weighted Average Life to
Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;
(iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the
Notes, such Permitted Refinancing Indebtedness has a final maturity date
later than the final maturity date of, and is subordinated in right of
payment to, the Notes on terms at least as favorable to the Holders of
Notes as those contained in the documentation governing the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
(iv) such Indebtedness is incurred either by the Company or by the
Restricted Subsidiary who is the obligor on the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization,
limited liability company or government or other entity.
"Pledge Agreement" means the pledge agreement dated as of the Issue
Date between the Company and BNY, as Trustee under the Indenture and as
Collateral Agent.
"Principals" means the Equity Sponsors and their respective
Affiliates.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i) to be placed on all Notes issued hereunder except where otherwise
permitted by the provisions of this Indenture.
"Pro Forma Cost Savings" means, with respect to any period, the
reduction in costs and related adjustments that occurred during the four-quarter
period or after the end of the four-quarter period and on or prior to the
Calculation Date that (i) were directly attributable to an Asset Acquisition and
calculated on a basis that is consistent with Regulation S-X under the
28
Securities Act as in effect and applied as hereof or (ii) were actually
implemented by the business that was the subject of any such Asset Acquisition
within six months of the date of the Asset Acquisition and prior to the
Calculation Date that are supportable and quantifiable by the underlying
accounting records of such business and are described, as provided below, in an
Officer's Certificate, as if in the case of each of clause (i) and (ii), all
such reductions in costs had been effected as of the beginning of such period.
Pro Forma Cost Savings described in clause (ii) above shall be set forth in
reasonable specificity in a certificate delivered to the Trustee from the
Company's Chief Financial Officer and, in the case of Prof Forma Cost Savings in
excess of $5.0 million per four-quarter period, such certificate shall be
accompanied by a supporting opinion from an accounting firm of national
standing.
"Public Equity Offering" means an offer and sale of common stock
(other than Disqualified Stock) of the Company or the Parent pursuant to a
registration statement that has been declared effective by the SEC 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).
"Purchase Money Note" means a promissory note evidencing a line of
credit, or evidencing other Indebtedness owed to the Company or any Restricted
Subsidiary of the Company in connection with a Qualified Receivables
Transaction, which note shall be repaid from cash available to the maker of such
note, other than amounts required to be established as reserves pursuant to
agreement, amounts paid to investors in respect of interest, principal and other
amounts owning to such investors and amounts paid in connection with the
purchase of newly generated receivables.
"Qualified Receivables Transaction" means any transaction or series
of transactions that may be entered into by the Company or by any Restricted
Subsidiary of the Company pursuant to which the Company or any Restricted
Subsidiary of the Company may sell, convey or otherwise transfer to a
Receivables Subsidiary any accounts receivable (whether now existing or arising
in the future) of the Company or any Restricted Subsidiary of the Company and
any asset related thereto, including, without limitation, all collateral
securing such accounts receivable, and all guarantees or other obligations in
respect of such accounts receivable, proceeds of such accounts receivable and
other assets that are customarily transferred, or in respect of which security
interests are customarily granted, in connection with an asset securitization
transaction involving accounts receivable.
"Recapitalization" means the Merger and all related transactions as
described in the Offering Memorandum.
"Receivables Subsidiary" means a Subsidiary of the Company (other
than a Guarantor) that engages in no activities other than in connection with
the financing of accounts receivables and that is designated by the Board of
Directors of the Company (as provided below) as a Receivables Subsidiary (a) no
portion of the Indebtedness or any other Obligations (contingent or otherwise)
of which (i) is guaranteed by the Company or any other Restricted Subsidiary of
the Company (excluding guarantees of obligations (other than the principal of,
and interest on, Indebtedness) pursuant to Standard Securitization
Undertakings), (ii) is recourse to or obligates the Company or any other
Restricted Subsidiary of the Company in any other way
29
other than pursuant to standard Securitization Undertakings or (iii) subjects
any property or asset of the issuer or any other Restricted Subsidiary of the
Company, directly or indirectly, contingently or otherwise to the satisfaction
thereof, other than pursuant to Standard Securitization Undertakings, (b) with
which neither the issuer nor any other Restricted Subsidiary of the Company has
any material contract, agreement, arrangement or understanding (except in
connection with a Purchase Money Note or Qualified Receivables Transaction)
other than on terms no less favorable to the issuer or such other Restricted
Subsidiary of the Company than those that might be obtained at the time from
Persons that are not Affiliates of the Company, other than fees payable in the
ordinary course of business in connection with servicing accounts receivable,
and (c) to which neither the Company nor any other Restricted Subsidiary of the
Company has any obligation to maintain or preserve such entity's financial
condition or cause such entity to achieve a certain level of operating results.
Any such designation by the Board of Directors of the Company shall be evidenced
to the Trustee by filing with the Trustee a certified copy of the resolution of
the Board of Directors of the Company giving effect to such designation and an
Officers' Certificate certifying to the best of such officer's knowledge and
belief after consulting with counsel, that such designation complied with the
foregoing conditions.
"QIB" means a "qualified institutional buyer" as defined in Rule
144A.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of March 27, 2001, by and among the Company and the other
parties named on the signature pages thereof, as such agreement may be amended,
modified or supplemented from time to time and, with respect to any Additional
Notes, one or more registration rights agreements between the Company and the
other parties thereto, as such agreement(s) may be amended, modified or
supplemented from time to time, relating to rights given by the Company to the
purchasers of Additional Notes to register such Additional Notes under the
Securities Act.
"Regulation S" means Regulation S promulgated under the Securities
Act.
"Regulation S Global Note" means a global Note bearing the Global
Note Legend and the Private Placement Legend and deposited with or on behalf of
and registered in the name of the Depositary or its nominee, issued in a
denomination equal to the outstanding principal amount of the Notes resold in
reliance on Rule 904 of Regulation S.
"Related Party" means (i) any controlling stockholder, 80% (or more)
owned Subsidiary, or immediate family member (in the case of an individual) of
any Principal; or (ii) any trust, corporation, partnership or other entity, the
beneficiaries, stockholders, partners, owners or Persons beneficially holding an
80% or more controlling interest of which consist of any one or more Principals
and/or such other Persons referred to in the immediately preceding clause (i).
"Representative" means the Trustee, agent or representative for any
Senior Debt.
"Responsible Officer" when used with respect to the Trustee, means
any officer within the Corporate Trust Administration of the Trustee (or any
successor group of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed
30
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 knowledge of and familiarity with the particular subject
and who shall have direct responsibility for the administration of this
Indenture.
"Restricted Definitive Note" means a Definitive Note bearing the
Private Placement Legend.
"Restricted Global Note" means a Global Note bearing the Private
Placement Legend.
"Restricted Investment" means any Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated the Securities Act.
"7.58% Notes" means the 7.58% Senior Promissory Note due 2009 of
Michael Foods.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Debt" means:
(i) all Indebtedness of the Company or any Guarantor outstanding
under the Credit Agreement and all Hedging Obligations with respect
thereto whether outstanding on the Merger Date or incurred thereafter;
(ii) any other Indebtedness of the Company or any Guarantor
permitted to be incurred under the terms hereof, unless the instrument
under which such Indebtedness is incurred expressly provides that it is on
a parity with or subordinated in right of payment to the Notes or any Note
Guarantee; and
(iii) all Obligations with respect to the items listed in the
preceding clauses (i) and (ii) (including any interest accruing subsequent
to the filing of a petition of bankruptcy at the rate provided for in the
documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law).
Notwithstanding anything to the contrary in the preceding, Senior
Debt will not include:
31
(i) any liability for federal, state, local or other taxes owed or
owing by the Company;
(ii) any Indebtedness of the Company to any of its Subsidiaries or
other Affiliates;
(iii) any trade payables;
(iv) the portion of any Indebtedness that is incurred in violation
of this Indenture; or
(v) Non-Recourse Debt.
"Shelf Registration Statement" means the Shelf Registration
Statement as defined in the Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article I, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Standard Securities Undertaking" means representations, warranties,
covenants and indemnities entered into by the Company or any Restricted
Subsidiary of the Company that are reasonably customary in all accounts
receivable transaction.
"Stated Maturity" means, with respect to any installment of interest
or principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any specified Person: (i) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
such Person or one or more of the other Subsidiaries of that Person (or a
combination thereof); and (ii) any partnership (a) the sole general partner or
the managing general partner of which is such Person or a Subsidiary of such
Person or (b) the only general partners of which are such Person or one or more
Subsidiaries of such Person (or any combination thereof); provided, however,
that R&P Liquid Egg Technology Limited Partnership, a New Jersey limited
partnership shall not be a "Subsidiary" under this definition.
"Technology Agreement" means the Technology Agreement among
Papetti's Hygrade Egg Products, Inc. a New Jersey corporation and Raztek
Corporation, a California corporation dated June 12, 1991 as amended through the
date hereof and as may be amended, modified, replaced or restated from time to
time hereafter.
"TIA" means the Trust Indenture Act of 1939, as amended (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
32
"Total Net Tangible Assets" means the total consolidated net assets,
less goodwill and intangibles, of the Company and its Restricted Subsidiaries,
as shown on the most recent balance sheet of the Company.
"Trustee" means the party named as such in the preamble to this
Indenture until a successor replaces it in accordance with the applicable
provisions of this Indenture and thereafter means the successor serving
hereunder.
"Unrestricted Definitive Note" means one or more Definitive Notes
that do not bear and are not required to bear the Private Placement Legend.
"Unrestricted Global Note" means a permanent global Note in the form
of Exhibit A attached hereto that bears the Global Note Legend and that has the
"Schedule of Exchanges of Interests in the Global Note" attached thereto, and
that is deposited with or on behalf of and registered in the name of the
Depositary, representing a series of Notes that do not bear the Private
Placement Legend.
"Unrestricted Subsidiary" means any Subsidiary (other than any
Subsidiary in the Egg Products Division) of the Company that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary:
(i) has no Indebtedness other than Non-Recourse Debt;
(ii) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted
Subsidiary than those that might be obtained at the time from Persons who
are not Affiliates of the Company;
(iii) is a Person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (a)
to subscribe for additional Equity Interests or (b) to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results;
(iv) is a guarantor or otherwise directly or indirectly provides
credit support for any Indebtedness of the Company or any of its
Restricted Subsidiaries at the time of such designation unless such
guarantee or credit support is released upon such designation; and
(v) has at least one director on its Board of Directors that is not
a director or executive officer of the Company or any of its Restricted
Subsidiaries and has at least one executive officer that is not a director
or executive officer of the Company or any of its Restricted Subsidiaries.
Any designation of a Restricted Subsidiary of the Company as an Unrestricted
Subsidiary shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation
33
complied with the preceding conditions and was permitted by Section 4.07. If, at
any time, any Unrestricted Subsidiary would fail to meet the preceding
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes hereof and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.09, the Company shall be in default
hereunder.
"U.S. Person" means a U.S. person as defined in Rule 902(o) under
the Securities Act.
"Vestar" means Vestar Capital Partners, a New York general
partnership.
"Voting Stock" of any Person as of any date means the Capital Stock
of such Person that is at the time entitled to vote in the election of the Board
of Directors of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing: (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment; by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any specified Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person and one or more Wholly Owned Restricted
Subsidiaries of such Person.
Section 1.02. Other Definitions.
Defined in
Term Section
"Affiliate Transaction"...................... 4.11
"Asset Sale Offer"........................... 4.10
"Authentication Order"....................... 2.02
"Change of Control Offer".................... 4.14
"Change of Control Payment".................. 4.14
"Change of Control Payment Date"............. 4.14
"Covenant Defeasance"........................ 8.03
"DTC"........................................ 2.03
"Event of Default"........................... 6.01
"Excess Proceeds"............................ 4.10
"incur"...................................... 4.09
"Legal Defeasance"........................... 8.02
"Offer Amount"............................... 3.09
"Offer Period"............................... 3.09
34
Defined in
Term Section
"Paying Agent"............................... 2.03
"Payment Blockage Notice".................... 10.03
"Payment Blockage Period".................... 10.03
"Permitted Debt"............................. 4.09
"Purchase Date".............................. 3.09
"Registrar".................................. 2.03
"Repurchase Offer"........................... 3.09
"Restricted Payments"........................ 4.07
Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Notes;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
and
"obligor" on the Notes means the Company and any successor obligor
upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
Section 1.04. Rules of Construction. Unless the context otherwise
requires:
a term has the meaning assigned to it;
an accounting term not otherwise defined has the meaning assigned to
it in accordance with GAAP;
"or" is not exclusive;
words in the singular include the plural, and in the plural include
the singular;
provisions apply to successive events and transactions; and
references to sections of or rules under the Securities Act shall be
deemed to include substitute, replacement of successor sections or rules
adopted by the SEC from time to time.
35
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating. (a) General. The Notes and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A hereto. The Notes may have notations, legends or endorsements required
by law, stock exchange rule or usage. Each Note shall be dated the date of its
authentication. The Notes shall be in denominations of $1,000 and integral
multiples thereof.
The terms and provisions contained in the Notes shall constitute,
and are hereby expressly made, a part of this Indenture and the Company and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby. However, to the extent any
provision of any Note conflicts with the express provisions of this Indenture,
the provisions of this Indenture shall govern and be controlling.
(b) Global Notes. Notes issued in global form shall be substantially
in the form of Exhibit A attached hereto (including the Global Note Legend
thereon and the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Notes issued in definitive form shall be substantially in the form of
Exhibit A attached hereto (but without the Global Note Legend thereon and
without the "Schedule of Exchanges of Interests in the Global Note" attached
thereto). Each Global Note shall represent such of the outstanding Notes as
shall be specified therein and each shall provide that it shall represent the
aggregate principal amount of outstanding Notes from time to time endorsed
thereon and that the aggregate principal amount of outstanding Notes represented
thereby may from time to time be reduced or increased, as appropriate, to
reflect exchanges and redemptions. Any endorsement of a Global Note to reflect
the amount of any increase or decrease in the aggregate principal amount of
outstanding Notes represented thereby shall be made by the Trustee, in
accordance with instructions given by the Holder thereof as required by Section
2.06 hereof.
(c) Euroclear and Clearstream Procedures Applicable. The provisions
of the "Operating Procedures of the Euroclear System" and "Terms and Conditions
Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream
Banking" and "Customer Handbook" of Clearstream shall be applicable to transfers
of beneficial interests in the Regulation S Global Notes that are held by
Participants through Euroclear or Clearstream.
Section 2.02. Execution and Authentication. One Officer shall sign
the Notes for the Company by manual or facsimile signature.
If the Officer whose signature is on a Note no longer holds that
office at the time a Note is authenticated, the Note shall nevertheless be
valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. The signature shall be conclusive evidence that the
Note has been authenticated under this Indenture.
36
The Trustee shall, upon a written order of the Company signed by one
Officer (an "Authentication Order"), authenticate Notes for original issue up to
the aggregate principal amount of $300 million, of which $200 million will be
issued as Initial Notes on the date hereof. The aggregate principal amount of
Notes outstanding at any time may not exceed such amount except as provided in
Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Notes. An authenticating agent may authenticate Notes
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with Holders or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent. The Company shall maintain
an office or agency where Notes may be presented for registration of transfer or
for exchange ("Registrar") and an office or agency where Notes may be presented
for payment ("Paying Agent"). The Registrar shall keep a register of the Notes
and of their transfer and exchange. The Company may appoint one or more
co-registrars and one or more additional paying agents. The term "Registrar"
includes any co-registrar and the term "Paying Agent" includes any additional
paying agent. The Company may change any Paying Agent or Registrar without
notice to any Holder. The Company shall promptly notify the Trustee in writing
of the name and address of any Agent not a party to this Indenture. If the
Company fails to appoint or maintain another entity as Registrar or Paying
Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may
act as Paying Agent or Registrar; provided, however, that neither the Company
nor any of its Subsidiaries shall act as Paying Agent for purposes of Section 7
of the Pledge Agreement.
The Company initially appoints The Depository Trust Company ("DTC")
to act as Depositary with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar
and Paying Agent and to act as Custodian with respect to the Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent shall hold in trust for the benefit of Holders or the Trustee all
money held by the Paying Agent for the payment of principal, premium or
Liquidated Damages, if any, or interest on the Notes, and shall notify the
Trustee of any default by the Company in making any such payment. While any such
default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee. The Company at any time may require a Paying Agent to pay
all money held by it to the Trustee. Upon payment over to the Trustee, the
Paying Agent (if other than the Company or a Subsidiary) shall have no further
liability for the money. If the Company or a Restricted Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy
or reorganization proceedings relating to the Company, the Trustee shall serve
as Paying Agent for the Notes.
37
Section 2.05. Holder Lists. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of all Holders and shall otherwise comply with TIA ss.
312(a). If the Trustee is not the Registrar, the Company shall furnish to the
Trustee at least seven Business Days before each interest payment date and at
such other times as the Trustee may request in writing, a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Holders of Notes and the Company shall otherwise comply with TIA ss.
312(a).
Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of
Global Notes. A Global Note may not be transferred as a whole except by the
Depositary to a nominee of the Depositary, by a nominee of the Depositary to the
Depositary or to another nominee of the Depositary, by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary. All Global Notes shall be exchanged by the Company for Definitive
Notes if (i) the Company delivers to the Trustee notice from the Depositary that
it is unwilling or unable to continue to act as Depositary or that it is no
longer a clearing agency registered under the Exchange Act and, in either case,
a successor Depositary is not appointed by the Company within 120 days after the
date of such notice from the Depositary or (ii) the Company in its sole
discretion determines that the Global Notes (in whole but not in part) should be
exchanged for Definitive Notes and delivers a written notice to such effect to
the Trustee or (iii) there shall have occurred and be continuing a Default or
Event of Default with respect to the Notes. Upon the occurrence of any of the
preceding events in (i), (ii) or (iii) above, Definitive Notes shall be issued
in such names as the Depositary shall instruct the Trustee. Global Notes also
may be exchanged or replaced, in whole or in part, as provided in Sections 2.07
and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in
lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or
Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form
of, and shall be, a Global Note. A Global Note may not be exchanged for another
Note other than as provided in this Section 2.06(a), however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in the Global
Notes. The transfer and exchange of beneficial interests in the Global Notes
shall be effected through the Depositary, in accordance with the provisions of
this Indenture and the Applicable Procedures. Beneficial interests in the
Restricted Global Notes shall be subject to restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Transfers of beneficial interests in the Global Notes also shall require
compliance with either subparagraph (i) or (ii) below, as applicable, as well as
one or more of the other following subparagraphs, as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to Persons
who take delivery thereof in the form of a beneficial interest in the same
Restricted Global Note in accordance with the transfer restrictions set forth in
the Private Placement Legend. Beneficial interests in any Unrestricted Global
Note may be transferred to Persons who take delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note. No written orders or
instructions shall be required to be delivered to the Registrar to effect the
transfers described in this Section 2.06(b)(i).
38
(ii) All Other Transfers and Exchanges of Beneficial Interests in Global
Notes. In connection with all transfers and exchanges of beneficial interests
that are not subject to Section 2.06(b)(i) above, the transferor of such
beneficial interest must deliver to the Registrar either (1) a written order
from a Participant or an Indirect Participant given to the Depositary in
accordance with the Applicable Procedures directing the Depositary to credit or
cause to be credited a beneficial interest in the Global Note in an amount equal
to the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Participant account to be credited with such increase or (1) a
written order from a Participant or an Indirect Participant given to the
Depositary in accordance with the Applicable Procedures directing the Depositary
to cause to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depositary to the Registrar containing information regarding the Person in whose
name such Definitive Note shall be registered to effect the transfer or exchange
referred to in (1) above. Upon consummation of an Exchange Offer by the Company
in accordance with Section 2.06(f) hereof, the requirements of this Section
2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar
of the instructions contained in the Letter of Transmittal delivered by the
Holder of such beneficial interests in the Restricted Global Notes. Upon
satisfaction of all of the requirements for transfer or exchange of beneficial
interests in Global Notes contained in this Indenture and the Notes or otherwise
applicable under the Securities Act, the Trustee shall adjust the principal
amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global Note.
A beneficial interest in any Restricted Global Note may be transferred to a
Person who takes delivery thereof in the form of a beneficial interest in
another Restricted Global Note if the transfer complies with the requirements of
Section 2.06(b)(ii) above and the Registrar receives the following:
(A) if the transferee shall take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee shall take delivery in the form of a
beneficial interest in the Regulation S Global Note, then the transferor
must deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of Section 2.06(b)(ii) above and:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of the
39
beneficial interest to be transferred, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
beneficial interest in an Unrestricted Global Note, a certificate
from such holder in the form of Exhibit C hereto, including the
certifications in item (1)(a) thereof; or
(2) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a beneficial
interest in an Unrestricted Global Note, a certificate from such
holder in the form of Exhibit B hereto, including the certifications
in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued, the
Company shall issue and, upon receipt of an Authentication Order in accordance
with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
aggregate principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
Beneficial interests in an Unrestricted Global Note cannot be
exchanged for, or transferred to Persons who take delivery thereof in the form
of, a beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests for Definitive
Notes.
40
(i) Beneficial Interests in Restricted Global Notes to Restricted
Definitive Notes. If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted Definitive
Note or to transfer such beneficial interest to a Person who takes delivery
thereof in the form of a Restricted Definitive Note, then, upon receipt by the
Registrar of the following documentation:
(A) if the holder of such beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted
Definitive Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(1) thereof;
(C) if such beneficial interest is being transferred to a Non-U.S.
Person in an offshore transaction in accordance with Rule 903 or Rule 904
under the Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (2) thereof;
(D) if such beneficial interest is being transferred pursuant to an
exemption from the registration requirements of the Securities Act in
accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those listed in
subparagraphs (B) through (D) above, a certificate to the effect set forth
in Exhibit B hereto, including the certifications, certificates and
Opinion of Counsel required by item (3) thereof, if applicable;
(F) if such beneficial interest is being transferred to the Company
or any of its Subsidiaries, a certificate to the effect set forth in
Exhibit B hereto, including the certifications in item (3)(b) thereof; or
(G) if such beneficial interest is being transferred pursuant to an
effective registration statement under the Securities Act, a certificate
to the effect set forth in Exhibit B hereto, including the certifications
in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the applicable Global
Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the
Company shall execute and the Trustee shall authenticate and deliver to the
Person designated in the instructions a Definitive Note in the appropriate
principal amount. Any Definitive Note issued in exchange for a beneficial
interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be
registered in such name or names and in such authorized denomination or
denominations as the holder of such beneficial interest shall instruct the
Registrar through instructions from the Depositary and the Participant or
Indirect
41
Participant. The Trustee shall deliver such Definitive Notes to the
Persons in whose names such Notes are so registered. Any Definitive Note issued
in exchange for a beneficial interest in a Restricted Global Note pursuant to
this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be
subject to all restrictions on transfer contained therein.
(ii) Beneficial Interests in Restricted Global Notes to Unrestricted
Definitive Notes. A holder of a beneficial interest in a Restricted Global Note
may exchange such beneficial interest for an Unrestricted Definitive Note or may
transfer such beneficial interest to a Person who takes delivery thereof in the
form of an Unrestricted Definitive Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the holder
of such beneficial interest, in the case of an exchange, or the
transferee, in the case of a transfer, certifies in the applicable Letter
of Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(3) if the holder of such beneficial interest in a Restricted
Global Note proposes to exchange such beneficial interest for a
Definitive Note that does not bear the Private Placement Legend, a
certificate from such holder in the form of Exhibit C hereto,
including the certifications in item (1)(b) thereof; or
(4) if the holder of such beneficial interest in a Restricted
Global Note proposes to transfer such beneficial interest to a
Person who shall take delivery thereof in the form of a Definitive
Note that does not bear the Private Placement Legend, a certificate
from such holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
42
(iii) Beneficial Interests in Unrestricted Global Notes to Unrestricted
Definitive Notes. If any holder of a beneficial interest in an Unrestricted
Global Note proposes to exchange such beneficial interest for a Definitive Note
or to transfer such beneficial interest to a Person who takes delivery thereof
in the form of a Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Global Note to be reduced accordingly
pursuant to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Definitive Note in the appropriate principal amount. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such beneficial
interest shall instruct the Registrar through instructions from the Depositary
and the Participant or Indirect Participant. The Trustee shall deliver such
Definitive Notes to the Persons in whose names such Notes are so registered. Any
Definitive Note issued in exchange for a beneficial interest pursuant to this
Section 2.06(c)(iii) shall not bear the Private Placement Legend.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.
(i) Restricted Definitive Notes to Beneficial Interests in Restricted
Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to transfer
such Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in a Restricted Global Note, then, upon receipt by
the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global Note,
a certificate from such Holder in the form of Exhibit C hereto, including
the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a QIB
in accordance with Rule 144A under the Securities Act, a certificate to
the effect set forth in Exhibit B hereto, including the certifications in
item (1) thereof;
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (2) thereof;
(D) if such Restricted Definitive Note is being transferred pursuant
to an exemption from the registration requirements of the Securities Act
in accordance with Rule 144 under the Securities Act, a certificate to the
effect set forth in Exhibit B hereto, including the certifications in item
(3)(a) thereof;
(E) if such Restricted Definitive Note is being transferred to an
Institutional Accredited Investor in reliance on an exemption from the
registration
43
requirements of the Securities Act other than those listed in subparagraphs (B)
through (D) above, a certificate to the effect set forth in Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required by
item (3) thereof, if applicable;
(F) if such Restricted Definitive Note is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect set forth
in Exhibit B hereto, including the certifications in item (3)(b) thereof;
or
(G) if such Restricted Definitive Note is being transferred pursuant
to an effective registration statement under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (3)(c) thereof,
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, in the case of clause (C) above, the
Regulation S Global Note, and in all other cases, the IAI Global Note.
(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted
Global Notes. A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the form of
a beneficial interest in an Unrestricted Global Note only if:
(A) such exchange or transfer is effected pursuant to the Exchange
Offer in accordance with the Registration Rights Agreement and the Holder,
in the case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
broker-dealer, (2) a Person participating in the distribution of the
Exchange Notes or (3) a Person who is an affiliate (as defined in Rule
144) of the Company;
(B) such transfer is effected pursuant to the Shelf Registration
Statement in accordance with the Registration Rights Agreement;
(C) such transfer is effected by a Broker-Dealer pursuant to the
Exchange Offer Registration Statement in accordance with the Registration
Rights Agreement; or
(D) the Registrar receives the following:
(5) if the Holder of such Definitive Notes proposes to
exchange such Notes for a beneficial interest in the Unrestricted
Global Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(c) thereof; or
(6) if the Holder of such Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in
the form of a
44
beneficial interest in the Unrestricted Global Note, a certificate
from such Holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests or if the Applicable Procedures so require, an
Opinion of Counsel in form reasonably acceptable to the Registrar to
the effect that such exchange or transfer is in compliance with the
Securities Act and that the restrictions on transfer contained
herein and in the Private Placement Legend are no longer required in
order to maintain compliance with the Securities Act.
Upon satisfaction of the conditions of any of the subparagraphs in
this Section 2.06(d)(ii), the Trustee shall cancel the Definitive
Notes and increase or cause to be increased the aggregate principal
amount of the Unrestricted Global Note.
(iii) Unrestricted Definitive Notes to Beneficial Interests in
Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may
exchange such Note for a beneficial interest in an Unrestricted Global
Note or transfer such Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in an Unrestricted Global
Note at any time. Upon receipt of a request for such an exchange or
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of one of the Unrestricted Global Notes.
If any such exchange or transfer from a Definitive Note to a
beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or
(iii) above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an Authentication Order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or more
Unrestricted Global Notes in an aggregate principal amount equal to the
principal amount of Definitive Notes so transferred.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes.
Upon request by a Holder of Definitive Notes and such Holder's compliance with
the provisions of this Section 2.06(e), the Registrar shall register the
transfer or exchange of Definitive Notes. Prior to such registration of transfer
or exchange, the requesting Holder shall present or surrender to the Registrar
the Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, required pursuant to the following provisions of this Section
2.06(e).
(i) Restricted Definitive Notes to Restricted Definitive Notes. Any
Restricted Definitive Note may be transferred to and registered in the
name of Persons who take delivery thereof in the form of a Restricted
Definitive Note if the Registrar receives the following:
45
(A) if the transfer shall be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the form
of Exhibit B hereto, including the certifications in item (1) thereof;
(B) if the transfer shall be made pursuant to Rule 903 or Rule 904,
then the transferor must deliver a certificate in the form of Exhibit B
hereto, including the certifications in item (2) thereof; and
(C) if the transfer shall be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel required
by item (3) thereof, if applicable.
(ii) Restricted Definitive Notes to Unrestricted Definitive Notes.
Any Restricted Definitive Note may be exchanged by the Holder thereof for
an Unrestricted Definitive Note or transferred to a Person or Persons who
take delivery thereof in the form of an Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in
the case of a transfer, certifies in the applicable Letter of
Transmittal that it is not (1) a broker-dealer, (2) a Person
participating in the distribution of the Exchange Notes or (3) a
Person who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Broker-Dealer pursuant
to the Exchange Offer Registration Statement in accordance with the
Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes proposes to
exchange such Notes for an Unrestricted Definitive Note, a certificate
from such Holder in the form of Exhibit C hereto, including the
certifications in item (1)(d) thereof; or
(2) if the Holder of such Restricted Definitive Notes proposes to
transfer such Notes to a Person who shall take delivery thereof in the
form of an Unrestricted Definitive Note, a certificate from such Holder in
the form of Exhibit B hereto, including the certifications in item (4)
thereof;
and, in each such case set forth in this subparagraph (D), if the
Registrar so requests, an Opinion of Counsel in form reasonably acceptable
to the Company to the effect that such exchange or transfer is in
compliance with
46
the Securities Act and that the restrictions on transfer contained herein
and in the Private Placement Legend are no longer required in order to
maintain compliance with the Securities Act.
(iii) Unrestricted Definitive Notes to Unrestricted Definitive
Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes
to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer,
the Registrar shall register the Unrestricted Definitive Notes pursuant to
the instructions from the Holder thereof.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue and,
upon receipt of an Authentication Order in accordance with Section 2.02, the
Trustee shall authenticate (i) one or more Unrestricted Global Notes in an
aggregate principal amount equal to the principal amount of the beneficial
interests in the Restricted Global Notes tendered for acceptance by Persons that
certify in the applicable Letters of Transmittal that (x) they are not
Broker-Dealers, (y) they are not participating in a distribution of the Exchange
Notes and (z) they are not affiliates (as defined in Rule 144) of the Company,
and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an
aggregate principal amount equal to the principal amount of the Restricted
Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with
the issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly, and
the Company shall execute and the Trustee shall authenticate and deliver to the
Persons designated by the Holders of Definitive Notes so accepted Definitive
Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of
all Global Notes and Definitive Notes issued under this Indenture
unless specifically stated otherwise in the applicable provisions of
this Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each
Global Note and each Definitive Note (and all Notes issued in
exchange therefor or substitution thereof) shall bear the
legend in substantially the following form:
"THIS NOTE AND ANY GUARANTEES OF THIS NOTE 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 GUARANTEES OF THIS NOTE NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE OFFERED, 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, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER
SUCH SECURITY, PRIOR TO THE DATE WHICH IS TWO YEARS AFTER THE
LATER OF THE
47
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 AND ANY GUARANTEES OF
THIS NOTE) (THE "RESALE RESTRICTION TERMINATION DATE") ONLY
(A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT 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 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) 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 OR (E)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S
AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D) PRIOR TO THE END OF THE
40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO CLAUSE
(E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE 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 THIS SECURITY
IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER
AGENT. THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF A
HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE."
(B) Notwithstanding the foregoing, any Global Note or
Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(ii), (c)(iii), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f)
to this Section 2.06 (and all Notes issued in exchange
therefor or substitution thereof) shall not bear the Private
Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE
INDENTURE GOVERNING THE NOTE) OR ITS NOMINEE IN CUSTODY FOR
THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT
TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT
(I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE
REQUIRED PURSUANT TO SECTION
48
2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED
IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE
TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE
INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A
SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE
COMPANY."
(h) Cancellation and/or Adjustment of Global Notes. At such time as
all beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
canceled in whole and not in part, each such Global Note shall be returned to or
retained and canceled by the Trustee in accordance with Section 2.11 hereof. At
any time prior to such cancellation, if any beneficial interest in a Global Note
is exchanged for or transferred to a Person who shall take delivery thereof in
the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note by the
Trustee or by the Depositary at the direction of the Trustee to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who shall take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note by the Trustee or by the
Depositary at the direction of the Trustee to reflect such increase.
(i) General Provisions Relating to Transfers and Exchanges.
(ii) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon the Company's order or at the Registrar's request.
(iii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof).
(iv) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(v) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid and legally binding obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Global Notes or Definitive Notes surrendered upon such
registration of transfer or exchange.
49
(vi) The Company shall not be required (A) to issue, to register the
transfer of or to exchange any Notes during a period beginning at the
opening of business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close of business
on the day of selection, (B) to register the transfer of or to exchange
any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part or (C) to register
the transfer of or to exchange a Note between a record date and the next
succeeding Interest Payment Date.
(vii) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(viii) The Trustee shall authenticate Global Notes and Definitive
Notes in accordance with the provisions of Section 2.02 hereof.
(ix) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile with the original to follow by first class mail.
Section 2.07. Replacement Notes. If any mutilated Note is
surrendered to the Trustee or the Company and the Trustee receives evidence to
its satisfaction of the destruction, loss or theft of any Note, the Company
shall issue and the Trustee, upon receipt of an Authentication Order, shall
authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its expenses in replacing a Note.
Every replacement Note issued pursuant to this Section 2.07 is an
additional obligation of the Company and shall be entitled to all of the
benefits of this Indenture equally and proportionately with all other Notes duly
issued hereunder.
Section 2.08. Outstanding Notes. The Notes outstanding at any time
are all the Notes authenticated by the Trustee except for those canceled by it,
those delivered to it for cancellation, those reductions in the interest in a
Global Note effected by the Trustee in accordance with the provisions hereof,
and those described in this Section as not outstanding. Except as set forth in
Section 2.09 hereof, a Note does not cease to be outstanding because the Company
or an Affiliate of the Company holds the Note; however, Notes held by the
Company or a Subsidiary of the Company shall not be deemed to be outstanding for
purposes of Section 3.07(b) hereof.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
50
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an
Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest.
Section 2.09. Treasury Notes. In determining whether the Holders of
the required principal amount of Notes have concurred in any direction, waiver
or consent, Notes owned by the Company, or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company, shall be considered as though not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded.
Section 2.10. Temporary Notes. Until certificates representing Notes
are ready for delivery, the Company may prepare and the Trustee, upon receipt of
an Authentication Order, shall authenticate temporary Notes. Temporary Notes
shall be substantially in the form of certificated Notes but may have variations
that the Company considers appropriate for temporary Notes and as shall be
reasonably acceptable to the Trustee. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Notes in exchange
for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits
of this Indenture.
Section 2.11. Cancellation. The Company at any time may deliver
Notes to the Trustee for cancellation. The Registrar and Paying Agent shall
forward to the Trustee any Notes surrendered to them for registration of
transfer, exchange or payment. The Trustee and no one else shall cancel all
Notes surrendered for registration of transfer, exchange, payment, replacement
or cancellation and shall dispose of such canceled Notes in its customary
manner. Subject to Section 2.07, the Company may not issue new Notes to replace
Notes that it has paid or that have been delivered to the Trustee for
cancellation.
Section 2.12. Defaulted Interest. If the Company defaults in a
payment of interest on the Notes, it shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable on the defaulted
interest, to the Persons who are Holders on a subsequent special record date, in
each case at the rate provided in the Notes and in Section 4.01 hereof. The
Company shall notify the Trustee in writing of the amount of defaulted interest
proposed to be paid on each Note and the date of the proposed payment. The
Company shall fix or cause to be fixed each such special record date and payment
date, provided that no such special record date shall be less than 10 days prior
to the related payment date for such defaulted interest. At least 15 days before
the special record date, the Company (or, upon the written request of the
Company, the Trustee in the name and at the expense of the Company) shall mail
or cause to be mailed to Holders a notice that states the special record date,
the related payment date and the amount of such interest to be paid.
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Section 2.13. CUSIP Numbers. The Company in issuing the Notes may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company shall
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee. If the Company elects to redeem
Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it
shall furnish to the Trustee, at least 35 days but not more than 60 days before
a redemption date (unless a shorter notice period shall be satisfactory to the
Trustee in its reasonable discretion), an Officers' Certificate setting forth
(i) the clause of this Indenture pursuant to which the redemption shall occur,
(ii) the redemption date, (iii) the principal amount of Notes to be redeemed and
(iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed. If less than all of
the Notes are to be redeemed at any time, selection of Notes for redemption
shall be made by the Trustee in compliance with the requirements of the
principal national securities exchange, if any, on which the Notes are listed,
or, if the Notes are not so listed, on a pro rata basis, by lot or by such
method as the Trustee shall deem fair and appropriate. In the event of partial
redemption by lot, the particular Notes to be redeemed shall be selected, unless
otherwise provided herein, not less than 35 nor more than 60 days prior to the
redemption date by the Trustee (unless a shorter time period shall be
satisfactory to the Trustee) from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of the
Notes selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000;
except that if all of the Notes of a Holder are to be redeemed, the entire
outstanding amount of Notes held by such Holder, even if not a multiple of
$1,000, shall be redeemed. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption. Subject to the provisions of
Section 3.09 hereof, at least 30 days (or in the case of a "Special Mandatory
Redemption" described in Section 3.08(b), 10 Business Days) but not more than 60
days before a redemption date, the Company shall mail or cause to be mailed, by
first class mail, a notice of redemption to each Holder whose Notes are to be
redeemed at its registered address.
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The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price and become due on the date
fixed for redemption;
(f) that, unless the Company defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the
Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers' Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph. The notice, if mailed in the manner provided herein
shall be presumed to have been given, whether or not the Holder receives such
notice.
Section 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed in accordance with Section 3.03 hereof, Notes called for
redemption become irrevocably due and payable on the redemption date at the
redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price. One Business Day prior to
the redemption date, the Company shall deposit with the Trustee or with the
Paying Agent money sufficient to pay the redemption price of and accrued
interest on all Notes to be redeemed on that date. The Trustee or the Paying
Agent shall promptly return to the Company any money deposited with the Trustee
or the Paying Agent by the Company in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid to the Person
53
in whose name such Note was registered at the close of business on such record
date. If any Note called for redemption shall not be so paid upon surrender for
redemption because of the failure of the Company to comply with the preceding
paragraph, interest shall be paid on the unpaid principal, from the redemption
date until such principal is paid, and to the extent lawful on any interest not
paid on such unpaid principal, in each case at the rate provided in the Notes
and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that
is redeemed in part, the Company shall issue and, upon the Company's written
request, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.07. Optional Redemption. (a) Except as set forth in
clauses (b) and (c) of this Section 3.07, the Notes shall not be redeemable at
the Company's option prior to April 1, 2006. Thereafter, the Company may redeem
all or a part of the Notes from time to time, upon not less than 30 nor more
than 60 days' notice, at the redemption prices (expressed as percentages of
principal amount) set forth below plus accrued and unpaid interest and
Liquidated Damages, if any, to the applicable redemption date, if redeemed
during the twelve-month period beginning on April 1 of the years indicated
below:
Year Percentage
2006 .................................. 105.875%
2007 .................................. 103.917%
2008 .................................. 101.958%
2009 and thereafter ................... 100.000%
(b) At any time prior to April 1, 2004, the Company may on any one
or more occasions redeem up to 35% of the sum of (i) the initial aggregate
principal amount of the Notes and (ii) the initial aggregate principal amount of
any Additional Notes at a redemption price of 111.750% of the principal amount
thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings of
the Company (or of the Parent to the extent such proceeds are contributed to the
common equity of the Company); provided that (A) at least 65% of the sum of (x)
the initial aggregate principal amount of the Notes and (y) the initial
aggregate principal amount of any Additional Notes issued remains outstanding
immediately after the occurrence of such redemption, excluding Notes held by the
Company and its Subsidiaries; and (B) the redemption must occur within 60 days
of the date of the closing of such Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through 3.06 hereof.
Section 3.08. Mandatory Redemption. (a) Except as set forth in
clause (b) of this Section 3.08 and Section 4.10 and 4.14 hereof, the Company is
not required to make mandatory redemption or sinking fund payments with respect
to the Notes.
(b) In the event that the Merger is not consummated on or before the
earlier to occur of (i) May 31, 2001 and (ii) if it appears, in the sole
judgment of the Company, that the
54
Merger shall not be consummated, the date on which notice of same is delivered
by the Company to the Collateral Agent and the Trustee, the Company shall be
required to redeem the Notes, in whole, on at least five Business Days' prior
written notice mailed by first class mail to each Holder at a redemption price
equal to 101% of the aggregate principal amount of the Notes plus accrued
interest thereon but not including, the date of repurchase.
Section 3.09. Offer to Purchase. In the event that, pursuant to
Sections 4.10 and 4.14 hereof, the Company shall be required to commence an
offer to all Holders to purchase Notes (a "Repurchase Offer"), it shall follow
the procedures specified below.
The Repurchase Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 or 4.14 hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Notes tendered in response to
the Repurchase Offer. Payment for any Notes so purchased shall be made in the
same manner as interest payments are made.
If the Purchase Date is on or after an interest record date and on
or before the related interest payment date, any accrued and unpaid interest
shall be paid to the Person in whose name a Note is registered at the close of
business on such record date, and no additional interest shall be payable to
Holders who tender Notes pursuant to the Repurchase Offer.
Upon the commencement of a Repurchase Offer, the Company shall send,
by first class mail, a notice to the Trustee and each of the Holders, with a
copy to the Trustee. The notice shall contain all instructions and materials
necessary to enable such Holders to tender Notes pursuant to the Repurchase
Offer. The Repurchase Offer shall be made to all Holders. The notice, which
shall govern the terms of the Repurchase Offer, shall state:
(a) that the Repurchase Offer is being made pursuant to this Section
3.09 and Sections 4.10 or 4.14 hereof and the length of time the
Repurchase Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrete or accrue interest;
(d) that, unless the Company defaults in making such payment, any
Note accepted for payment pursuant to the Repurchase Offer shall cease to
accrete or accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to a
Repurchase Offer may only elect to have all of such Note purchased or a
portion of such Note in denominations of $1,000 or integral multiples
thereof;
55
(f) that Holders electing to have a Note purchased pursuant to any
Repurchase Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, or transfer by book-entry transfer, to the Company, the
Depositary, if appointed by the Company, or a Paying Agent at the address
specified in the notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company, the Depositary or the Paying Agent, as the case may be, receives,
not later than the expiration of the Offer Period, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a
statement that such Holder is withdrawing his election to have such Note
purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
On or before the Purchase Date, the Company shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Repurchase
Offer, or if less than the Offer Amount has been tendered, all Notes tendered,
and shall deliver to the Trustee an Officers' Certificate stating that such
Notes or portions thereof were accepted for payment by the Company in accordance
with the terms of this Section 3.09. The Company, the Depositary or the Paying
Agent, as the case may be, shall promptly (but in any case not later than five
days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, and the Company shall promptly issue a new Note, and
the Trustee, upon written request from the Company shall authenticate and mail
or deliver such new Note to such Holder, in a principal amount equal to any
unpurchased portion of the Note surrendered. Any Note not so accepted shall be
promptly mailed or delivered by the Company to the Holder thereof. The Company
shall publicly announce the results of the Repurchase Offer on the Purchase
Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Sections 3.01 through 3.06 hereof.
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes. The Company shall pay or cause to be
paid the principal of, premium, if any, and interest on the Notes on the dates
and in the manner provided in the Notes. Principal, premium, if any, and
interest shall be considered paid on the date due if the Paying Agent, if a
Person other than the Company or a Subsidiary thereof, holds as of 12:00 p.m.
(noon) Eastern Time on the due date money deposited by the Company in
immediately available funds and designated for and sufficient to pay all
principal, premium, if any, and interest then due. The Company shall pay all
Liquidated Damages, if any, in the same manner on the dates and in the amounts
set forth in the Registration Rights Agreement.
The Company shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal at the rate equal
to 1% per annum in excess of the then applicable interest rate on the Notes to
the extent lawful; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) at the same
rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency. The Company shall
maintain in the Borough of Manhattan, the City of New York, an office or agency
(which may be an office of the Trustee or an affiliate of the Trustee, Registrar
or co-registrar) where Notes may be surrendered for registration of transfer or
for exchange and where notices and demands to or upon the Company in respect of
the Notes and this Indenture may be served. The Company shall give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company 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.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, the City of New York for such purposes. The Company shall give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
The Company hereby designates the Corporate Trust Office of the
Trustee as one such office or agency of the Company in accordance with Section
2.03.
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Section 4.03. Reports. (a) Whether or not required by the SEC, so
long as any Notes are outstanding (unless defeased in a legal defeasance), the
Company will furnish to the Holders of Notes, within the time periods specified
in the SEC's rules and regulations (including any extensions permitted
thereunder), (i) all quarterly and annual financial information that would be
required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the
Company were required to file such Forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with respect
to the annual information only, a report on the annual financial statements by
the Company's certified independent accountants; and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports. In addition, following the date by which the
Company is required to consummate the Exchange Offer, whether or not required by
the SEC, the Company will file a copy of all of the information and reports
referred to in clauses (i) and (ii) above with the SEC for public availability
within the time periods specified in the SEC's rules and regulations (unless the
SEC will not accept such a filing) and make such information available to
securities analysts and prospective investors upon request. In addition, the
Company and the Guarantors have agreed that, for so long as any Notes (but not
the Exchange Notes) remain outstanding, they will furnish to the Holders and to
securities analysts and prospective investors, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act if not obtainable from the SEC.
(b) If the Company has designated any of its Subsidiaries as
Unrestricted Subsidiaries (other than Subsidiaries that individually or as a
group constitute an Immaterial Subsidiary), then the quarterly and annual
financial information required by paragraph (a) above shall include a reasonably
detailed presentation, either on the face of the financial statements or in the
footnotes thereto, and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," in the Offering Memorandum of the
financial condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company.
Section 4.04. Compliance Certificate. (a) The Company and each
Guarantor (to the extent that such Guarantor is so required under the TIA) shall
deliver to the Trustee, within 120 days after the end of each fiscal year, an
Officers' Certificate stating that a review of the activities of the Company and
its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Officer signing such
certificate, that to the best of his or her knowledge the Company has kept,
observed, performed and fulfilled each and every covenant contained in this
Indenture and is not in default in the performance or observance of any of the
terms, provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto.
58
(b) So long as not contrary to the then current recommendations of
the American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any such violation has
occurred, specifying the nature and period of existence thereof, it being
understood that such accountants shall not be liable directly or indirectly to
any Person for any failure to obtain knowledge of any such violation.
(c) The Company shall, so long as any of the Notes are outstanding,
deliver to the Trustee, forthwith, but in no event later than three Business
Days, upon any Officer becoming aware of any Default or Event of Default, an
Officers' Certificate specifying such Default or Event of Default and what
action the Company is taking or proposes to take with respect thereto.
Section 4.05. Taxes. The Company shall pay, and shall cause each of
its Subsidiaries to pay, prior to delinquency, all material taxes, assessments,
and governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws. The Company and each
of the Guarantors covenant (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company and each of the Guarantors
(to the extent that it may lawfully do so) hereby expressly waive all benefit or
advantage of any such law, and covenant that it shall not, by resort to any such
law, hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law has been enacted.
Section 4.07. Restricted Payments. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend or make any other payment or
distribution on account of the Company's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving the Company or
any of its Restricted Subsidiaries) or to the direct or indirect holders
of the Company's or any of its Restricted Subsidiaries' Equity Interests
in their capacity as such (other than dividends or distributions payable
in Equity Interests (other than Disqualified Stock) of the Company or to
the Company or a Restricted Subsidiary of the Company);
(ii) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving the Company) any Equity Interests of the Company,
the Parent or any Subsidiary of the Company (other than a Wholly Owned
Restricted Subsidiary);
59
(iii) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness that is
subordinated to the Notes or the Note Guarantees, except a payment of
interest or principal at the Stated Maturity thereof; or
(iv) make any Restricted Investment (all such payments and other
actions set forth in clauses (1) through (4) above being collectively
referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof; and
(ii) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have
been permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Fixed Charge Coverage Ratio test set forth in the first paragraph
of Section 4.09; and
(iii) such Restricted Payment, together with the aggregate amount of
all other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date hereof (excluding Restricted Payments
permitted by clauses (ii), (iii), (vi), (vii), (viii), and (x) of the next
succeeding paragraph), is less than the sum, without duplication, of:
(A) 50% of the Consolidated Net Income of the Company for the
period (taken as one accounting period) beginning on the Merger Date
and ending on the date of the Company's most recently ended fiscal
quarter for which internal financial statements are available at the
time of such Restricted Payment (or, if such Consolidated Net Income
for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by the
Company subsequent to the Merger Date as a contribution to its
common equity capital or from the issue or sale of Equity Interests
of the Company (other than Excluded Contributions or net cash
proceeds from the issue and sale of Disqualified Stock) or from the
issue or sale of convertible or exchangeable Disqualified Stock or
convertible or exchangeable debt securities of the Company that have
been converted into or exchanged for such Equity Interests (other
than Equity Interests (or Disqualified Stock or debt securities)
sold to a Subsidiary of the Company); plus
(C) an amount equal to the net reduction in Investments by the
Company and its Restricted Subsidiaries, subsequent to the Merger
Date, resulting from payments of interest on Indebtedness,
dividends, repayments of loans or advances or other transfers of
assets, in each case to the Company or any such Restricted
Subsidiary from any such Investment, or from the net cash proceeds
from the sale of any such Investment, or from a redesignation of an
Unrestricted Subsidiary to a
60
Restricted Subsidiary, but only if and to the extent such amounts
are not included in the calculation of Consolidated Net Income and
not to exceed in the case of any Investment the amount of the
Investment previously made by the Company or any Restricted
Subsidiary in such Person or Unrestricted Subsidiary; provided, that
any amounts in excess of the amount of the Investment may be added
to the amounts otherwise available under this clause (C) to make
Restricted Investments pursuant to this clause (C).
So long as no Default has occurred and is continuing or would be
caused thereby, the preceding provisions will not prohibit:
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture;
(ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of the Company or any Restricted
Subsidiary or of any Equity Interests of the Company in exchange for, or out of
the net cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of the Company) of, Equity Interests of the Company other
than Disqualified Stock; provided that the amount of any such net cash proceeds
that are utilized for any such redemption, repurchase, retirement, defeasance or
other acquisition shall be excluded from clause (iii) (B) of the preceding
paragraph;
(iii) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of the Company or any Restricted Subsidiary with the
net cash proceeds from an incurrence of Permitted Refinancing Indebtedness;
(iv) the payment of any dividend by a Restricted Subsidiary of the
Company to the holders of any series or class of its common Equity Interests on
a pro rata basis;
(v) the repurchase, redemption or other acquisition or retirement
for value of any Equity Interests of the Company and any distribution, loan or
advance to the Parent for the repurchase, redemption or other acquisition or
retirement for value of any Equity Interests, of the Parent, in each case held
by any former or current employees, officers, directors or consultants of the
Company or any of its Restricted Subsidiaries or their respective estates,
spouses or family members under any management equity plan or stock option or
other management or employee benefit plan upon the death, disability or
termination of employment of such Persons, in an amount not to exceed $2.0
million in any calendar year; provided that the Company may carry over and make
in a subsequent calendar year, in addition to the amounts permitted for such
calendar year, the amount of such purchases, redemptions or other acquisitions
or retirements for value permitted to have been made but not made in any
preceding calendar year up to a maximum of $6.0 million in any calendar year;
and provided further that such amount in any calendar year may be increased by
an amount not to exceed (x) the net cash proceeds from the sale of Equity
Interests (other than Disqualified Stock) of the Company (or the Parent to the
extent such net cash proceeds are contributed to the common equity of the
Company) to employees, officers, directors or consultants of the Company and its
Restricted Subsidiaries that occurs after the Merger Date (to the extent the
cash proceeds from the sale of such Equity Interests have not otherwise been
applied to the
61
payment of Restricted Payments pursuant to clause (ii) above or previously
applied to the payment of Restricted Payments pursuant to this clause (v)) plus
(y) the cash proceeds of key man life insurance policies received by the Company
and its Restricted Subsidiaries after the Merger Date less any amounts
previously applied to the payment of Restricted Payments pursuant to this clause
(v); provided further that cancellation of Indebtedness owing to the Company
from employees, officers, directors and consultants of the Company or any of its
Restricted Subsidiaries in connection with a repurchase of Equity Interests of
the Company from such Persons will not be deemed to constitute a Restricted
Payment for purposes of this covenant or any other provisions of the Indenture;
provided further that the net cash proceeds from such sales of Equity Interests
described in clause (x) of this clause (v) shall be excluded from clause
(iii)(B) of the preceding paragraph to the extent such proceeds have been or are
applied to the payment of Restricted Payments pursuant to this clause (v);
(vi) the payment of dividends or other distributions or the making
of loans or advances to the Parent in amounts required for the Parent to pay
franchise taxes and other fees required to maintain its existence and provide
for all other operating costs of the Parent to the extent attributable to the
ownership or operation of the Company and its Restricted Subsidiaries,
including, without limitation, in respect of director fees and expenses,
administrative, legal and accounting services provided by third parties and
other costs and expenses including all costs and expenses with respect to
filings with the SEC, of up to an aggregate under this clause (vi) of $500,000
per fiscal year plus any indemnification claims made by directors or officers of
the Parent attributable to the ownership or operation of the Company and its
Restricted Subsidiaries;
(vii) the payment of dividends or other distributions by the Company
to the Parent in amounts required to pay the tax obligations of the Parent
attributable to the Company and its Subsidiaries determined as if the Company
and its Subsidiaries had filed a separate consolidated, combined or unitary
return for the relevant taxing jurisdiction; provided that (x) the amount of
dividends paid pursuant to this clause (vii) to enable the Parent to pay Federal
and state income taxes (and franchise taxes based on income) at any time shall
not exceed the amount of such Federal and state income taxes (and franchise
taxes based on income) actually owing by the Parent at such time to the
respective tax authorities for the respective period and (y) any refunds
received by the Parent attributable to the Company or any of its Subsidiaries
shall promptly be returned by the Parent to the Company through a contribution
or purchase of common stock (other than Disqualified Stock) of the Company from
the Company;
(viii) repurchases of Capital Stock deemed to occur upon the
cashless exercise of stock options and warrants;
(ix) other Restricted Payments not otherwise permitted by this
Section 4.07 in an aggregate amount not to exceed $25.0 million;
(x) Restricted Payments to holders of equity interests of Michael
Foods contemplated by the Merger Agreement;
(xi) the declaration and payment of dividends and distributions to
holders of any class or series of Disqualified Stock of the Company or any of
its Restricted Subsidiaries issued or incurred in accordance with Section 4.09;
and
62
(xii) Investments that are made with Excluded Contributions.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued to or by the Company or such
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any assets or securities that are required to be valued for the
purposes hereof shall be determined by the Board of Directors whose resolution
with respect thereto shall be delivered to the Trustee. The Board of Directors'
determination must be based upon an opinion or appraisal issued by an
accounting, appraisal or investment banking firm of national standing if the
fair market value exceeds $5.0 million. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed, together with a copy of any fairness opinion or appraisal required by
this Indenture.
Section 4.08. Dividend and Other Payment Restrictions Affecting
Restricted Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:
(i) pay dividends or make any other distributions on its Capital
Stock to the Company or any of its Restricted Subsidiaries, or with
respect to any other interest or participation in, or measured by, its
profits, or pay any indebtedness owed to the Company or any of its
Restricted Subsidiaries;
(ii) make loans or advances to the Company or any of its Restricted
Subsidiaries; or
(iii) transfer any of its properties or assets to the Company or any
of its Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances
or restrictions existing under or by reason of:
(i) Existing Indebtedness as in effect on the date hereof and the
Credit Agreement as in effect on the Merger Date and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof; provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings are no more restrictive, taken as a whole,
with respect to such encumbrances than those contained in such Existing
Indebtedness, as in effect on the date hereof;
(ii) this Indenture, the Notes and the Note Guarantees;
(iii) applicable law or regulation;
(iv) any agreements or instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted
Subsidiaries as in effect at the
63
time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition),
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, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this
Indenture to be incurred;
(v) customary non-assignment provisions in leases entered into in
the ordinary course of business;
(vi) purchase money obligations for property acquired in the
ordinary course of business that impose restrictions on the property so acquired
of the nature described in clause (iii) of the preceding paragraph;
(vii) an agreement entered into for the sale or disposition of
Capital Stock or assets of a Restricted Subsidiary or an agreement entered into
for the sale of specified assets (in either case, so long as such encumbrance or
restriction, by its terms, terminates on the earlier of the termination of such
agreement or the consummation of such agreement and so long as such restriction
applies only to the Capital Stock or assets to be sold);
(viii) Permitted Refinancing Indebtedness, provided that the
encumbrances and restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole,
than those contained in the agreements governing the Indebtedness being
refinanced;
(ix) Permitted Liens securing Indebtedness that limit the right of
the debtor to dispose of the assets subject to such Lien;
(x) customary limitations on the disposition or distribution of
assets or property in joint venture agreements and other similar agreements
entered into in the ordinary course of business; and
(xi) any Purchase Money Note, or other Indebtedness or contractual
requirements of a Receivables Subsidiary in connection with a Qualified
Securitization Transaction; provided that such restrictions only apply only to
such Receivables Subsidiary.
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur") any Indebtedness (including Acquired
Debt), and the Company will not issue any Disqualified Stock and the Company
will not permit any of its Restricted Subsidiaries to issue any Disqualified
Stock or preferred stock; provided, however, that the Company and the Guarantors
may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock, if
the Fixed Charge Coverage Ratio for the Company's most recently ended four full
fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
64
or such Disqualified Stock is issued would have been at least 2.00 to 1,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred or
Disqualified Stock had been issued, as the case may be, at the beginning of such
four-quarter period.
So long as no Default shall have occurred and be continuing or would
be caused thereby, the first paragraph of this Section 4.09 will not prohibit
the incurrence of any of the following items of Indebtedness (collectively,
"Permitted Debt"):
(i) the incurrence by the Company or any Guarantor of Indebtedness
under the Credit Agreement (and the incurrence by the Guarantors of
guarantees thereof) in an aggregate principal amount at any one time
outstanding (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Company and the
Guarantors thereunder) not to exceed $470 million and (b) the incurrence
by the Company or any Guarantor of additional Indebtedness under Credit
Facilities (and the incurrence by the Guarantors of guarantees thereof) in
an aggregate principal amount at any one time outstanding (with letters of
credit being deemed to have a principal amount equal to the maximum
potential liability of the Company and the Guarantors thereunder) not to
exceed the amount, if any, by which (x) the amount of the Borrowing Base
as of the date of such incurrence exceeds (y) the aggregate amount of
Indebtedness permitted to be incurred pursuant to the immediately
preceding clause (a) as of the date of such incurrence, less, in the case
of each of clause (a) and (b) the aggregate amount of all Net Proceeds of
Asset Sales applied by the Company or any Guarantor to repay any
Indebtedness under the Credit Agreement or the Credit Facilities (and, in
the case of any revolving credit Indebtedness under the Credit Agreement
or a Credit Facility, to effect a corresponding commitment reduction
thereunder) pursuant to Section 4.10;
(ii) the incurrence by the Company or any Guarantor of the Existing
Indebtedness;
(iii) the incurrence by the Company and its Restricted Subsidiaries
of Indebtedness represented by the Notes to be issued on the Issue Date
and the related Note Guarantees and the Exchange Notes and the related
Note Guarantees to be issued pursuant to the Registration Rights
Agreement;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case, incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or any of its Restricted Subsidiaries in an
aggregate principal amount, including all Permitted Refinancing
Indebtedness incurred to refund, refinance or replace any Indebtedness
incurred pursuant to this clause (iv), not to exceed $15 million at any
time outstanding;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are
65
used to refund, refinance or replace Indebtedness (other than intercompany
Indebtedness) that was permitted to be incurred under the first paragraph
of this Section 4.09 or clauses (ii), (iii), (iv), (v), or (xv), of this
Section 4.09;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and any
of its Restricted Subsidiaries; provided, however, that:
(a) if the Company or any Guarantor is the obligor on such
Indebtedness, such Indebtedness must be expressly subordinated to the prior
payment in full in cash of all Obligations with respect to the Notes, in the
case of the Company, or the Note Guarantee, in the case of a Guarantor; and
(b) (1) any subsequent issuance or transfer of Equity Interests that
results in any such Indebtedness being held by a Person other than the Company
or a Restricted Subsidiary thereof and (2) any sale or other transfer of any
such Indebtedness to a Person that is not either the Company or a Restricted
Subsidiary thereof; shall be deemed, in each case, to constitute an incurrence
of such Indebtedness by the Company or such Restricted Subsidiary, as the case
may be, that was not permitted by this clause (vi);
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred:
(a) for the purpose of fixing or hedging interest rate risk with
respect to any floating rate Indebtedness that is permitted by the terms of this
Indenture to be outstanding;
(b) for the purpose of fixing or hedging currency exchange rate risk
with respect to any currency exchanges; or
(c) for the purpose of fixing or hedging commodity price risk with
respect to any commodity purchases;
(viii) the guarantee by the Company or any Guarantor of Indebtedness
of the Company or a Restricted Subsidiary of the Company that was
permitted to be incurred by this Section 4.09;
(ix) the accrual of interest, the accretion or amortization of
original issue discount, the payment of interest on any Indebtedness in
the form of additional Indebtedness with the same terms, and the payment
of dividends on Disqualified Stock in the form of additional shares of the
same class of Disqualified Stock will not be deemed to be an incurrence of
Indebtedness or an issuance of Disqualified Stock for purposes of this
Section 4.09; provided, in each such case, that the amount thereof is
included in Fixed Charges of the Company as accrued;
(x) the incurrence by the Company's Unrestricted Subsidiaries of
Non-Recourse Debt, provided, however, that if any such Indebtedness ceases
to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be
deemed to constitute an
66
incurrence of Indebtedness by a Restricted Subsidiary of the Company that
was not permitted by this clause (x);
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness constituting reimbursement obligations with
respect to letters of credit issued in the ordinary course of business,
including, without limitation, letters of credit in respect of workers'
compensation claims or self-insurance, or other Indebtedness with respect
to reimbursement type obligations regarding workers' compensation claims
or self-insurance; provided, however, that, upon the drawing of such
letters of credit or the incurrence of such Indebtedness, such obligations
are reimbursed within 30 days following such drawing or incurrence;
(xii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness arising from agreements of the Company or
such Restricted Subsidiary providing for indemnification, adjustment of
purchase price or similar obligations, in each case, incurred or assumed
in connection with the disposition of any business, assets or Capital
Stock of a Restricted Subsidiary, other than guarantees of Indebtedness
incurred by any Person acquiring all or any portion of such business,
assets or a Subsidiary for the purpose of financing such acquisition;
provided that:
(a) that Indebtedness is not reflected on the balance sheet of the
Company or any Restricted Subsidiary (contingent obligations referred to in a
footnote or footnotes to financial statements and not otherwise reflected on the
balance sheet will not be deemed to be reflected on that balance sheet for
purposes of this clause (a)); and
(b) the maximum assumable liability in respect of that Indebtedness
shall at no time exceed the gross proceeds including noncash proceeds (the fair
market value of those noncash proceeds being measured at the time received and
without giving effect to any subsequent changes in value) actually received by
the Company and/or that Restricted Subsidiary in connection with that
disposition;
(xiii) the issuance of preferred stock by any of the Company's
Restricted Subsidiaries issued to the Company or another Restricted
Subsidiary; provided that any subsequent issuance or transfer of any
Equity Securities or any other event that results in any such Restricted
Subsidiary ceasing to be a Restricted Subsidiary or any other subsequent
transfer of any such shares of preferred stock (except to the Company or
another Restricted Subsidiary) shall be deemed, in each case to be an
issuance of such shares of preferred stock;
(xiv) the incurrence by the Company or any of its Restricted
Subsidiaries of obligations in respect of performance and surety bonds and
completion guarantees provided by the Company or such Restricted
Subsidiary in the ordinary course of business;
(xv) the incurrence by the Company or any Guarantor of Indebtedness
in an aggregate principal amount (or accreted value, as applicable) at any
time outstanding,
67
including all Permitted Refinancing Indebtedness incurred to refund,
refinance or replace any Indebtedness incurred pursuant to this clause
(xv), not to exceed $30 million;
(xvi) the incurrence by the Foreign Restricted Subsidiaries of the
Company of Indebtedness in an aggregate principal amount at any one time
outstanding (with letters of credit being deemed to have a principal
amount equal to the maximum potential liability of the Restricted
Subsidiaries under any credit facility entered into in connection
therewith) not to exceed the greater of (x) $20 million or (y) the amount
of the Foreign Borrowing Base as of the date of such incurrence; and
(xvii) the incurrence of any Indebtedness by a Receivables
Subsidiary that is not recourse to the Company or any other Restricted
Subsidiary of the Company (other than Standard Securitization
Undertakings) incurred in connection with a Qualified Receivables
Transaction.
For purposes of determining compliance with this Section 4.09, in
the event that any proposed Indebtedness meets the criteria of more than one of
the categories of Permitted Debt described in clauses (i) through (xvii) above,
or is entitled to be incurred pursuant to the first paragraph of this Section
4.09, the Company will be permitted to classify such item of Indebtedness on the
date of its incurrence in any manner that complies with this Section 4.09.
Indebtedness under the Credit Agreement immediately following the Merger shall
be deemed to have been incurred on the Merger Date in reliance on the exception
provided by clause (i) of the definition of Permitted Debt.
Section 4.10. Asset Sales. The Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (i) the
Company (or the Restricted Subsidiary, as the case may be) receives
consideration at the time of such Asset Sale at least equal to the fair market
value of the assets or Equity Interests issued or sold or otherwise disposed of;
(ii) such fair market value is determined by the Company's Board of Directors
and evidenced by a resolution of the Board of Directors set forth in an
Officers' Certificate delivered to the Trustee; and (iii) at least 75% of the
consideration therefor received by the Company or such Restricted Subsidiary is
in the form of Cash Equivalents. For purposes of this provision, each of the
following shall be deemed to be cash:
(a) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet), of the Company or any Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Note Guarantee) that are assumed by the
transferee of any such assets and where the Company and all Restricted
Subsidiaries are released from any further liability in connection therewith;
(b) any securities, notes or other obligations received by the
Company or any such Restricted Subsidiary from such transferee that are within
180 days of receipt thereof converted by the Company or such Restricted
Subsidiary into cash (to the extent of the cash received in that conversion);
(c) any Designated Non-cash Consideration received by the Company or
any of its Restricted Subsidiaries in such Asset Sale having a fair market
value, taken together with
68
all other Designated Non-cash Consideration received pursuant to this clause (c)
that is at that time outstanding, not to exceed 15% of Total Net Tangible Assets
at the time of the receipt of such Designated Noncash Consideration, with the
fair market value of each item of Designated Noncash Consideration being
measured at the time received without giving effect to subsequent changes in
value; and
(d) any combination thereof.
For purposes of paragraph (c) above, any liabilities of the Company
or any Restricted Subsidiary that are not assumed by the transferee of such
assets in respect of which the Company and all Restricted Subsidiaries are not
released from any future liabilities in connection therewith shall not be
considered consideration.
Within 365 days after the receipt of any Net Proceeds from an Asset
Sale, the Company may apply such Net Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is
revolving credit Indebtedness, to correspondingly reduce
commitments with respect thereto;
(2) to acquire all or substantially all of the assets of, or
a majority of the Voting Stock of, another Permitted
Business;
(3) to acquire other assets, including investments in
property or capital expenditures, that are used or
useful in a Permitted Business; or
(4) any combination of the foregoing.
Pending the final application of any such Net Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Proceeds in any manner that is not prohibited hereunder.
Any Net Proceeds from Asset Sales that are not applied or invested
as provided in the preceding paragraph will constitute "Excess Proceeds." When
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Company will
make an Asset Sale Offer to all Holders of Notes and Additional Notes, if any,
and all holders of other Indebtedness that is pari passu with the Notes
containing provisions similar to those set forth herein with respect to offers
to purchase with the proceeds of sales of assets to purchase the maximum
principal amount of Notes and Additional Notes, if any, and such other pari
passu Indebtedness that may be purchased out of the Excess Proceeds. The offer
price in any Asset Sale Offer will be equal to 100% of principal amount plus
accrued and unpaid interest and Liquidated Damages, if any, to the date of
purchase, and will be payable in cash. If any Excess Proceeds remain after
consummation of an Asset Sale Offer, the Company may use such Excess Proceeds
for any purpose not otherwise prohibited by this Indenture. If the aggregate
principal amount of Notes and such other pari passu Indebtedness tendered into
such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall
select the Notes and such other pari passu Indebtedness to be purchased on a pro
rata basis based on the principal amount of Notes and Additional Notes
69
and such other pari passu Indebtedness tendered. Upon completion of each Asset
Sale Offer, the amount of Excess Proceeds shall be reset at zero.
The Company will comply with the requirements of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sales
provisions of this Indenture, the Company will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of this Indenture by virtue of such
conflict.
Section 4.11. Transactions with Affiliates. The Company will not,
and will not permit any of its Restricted Subsidiaries to, make any payment to,
or sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"),
unless: (i) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person; and (ii) the Company delivers to the
Trustee: (a) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $1.0
million, a resolution of the Board of Directors set forth in an Officers'
Certificate certifying that such Affiliate Transaction complies with this
Section 4.11 and that such Affiliate Transaction has been approved by a majority
of the disinterested members of the Board of Directors; and (b) with respect to
any Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $10.0 million, an opinion as to the
fairness to the Company or such Restricted Subsidiary of such Affiliate
Transaction from a financial point of view issued by an accounting, appraisal or
investment banking firm of national standing. No outside director or
non-management director shall be deemed not to be a "disinterested director" by
reason of his receipt of reasonable and customary directors' fees or the
participation in reasonable and customary directors' stock grant, stock option
or stock warrant plans, or such other form of director remuneration as is
reasonable and customary.
The following items shall not be deemed to be Affiliate Transactions
and, therefore, will not be subject to the provisions of the prior paragraph:
(1) any consulting or employment agreement entered into by
the Company or any of its Restricted Subsidiaries
consistent with the past practice of the Company or such
Restricted Subsidiary;
(2) transactions between or among the Company and/or its
Restricted Subsidiaries;
(3) payment of reasonable directors fees to directors of the
Company and the Parent and the provision of customary
indemnification to directors and officers of the Company
and the Parent;
70
(4) sales of Equity Interests (other than Disqualified
Stock) to Affiliates of the Company;
(5) any tax sharing agreement or arrangement and payments
pursuant thereto among the Company and its Subsidiaries
and any other Person with which the Company or its
Subsidiaries is required or permitted to file a
consolidated tax return or with which the Company or any
of its Restricted Subsidiaries is or could be part of a
consolidated group for tax purposes in amounts not
otherwise prohibited by this Indenture;
(6) Restricted Payments that are permitted by the provisions
of Section 4.07;
(7) the payment (directly or through the Parent) of annual
management, consulting, monitoring and advising fees and
related expenses to the Equity Sponsors and their
respective Affiliates pursuant to management agreements
entered into in connection with the Merger pursuant to
the Merger Agreement and as described under the caption
"Certain Relationships and Related Transactions
Management Agreement" of the Offering Memorandum;
(8) payments by the Company or any of its Restricted
Subsidiaries to the Equity Sponsors and their respective
Affiliates for any financial advisory, financing,
underwriting or placement services or in respect of
other investment banking activities, including, without
limitation, in connection with acquisitions or
divestitures, which payments are approved by the
majority of the Board of Directors of the Company in
good faith and are in an amount not to exceed the
greater of (i) $1.0 million or (ii) 1.25% of the
aggregate transaction value (including enterprise value
in connection with acquisitions or divestitures) (or
portion thereof) in respect of which such services are
rendered.
(9) loans to employees that are approved in good faith by a
majority of the Board of Directors of the Company in an
amount not to exceed $3.0 million outstanding at any
time;
(10) agreements (and payments relating thereto) pursuant to
the Merger Agreement and as otherwise described in the
Offering Memorandum, as the same may be amended,
modified or replaced from time to time, so long as any
amendment, modification or replacement is no less
favorable to the Company and its Restricted Subsidiaries
than the Agreement described in the Offering Memorandum
and in effect on the Merger Date;
(11) transactions with a joint venture engaged in a Permitted
Business; provided that all the outstanding ownership
interests of such joint venture are owned only by the
Company, its Restricted Subsidiaries and Persons who are
not Affiliates of the Company; and
71
(12) transactions between a Receivables Subsidiary and any
Person in which the Receivables Subsidiary has an
Investment.
Section 4.12. Liens. The Company will not, and will not permit any
of its Restricted Subsidiaries to, create, incur, assume or otherwise cause or
suffer to exist or become effective any Lien of any kind securing Indebtedness,
Attributable Debt or trade payables (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired, unless all payments
due under this Indenture and the Notes are secured on an equal and ratable basis
with the obligations so secured until such time as such obligations are no
longer secured by a Lien.
Section 4.13. Corporate Existence. Subject to Article 5 hereof, the
Company shall do or cause to be done all things necessary to preserve and keep
in full force and effect (i) its corporate existence, and the corporate,
partnership or other existence of each of its Subsidiaries, in accordance with
the respective organizational documents (as the same may be amended from time to
time) of the Company or any such Subsidiary and (ii) the rights (charter and
statutory), licenses and franchises of the Company and its Subsidiaries;
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any of its Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
Section 4.14. Offer to Repurchase upon Change of Control. (a) Upon
the occurrence of a Change of Control, each Holder of Notes shall have the right
to require the Company to repurchase all or any part (equal to $1,000 or an
integral multiple thereof) of such Holder's Notes pursuant to the offer
described below (the "Change of Control Offer") at an offer price in cash equal
to 101% of the aggregate principal amount thereof plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the date of purchase (the
"Change of Control Payment"). Within 30 days following any Change of Control,
the Company shall mail a notice to each Holder describing the transaction or
transactions that constitute the Change of Control and stating (1) that the
Change of Control Offer is being made pursuant to this Section 4.14 and that all
Notes tendered will be accepted for payment; (2) the purchase price and the
purchase date, which shall be no earlier than 30 days and no later than 60 days
from the date such notice is mailed (the "Change of Control Payment Date"); (3)
that any Note not tendered will continue to accrue interest; (4) that, unless
the Company defaults in the payment of the Change of Control Payment, all Notes
accepted for payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Payment Date; (5) that Holders
electing to have any Notes purchased pursuant to a Change of Control Offer will
be required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, 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 of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only
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in part will 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. The Company shall
comply with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of the Notes as a
result of a Change of Control. To the extent that the provisions of any
securities laws or regulations conflict with the provisions of this Indenture
relating to such Change of Control Offer, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations described in this Indenture by virtue thereof.
(b) By 12:00 p.m. (noon) Eastern Time on the Change of Control
Payment Date, the Company shall, to the extent lawful, (1) accept for payment
all Notes or portions thereof properly tendered pursuant to the Change of
Control Offer, (2) deposit with the Paying Agent an amount equal to the Change
of Control Payment in respect of all Notes or portions thereof so tendered and
(3) deliver or cause to be delivered to the Trustee the Notes so accepted
together with an Officers' Certificate stating the aggregate principal amount of
Notes or portions thereof being purchased by the Company. The Paying Agent shall
promptly mail to each Holder of Notes so tendered the Change of Control Payment
for such Notes, and the Trustee shall promptly authenticate and mail (or cause
to be transferred by book entry) to each Holder a new Note equal in principal
amount to any unpurchased portion of the Notes surrendered, if any; provided
that each such new Note shall be in a principal amount of $1,000 or an integral
multiple thereof. Prior to compliance with this Section 4.14, but in any event
within 90 days following a Change of Control, the Company will either repay all
outstanding Senior Debt or obtain the requisite consents, if any, under all
agreements governing outstanding Senior Debt to permit the repurchase of Notes
required by this Section 4.14. The Company shall publicly announce the results
of the Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
(c) Notwithstanding anything to the contrary in this Section 4.14,
the Company shall not be required to make a Change of Control Offer upon a
Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in this Section 4.14 and Section 3.09 hereof and all other provisions of this
Indenture applicable to a Change of Control Offer made by the Company and
purchases all Notes validly tendered and not withdrawn under such Change of
Control Offer.
Section 4.15. Limitation on Other Senior Subordinated Debt. The
Company shall not incur, create, issue, assume, guarantee or otherwise become
liable for any Indebtedness that is by its terms subordinate or junior in right
of payment to any Senior Debt of the Company and senior in any respect in right
of payment to the Notes. No Guarantor will incur, create, issue, assume,
guarantee or otherwise become liable for any Indebtedness that is by its terms
subordinate or junior in right of payment to the Senior Debt of such Guarantor
and senior in any respect in right of payment to such Guarantor's Note
Guarantee.
Section 4.16. Sale and Leaseback Transactions. The Company will not,
and will not permit any of its Restricted Subsidiaries to, enter into any sale
and leaseback transaction; provided that the Company or any Restricted
Subsidiary may enter into a sale and leaseback transaction if:
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(i) the issuer or that Restricted Subsidiary, as applicable, could
have incurred Indebtedness in an amount equal to the Attributable Debt
relating to such sale and leaseback transaction under the Fixed Charge
Coverage Ratio test in the first paragraph of Section 4.09;
(ii) the gross cash proceeds of that sale and leaseback transaction
are at least equal to the fair market value, as determined in good faith
by the Board of Directors of the Company and set forth in an Officers'
Certificate delivered to the Trustee, of the property that is the subject
of that sale and leaseback transaction; and
(iii) the transfer of assets in that sale and leaseback transaction
is permitted by, and the Company applies the proceeds of such transaction
in compliance with, the requirements of Section 4.10.
Section 4.17. Limitation on Issuances of Guarantees of Indebtedness.
The Company will not permit any of its Restricted Subsidiaries, directly or
indirectly, to Guarantee or pledge any assets to secure the payment of any other
Indebtedness of the Company unless either (1) such Restricted Subsidiary is a
Guarantor or (2) such Restricted Subsidiary simultaneously executes and delivers
a supplemental indenture providing for the Guarantee of the payment of the Notes
by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu
with such Subsidiary's Guarantee of or pledge to secure such other Indebtedness,
unless such other Indebtedness is Senior Debt, in which case the Guarantee of
the Notes may be subordinated to the Guarantee of such Senior Debt to the same
extent as the Notes are subordinated to such Senior Debt.
(b) Notwithstanding clause(a) of this Section 4.17, any Note
Guarantee will provide by its terms that it will be automatically and
unconditionally released and discharged pursuant to Section 11.06. Such Note
Guarantee shall be in the form of Exhibit F attached hereto.
Section 4.18. Additional Guarantees. If the Company or any of its
Restricted Subsidiaries acquires or creates another Domestic Subsidiary (other
than a Receivables Subsidiary) on or after the Merger Date, then the newly
acquired or created Domestic Subsidiary (other than an Immaterial Subsidiary)
must become a Guarantor and execute a supplemental indenture in the form of
Exhibit F hereto providing for the Guarantee of the payment of the Notes by such
Domestic Subsidiary on the same basis as the Guarantors on the Merger Date and
deliver an Opinion of Counsel to the Trustee within 20 Business Days of the date
on which it was acquired or created.
Section 4.19. Business Activities. The Company will not, and will
not permit any Restricted Subsidiary to, engage in any business other than
Permitted Businesses.
Section 4.20. Designation of Restricted and Unrestricted
Subsidiaries. The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if that designation would not cause
a Default; provided that in no event shall (i) there be any Unrestricted
Subsidiaries on or immediately following the Merger Date and (ii) the business
currently operated by the Egg Products Division be transferred to or held by an
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Unrestricted Subsidiary. If a Restricted Subsidiary is designated as an
Unrestricted Subsidiary, the aggregate fair market value of all outstanding
Investments owned by the Company and its Restricted Subsidiaries in the
Subsidiary so designated (after giving effect to any sale of Equity Interests of
such Subsidiary in connection with such designation) will be deemed to be a
Restricted Investment made as of the time of such designation and will either
reduce the amount available for Restricted Payments pursuant to the first
paragraph of Section 4.07 or reduce the amount available for future Permitted
Investments under one or more clauses of the definition of "Permitted
Investments". That designation will only be permitted if such Investment would
be permitted at that time and if such Restricted Subsidiary otherwise meets the
definition of an Unrestricted Subsidiary. The Board of Directors of the Company
may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary; provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (1) such Indebtedness is permitted under Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four quarter reference period; and (2) no Default or Event of
Default would be in existence following such designation.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets. The Company
will not, directly or indirectly, consolidate or merge with or into another
Person (whether or not the Company is the surviving corporation), and the
Company will not, and will not cause or permit any Restricted Subsidiary to,
sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company and its Restricted Subsidiaries taken
as a whole, in one or more related transactions, to another Person (including by
way of consolidation or merger), unless:
(1) either: (a) the Company or such Restricted Subsidiary, as the
case may be, is the surviving corporation; or (b) the Person
formed by or surviving any such consolidation or merger (if
other than the Company or such Restricted Subsidiary) or to
which such sale, assignment, transfer, conveyance or other
disposition shall have been made is a corporation, partnership
or limited liability company organized or existing under the
laws of the United States, any state thereof or the District
of Columbia; provided, that in the case such Person is a
limited liability company or a partnership, a co-obligor of
the Notes is a corporation;
(2) the Person formed by or surviving any such consolidation or
merger (if other than the Company or such Restricted
Subsidiary) or the Person to which such sale, assignment,
transfer, conveyance or other disposition shall have been made
assumes all the obligations of the Company or such Restricted
Subsidiary (if such Restricted Subsidiary is a Guarantor), as
the
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case may be, under the Notes, the Indenture and the
Registration Rights Agreement pursuant to agreements
reasonably satisfactory to the Trustee;
(3) immediately after such transaction no Default or Event of
Default exists; and
(4) the Company or the Person formed by or surviving any such
consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, conveyance or other
disposition shall have been made, will, on the date of such
transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at
the beginning of the applicable four-quarter period be
permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Fixed Charge Coverage Ratio test set forth in
the first paragraph of Section 4.09.
In addition, neither the Company nor any Restricted Subsidiary may,
directly or indirectly, lease all or substantially all of its properties or
assets, in one or more related transactions, to any other Person. This Section
5.01 will not apply to (i) a sale, assignment, transfer, conveyance or other
disposition of assets between or among the Company and any of its Restricted
Subsidiaries or (ii) the Merger on the terms set forth in the Merger Agreement
and as described in the Offering Memorandum so long as Michael Foods and each of
its Domestic Restricted Subsidiaries existing on the date hereof execute and
deliver to the Trustee a supplemental indenture providing for (i) the assumption
by Michael Foods of the Company's obligations under this Indenture and (ii) each
of the Domestic Restricted Subsidiaries of Michael Foods to become a party to
this Indenture.
Section 5.02. Successor Corporation Substituted. Upon any
consolidation or merger, or any sale, assignment, transfer, conveyance or other
disposition of all or substantially all of the assets of the Company in
accordance with Section 5.01 hereof, the successor corporation formed by such
consolidation or into or with which the Company is merged or to which such sale,
assignment, transfer, conveyance or other disposition is made shall succeed to,
and be substituted for (so that from and after the date of such consolidation,
merger, sale, conveyance or other disposition, the provisions of this Indenture
referring to the "Company" shall refer instead to the successor corporation and
not to the Company), and may exercise every right and power of the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from the obligation to pay the principal of and interest on the
Notes except in the case of a sale of all of the Company's assets that meets the
requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. Each of the following is an "Event
of Default":
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(a) default in the payment when due of interest on, or Liquidated
Damages with respect to, the Notes (whether or not permitted by Article 10
hereof) and such default continues for a period of 30 days;
(b) default in payment when due of the principal of or premium, if
any, on the Notes (whether or not permitted by Article 10 hereof);
(c) failure by the Company to comply with the provisions of Sections
3.08(b), 4.10, 4.14 and 5.01 hereof;
(d) failure by the Company or any of its Restricted Subsidiaries for
45 days after notice from the Trustee or holders of at least 25% in principal
amount of the Notes including Additional Notes, if any then outstanding to
comply with any of its other covenants or agreements in this Indenture or the
Notes;
(e) default by the Company or any Restricted Subsidiary under any
mortgage, indenture or instrument under which there may be issued or by which
there may be secured or evidenced any Indebtedness for money borrowed by the
Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date hereof, if
that default (i) is caused by a failure to make any payment when due at final
maturity any such Indebtedness of (a "Payment Default") or (ii) results in the
acceleration of such Indebtedness prior to its express maturity, and, in each
case, the principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a Payment
Default or the maturity of which has been so accelerated, aggregates $15 million
or more (other than the 7.58% Notes to be repaid in connection with the Merger
so long as such 7.58%Notes are repaid within 35 days of the Merger Date.
(f) failure by the Company or any of its Restricted Subsidiaries to
pay final judgments aggregating in excess of $15.0 million, which judgments are
not paid, discharged or stayed for a period of 60 days after such judgments have
become final and non appealable and in the event such judgment is covered by
insurance, an enforcement proceeding has been commenced by any creditor upon
such judgment or decree that is not promptly stayed;
(g) except as permitted by this Indenture, any Note Guarantee of a
Guarantor (other than an Immaterial Guarantor) shall be held in any judicial
proceeding to be unenforceable or invalid or shall cease for any reason to be in
full force and effect or any Guarantor (other than an Immaterial Guarantor), or
any Person acting on behalf of any Guarantor (other than an Immaterial
Guarantor), shall deny or disaffirm its obligations under its Note Guarantee;
(h) the Pledge Agreement shall cease to be in full force and effect
or enforceable in accordance with its terms (other than in accordance with its
terms) or the Company denies or disaffirms its obligations under the Pledge
Agreement or the obligations under the Pledge Agreement cease to be secured by a
perfected first priority security interest in any portion of the collateral
purported to be pledged under the Pledge Agreement (other than in accordance
with its terms); and
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(i) any Guarantor, the Company or any of its Subsidiaries that is a
Significant Subsidiary or any group of Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary pursuant to or within the meaning of
Bankruptcy Law:
(i) commences a voluntary case; or
(ii) consents to entry of an order for relief against it in an
involuntary case; or
(iii) consents to the appointment of a custodian of it or for all or
substantially all of its property; or
(iv) makes a general assignment for the benefit of its creditors; or
(v) generally is not paying its debts as they become due; or
(j) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(i) is for relief against any Guarantor, the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group of Subsidiaries
that, taken as a whole, would constitute a Significant Subsidiary in an
involuntary case;
(ii) appoints a custodian of any Guarantor, the Company or any of
its Subsidiaries that is a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary or for all or substantially all of the property of any
Guarantor, the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of Subsidiaries that, take as a whole, would
constitute a Significant Subsidiary; or
(iii) orders the liquidation of any Guarantor, the Company or any of
its Subsidiaries that is a Significant Subsidiary or any group of
Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary;
and the order or decree remains unstayed and in effect for 60
consecutive days; or
In the event of a declaration of acceleration of the Notes because
an Event of Default has occurred and is continuing as a result of the
acceleration of any Indebtedness described in clause (e) of the preceding
paragraph, the declaration of acceleration of the Notes shall be automatically
annulled if the holders of any Indebtedness described in clause (e) of the
preceding paragraph have rescinded the declaration of acceleration in respect of
such Indebtedness within 30 days of the date of such declaration and if (i) the
annulment of the acceleration of Notes would not conflict with any judgment or
decree of an court of competent jurisdiction and (ii) all existing Events of
Default, except nonpayment of principal or interest on the Notes that became due
solely because of the acceleration of the Notes have been cured or waived.
Section 6.02. Acceleration. If any Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Notes may
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declare all the principal, premium, if any, accrued interest and Liquidated
Damages, if any, of the Notes to be due and payable by notice in writing to the
Company and (if from the Holders) the Trustee specifying the respective Event of
Default and it is a "notice of acceleration", and upon receipt of such notice
the same shall become due and payable upon the first to occur of an acceleration
under any issue of then outstanding Designated Senior Debt; or (2) five Business
Days after receipt by the Company and each Representative of holders of
Designated Senior Debt then outstanding of such notice of acceleration, unless
all Events of Default specified in their respective notices of acceleration
shall have been cured within said five Business Day period. Notwithstanding the
foregoing, in the case of an Event of Default described in clause (i) or (j) of
Section 6.01, with respect to the Company or any of its Subsidiaries all
outstanding Notes.
In the case of any Event of Default occurring by reason of any
willful action or inaction taken or not taken by or on behalf of the Company
with the intention of avoiding payment of the premium that the Company would
have had to pay if the Company then had elected to redeem the Notes pursuant to
Section 3.07 hereof, an equivalent premium shall also become and be immediately
due and payable to the extent permitted by law upon the acceleration of the
Notes. If an Event of Default occurs at any time that the Notes are outstanding,
by reason of any willful action (or inaction) taken (or not taken) by or on
behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes, then an additional premium shall also become
immediately due and payable to the extent permitted by law upon acceleration of
the Notes.
Section 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal, premium, if any, and interest on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess
any of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults. Holders of not less than a
majority in aggregate principal amount of the then outstanding Notes by notice
to the Trustee may on behalf of the Holders of all of the Notes waive an
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of,
premium and Liquidated Damages, if any, or interest on, the Notes (including in
connection with an offer to purchase) (provided, however, that the Holders of a
majority in aggregate principal amount of the then outstanding Notes may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration). The Company shall deliver to the Trustee an
Officers' Certificate stating that the requisite percentage of Holders have
consented to such waiver and attaching copies of such consents. In case of any
such waiver, the Company, the Trustee and the Holders shall be restored to their
former positions and rights hereunder and under the Notes, respectively. This
Section 6.04 shall be in lieu of
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Section 316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA. Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 6.05. Control by Majority. Subject to Section 2.09, holders
of a majority in principal amount of the then outstanding Notes may direct in
writing the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture that the Trustee determines may be unduly prejudicial
to the rights of Holders of Notes not taking part in such direction, and the
Trustee shall have the right to decline to follow any such direction, if the
Trustee, being advised by counsel, determines that such action so directed may
not be lawfully taken or if the Trustee, in good faith shall by a Responsible
Officer, determine that the proceedings so directed may involve the Trustee in
personal liability; provided that the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such direction. In the
event the Trustee takes any action or follows any direction pursuant to this
Indenture, the Trustee shall be entitled to indemnification satisfactory to it
in its sole discretion against any loss or expense caused by taking such action
or following such direction. This Section 6.05 shall be in lieu of Section
316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.
Section 6.06. Limitation on Suits. A Holder of a Note may pursue a
remedy with respect to this Indenture, the Notes or the Note Guarantees only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee against
any loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
amount of the then outstanding Notes do not give the Trustee a direction
inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the
rights of another Holder of a Note or to obtain a preference or priority over
another Holder of a Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any Holder
of a Note to receive payment of principal, premium and Liquidated Damages, if
any, and interest on the Note, on or after the respective due dates expressed in
the Note (including in connection with an offer to purchase), or
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to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is
authorized to recover judgment in its own name and as trustee of an express
trust against the Company for the whole amount of principal of, premium and
Liquidated Damages, if any, and interest remaining unpaid on the Notes and
interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim. The Trustee is
authorized to file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and the Holders of the Notes allowed in any
judicial proceedings relative to the Company (or any other obligor upon the
Notes), its creditors or its property and shall be entitled and empowered to
collect, receive and distribute any money or other securities or property
payable or deliverable on any such claims and any custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant
to this Article, it shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due
under Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs and
expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium and Liquidated Damages, if any, and interest, ratably,
without preference or priority of any kind, according to the amounts due and
payable on the Notes for principal, premium and Liquidated Damages, if any and
interest, respectively; and
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Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment
to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs. In any suit for the enforcement
of any right or remedy under this Indenture or in any suit against the Trustee
for any action taken or omitted by it as a Trustee, a court in its discretion
may require the filing by any party litigant in the suit of an undertaking to
pay the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit
by Holders of more than 10% in principal amount of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in its exercise, as a prudent man would exercise or use under the circumstances
in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture (but need not confirm or investigate the accuracy of
mathematical calculations or other facts purported to be stated therein).
(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section;
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(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to paragraphs
(a), (b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money or assets held in trust by the Trustee need not be segregated from other
funds or assets except to the extent required by law.
Section 7.02. Rights of Trustee. (a) The Trustee may conclusively
rely upon any document (whether in its original or facsimile form) believed by
it to be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult
with counsel and may require (other than in connection with the Exchange Offer
contemplated by Section 2.06(f) unless required by the TIA) an Officers'
Certificate or an Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection from liability in respect of any
action taken, suffered or omitted by it hereunder in good faith and in reliance
thereon.
(c) The Trustee may act through its attorneys and agents and shall
not be responsible for the misconduct or negligence of any agent or attorney
appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits
to take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
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(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders unless such Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to it against the costs, expenses
and liabilities that might be incurred by it in compliance with such request or
direction.
(g) The Trustee shall not be deemed to have knowledge of any Default
or Event of Default except (i) any Event of Default occurring pursuant to
Section 6.01(a) or 6.01(b) or (ii) any Event of Default of which the Trustee
shall have received written notification or otherwise obtained actual knowledge.
Section 7.03 Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any Affiliate of the Company with the
same rights it would have if it were not Trustee. However, in the event that the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as trustee or resign. Any
Agent may do the same with like rights and duties. The Trustee is also subject
to Sections 7.10 and 7.11 hereof.
Section 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, it shall not be accountable for the Company's use
of the proceeds from the Notes or any money paid to the Company or upon the
Company's direction under any provision of this Indenture, it shall not be
responsible for the use or application of any money received by any Paying Agent
other than the Trustee, and it shall not be responsible for any statement or
recital herein or any statement in the Notes or any other document in connection
with the sale of the Notes or pursuant to this Indenture other than its
certificate of authentication.
Section 7.05. Notice of Defaults. If a Default or Event of Default
occurs and is continuing and if it is known to the Trustee, the Trustee shall
mail to the Holders of the Notes a notice of the Default or Event of Default
within 90 days after it occurs. Except in the case of a Default or Event of
Default in payment of principal of, premium, if any, or interest on any Note,
the Trustee may withhold the notice if and so long as the board of directors,
the executive committee or a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of the Holders of the
Notes.
Section 7.06. Reports by Trustee to the Holders of the Notes. Within
60 days after each September 1 beginning with the September 1 following the date
of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA ss. 313(a) (but if no event described in TIA ss.
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA ss.
313(b)(2). The Trustee shall also transmit by mail all reports as required by
TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of
the Notes shall be mailed to the Company and filed with the SEC and each stock
exchange on which the Notes
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are listed in accordance with TIA ss. 313(d). The Company shall promptly notify
the Trustee when the Notes are listed on any securities exchange or of any
delisting thereof.
Section 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its acceptance of this
Indenture and services hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee promptly upon request for all reasonable
disbursements, advances and expenses incurred or made by it in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel and
any taxes or other expenses incurred by a trust created pursuant to Section 8.04
hereof.
The Company shall indemnify the Trustee and its agents against any
and all losses, liabilities, claims, damages or expenses (including
compensation, fees, disbursements and expenses of Trustee's agents and counsel)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense is judicially determined to have been caused by
to its own negligence or bad faith. The Trustee shall notify the Company
promptly of any claim for which it may seek indemnity. Failure by the Trustee to
so notify the Company shall not relieve the Company of its obligations
hereunder. The Company shall defend the claim and the Trustee shall cooperate in
the defense. The Trustee may have separate counsel and the Company shall pay the
reasonable fees and expenses of such counsel. The Company need not pay for any
settlement made without its consent, which consent shall not be unreasonably
withheld.
The obligations of the Company under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture. The Trustee's right to receive payment of any
amounts due under this Section 7.07 shall not be subordinated to any other
liability or Indebtedness of the Company.
When the Trustee incurs expenses or renders services after an Event
of Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and
the compensation for the services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to
the extent applicable.
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Section 7.08. Replacement of Trustee. A resignation or removal of
the Trustee and appointment of a successor Trustee shall become effective only
upon the successor Trustee's acceptance of appointment as provided in this
Section 7.08.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order
for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition at the expense of the Company any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note who
has been a Holder of a Note for at least six months, fails to comply with
Section 7.10, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
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Section 7.10. Eligibility; Disqualification. There shall at all
times be a Trustee hereunder that is a corporation organized and doing business
under the laws of the United States of America or of any state thereof that is
authorized under such laws to exercise corporate trustee power, that is subject
to supervision or examination by federal or state authorities and that has a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.ss.310(a)(1), (2) and (5). The Trustee is subject to TIA
ss.310(b); provided, however, that there shall be excluded from the operation of
TIA ss.310(b)(1) any indenture or indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding, if the requirements for such exclusion set forth in TIA
ss.310(b)(1) are met.
Section 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to TIA ss.311(a), excluding any creditor relationship listed
in TIA ss.311(b). A Trustee who has resigned or been removed shall be subject to
TIA ss.311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance. The Company may, at the option of its Board of Directors evidenced
by a resolution set forth in an Officers' Certificate, at any time, elect to
have either Section 8.02 or Section 8.03 hereof be applied to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8
Section 8.02. Legal Defeasance and Discharge. Upon the Company's
exercise under Section 8.02 hereof of the option applicable to this Section
8.02, the Company shall, subject to the satisfaction of the conditions set forth
in Section 8.04 hereof, be deemed to have been discharged from its obligations
with respect to all outstanding Notes and all obligations of the Guarantors
shall be deemed to have been discharged with respect to their obligations under
the Subsidiary Guarantees on the date the conditions set forth below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company and the Guarantors shall be deemed to have paid and
discharged the entire Indebtedness represented by the outstanding Notes and
Subsidiary Guarantees, respectively, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 hereof and the other
Sections of this Indenture referred to in (a) and (b) below, and to have
satisfied all its other obligations under such Notes and this Indenture (and the
Trustee, on demand of and at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following provisions which
shall survive until otherwise terminated or discharged hereunder: (a) the rights
of Holders of outstanding Notes to receive solely from the trust fund described
in Section 8.04 hereof, and as more fully set forth in such Section, payments in
respect of the principal of, premium, if any, interest and Liquidated Damages,
if any, on such Notes when such payments
87
are due, (b) the Company's obligations with respect to such Notes under Article
2 and Section 4.02 hereof, (c) the rights, powers, trusts, duties and immunities
of the Trustee hereunder and the Company's obligations in connection therewith
and (d) this Article 8. Subject to compliance with this Article 8, the Company
may exercise its option under this Section 8.02 notwithstanding the prior
exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance. Upon the Company's exercise under
Section 8.01 hereof of the option applicable to this Section 8.03, the Company
and each of the Guarantors shall, subject to the satisfaction of the conditions
set forth in Section 8.04 hereof, be released from their respective obligations
under the covenants set forth in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.14, 4.15, 4.16, 4.17, 4.18, 4.19 and 4.20 hereof with respect to the
outstanding Notes on and after the date the conditions set forth in Section 8.04
are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall
thereafter be deemed not "outstanding" for the purposes of any direction,
waiver, consent or declaration or act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes shall not be deemed outstanding for accounting purposes). For this
purpose, Covenant Defeasance means that, with respect to the outstanding Notes,
the Company may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(c) through 6.01(g) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to the application of either Section 8.02
or 8.03 hereof to the outstanding Notes:
In order to exercise either Legal Defeasance or Covenant Defeasance:
(i) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as shall be sufficient, in the opinion of a nationally recognized
firm of independent public accountants, to pay the principal of, premium
and Liquidated Damages, if any, and interest on the outstanding Notes on
the stated maturity or on the applicable redemption date, as the case may
be, and the Company must specify whether the Notes are being defeased to
maturity or to a particular redemption date;
(ii) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that (A) the Company has
received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
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change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding Notes shall not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance
and shall be subject to federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such
Legal Defeasance had not occurred;
(iii) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes shall not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and shall 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;
(iv) no Default or Event of Default shall have occurred and be
continuing either (i) on the date of such deposit, or (ii) insofar as an
Event of Default set forth in Section 6.01(i) or Section 6.01(j) shall
have occurred and be continuing, at any time in the period ending on the
91st day after the date of deposit (other than a Default or Event of
Default resulting from the borrowing of funds to be applied to such
deposit);
(v) such Legal Defeasance or Covenant Defeasance shall not result in
a breach or violation of, or constitute a default under any material
agreement or instrument (other than this Indenture) to which the Company
or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound, including the Credit Agreement;
(vi) 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 Notes over any other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
any other creditors of the Company or others; and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent, including, without limitation, the conditions set forth in this
Section 8.04, provided for or relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Cash Equivalents to be Held in
Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money
and non-callable Cash Equivalents (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee, collectively for purposes of this
Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in respect of the
outstanding Notes 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
Paying Agent) as the Trustee may determine, to the Holders of such Notes of all
sums due and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
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The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or non-callable Cash
Equivalents deposited pursuant to Section 8.04(i) hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon the request
of the Company any money or non-callable Cash Equivalents held by it as provided
in Section 8.05 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.05(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company. Any money deposited with the
Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, interest, or Liquidated Damages,
if any, on any Note and remaining unclaimed for two years after such principal,
and premium, if any, interest, or Liquidated Damages, if any, has become due and
payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
shall be repaid to the Company.
Section 8.07. Reinstatement. If the Trustee or Paying Agent is
unable to apply any United States dollars or non-callable Government Securities
in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Company's
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 8.02 or 8.03 hereof, as the case may be; provided,
however, that, if the Company makes any payment of principal of, premium, if
any, or interest on any 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.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes. Notwithstanding
Section 9.02 of this Indenture, without the consent of any Holder of Notes, the
Company, the Guarantors and the Trustee may amend or supplement this Indenture,
the Notes or the Pledge Agreement:
(a) to cure any ambiguity, defect, error or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place
of certificated Notes;
(c) to provide for the assumption of the Company's or any
Guarantor's obligations to Holders of Notes in the case of a merger or
consolidation or sale of all or substantially all of the assets of the Company
or of such Guarantor;
(d) to make any change that would provide any additional rights or
benefits to the Holders of Notes or that does not adversely affect the legal
rights under this Indenture of any such Holder;
(e) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act;
(f) to provide for the issuance of Additional Notes in accordance
with the limitations set forth in this Indenture as of the date hereof; or
(g) to allow any Subsidiary to guarantee the Notes.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of the documents described in Section
7.02(b) hereof stating that such amended or supplemental Indenture complies with
this Section 9.01, the Trustee shall join with the Company in the execution of
any amended or supplemental Indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes. Except as provided
below in this Section 9.02, the Company and the Trustee may amend or supplement
this Indenture (including Sections 3.09, 4.10 and 4.14 hereof), the Notes and
the Pledge Agreement with the consent of the Holders of at least a majority in
principal amount of the Notes (including Additional Notes, if any) then
outstanding voting as a single class (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing
Default or Event of Default or
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compliance with any provision of this Indenture or the Notes may be waived with
the consent of the Holders of a majority in principal amount of the then
outstanding Notes (including Additional Notes, if any) voting as a single class
(including, without limitation, consents obtained in connection with a tender
offer or exchange offer for, the Notes). Without the consent of at least 75% in
aggregate principal amount of the Notes then outstanding (including Additional
Notes, if any) voting as a single class (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), no waiver or amendment to this Indenture may make any change in the
provisions of Article 10 hereof that adversely affects the rights of any Holder
of Notes. Furthermore, neither Article 8, Article 10 nor Section 11.02 shall be
amended or modified without the consent of the Administrative Agent under the
Credit Agreement. Section 2.08 hereof shall determine which Notes are considered
to be "outstanding" for purposes of this Section 9.02.
Upon the request of the Company accompanied by a resolution of its
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 7.02(b) hereof stating that
any such amended or supplemental Indenture complies with this Section 9.02, the
Trustee shall join with the Company in the execution of such amended or
supplemental Indenture unless such amended or supplemental Indenture directly
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
It shall not be necessary for the consent of the Holders of Notes
under this Section 9.02 to approve the particular form of any proposed amendment
or waiver, but it shall be sufficient if such consent approves the substance
thereof.
After an amendment, supplement or waiver under this Section 9.02
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver.
Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority
in aggregate principal amount of the Notes (including Additional Notes, if any)
then outstanding voting as a single class may waive compliance in a particular
instance by the Company with any provision of this Indenture or the Notes.
However, without the consent of each Holder affected, an amendment or waiver
under this Section 9.02 may not (with respect to any Notes held by a
non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must consent
to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions, or waive any payment, with respect to the redemption of
the Notes, except with respect to Sections 3.09, 4.10 and 4.14 hereof;
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(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal
of or premium, if any, or interest or Liquidated Damages, if any, on the Notes
(except a rescission of acceleration of the Notes (including Additional Notes,
if any) by the Holders of at least a majority in aggregate principal amount of
the Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than U. S. dollars;
(f) make any change in the provisions of this Indenture relating to
waivers of (i) past Defaults or (ii) the rights of the Holders of the Notes to
receive payments of principal of or premium, if any, or interest or Liquidated
Damages, if any, on the Notes;
(g) amend or modify the obligations of the Company to make offers to
purchase Notes and Additional Notes, if any, pursuant to Section 3.08(b);
(h) make any change in Section 6.04 or 6.07 hereof or in the
foregoing amendment and waiver provisions; or
(i) release any Guarantor from any of its obligations under its Note
Guarantee of these Notes or this Indenture or release any collateral under the
Pledge Agreement, except in accordance with the terms of this Indenture or the
Pledge Agreement, respectively.
Section 9.03. Compliance with Trust Indenture Act. Every amendment
or supplement to this Indenture or the Notes shall be set forth in a amended or
supplemental Indenture that complies with the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents. Until an amendment,
supplement or waiver becomes effective, a consent to it by a Holder of a Note is
a continuing consent by such Holder of a Note and every subsequent Holder of a
Note or portion of a Note that evidences the same debt as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder of a Note or subsequent Holder of a Note may revoke the consent
as to its Note if the Trustee receives written notice of revocation before the
date the waiver, supplement or amendment becomes effective. An amendment,
supplement or waiver becomes effective in accordance with its terms and
thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes. The Trustee may
place an appropriate notation about an amendment, supplement or waiver on any
Note thereafter authenticated. The Company in exchange for all Notes may issue
and the Trustee shall, upon receipt of an Authentication Order, authenticate new
Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall
sign any amended or
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supplemental Indenture authorized pursuant to this Article 9 if the amendment or
supplement does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. The Company may not sign an amendment or supplemental
Indenture until the Board of Directors approves it. In executing any amended or
supplemental indenture, the Trustee shall be entitled to receive and (subject to
Section 7.01 hereof) shall be fully protected in relying upon, in addition to
the documents required by Section 11.04 hereof, an Officer's Certificate and an
Opinion of Counsel stating that the execution of such amended or supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, execute any such amendment, supplement or waiver
which affects the Trustee's rights, duties or immunities under this Indenture or
otherwise. In signing any amendment, supplement or waiver, the Trustee shall be
entitled to receive an indemnity reasonably satisfactory to it.
Section 9.07. Payments for Consent. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, pay or
cause to be paid any consideration to or for the benefit of any Holder of Notes
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Notes unless such consideration is
offered to be paid and is paid to all Holders of the Notes that consent, waive
or agree to amend in the time frame set forth in the solicitation documents
relating to such consent, waiver or agreement.
ARTICLE 10
SUBORDINATION
Section 10.01. Agreement to Subordinate. The Company agrees, and
each Holder by accepting a Note agrees, that the Indebtedness evidenced by the
Notes is subordinated in right of payment, to the extent and in the manner
provided in this Article 10, to the prior payment in full of all Senior Debt
(whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed), and that the subordination is for the benefit of the holders of
Senior Debt.
Section 10.02. Liquidation; Dissolution; Bankruptcy. The holders of
Senior Debt of the Company will be entitled to receive payment in full in Cash
Equivalents of all Obligations due in respect of Senior Debt of the Company
(including interest after the commencement of any bankruptcy proceeding at the
rate specified in the applicable Senior Debt of the Company) before the Holders
of Notes will be entitled to receive any payment with respect to the Notes, and
until all Obligations with respect to Senior Debt of the Company are paid in
full in cash or Cash Equivalents, any distribution, to which the Holder would be
entitled shall be made to the holders of such Senior Debt (except that Holders
of Notes may receive and retain Permitted Junior Securities and payments made
from the trust pursuant to Article 8 hereof), in the event of any distribution
to creditors of the Company: (i) in a liquidation or dissolution of the Company;
(ii) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its property; (iii) in an assignment by
the Company for the benefit of its creditors; or (iv) in any marshaling of the
Company's assets and liabilities.
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Section 10.03. Default on Designated Senior Debt. The Company may
not make any payment in respect of the Notes (except in Permitted Junior
Securities or from the trust pursuant to Article 8 hereof).
(a) In the event of and during the continuation beyond any
applicable grace period of any default in the payment of principal of, interest
or premium, if any, on any Designated Senior Debt, or any Obligation owing from
time to time under or in respect of Senior Debt, or in the event that any event
of default (other than a payment default) with respect to any Designated Senior
Debt shall have occurred and be continuing and shall have resulted in such
Designated Senior Debt becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable; or
(b) If any event of default other than as described in clause (a)
above with respect to any Designated Senior Debt shall have occurred and be
continuing permitting the holders of such Designated Senior Debt or the holders
of any series thereof (or their Representative or Representatives) to declare
such Designated Senior Debt due and payable prior to the date on which it would
otherwise have become due and payable;
(1) in case of any payment or nonpayment default specified in
clause (a), unless and until such default shall have been cured or
waived in writing in accordance with the instruments governing such
Designated Senior Debt or such acceleration shall have been
rescinded or annulled, or
(2) in case of any nonpayment event of default specified in
clause (b), during the period (a "Payment Blockage Period")
commencing on the date the Company or the Trustee receives written
notice (a "Payment Blockage Notice") of such event of default from a
Representative of the holders of such Designated Senior Debt (which
notice shall be binding on the Trustee and the Holders of Notes as
to the occurrence of such a nonpayment event of default) and ending
on the earlier of:
(A) 179 days after such date; and
(B) the date, if any, on which such Designated
Senior Debt to which such default relates is paid
in full in cash or such default is cured or waived
in writing in accordance with the instruments
governing such Designated Senior Debt by the
holders of such Designated Senior Debt; and
(C) the date the Trustee receives notice from the
representative rescinding the Payment Blockage
Notice.
(c) No new Payment Blockage Notice may be delivered to the Company
or the Trustee that would start a new Payment Blockage Period unless and until:
(i) 360 days have elapsed since the delivery of the immediately prior Payment
Blockage Notice that started a Payment Blockage Period; and (ii) all scheduled
payments of principal, interest and premium and Liquidated Damages, if any, on
the Notes that have come due have been paid in full in cash. No nonpayment event
of default which existed or was continuing with respect to the Designated
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Senior Debt on the date of delivery of any Payment Blockage Notice to the
Trustee shall be or be made the basis for the commencement of any subsequent
Payment Blockage Period unless such event of default is cured or waived for a
period of not less than 90 consecutive days.
Section 10.04. Acceleration of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company and the
Trustee shall promptly notify holders of Senior Debt of the acceleration.
Section 10.05. When Distribution Must Be Paid Over. In the event
that the Trustee or any Holder receives any payment of any Obligations with
respect to the Notes (except in Permitted Junior Securities or from the trust
pursuant to Article 8 hereof) at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Article 10
hereof, such payment shall be held by the Trustee or such Holder, as applicable,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to the holders of Senior Debt as their interests may
appear or their Representative under this Indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the Trustee undertakes
to perform only such obligations on the part of the Trustee as are specifically
set forth in this Article 10, and no implied covenants or obligations with
respect to the holders of Senior Debt shall be read into this Indenture against
the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
Section 10.06. Notice by the Company. The Company shall promptly
notify the Trustee and the Paying Agent in writing of any facts known to the
Company that would cause a payment of any Obligations with respect to the Notes
to violate this Article 10, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Debt as provided in this Article 10.
Section 10.07. Subrogation. After all Senior Debt is paid in full
and until the Notes are paid in full, Holders of Notes shall be subrogated
(equally and ratably with all other Indebtedness pari passu with the Notes) to
the rights of holders of Senior Debt to receive distributions applicable to
Senior Debt to the extent that distributions otherwise payable to the Holders of
Notes have been applied to the payment of Senior Debt. A distribution made under
this Article 10 to holders of Senior Debt that otherwise would have been made to
Holders of Notes is not, as between the Company and Holders, a payment by the
Company on the Notes.
Section 10.08. Relative Rights. This Article 10 defines the relative
rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture
shall:
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(a) impair, as between the Company and Holders of Notes, the
obligation of the Company, which is absolute and unconditional, to pay principal
of and interest on the Notes in accordance with their terms;
(b) affect the relative rights of Holders of Notes and creditors of
the Company other than their rights in relation to holders of Senior Debt; or
(c) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to the rights of
holders and owners of Senior Debt to receive distributions and payments
otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of
or interest on a Note on the due date, the failure is still a Default or Event
of Default.
Section 10.09. Subordination May Not Be Impaired by the Company. No
right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
Section 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee and the Holders of Notes shall be entitled to
rely upon any order or decree made by any court of competent jurisdiction or
upon any certificate of such Representative or of the liquidating trustee or
agent or other Person making any distribution to the Trustee or to the Holders
of Notes for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
Section 10.11. Rights of Trustee and Paying Agent. Notwithstanding
the provisions of this Article 10 or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment or distribution by the Trustee, and the
Trustee and the Paying Agent may continue to make payments on the Notes, unless
the Trustee shall have received at its Corporate Trust Office at least five
Business Days prior to the date of such payment written notice of facts that
would cause the payment of any Obligations with respect to the Notes to violate
this Article 10. Only the Company or a Representative may give the notice.
Nothing in this Article 10 shall impair the claims of, or payments to, the
Trustee under or pursuant to Section 7.07 hereof.
The Trustee in its individual or any other capacity may hold Senior
Debt with the same rights it would have if it were not Trustee. Any Agent may do
the same with like rights.
Section 10.12. Authorization to Effect Subordination. Each Holder of
Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on
such Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided
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in this Article 10, and appoints the Trustee to act as such Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 6.09 hereof at least 30 days before the expiration of the
time to file such claim, the lenders under the Credit Agreement are hereby
authorized to file an appropriate claim for and on behalf of the Holders of the
Notes.
ARTICLE 11
NOTE GUARANTEES
Section 11.01. Guarantee. Subject to this Article 11 each of the
Guarantors hereby, jointly and severally, unconditionally guarantees to each
Holder of a Note authenticated and delivered by the Trustee and to the Trustee
and its successors and assigns, irrespective of the validity and enforceability
of this Indenture, the Notes or the obligations of the Company hereunder or
thereunder, that: (a) the principal of and interest on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful (subject in all cases to any applicable grace period
provided herein), and all other obligations of the Company to the Holders or the
Trustee hereunder or thereunder will be promptly paid in full or performed, all
in accordance with the terms hereof and thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
obligations, that same will be promptly paid in full when due or performed in
accordance with the terms of the extension or renewal, whether at stated
maturity, by acceleration or otherwise. Failing payment when due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors shall be jointly and severally obligated to pay the same immediately.
Each Guarantor agrees that this is a guarantee of payment and not a guarantee of
collection.
The Guarantors hereby agree that their 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, 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. Subject to Section 6.06
hereof, each Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice and all demands whatsoever and covenant that this Note Guarantee shall
not be discharged except by complete performance of the obligations contained in
the Notes and this Indenture.
If any Holder or the Trustee is required by any court or otherwise
to return to the Company, the Guarantors or any custodian, trustee, liquidator
or other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all
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obligations guaranteed hereby. Each Guarantor further agrees that, as between
the Guarantors, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 hereof for the purposes of this Note Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6 hereof, such obligations (whether or not due and payable) shall
forthwith become due and payable by the Guarantors for the purpose of this Note
Guarantee. The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under the Note Guarantee.
Section 11.02. Subordination of Note Guarantee. The Obligations of
each Guarantor under its Note Guarantee pursuant to this Article 11 shall be
junior and subordinated to the Guarantee of any Senior Debt of such Guarantor on
the same basis as the Notes are junior and subordinated to Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by any of the Guarantors
only at such times as they may receive and/or retain payments in respect of the
Notes pursuant to this Indenture, including Article Ten hereof.
Section 11.03. Limitation on Guarantor Liability. Each Guarantor,
and by its acceptance of Notes, each Holder, hereby confirms that it is the
intention of all such parties that the Note Guarantee of such Guarantor not
constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law,
the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or
any similar federal or state law to the extent applicable to any Note Guarantee.
To effectuate the foregoing intention, the Trustee, the Holders and the
Guarantors hereby irrevocably agree that the obligations of such Guarantor will,
after giving effect to such maximum amount and all other contingent and fixed
liabilities of such Guarantor that are relevant under such laws, and after
giving effect to any collections from, rights to receive contribution from or
payments made by or on behalf of any other Guarantor in respect of the
obligations of such other Guarantor under this Article Eleven, result in the
obligations of such Guarantor under its Note Guarantee not constituting a
fraudulent transfer or conveyance.
Section 11.04. Execution and Delivery of Note Guarantee. To evidence
its Note Guarantee set forth in Section 11.01, each Guarantor hereby agrees that
a notation of such Note Guarantee substantially in the form included in Exhibit
E shall be endorsed by an Officer of such Guarantor on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by its President or one of its Vice Presidents.
Each Guarantor hereby agrees that its Note Guarantee set forth in
Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Note Guarantee.
If an Officer whose signature is on this Indenture or on the Note
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid
nevertheless.
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The delivery of any Note by the Trustee, after the authentication
thereof hereunder, shall constitute due delivery of the Note Guarantee set forth
in this Indenture on behalf of the Guarantors.
In the event that the Company creates or acquires any new
Subsidiaries subsequent to the date of this Indenture, if required by Section
4.18 hereof, the Company shall cause such Subsidiaries to execute supplemental
indentures to this Indenture and Note Guarantees in accordance with Section 4.18
hereof and this Article 11, to the extent applicable.
Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.
Except as otherwise provided in Section 11.06, a Guarantor may not sell or
otherwise dispose of all or substantially all of its assets , or consolidate
with or merge with or into (whether or not such Guarantor is the surviving
Person) another Person unless:
(a) immediately after giving effect to such transaction, no Default
or Event of Default exists; and
(b) either:
(i) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation or
merger is a corporation, partnership or limited liability company,
organized or existing under (i) the laws of the United States, any state
thereof or the District of Columbia or (ii) the laws of the same
jurisdiction as that Guarantor and, in each case, assumes all the
obligations of that Guarantor under this Indenture, its Note Guarantee and
the Registration Rights Agreement pursuant to a supplemental indenture
satisfactory to the Trustee; or
(ii) such sale or other disposition complies with Section 4.10,
including the application of the Net Proceeds therefrom.
In case of any such consolidation, merger, sale or conveyance and
upon the assumption by the successor Person, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the
Note Guarantee endorsed upon the Notes and the due and punctual performance of
all of the covenants and conditions of this Indenture to be performed by a
Guarantor, such successor Person shall succeed to and be substituted for a
Guarantor with the same effect as if it had been named herein as a Guarantor.
Such successor Person thereupon may cause to be signed any or all of the Note
Guarantees to be endorsed upon all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Note Guarantees so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Note Guarantees theretofore
and thereafter issued in accordance with the terms of this Indenture as though
all of such Note Guarantees had been issued at the date of the execution hereof.
Except as set forth in Articles 4 and 5 hereof, and notwithstanding
clauses (a) and (b) above, nothing contained in this Indenture or in any of the
Notes shall prevent any consolidation or merger of a Guarantor with or into the
Company or another Guarantor, or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
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Section 11.06. Releases Following Sale of Assets. Any Guarantor will
be released and relieved of any obligations under its Note Guarantee, (i) in
connection with any sale or other disposition of all or substantially all of the
assets of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale or other disposition of all or
substantially all of the assets of that Guarantor complies with Section 4.10
hereof, including the application of the Net Proceeds therefrom; (ii) in
connection with any sale of all of the Capital Stock of a Guarantor to a Person
that is not (either before or after giving effect to such transaction) a
Restricted Subsidiary of the Company, if the sale of all such Capital Stock of
that Guarantor complies with Section 4.10 hereof, including the application of
the Net Proceeds therefrom; (iii) if the Company designates any Restricted
Subsidiary that is a Guarantor (other than the Egg Products Division) as an
Unrestricted Subsidiary in accordance with the terms hereof; or (iv) in
connection with any sale of Capital Stock of a Guarantor (other than the Egg
Products Division) to a Person that results in the Guarantor no longer being a
Subsidiary of the Company, if the sale of such Capital Stock of that Guarantor
complies with Section 4.10, including the application of the Net Proceeds
therefrom. Upon delivery by the Company to the Trustee of an Officers'
Certificate and an Opinion of Counsel to the effect that such sale or other
disposition was made by the Company in accordance with the provisions of this
Indenture, including without limitation Section 4.10 hereof, the Trustee shall
execute any documents reasonably required in order to evidence the release of
any Guarantor from its obligations under its Note Guarantee.
Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under this Indenture
as provided in this Article Eleven.
ARTICLE 12
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls. This Indenture is
subject to the provisions of the TIA that are required to be a part of this
Indenture, and shall, to the extent applicable, be governed by such provisions.
If any provision of this Indenture modifies any TIA provision that may be so
modified, such TIA provision shall be deemed to apply to this Indenture as so
modified. If any provision of this Indenture excludes any TIA provision that may
be so excluded, such TIA provision shall be excluded from this Indenture.
The provisions of TIA ss.ss.310 through 317 that impose duties on
any Person (including the provisions automatically deemed included unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 12.02. Notices. Any notice or communication by the Company,
any Guarantor or the Trustee to the others is duly given if in writing and
delivered in Person or mailed by first class mail (registered or certified,
return receipt requested), telex, telecopier or overnight air courier
guaranteeing next day delivery, to the others' address
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If to the Company and/or any Guarantor:
Prior to the Merger Date:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street, Suite 1660
Denver Colorado 80202
Telecopier No.: (303) 292-6639
Attention: J. Christopher Henderson
Following the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
Telecopier No.: (952) 546-1500
Attention: John D. Reedy, Executive Vice President
and Chief Financial Officer
With a copy to:
Kirkland & Ellis
Aon Center
200 East Randolph Drive
Chicago, IL 60601
Telecopier No.: (312) 861-2200
Attention: Dennis M. Myers
If to the Trustee:
BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8542
Attention: Dan Donovan
The Company, any Guarantor or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders)
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five
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Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged, if telecopied; and
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first
class mail, certified or registered, return receipt requested, or by overnight
air courier guaranteeing next day delivery to its address shown on the register
kept by the Registrar. Any notice or communication shall also be so mailed to
any Person described in TIA ss. 313(c), to the extent required by the TIA.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall
mail a copy to the Trustee and each Agent at the same time.
Section 12.03. Communication by Holders of Notes with Other Holders
of Notes. Holders may communicate pursuant to TIA ss.312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA
ss.312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any action
under this Indenture (other than in connection with the Exchange Offer
contemplated by Section 2.06(e) or under Section 2.02 hereof unless required by
the TIA), the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied;
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth in
Section 12.05 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been satisfied; and
(c) where applicable, a certificate or opinion by an independent
certified public accountant satisfactory to the Trustee that complies with TIA
Section 314(c).
Section 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
TIA ss.314(a)(4)) shall comply with the provisions of TIA ss.314(e) and shall
include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
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(b) 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;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 12.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 12.07. No Personal Liability of Directors, Officers,
Employees and Stockholders. No director, officer, employee, incorporator or
stockholder of the Company or any Guarantor, as such, shall have any liability
for any obligations of the Company or the Guarantors under the Notes, the
Exchange Notes, the Note Guarantees, this Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.
Section 12.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW
YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE
GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO
THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY.
Section 12.09. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or its Subsidiaries or of any other Person. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
All agreements of each Guarantor in this Indenture shall bind its successors,
except as otherwise provided in Section 11.05.
Section 12.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successors. All agreements of the Trustee
in this Indenture shall bind its successors. All agreements of each Guarantor in
this Indenture shall bind its successors, except as otherwise provided in
Section 11.05.
Section 12.11. Severability. In case any provision in this Indenture
or in the Notes 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.
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Section 12.12. Counterpart Originals. The parties may sign any
number of copies of this Indenture. Each signed copy shall be an original, but
all of them together represent the same agreement.
Section 12.13. Table of Contents, Headings, etc. The Table of
Contents, Cross-Reference Table and Headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part of this Indenture and shall in no way modify or restrict
any of the terms or provisions hereof.
[Signatures on following page]
105
SIGNATURES
Dated as of March 27, 2001
Very truly yours,
MICHAEL FOODS ACQUISITION CORP.
By:____________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY
as Trustee
By:____________________________
Name:
Title:
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EXHIBIT A
(Face of Note)
CUSIP/CINS. 144A 594072AB6
REGS U59322AA2
11 3/4% Senior Subordinated Notes due 2011
No. ___ $____________
MICHAEL FOODS ACQUISITION CORP.
promises to pay to CEDE & Co., or registered assigns, the principal sum of
___________Dollars on April 1, 2011
Interest Payment Dates: April 1 and October 1
Record Dates: March 15 and September 15
Dated: March 27, 2001
Michael Foods Acquisition Corp.
By:____________________________
Name:
Title:
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
BNY MIDWEST TRUST COMPANY,
as Trustee
By:________________________
(Authorized Signatory)
(BACK OF NOTE)
11 3/4% Senior Subordinated Notes due 2011
THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(A) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.
THIS NOTE AND ANY GUARANTEES OF THIS NOTE 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 GUARANTEES OF THIS NOTE NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, 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, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS NOTE BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY, 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 AND ANY GUARANTEES OF THIS NOTE)
(THE "RESALE RESTRICTION TERMINATION DATE") ONLY (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT 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 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) 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 OR (E) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D) PRIOR TO THE END OF THE 40-DAY DISTRIBUTION COMPLIANCE PERIOD WITHIN
THE MEANING OF REGULATION S UNDER THE SECURITIES ACT OR PURSUANT TO
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CLAUSE (E) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE 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 THIS SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE TRANSFER AGENT. THIS LEGEND
WILL BE REMOVED UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTION
TERMINATION DATE.
Capitalized terms used herein shall have the meanings assigned to
them in the Indenture referred to below unless otherwise indicated.
1. Interest. Michael Foods Acquisition Corp., a Minnesota
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 11 3/4% per annum from the date hereof until maturity and shall pay
the Liquidated Damages payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages semi-annually on April 1 and October 1 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes shall accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
issuance; provided that if there is no existing Default in the payment of
interest, and if this Note is authenticated between a record date referred to on
the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided, further, that
the first Interest Payment Date shall be October 1, 2001. The Company shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue principal and premium, if any, from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company shall pay interest on the Notes
(except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the March 15 or
September 15 next preceding the Interest Payment Date, even if such Notes are
canceled after such record date and on or before such Interest Payment Date,
except as provided in Section 2.12 of the Indenture with respect to defaulted
interest. The Notes shall be payable as to principal, premium and Liquidated
Damages, if any, and interest at the office or agency of the Company maintained
for such purpose within or without the City and State of New York, or, at the
option of the Company, payment of interest and Liquidated Damages may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds shall be required with respect to principal of and interest, premium and
Liquidated Damages on, all Global Notes and all other Notes the Holders of which
shall have provided wire transfer instructions to the Company or the Paying
Agent. Such payment shall be in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts.
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3. Paying Agent and Registrar. Initially, BNY Midwest Trust Company,
the Trustee under the Indenture, shall act as Paying Agent and Registrar. The
Company may change any Paying Agent or Registrar without notice to any Holder.
The Company or any of its Subsidiaries may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture dated
as of March 27, 2001 (the "Indenture") between the Company and the Trustee. The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S. Code ss.ss. 77aaa-77bbbb). The Notes are subject to all such terms, and
Holders are referred to the Indenture and such Act for a statement of such
terms. To the extent any provision of this Note conflicts with the express
provisions of the Indenture, the provisions of the Indenture shall govern and be
controlling. This Note is an obligation of the Company limited to $200.0 million
in aggregate principal amount. The Indenture pursuant to which this Note is
issued provides that up to $100 million of Additional Notes may be issued
thereunder.
5. Optional Redemption.
(a) Except as set forth in this paragraph 5 and paragraph 6 below,
the Notes shall not be redeemable at the Company's option prior to April 1,
2006. Thereafter, the Company may redeem all or a part of these Notes, upon not
less than 30 nor more than 60 days' notice, at the redemption prices (expressed
as percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the applicable redemption
date, if redeemed during the twelve-month period beginning on April 1 of the
years indicated below:
Year Percentage
2006 ................................ 105.875%
2007 ................................ 103.917%
2008 ................................ 101.958%
2009 and thereafter ................. 100.000%
(b)Notwithstanding the foregoing, at any time prior to April 1,
2004, the Company may on one or more occasions redeem up to 35% of the aggregate
principal amount of Notes originally issued under the Indenture at a redemption
price of 111.750% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages thereon, if any, to the redemption date, with
the net cash proceeds of one or more Equity Offerings of the Company (or of the
Parent to the extent such proceeds are contributed to the common equity of the
Company); provided that at least 65% of the aggregate principal amount of Notes
remains outstanding immediately after the occurrence of such redemption
(excluding Notes held by the Company and its Subsidiaries); and such redemption
shall occur within 60 days of the date of the closing of such Equity Offering.
6. Mandatory Redemption.
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(a)Except as set forth in paragraph 7 below and clause (b) of this
paragraph 6, the Company shall not be required to make mandatory redemption or
sinking fund payments with respect to the Notes.
(b)In the event that the Merger is not consummated on or prior to
the earlier to occur of (i) May 31, 2001 and (ii) if it appears, in the sole
judgment of the Company, that the Merger shall not be consummated, the date on
which notice of same is delivered by the Company to the Collateral Agent and the
Trustee, the Company shall be required to redeem the Notes, in whole, on at
least five Business Days' prior written notice mailed by first class mail to
each Holder at a redemption price equal to 101% of the aggregate principal
amount of the Notes plus accrued interest thereon and premium, if any, to, but
not including, the date of repurchase.
7. Repurchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each Holder of Notes
will have the right to require the Company to repurchase all or any part (equal
to $1,000 or an integral multiple thereof) of such Holder's Notes pursuant to
the offer described below (the "Change of Control Offer") at an offer price in
cash equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages thereon, if any, to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company will mail a notice to each Holder describing the
transaction or transactions that constitute the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice.
(b) If the Company or a Restricted Subsidiary consummates any Asset
Sales, within 365 days of each date on which the aggregate amount of Excess
Proceeds exceeds $10.0 million, the Company will be required to make an offer to
all Holders of Notes (a "Repurchase Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash in an amount equal to 100% of the principal amount thereof plus
accrued and unpaid interest and Liquidated Damages thereon, if any, to the date
of purchase, in accordance with the procedures set forth in the Indenture. To
the extent that the aggregate amount of Notes (including any Additional Notes)
tendered pursuant to a Repurchase Offer is less than the Excess Proceeds, the
Company may use any remaining Excess Proceeds for any purpose not otherwise
prohibited by the Indenture. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Holders of
Notes that are the subject of an offer to purchase shall receive a Repurchase
Offer from the Company prior to any related purchase date and may elect to have
such Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
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redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder,
among other things, to furnish appropriate endorsements and transfer documents
and the Company may require a Holder to pay any taxes and fees required by law
or permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, the Company
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be
treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture or the Notes may be amended or supplemented with the consent of
the Holders of at least a majority in principal amount of the then outstanding
Notes and Additional Notes, if any, voting as a single class, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Holders of a majority in principal amount of the
then outstanding Notes and Additional Notes, if any, voting as a single class.
Without the consent of any Holder of a Note, the Indenture or the Notes may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to Holders of
the Notes in case of a merger or consolidation or sale of all or substantially
all of the assets of the Company, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act or to allow any
Subsidiary to guarantee the Notes, to provide for the issuance of Additional
Notes in accordance with the limitations set forth in the Indenture, or to allow
any Guarantor to execute a supplemental indenture to the Indenture with respect
to the Notes.
12. Defaults and Remedies. Events of Default include: (a) default
for 30 days in the payment when due of interest on, or Liquidated Damages with
respect to, the Notes (whether or not permitted by Article 10 of the Indenture);
(b) default in payment of the principal of or premium, if any, on the (whether
or not permitted by Article 10 of the Indenture); (c) failure by the Company or
any of its Restricted Subsidiaries to comply with the provisions of Sections
3.08(b), 4.10, 4.14 and 5.01 of the Indenture; (d) failure by the Company or any
of its Restricted Subsidiaries for 45 days after notice from the Trustee or
holders of at least 25% in principal amount of the Notes (including Additional
Notes, if any) then outstanding to comply with any of the other agreements in
the Indenture; (e) default under any mortgage, indenture or instrument under
which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the
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payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created
after the date of the Indenture, if that default (i) is caused by a failure to
pay principal of or interest or premium, if any, on such Indebtedness after
giving effect to the grace period provided in such Indebtedness on the date of
such default (a "Payment Default"); or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the maturity
of which has been so accelerated, aggregates $15.0 million or more (other than
the 7.58% Notes to be repaid in connection with the Merger so long as such 7.58%
Notes are repaid within 35 days of the Merger Date); (f) failure by the Company
or any of its Restricted Subsidiaries to pay final judgments aggregating in
excess of $15.0 million, which judgments are not paid, discharged or stayed for
a period of 60 days after such judgments have become non-appealable and, in the
event such judgment is covered by insurance, an enforcement proceeding has been
commenced by any creditor upon such judgment or decree that is not properly
stayed; (g) except as permitted by the Indenture, any Note Guarantee of a
Guarantor (other than an Immaterial Guarantor) being held in any judicial
proceeding to be unenforceable or invalid or ceasing for any reason to be in
full force and effect or any Guarantor (other than an Immaterial Guarantor), or
any Person acting on behalf of any Guarantor, (other than an Immaterial
Guarantor) shall deny or disaffirm its obligations under its Note Guarantee; (h)
causes the Pledge Agreement to cease to be in full force and effect or
enforceable in accordance with its terms (other than in accordance with its
terms) or the Company denies or disaffirms its obligations under the Pledge
Agreement or the obligations under the Pledge Agreement cease to be secured by a
perfected first priority security interest in any portion of the collateral
purported to be pledge under the Pledge Agreement (other than in accordance with
its terms) and (i) certain events of bankruptcy or insolvency with respect to
the Company or any of its Significant Subsidiaries or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary. In
the event of a declaration of acceleration of the Notes because an Event of
Default has occurred and is continuing as a result of the acceleration of any
Indebtedness described in clause (f) above, the declaration of acceleration of
the Notes shall be automatically annulled if the holders of any Indebtedness
described in clause (f) above have rescinded the declaration of acceleration in
respect of such Indebtedness within 30 days of the date of such declaration and
if (i) the annulment of the acceleration of Notes would not conflict with any
judgment or decree of a court of competent jurisdiction and (ii) all existing
Events of Default, except nonpayment of principal or interest on the Notes that
became due solely because of the acceleration of the Notes have been cured or
waived. If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the principal, premium, if any, accrued interest and Liquidated
Damages, if any, of the Notes to be due and payable immediately. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company or any of its Subsidiaries
all outstanding Notes shall become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture, the Notes or the
Notes Guarantees except as provided in the Indenture. The Holders of a majority
in aggregate principal amount of the Notes then outstanding by notice to the
Trustee may on behalf of the Holders of all of the Notes waive any existing
Default or Event of Default and its consequences under the Indenture except a
continuing Default or Event of Default in the payment of interest on, or the
principal of, the Notes. The Company is required to deliver to the
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Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. Trustee Dealings with Company. The Trustee, in its individual or
any other capacity, may make loans to, accept deposits from, and perform
services for the Company or its Affiliates, and may otherwise deal with the
Company or its Affiliates, as if it were not the Trustee.
14. No Recourse Against Others. No director, officer, employee,
incorporator or stockholder of the Company or any of the Guarantors, as such,
shall have any liability for any obligations of the Company or such Guarantor
under the Notes, the Note Guarantees or the Indenture or for any claim based on,
in respect of, or by reason of, such obligations or their creation. Each Holder
of Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes. Such waiver
may not be effective to waive liabilities under the federal securities laws and
it is the view of the SEC that such a waiver is against public policy.
15. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
17. Additional Rights of Holders of Restricted Global Notes and
Restricted Definitive Notes. In addition to the rights provided to Holders of
Notes under the Indenture, Holders of Restricted Global Notes and Restricted
Definitive Notes shall have all the rights set forth in the Registration Rights
Agreement, dated as of March 27, 2001, between the Company and the parties named
on the signature pages thereof or, in the case of Additional Notes, Holders of
Restricted Global Notes and Restricted Definitive Notes shall have the rights
set forth in one or more registration rights agreements, if any, between the
Company and the other parties thereto, relating to rights given by the Company
to the purchasers of Additional Notes (collectively, the "Registration Rights
Agreement").
18. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and
without charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Prior to the Merger Date:
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Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, LP
1225 Seventeenth Street, Suite 1660
Denver, Colorado 80202
Telecopier No.: (303) 292-6639
Attention: J. Christopher Henderson
Following the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
Attention: John D. Reedy, Executive Vice President
and Chief Financial Officer
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
and irrevocably appoint
- -------------------------------------------------------------------------------
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- -------------------------------------------------------------------------------
Date: _______________
Your Signature:__________________________
(Sign exactly as your name appears on the face of
this Note)
Signature Guarantee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company
pursuant to Section 4.10 or 4.14 of the Indenture, check the box below:
Section 4.10 Section 4.14
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the
amount you elect to have purchased: $________
Date: _______________ Your Signature:________________________
(Sign exactly as your name appears on
the Note)
Tax Identification No:_________________
Signature Guarantee.
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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Prior to the Merger Date:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, L.P.
1225 Seventeenth Street, Suite 1660
Denver Colorado 80202
Telecopier No.: (303) 292-6639
Following the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
Attention: J. Christopher Henderson
BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8542
Attention: Dan Donovan
Re: 11 3/4% Senior Subordinated Notes due 2011
Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company"), and BNY Midwest Trust Company, as trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1. Check if Transferee will take delivery of a beneficial interest
in the 144A Global Note or a Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Definitive Note is being transferred to a Person that the Transferor
reasonably believed and believes is purchasing the beneficial interest or
Definitive Note for its
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own account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a transaction
meeting the requirements of Rule 144A and such Transfer is in compliance with
any applicable blue sky securities laws of any state of the United States. Upon
consummation of the proposed Transfer in accordance with the terms of the
Indenture, the transferred beneficial interest or Definitive Note will be
subject to the restrictions on transfer enumerated in the Private Placement
Legend printed on the 144A Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
2. Check if Transferee will take delivery of a beneficial interest
in the Regulation S Global Note or a Definitive Note pursuant to Regulation S.
The Transfer is being effected pursuant to and in accordance with Rule 903 or
Rule 904 under the Securities Act and, accordingly, the Transferor hereby
further certifies that (i) the Transfer is not being made to a person in the
United States and (x) at the time the buy order was originated, the Transferee
was outside the United States or such Transferor and any Person acting on its
behalf reasonably believed and believes that the Transferee was outside the
United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Definitive Note
will be subject to the restrictions on Transfer enumerated in the Private
Placement Legend printed on the Regulation S Global Note and/or the Definitive
Note and in the Indenture and the Securities Act.
3. Check and complete if Transferee will take delivery of a
beneficial interest in the IAI Global Note or a Definitive Note pursuant to any
provision of the Securities Act other than Rule 144A or Regulation S. The
Transfer is being effected in compliance with the transfer restrictions
applicable to beneficial interests in Restricted Global Notes and Restricted
Definitive Notes and pursuant to and in accordance with the Securities Act and
any applicable blue sky securities laws of any state of the United States, and
accordingly the Transferor hereby further certifies that (check one):
(a) such Transfer is being effected pursuant to and in accordance
with Rule 144 under the Securities Act;
or
(b) such Transfer is being effected to the Company or a subsidiary
thereof;
or
B-4
(c) such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d) such Transfer is being effected to an Institutional Accredited
Investor and pursuant to an exemption from the registration requirements of the
Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor
hereby further certifies that it has not engaged in any general solicitation
within the meaning of Regulation D under the Securities Act and the Transfer
complies with the transfer restrictions applicable to beneficial interests in a
Restricted Global Note or Restricted Definitive Notes and the requirements of
the exemption claimed, which certification is supported by (1) a certificate
executed by the Transferee in the form of Exhibit D to the Indenture and (2) if
such Transfer is in respect of a principal amount of Notes at the time of
transfer of less than $250,000, an Opinion of Counsel provided by the Transferor
or the Transferee (a copy of which the Transferor has attached to this
certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the IAI Global Note and/or the Definitive Notes and
in the Indenture and the Securities Act.
4. Check if Transferee will take delivery of a beneficial interest
in an Unrestricted Global Note or of an Unrestricted Definitive Note.
(a) Check if Transfer is pursuant to Rule 144. (i) The Transfer is
being effected pursuant to and in accordance with Rule 144 under the Securities
Act and in compliance with the transfer restrictions contained in the Indenture
and any applicable blue sky securities laws of any state of the United States
and (ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will no longer be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes, on Restricted
Definitive Notes and in the Indenture.
(b) Check if Transfer is pursuant to Regulation S. (i) The Transfer
is being effected pursuant to and in accordance with Rule 903 or Rule 904 under
the Securities Act and in compliance with the transfer restrictions contained in
the Indenture and any applicable blue sky securities laws of any state of the
United States and (ii) he restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act. Upon consummation of the proposed Transfer
in accordance with the terms of the Indenture, the transferred beneficial
interest or Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c) Check if Transfer is pursuant to Other Exemption. (i) The
Transfer is being effected pursuant to and in compliance with an exemption from
the registration
B-5
requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and
in compliance with the transfer restrictions contained in the Indenture and any
applicable blue sky securities laws of any State of the United States and (ii)
the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Definitive
Note will not be subject to the restrictions on transfer enumerated in the
Private Placement Legend printed on the Restricted Global Notes or Restricted
Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:_____________,____
B-6
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
[CHECK ONE OF (a) OR (b)]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ), or
(ii) Regulation S Global Note (CUSIP ), or
(iii) IAI Global Note (CUSIP ); or
(b) a Restricted Definitive Note.
2. After the Transfer the Transferee will hold:
[CHECK ONE]
(a) a beneficial interest in the:
(i) 144A Global Note (CUSIP ), or
(ii) Regulation S Global Note (CUSIP ), or
(iii) IAI Global Note (CUSIP ); or
(iv) Unrestricted Global Note (CUSIP ); or
(b) a Restricted Definitive Note; or
(c) an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-7
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Prior to the Merger Date:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, LP
1225 Seventeenth Street, Suite 1660
Denver, Colorado 80202
Telecopier No.: (303) 292-6639
Following the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8542
Attention: Dan Donovan
Re: 11 3/4% Senior Subordinated Notes due 2011
(CUSIP______________)
Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company") and BNY Midwest Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
____________, (the "Owner") owns and proposes to exchange the
Note[s] or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests
in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial
Interests in an Unrestricted Global Note
(a) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Beneficial Interest in an Unrestricted Global Note. In connection
with the Exchange of the Owner's beneficial interest in a Restricted Global Note
for a beneficial interest in an
C-1
Unrestricted Global Note in an equal principal amount, the Owner hereby
certifies (i) the beneficial interest is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the United States Securities Act of 1933, as amended (the
"Securities Act"), (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest in an
Unrestricted Global Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
(b) Check if Exchange is from Beneficial Interest in a Restricted
Global Note to Unrestricted Definitive Note. In connection with the Exchange of
the Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Definitive Note is being acquired in compliance
with any applicable blue sky securities laws of any state of the United States.
(c) Check if Exchange is from Restricted Definitive Note to
Beneficial Interest in an Unrestricted Global Note. In connection with the
Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an
Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer, (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to Restricted Definitive Notes and pursuant to and in accordance with
the Securities Act, (iii) the restrictions on transfer contained in the
Indenture and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d) Check if Exchange is from Restricted Definitive Note to
Unrestricted Definitive Note. In connection with the Owner's Exchange of a
Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby
certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's
own account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests
in Restricted Global Notes for Restricted Definitive Notes or Beneficial
Interests in Restricted Global Notes
(a) Check if Exchange is from beneficial interest in a Restricted
Global Note to Restricted Definitive Note. In connection with the Exchange of
the Owner's beneficial
C-2
interest in a Restricted Global Note for a Restricted Definitive Note with an
equal principal amount, the Owner hereby certifies that the Restricted
Definitive Note is being acquired for the Owner's own account without transfer.
Upon consummation of the proposed Exchange in accordance with the terms of the
Indenture, the Restricted Definitive Note issued will continue to be subject to
the restrictions on transfer enumerated in the Private Placement Legend printed
on the Restricted Definitive Note and in the Indenture and the Securities Act.
(b) Check if Exchange is from Restricted Definitive Note to
Beneficial Interest in a Restricted Global Note. In connection with the Exchange
of the Owner's Restricted Definitive Note for a beneficial interest in the
[CHECK ONE] 144A Global Note, Regulation S Global Note, IAI Global Note with an
equal principal amount, the Owner hereby certifies (i) the beneficial interest
is being acquired for the Owner's own account without transfer and (ii) such
Exchange has been effected in compliance with the transfer restrictions
applicable to the Restricted Global Notes and pursuant to and in accordance with
the Securities Act, and in compliance with any applicable blue sky securities
laws of any state of the United States. Upon consummation of the proposed
Exchange in accordance with the terms of the Indenture, the beneficial interest
issued will be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the relevant Restricted Global Note and in the
Indenture and the Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company.
[Insert Name of Owner]
By:________________________
Name:
Title:
Dated: ________________, ____
C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Prior to the Merger Date:
Michael Foods Acquisition Corp.
c/o Vestar Capital Partners IV, LP
1225 Seventeenth Street, Suite 1660
Denver, Colorado 80202
Telecopier No.: (303) 292-6639
After the Merger Date:
Michael Foods, Inc.
Park National Bank Building
5353 Wayzata Blvd., Suite 324
Minneapolis, MN 55416
BNY Midwest Trust Company
2 North La Salle Street
Suite 1020
Chicago, IL 60602
Telecopier No.: (312) 827-8562
Re: 11 3/4% Senior Subordinated Notes due 2011
Reference is hereby made to the Indenture, dated as of March 27,
2001 (the "Indenture"), between Michael Foods Acquisition Corp., as issuer (the
"Company") and BNY Midwest Trust Company, as trustee. Capitalized terms used but
not defined herein shall have the meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) a beneficial interest in a Global Note, or
(b) a Definitive Note,
we confirm that:
1. We understand that any subsequent transfer of the Notes or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Notes or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
D-1
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the Notes and any interest therein
may not be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, that if we should sell the Notes or any interest therein,
we will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified institutional
buyer" (as defined therein), (C) to an institutional "accredited investor" (as
defined below) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Company a signed letter
substantially in the form of this letter and, if such transfer is in respect of
a principal amount of Notes, at the time of transfer of less than $250,000, an
Opinion of Counsel in form reasonably acceptable to the Company to the effect
that such transfer is in compliance with the Securities Act, (D) outside the
United States in accordance with Rule 904 of Regulation S under the Securities
Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or
(F) pursuant to an effective registration statement under the Securities Act,
and we further agree to provide to any person purchasing the Definitive Note or
beneficial interest in a Global Note from us in a transaction meeting the
requirements of clauses (A) through (E) of this paragraph a notice advising such
purchaser that resales thereof are restricted as stated herein.
3. We understand that, on any proposed resale of the Notes or
beneficial interest therein, we will be required to furnish to you and the
Company such certifications, legal opinions and other information as you and the
Company may reasonably require to confirm that the proposed sale complies with
the foregoing restrictions. We further understand that the Notes purchased by us
will bear a legend to the foregoing effect. We further understand that any
subsequent transfer by us of the Notes or beneficial interest therein acquired
by us must be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment.
5. We are acquiring the Notes or beneficial interest therein
purchased by us for our own account or for one or more accounts (each of which
is an institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Accredited Investor]
By:________________________
Name:
Title:
Dated:__________________,____
D-2
FORM OF NOTATION OF GUARANTEE
For value received, each Guarantor (which term includes any
successor Person under the Indenture) has, jointly and severally,
unconditionally guaranteed, to the extent set forth in the Indenture and subject
to the provisions in the Indenture dated as of March __, 2001 (the "Indenture")
among Michael Foods Acquisition Corp. and BNY Midwest Trust Company, as trustee
(the "Trustee"), (a) the due and punctual payment of the principal of, premium,
if any, and interest on the Notes (as defined in the Indenture), whether at
maturity, by acceleration, redemption or otherwise, the due and punctual payment
of interest on overdue principal and premium, and, to the extent permitted by
law, interest, and the due and punctual performance of all other obligations of
the Company to the Holders or the Trustee all in accordance with the terms of
the Indenture and (b) in case of any extension of time of payment or renewal of
any Notes or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise. The
obligations of the Guarantors to the Holders of Notes and to the Trustee
pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth
in Article Eleven of the Indenture and reference is hereby made to the Indenture
for the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee, on behalf of such Holder, to take such
action as may be necessary or appropriate to effectuate the subordination as
provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such
Holder for such purpose; provided, however, that the Indebtedness evidenced by
this Subsidiary Guarantee shall cease to be so subordinated and subject in right
of payment upon any defeasance of this Note in accordance with the provisions of
the Indenture.
[Name of Guarantor]
By:________________________
Name:
Title:
E-1
EXHIBIT F
FORM OF SUPPLEMENTAL INDENTURE
TO BE DELIVERED BY SUBSEQUENT GUARANTORS
Supplemental Indenture (this "Supplemental Indenture"), dated as of
_____________, among __________________ (the "Guaranteeing Subsidiary"), a
subsidiary of Michael Foods Acquisition Corp. (or its permitted successor), a
Minnesota corporation (the "Company"), the Company, the other Guarantors (as
defined in the Indenture referred to herein) and BNY Midwest Trust Company, as
trustee under the Indenture referred to below (the "Trustee").
W I T N E S S E T H
WHEREAS, the Company has heretofore executed and delivered to the
Trustee an indenture (the "Indenture"), dated as of March 27, 2001 providing for
the issuance of an aggregate principal amount of up to $300 million of 11 3/4%
Senior Subordinated Notes due 2011 (the "Notes");
WHEREAS, the Indenture provides that under certain circumstances the
Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental
indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally
guarantee all of the Company's obligations under the Notes and the Indenture on
the terms and conditions set forth herein (the "Note Guarantee"); and
WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is
authorized to execute and deliver this Supplemental Indenture.
NOW THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the
equal and ratable benefit of the Holders of the Notes as follows:
1. Capitalized Terms. Capitalized terms used herein without
definition shall have the meanings assigned to them in the Indenture.
2. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees
as follows:
(a) Along with all other Guarantors, to jointly and severally Guarantee to
each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes or the obligations of the Company
hereunder or thereunder, that:
(i) the principal of and interest on the Notes will be promptly paid
in full when due, whether at maturity, by acceleration, redemption or otherwise,
and interest on the overdue principal of and interest on the Notes, if any, if
lawful, and all other obligations of the
Company to the Holders or the Trustee hereunder or thereunder will be promptly
paid in full or performed, all in accordance with the terms hereof and thereof;
and
(ii) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors shall be jointly and severally obligated to pay the same
immediately.
(b) The obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the Notes with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance that might otherwise constitute a legal or equitable discharge or
defense of a guarantor.
(c) The following is hereby waived: diligence presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever.
(d) This Note Guarantee shall not be discharged except by complete
performance of the obligations contained in the Notes and the Indenture.
(e) If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by either to the Trustee or such Holder, this Note
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect.
(f) The Guaranteeing Subsidiary shall not be entitled to any right of
subrogation in relation to the Holders in respect of any obligations guaranteed
hereby until payment in full of all obligations guaranteed hereby.
(g) As between the Guarantors, on the one hand, and the Holders and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article 6 of the Indenture for the
purposes of this Note Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed hereby, and (y) in the event of any declaration of acceleration of
such obligations as provided in Article 6 of the Indenture, such obligations
(whether or not due and payable) shall forthwith become due and payable by the
Guarantors for the purpose of this Note Guarantee.
(h) The Guarantors shall have the right to seek contribution from any
non-paying Guarantor so long as the exercise of such right does not impair the
rights of the Holders under any Note Guarantee.
(i) Pursuant to Section 10.02 of the Indenture, after giving effect to any
maximum amount and any other contingent and fixed liabilities that are relevant
under any
applicable Bankruptcy or fraudulent conveyance laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by or
on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under Article 10 of the Indenture shall result in the obligations of
such Guarantor under its Note Guarantee not constituting a fraudulent transfer
or conveyance.
3. Subordination. The Obligations of the Guaranteeing Subsidiary
under its Note Guarantee pursuant to this Supplemental Indenture shall be junior
and subordinated to the Senior Debt of the Guaranteeing Subsidiary on the same
basis as the Notes are junior and subordinated to the Senior Debt of the
Company. For the purposes of the foregoing sentence, the Trustee and the Holders
shall have the right to receive and/or retain payments by the Guaranteeing
Subsidiary only at such time as they may receive and/or retain payments in
respect of the Notes pursuant to the Indenture, including Article 10 thereof.
4. Execution and Delivery. Each Guaranteeing Subsidiary agrees that
the Note Guarantees shall remain in full force and effect notwithstanding any
failure to endorse on each Note a notation of such Note Guarantee.
5. Guaranteeing Subsidiary May Consolidate, Etc., on Certain Terms.
Except as otherwise provided in Section 11.06 of the Indenture, a Guarantor may
not sell or otherwise dispose of all or substantially all of its assets, or
consolidate with or merge with or into (whether or not such Guarantor is the
surviving Person) another Person unless:
(a) the Company or a Guarantor is the surviving corporation or the
entity or the Person formed by or surviving any such consolidation
or merger (if other than a Guarantor or the Company) or to which
such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made is a corporation organized,
partnership or limited liability company or existing under (i) the
laws of the United States, any state thereof or the District of
Columbia or (ii) the laws of the same jurisdiction as that
Guarantor;
(i) the entity or Person formed by or surviving any such
consolidation or merger (if other than a Guarantor or
the Company) or the entity or Person to which such sale,
transfer, conveyance or other disposition assumes all
the obligations of such Guarantor under the Notes, the
Indenture, its Note Guarantee and the Registration
Rights Agreement, pursuant to a supplemental indenture
in the form of Exhibit E to the Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default exists; and
(iii) the Company will, at the time of such transaction and
after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at
least $1.00 of additional Indebtedness pursuant to the
Fixed Charge Coverage Ratio test set forth in the first
paragraph of Section 4.09 of the Indenture;
(b) In case of any such consolidation, merger, sale or conveyance
and upon the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form
to the Trustee, of the Note Guarantee endorsed upon the Notes and the due
and punctual performance of all of the covenants and conditions of the
Indenture to be performed by a Guarantor, such successor corporation shall
succeed to and be substituted for a Guarantor with the same effect as if
it had been named herein as a Guarantor. Such successor corporation
thereupon may cause to be signed any or all of the Note Guarantees to be
endorsed upon all of the Notes issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Trustee. All the
Note Guarantees so issued shall in all respects have the same legal rank
and benefit under the Indenture as the Note Guarantees theretofore and
thereafter issued in accordance with the terms of the Indenture as though
all of such Note Guarantees had been issued at the date of the execution
hereof.
(c) Except as set forth in Articles 4 and 5 of the Indenture, and
notwithstanding clauses (a) and (b) above, nothing contained in the
Indenture or in any of the Notes shall prevent any consolidation or merger
of a Guarantor with or into the Company or another Guarantor, or shall
prevent any sale or conveyance of the property of a Guarantor as an
entirety or substantially as an entirety to the Company or another
Guarantor.
6. Releases.
(a) Any Guarantor will be released and relieved of any obligations
under its Note Guarantee, (i) in connection with any sale or other disposition
of all or substantially all of the assets of that Guarantor (including by way of
merger or consolidation) to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale
or other disposition of all or substantially all of the assets of that Guarantor
complies with Section 4.10 of the Indenture, including the application of the
Net Proceeds therefrom; (ii) in connection with any sale of all of the Capital
Stock of a Guarantor to a Person that is not (either before or after giving
effect to such transaction) a Restricted Subsidiary of the Company, if the sale
of all such Capital Stock of that Guarantor complies with Section 4.10 of the
Indenture, including the application of the Net Proceeds therefrom; (iii) if the
Company designates any Restricted Subsidiary that is a Guarantor (other than the
Egg Products Division) as an Unrestricted Subsidiary in accordance with the
terms hereof; or (iv) in connection with any sale of Capital Stock of a
Guarantor (other than the Egg Products Division) to a Person that results in the
Guarantor no longer being a Subsidiary of the Company, if the sale of such
Capital Stock of that Guarantor complies with Section 4.10, including the
application of the Net Proceeds therefrom. Upon delivery by the Company to the
Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that
such sale or other disposition was made by the Company in accordance with the
provisions of the Indenture, including without limitation Section 4.10 hereof,
the Trustee shall execute any documents reasonably required in order to evidence
the release of any Guarantor from its obligations under its Note Guarantee.
(b) Any Guarantor not released from its obligations under its Note
Guarantee shall remain liable for the full amount of principal of and interest
on the Notes and for the other obligations of any Guarantor under the Indenture
as provided in Article 10 of the Indenture.
7. No Recourse Against Others. No past, present or future director,
officer, employee, incorporator, stockholder or agent of the Guaranteeing
Subsidiary, as such, shall have any liability for any obligations of the Company
or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the
Indenture or this Supplemental Indenture or for any claim based on, in respect
of, or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for issuance of the Notes. Such waiver may
not be effective to waive liabilities under the federal securities laws and it
is the view of the SEC that such a waiver is against public policy.
8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT
GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.
9. Counterparts. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement.
10. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
11. Trustee. The Trustee shall not be responsible in any manner
whatsoever for or in respect of the validity or sufficiency of this Supplemental
Indenture or for or in respect of the recitals contained herein, all of which
recitals are made solely by the Guaranteeing Subsidiary and the Company.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
Dated: _______________, ____
[Guaranteeing Subsidiary]
By:________________________
Name:
Title:
MICHAEL FOODS ACQUISITION CORP.
By:________________________
Name:
Title:
BNY MIDWEST TRUST COMPANY, AS TRUSTEE
By:________________________
Name:
Title: